As a combined result of all this, investments of insurance companies have been largely in bonds floated by GOI, PSUs, state governments, local bodies, corporate bodies and mortgages of long term nature. The last place where Insurance companies are expected to be over-active is bourses. Lately ICs have ventured into pension schemes and mutual funds also. However, life insurance, constitutes the major share of insurance business. Life Insurance depends upon the laws of mortality and there lies the difference between life and general insurance businesses.
Life has to extinguish sooner or later and the claim in respect of life is certain.
In case of general insurance, however, there may never be a claim and the amount can never be ascertained in advance. Hence, Life Insurance includes, besides covering the risk of early happening of an event, an element of savings also for the beneficiaries. Pension business also derives from life insurance in as much as the pension outgo again depends upon the laws of mortality. The forays made by insurance companies in this area are, therefore, natural corollary of their business. All rights reserved worldwide.