Description
overview about insurance industry, challenges facing Insurance Industry, how to choose an Insurance Company, function of Insurance Company, brief History of Insurance Sector, various types of life insurance Policy.
? Insurance
(Introduction) ? Challenges facing Insurance Industry ? How to choose an Insurance Company ? Function of Insurance Company ? Brief History of Insurance Sector ? Important Milestones in Indian Insurance Business ? IRDA ? Insurance Policy ? Insurance Companies of India
It is due to globalization, deregulation and also terrorist attacks; that the insurance industry is undergoing a massive change and the metamorphosis has been noteworthy in the last few decades. Before we begin the analysis of Indian insurance industry, let us clear some basics on insurance. ? In the words of a layman, insurance means managing risk. For instance, in life insurance segment, the insurance company tries to manage mortality (death) rates among the wide array of clients. ? The insurance company works in a manner by collecting premiums from policy holders, investing the money (usually in low risk investments), and then reimbursing this same money once the person passes away or the policy matures. The greater the probability for a person to have a shorter life span than the average mark, the higher premium that person has to pay. The case is the same for all other types of insurance, including automobile, health and property. ? Ownership of insurance companies is of two types: Shareholder ownership Policyholder ownership
? Threat
of New Entrants ? Power of Suppliers ? Power of Buyers ? Availability of Substitutes
There are many factors to probe into when an investor chose an insurance company. ? The consumers as well as the investors should only focus on the insurer's financial strength and capability to meet ongoing responsibilities to its policyholders. ? The fundamentals of the insurance company should be strong and should not indicate a poor investment opportunity as this might also deter growth.
The functions of Insurance will give you an idea on how to go ahead with the approach of insurance and what type of insurance to choose. Basic functions of Insurance : ? Primary Functions ? Secondary Functions ? Other Functions
Primary functions of insurance ? Providing protection ? Collective risk bearing ? Evaluating risk ? Provide Certainty Secondary functions of insurance ? Preventing losses ? Covering larger risks with small capital ? Helps in the development of larger industries
Other functions of insurance ? Is a savings and investment tool ? Medium of earning foreign exchange ? Risk Free trade
The insurance sector in India has completed all the facets of competition- from being an open market to being nationalized and the getting back to the form of liberalized market once again. The history of the insurance sector that it has witnessed complete dynamism for the past two centuries approximately. With the establishment of the Oriental Life Insurance Company in Kolkata the business of Indian Life Insurance Started in the year 1818.
1912: The Indian Life Assurance Companies Act came into force for regulating the life insurance business. ? 1928: The Indian Insurance Companies Act was enacted for enabling the government to collect statistical information on both life and non-life insurance businesses. ? 1938: The earlier legislation consolidated the Insurance Act with the aim of safeguarding the interests of the insuring public. ? 1956: 245 Indian and foreign insurers and provident societies were taken over by the central government and they got nationalized. LIC was formed by an Act of Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 cr. and that too from the Government of India.
?
IRDA was set up by the parliament in 1999. The section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority specify the composition of Authority The Authority is a ten-member team consisting of ? Chairman ? Five whole-time members ? Four part-time members All these positions are appointed by the Government of India
The law of India has following expectations from IRDA ? To protect the interest of and secure fair treatment to policyholders ? To bring about speedy and orderly growth of the insurance industry (including annuity and superannuation payments), for the benefit of the common man, and to provide long term funds for accelerating growth of the economy ? To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates ? To ensure that insurance customers receive precise, clear and correct information about products and services and make them aware of their responsibilities and duties in this regard
To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery ? To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players ? To take action where such standards are inadequate or ineffectively enforced ? To bring about optimum amount of self-regulation in day to day working of the industry consistent with the requirements of prudential regulation.
?
