Professional Documents
Culture Documents
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Phase I (1918-1972)
Phase II (1956-2000)
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Public Sector
Private sector
Life 16 Cos
General 16 Cos
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TYPES OF INSURANCE
Life insurance
General insurance
Miscellaneous insurance
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Secondary Preventing losses Covering larger risks with small capital Helps in the development of larger industries
Others Risk Free trade Medium of earning foreign exchange Is a savings and investment tool
Evaluating risk
Provide Certainty
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Life insurance business is the business of effecting contract upon human life insurance acts
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10. I T benefits
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POLICY SPECIFICATIONS
A life insurance contract will specify
Sum assured
Term
Premium
Participation in profits
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ADVANTAGES
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Superior to an ordinary Easy settlement & protection Savings plan with tax relief against creditors
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Economic principle Risk suffered by few is spread over large number of people who face the same risk. Spread of risk is the economic principle of life insurance
Actuarial principles Fixing the contribution or premium Everyone should contribute premium commensurate with the risk he brings to the fund.
Legal principles Establishing relationship between individual & the fund. Relevant law of land will have to be abided to establish legally acceptable understanding , relationships & mutual understanding.
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Principle of shared risk works when law of large numbers is applied. Larger the group less impact on the death of an individual. Though it is not possible to predict an individuals death, tracking & recording data about health , lifestyle & mortality trends can give insurer a reasonable information about life expectancies. This data is recorded in mortality tables. Once this is known, the insurance companies can predict the number of people who may die in a given Year & can calculate the premium rates. The premium is invested for earning income . The projected income is factored into premium. A % of assets is set aside in company reserves to reduce the impact of unexpected events. Insuring people of good health. Every insurance policy coverage is with reasonable risk
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7. Insuring the life of partners to pay to the legal heirs & ensure that the amount in business is retained.
8. Group insurance for employees .
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IMPORTANT POLICIES
Endowments Assurance Whole life with a. profits b. Limited plan c. Single premium d. Convertible W L plan Childrens deferred Assurance plan
Mediclaim policy
Group insurance
ULIP
Key man
AssignmentTo study & submit a note on the LI plans with features of different companies
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Endowments plan
Special plans
Assignment
Study in detail the following aspects 1. 2. 3. 4. 5. 6. Combination of term insurance & pure endowment Flexible premium plans Variable annuities Family protection policies Disability income policies ULIP
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Schedule
Attestation
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RIDERS
Add-ons to the basic policy to supplement the cover provided. It can also be set of riders. The most commonly used riders in life policies are
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ASSIGNMENT- NOMINATION
Assignment is legal transference. It is a method by which a policy holder can transfer his interest to another person.
It can be done by endorsement on the policy/ as a separate deed. It can be conditional/ absolute. Nomination is an act by which the policy holder authorizes another person to receive the policy moneys . The authorized person is nominee.
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Consideration essential Irrevocable Property in the policy passes to Assignee Assignee has right to sue under the policy
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Value payable on assureds death Or at the time of maturity Calculated on the basis of no of years , premium is paid, payable & sum assured with profits Always higher than the S V since it not required to be paid.
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OTHER ASPECTS
Foreclosure
Closing before maturity date. Action taken when two or more installments on loan are due
Days of grace
15 to 30 days is given to the policy holder beyond the due date to make payment of the premium.
Suicide
Liability of insurer is modified & limited in case of suicide. Insurer will not pay the insured amount in some cases though Indian law states that the company cannot avoid payment on the ground of suicide.
Revival
Policy lapses When premium is not paid within grace period. Normally it can be revived within a period of 5 years From the due date of last paid premium.
If principle / interest on the loan is more than S V , the policy will be subject to foreclosure.
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CLASSIFICATION OF RISK
Personal
Property
Liability
Others failure
Fidelity
Ownership
Wrong failure to meet committed The obligation Due to Human mistakes effecting others
Dishonesty Of employees
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Protecting employees from accidents that might result in death / injury. Due attention given to cost of handling risks. Effective utilization of resources Maintaining good relation with the society & public.
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Control of loss
Financing of loss
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Prevention Of risk
Reduction Of risks
Assignment
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UNIT-1 CONCLUDED
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