subject: Nav The Basic Concepts Of Net Asset Value [print this page] Net Asset Value (NAV) is the value obtained from the difference between the total assets and the total liabilities of an entity. This term is used to describe the equity value of a company or may be explained in terms of shares or dividends. It is mostly used by investment companies to obtain the net assets. It is mostly used in mutual funds transfers to identify the price for every share. For an investor to redeem his or her shares at a price then the NAV is used to make reference for the fund. Computation of NAV on a daily basis is done by taking closing market value of all assets including cash and subtracting all the liabilities and then dividing the resulting value by the total number of outstanding shares. This is now price per share.
Insurance in India is governed by certain different acts and policies. An insurance policy will determine covers against certain kinds of risks or uncertainties. The insurance company sets high returns and even explains about tax benefits. There are different types of insurance covers, for example, life insurance. This type deals with risks like accidents that might affect a customer in his or her life. When a customer is entitled to this type of insurance he or she is informed of tax planning and investment returns. There are sub categories under this type of insurance cover which are for example; whole life insurance- where a customer will devote him or herself in covering all the aspects of risks in his or her life. There are other covers under life insurance like; loan cover term assurance policy, pension plan, joint life policy and group insurance policy.
The other type of insurance cover is "General Insurance"- in this type a cover of everything related to cash, house holdings, health, vehicle, all properties is taken care of in general insurance policy.
Sub categories of general purpose insurance are health insurance, motor vehicle insurance, and travel insurance among others. Any insurance company must incorporate policies that will govern its terms and conditions. Some examples of insurance policy in a country like India may include:
Social security group scheme: This is a scheme that covers an age bracket of between 18-60 years. This group is entitled to an insurance of NAV of about 4,000 natural deaths and NAV of 20,000 on accidents and untimely deaths.
Ashray Bima scheme: that is mainly targeted for workers in times when they are fired or lose their jobs.
Personal accident insurance scheme: that is intended to cover people of over 70 years and persons with disabilities. There are other insurance policies like a scheme that covers a girl child below the age 18 and whose parents do not exceed 60 years of age. In this scheme the insured will get a NAV of about 10 per year. Another scheme is one that offers a scholarship to students for a predetermined period of time.
Basically an insurance company will aim to provide protection, act as a savings and investment tool limiting unnecessary expenses, change uncertainty to certainty, and evaluate risks in order to ascertain for premium rates for its customers and also to share financial loss with the deceased. Sharing financial loss is done by adding the premiums towards a fund from which the individual facing the risk is paid off.