Insurance Policy India provides the clients with the details required for the coverage in the policy, date of commencement of the policy and their adopting organisations. It plays an important role in the Indian insurance sector. Two types of insurance covers ? Life insurance ? General insurance
There are various types of life insurance Policy India ? Endowment Policy ? Whole Life Policy ? Term Life Policy ? Money-back Policy ? Joint Life Policy ? Group Insurance Policy ? Loan Cover Term Assurance Policy ? Pension Plan or Annuities ? Unit Linked Insurance Plan
An endowment policy is a life insurance contract designed to pay a lump sum after a specified term (on its 'maturity') or on earlier death. ? Typical maturities are ten, fifteen or twenty years up to a certain age limit. Some policies also pay out in the case of critical illness. ? Policies are typically traditional with-profits or unitlinked ? Endowments can be cashed in early (or 'surrendered') and the holder then receives the surrender value which is determined by the insurance company depending on how long the policy has been running and how much has been paid in to it.
?
Traditional With Profits Endowments ? There is an amount guaranteed to be paid out called the sum assured and this can be increased on the basis of investment performance through the addition of periodic (for example annual) bonuses ? Regular bonuses (sometimes referred to as reversionary bonuses) are guaranteed at maturity and a further non-guaranteed bonus may be paid at the end known as a terminal bonus. ? During adverse investment conditions, the encashment value or surrender value may be reduced by a 'Market Value Reduction' or MVR
Unit-linked endowment ? Unit-linked endowments are investments where the premium is invested in units of a unitised insurance fund. ? Units are encashed to cover the cost of the life assurance. ? Policyholders can often choose which funds their premiums are invested in and in what proportion. ? Unit prices are published on a regular basis and the encashment value of the policy is the current value of the units
Whole Life Insurance, or Whole of Life Assurance , is a life insurance policy that remains in force for the insured's whole life and requires (in most cases) premiums to be paid every year into the policy. There are several types of whole life insurance policies ? Non-participating ? Participating ? Indeterminate premium ? Economic ? Limited pay ? Single premium
Non-Participating ? All values related to the policy (death benefits, cash surrender values, premiums) are usually determined at policy issue, for the life of the contract, and usually cannot be altered after issue. ? This means that the insurance company assumes all risk of future performance versus the actuaries' estimates. ? If future claims are underestimated, the insurance company makes up the difference. On the other hand, if the actuaries' estimates on future death claims are high, the insurance company will retain the difference.
? In
a participating policy, the insurance company shares the excess profits with the policyholder. ? Typically these refunds are not taxable because they are considered an overcharge of premium. ? The greater the overcharge by the company, the greater the refund/dividend. ? For a mutual life insurance company, participation also implies a degree of ownership of the mutuality
Indeterminate Premium ? Similar to non-participating, except that the premium may vary year to year. However, the premium will never exceed the maximum premium guaranteed in the policy. Economic ? A blending of participating and term life insurance wherein a part of the dividends is used to purchase additional term insurance. This can generally yield a higher death benefit, at a cost to long term cash value. In some policy years the dividends may be below projections, causing the death benefit in those years to decrease.
Limited Pay ? Similar to a participating policy, but instead of paying annual premiums for life, they are only due for a certain number of years, such as 20. The policy may also be set up to be fully paid up at a certain age, such as 65 or 80. ? The policy itself continues for the life of the insured. ? These policies would typically cost more up front, since the insurance company needs to build up sufficient cash value within the policy during the payment years to fund the policy for the remainder of the insured's life.
Single Premium ? A form of limited pay, where the pay period is a single large payment up front. ? These policies typically have fees during early policy years should the policyholder cash it in. Interest Sensitive ? This type is fairly new, and is also known as either excess interest or current assumption whole life. ? The policies are a mixture of traditional whole life and universal life.
Interest Sensitive (contd.) ? Instead of using dividends to augment guaranteed cash value accumulation, the interest on the policy's cash value varies with current market conditions. Like whole life, death benefit remains constant for life. Like universal life, the premium payment might vary, but not above the maximum premium guaranteed within the policy.
Term life insurance or term assurance is life insurance which provides coverage at a fixed rate of payments for a limited period of time, the relevant term. ? After that period expires coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments and/or conditions. ? If the insured dies during the term, the death benefit will be paid to the beneficiary. ? Term insurance is the most inexpensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis.
?
Unlike permanent life insurance policies guarantee coverage at fixed premiums for the lifetime of the covered individual. ? Additionally many permanent life insurance products build a predetermined cash value over the life of the contract available for later withdrawal by the client under specific conditions. ? However on most cash value policies like Whole Life insurance the only way to receive the "savings" is to cash out the policy. The beneficiaries receive the face value of the insurance but NEVER the cash value with Whole Life policies. That is one reason that most experts advise families to buy term insurance and invest the difference.
?
Money back Policy plan is an excellent plan with good return on reinvestment, best suited for businessmen and professionals. Money is available at regular intervals in future to meet the specific expenses such as children's education or marriage. At the same time, the policy provides insurance protection for the family as well as old age provision. Salient Features ? A policy where lump sum amounts are paid to the life assured at periodic intervals on survival.
? In
case of death of the life assured within the term, the total sum insured is paid to the nominee, irrespective of earlier survival benefits. ? Bonus is payable under this scheme. ? Premiums are to be paid regularly to get survival benefits. ? Premiums cease at death or on expiry of term whichever is earlier. ? This plan can be availed of for terms 20 or 25 years .
? Joint
life policies are similar to endowment policies in as much as these policies also offer maturity benefits to the policyholders, apart form covering the risks as all life insurance policies. ? But these are categorized separately as these cover two lives together thus offering a unique advantage in some cases; notable, for a married couple or for partners in a business firm.
Group insurance is an insurance that covers a group of people, usually who are the members of societies, employees of a common employer, or professionals in a common group. ? A feature which is sometimes common in group insurance is that the premium cost on an individual basis may not be risk-based. Instead it is the same amount for all the insured persons in the group. ? Another distinctive feature is that under group coverage, a member of the group is generally eligible to purchase or renew coverage all whilst he or she is a member of the group subject to certain conditions.
?
?
?
Loan cover term assurance policy is an insurance policy, which covers a loan. Such a policy covers the individual's loan amount in case of an eventuality. The cover on such a policy keeps reducing with the passage of time as individuals keep paying their EMIs (equated monthly instalments) regularly, which reduces the loan amount. This plan provides a lumpsum in case of death of the life assured during the term of the plan. The lumpsum will be a decreasing percentage of the initial sum assured as per the policy schedule. Since this is a non-participating (without profits) pure risk cover plan, no benefits are payable on survival to the end of the term of the policy.
The premium of loan cover term assurance policy is structured in a manner to cover the outstanding amount of the loan. Therefore, the size of the insurance cover declines as the loan's term draws to a close. Therefore, loan cover term assurance policy has a lower premium vis-à-vis a term assurance policy that does not provide investment returns. ? Some insurance companies have restricted the premium paying term to two-thirds of the loan's term. This is because, trends indicate that policy-holders are more inclined to skip paying premium on the loan-cover policy as the term of the loan draws to a close; maybe due to the relatively small size of the outstanding loan.
?
A pension plan or an annuity is an investment that is made either in a single lump sum payment or through instalments paid over a certain number of years, in return for a specific sum that is received every year, every half-year or every month, either for life or for a fixed number of years. ? Annuities differ from all the other forms of life insurance in that an annuity does not provide any life insurance cover but, instead, offers a guaranteed income either for life or a certain period
?
Types of Annuities / Pension Plans
?
Life Annuity: Guarantees you a specified amount of income for your life. After death, the amount invested is refunded to your nominee. Guaranteed Period Annuity: Provides specified income for your lifetime and guarantees that your nominee will receive payments for a certain minimum number of years, even if you should die earlier. In case you live longer than the specified minimum number of years, you are entitled to receive annuity payments for your lifetime.
?
?
Annuity Certain: Under this plan, the stipulated annuity is paid for a fixed number of years. The annuity payments stop at the end of that period, irrespective of how much longer you may live. Deferred Annuities: The premiums paid into such plans may be deducted from one’s taxable income at the time of payment. In addition, the interest earned on the annuities is not taxed immediately. But the proceeds of the annuity will be taxable when they are paid to you.
?
Unit Linked Insurance Plan (ULIP) provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time. ULIP is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). ? ULIP came into play in the 1960s and is popular in many countries in the world. The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it offers.
?
As times progressed the plans were also successfully mapped along with life insurance need to retirement planning. In today's times, ULIP provides solutions for insurance planning, financial needs, and many types of financial planning including children’s marriage planning. ? Unit Linked Insurance Plan - is a financial product that offers you life insurance as well as an investment like a mutual fund. Part of the premium you pay goes towards the sum assured (amount you get in a life insurance policy) and the balance will be invested in whichever investments you desire - equity, fixed-return or a mixture of both.
?
IRDA has till now provided registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are considered then there are presently 13 insurance companies in the life side and 13 companies functioning in general insurance business. General Insurance Corporation has been sanctioned as the "Indian reinsurer" for underwriting only reinsurance business.
Life insurers ? Life Insurance Corporation of India ? Allianz Bajaj Life Insurance Company Limited ? Birla Sun-Life Insurance Company Limited ? HDFC Standard Life Insurance Co. Limited ? ICICI Prudential Life Insurance Co. Limited ? ING Vysya Life Insurance Company Limited ? Max New York Life Insurance Co. Limited ? MetLife Insurance Company Limited ? Om Kotak Mahindra Life Insurance Co. Ltd. ? SBI Life Insurance Company Limited ? TATA AIG Life Insurance Company Limited ? AMP Sanmar Assurance Company Limited ? Dabur CGU Life Insurance Co. Pvt. Limited
doc_572658883.pptx
overview about insurance industry, challenges facing Insurance Industry, how to choose an Insurance Company, function of Insurance Company, brief History of Insurance Sector, various types of life insurance Policy.
? Insurance
(Introduction) ? Challenges facing Insurance Industry ? How to choose an Insurance Company ? Function of Insurance Company ? Brief History of Insurance Sector ? Important Milestones in Indian Insurance Business ? IRDA ? Insurance Policy ? Insurance Companies of India
It is due to globalization, deregulation and also terrorist attacks; that the insurance industry is undergoing a massive change and the metamorphosis has been noteworthy in the last few decades. Before we begin the analysis of Indian insurance industry, let us clear some basics on insurance. ? In the words of a layman, insurance means managing risk. For instance, in life insurance segment, the insurance company tries to manage mortality (death) rates among the wide array of clients. ? The insurance company works in a manner by collecting premiums from policy holders, investing the money (usually in low risk investments), and then reimbursing this same money once the person passes away or the policy matures. The greater the probability for a person to have a shorter life span than the average mark, the higher premium that person has to pay. The case is the same for all other types of insurance, including automobile, health and property. ? Ownership of insurance companies is of two types: Shareholder ownership Policyholder ownership
? Threat
of New Entrants ? Power of Suppliers ? Power of Buyers ? Availability of Substitutes
There are many factors to probe into when an investor chose an insurance company. ? The consumers as well as the investors should only focus on the insurer's financial strength and capability to meet ongoing responsibilities to its policyholders. ? The fundamentals of the insurance company should be strong and should not indicate a poor investment opportunity as this might also deter growth.
The functions of Insurance will give you an idea on how to go ahead with the approach of insurance and what type of insurance to choose. Basic functions of Insurance : ? Primary Functions ? Secondary Functions ? Other Functions
Primary functions of insurance ? Providing protection ? Collective risk bearing ? Evaluating risk ? Provide Certainty Secondary functions of insurance ? Preventing losses ? Covering larger risks with small capital ? Helps in the development of larger industries
Other functions of insurance ? Is a savings and investment tool ? Medium of earning foreign exchange ? Risk Free trade
The insurance sector in India has completed all the facets of competition- from being an open market to being nationalized and the getting back to the form of liberalized market once again. The history of the insurance sector that it has witnessed complete dynamism for the past two centuries approximately. With the establishment of the Oriental Life Insurance Company in Kolkata the business of Indian Life Insurance Started in the year 1818.
1912: The Indian Life Assurance Companies Act came into force for regulating the life insurance business. ? 1928: The Indian Insurance Companies Act was enacted for enabling the government to collect statistical information on both life and non-life insurance businesses. ? 1938: The earlier legislation consolidated the Insurance Act with the aim of safeguarding the interests of the insuring public. ? 1956: 245 Indian and foreign insurers and provident societies were taken over by the central government and they got nationalized. LIC was formed by an Act of Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 cr. and that too from the Government of India.
?
IRDA was set up by the parliament in 1999. The section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority specify the composition of Authority The Authority is a ten-member team consisting of ? Chairman ? Five whole-time members ? Four part-time members All these positions are appointed by the Government of India
The law of India has following expectations from IRDA ? To protect the interest of and secure fair treatment to policyholders ? To bring about speedy and orderly growth of the insurance industry (including annuity and superannuation payments), for the benefit of the common man, and to provide long term funds for accelerating growth of the economy ? To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates ? To ensure that insurance customers receive precise, clear and correct information about products and services and make them aware of their responsibilities and duties in this regard
To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery ? To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players ? To take action where such standards are inadequate or ineffectively enforced ? To bring about optimum amount of self-regulation in day to day working of the industry consistent with the requirements of prudential regulation.
?
Insurance Policy India provides the clients with the details required for the coverage in the policy, date of commencement of the policy and their adopting organisations. It plays an important role in the Indian insurance sector. Two types of insurance covers ? Life insurance ? General insurance
There are various types of life insurance Policy India ? Endowment Policy ? Whole Life Policy ? Term Life Policy ? Money-back Policy ? Joint Life Policy ? Group Insurance Policy ? Loan Cover Term Assurance Policy ? Pension Plan or Annuities ? Unit Linked Insurance Plan
An endowment policy is a life insurance contract designed to pay a lump sum after a specified term (on its 'maturity') or on earlier death. ? Typical maturities are ten, fifteen or twenty years up to a certain age limit. Some policies also pay out in the case of critical illness. ? Policies are typically traditional with-profits or unitlinked ? Endowments can be cashed in early (or 'surrendered') and the holder then receives the surrender value which is determined by the insurance company depending on how long the policy has been running and how much has been paid in to it.
?
Traditional With Profits Endowments ? There is an amount guaranteed to be paid out called the sum assured and this can be increased on the basis of investment performance through the addition of periodic (for example annual) bonuses ? Regular bonuses (sometimes referred to as reversionary bonuses) are guaranteed at maturity and a further non-guaranteed bonus may be paid at the end known as a terminal bonus. ? During adverse investment conditions, the encashment value or surrender value may be reduced by a 'Market Value Reduction' or MVR
Unit-linked endowment ? Unit-linked endowments are investments where the premium is invested in units of a unitised insurance fund. ? Units are encashed to cover the cost of the life assurance. ? Policyholders can often choose which funds their premiums are invested in and in what proportion. ? Unit prices are published on a regular basis and the encashment value of the policy is the current value of the units
Whole Life Insurance, or Whole of Life Assurance , is a life insurance policy that remains in force for the insured's whole life and requires (in most cases) premiums to be paid every year into the policy. There are several types of whole life insurance policies ? Non-participating ? Participating ? Indeterminate premium ? Economic ? Limited pay ? Single premium
Non-Participating ? All values related to the policy (death benefits, cash surrender values, premiums) are usually determined at policy issue, for the life of the contract, and usually cannot be altered after issue. ? This means that the insurance company assumes all risk of future performance versus the actuaries' estimates. ? If future claims are underestimated, the insurance company makes up the difference. On the other hand, if the actuaries' estimates on future death claims are high, the insurance company will retain the difference.
? In
a participating policy, the insurance company shares the excess profits with the policyholder. ? Typically these refunds are not taxable because they are considered an overcharge of premium. ? The greater the overcharge by the company, the greater the refund/dividend. ? For a mutual life insurance company, participation also implies a degree of ownership of the mutuality
Indeterminate Premium ? Similar to non-participating, except that the premium may vary year to year. However, the premium will never exceed the maximum premium guaranteed in the policy. Economic ? A blending of participating and term life insurance wherein a part of the dividends is used to purchase additional term insurance. This can generally yield a higher death benefit, at a cost to long term cash value. In some policy years the dividends may be below projections, causing the death benefit in those years to decrease.
Limited Pay ? Similar to a participating policy, but instead of paying annual premiums for life, they are only due for a certain number of years, such as 20. The policy may also be set up to be fully paid up at a certain age, such as 65 or 80. ? The policy itself continues for the life of the insured. ? These policies would typically cost more up front, since the insurance company needs to build up sufficient cash value within the policy during the payment years to fund the policy for the remainder of the insured's life.
Single Premium ? A form of limited pay, where the pay period is a single large payment up front. ? These policies typically have fees during early policy years should the policyholder cash it in. Interest Sensitive ? This type is fairly new, and is also known as either excess interest or current assumption whole life. ? The policies are a mixture of traditional whole life and universal life.
Interest Sensitive (contd.) ? Instead of using dividends to augment guaranteed cash value accumulation, the interest on the policy's cash value varies with current market conditions. Like whole life, death benefit remains constant for life. Like universal life, the premium payment might vary, but not above the maximum premium guaranteed within the policy.
Term life insurance or term assurance is life insurance which provides coverage at a fixed rate of payments for a limited period of time, the relevant term. ? After that period expires coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments and/or conditions. ? If the insured dies during the term, the death benefit will be paid to the beneficiary. ? Term insurance is the most inexpensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis.
?
Unlike permanent life insurance policies guarantee coverage at fixed premiums for the lifetime of the covered individual. ? Additionally many permanent life insurance products build a predetermined cash value over the life of the contract available for later withdrawal by the client under specific conditions. ? However on most cash value policies like Whole Life insurance the only way to receive the "savings" is to cash out the policy. The beneficiaries receive the face value of the insurance but NEVER the cash value with Whole Life policies. That is one reason that most experts advise families to buy term insurance and invest the difference.
?
Money back Policy plan is an excellent plan with good return on reinvestment, best suited for businessmen and professionals. Money is available at regular intervals in future to meet the specific expenses such as children's education or marriage. At the same time, the policy provides insurance protection for the family as well as old age provision. Salient Features ? A policy where lump sum amounts are paid to the life assured at periodic intervals on survival.
? In
case of death of the life assured within the term, the total sum insured is paid to the nominee, irrespective of earlier survival benefits. ? Bonus is payable under this scheme. ? Premiums are to be paid regularly to get survival benefits. ? Premiums cease at death or on expiry of term whichever is earlier. ? This plan can be availed of for terms 20 or 25 years .
? Joint
life policies are similar to endowment policies in as much as these policies also offer maturity benefits to the policyholders, apart form covering the risks as all life insurance policies. ? But these are categorized separately as these cover two lives together thus offering a unique advantage in some cases; notable, for a married couple or for partners in a business firm.
Group insurance is an insurance that covers a group of people, usually who are the members of societies, employees of a common employer, or professionals in a common group. ? A feature which is sometimes common in group insurance is that the premium cost on an individual basis may not be risk-based. Instead it is the same amount for all the insured persons in the group. ? Another distinctive feature is that under group coverage, a member of the group is generally eligible to purchase or renew coverage all whilst he or she is a member of the group subject to certain conditions.
?
?
?
Loan cover term assurance policy is an insurance policy, which covers a loan. Such a policy covers the individual's loan amount in case of an eventuality. The cover on such a policy keeps reducing with the passage of time as individuals keep paying their EMIs (equated monthly instalments) regularly, which reduces the loan amount. This plan provides a lumpsum in case of death of the life assured during the term of the plan. The lumpsum will be a decreasing percentage of the initial sum assured as per the policy schedule. Since this is a non-participating (without profits) pure risk cover plan, no benefits are payable on survival to the end of the term of the policy.
The premium of loan cover term assurance policy is structured in a manner to cover the outstanding amount of the loan. Therefore, the size of the insurance cover declines as the loan's term draws to a close. Therefore, loan cover term assurance policy has a lower premium vis-à-vis a term assurance policy that does not provide investment returns. ? Some insurance companies have restricted the premium paying term to two-thirds of the loan's term. This is because, trends indicate that policy-holders are more inclined to skip paying premium on the loan-cover policy as the term of the loan draws to a close; maybe due to the relatively small size of the outstanding loan.
?
A pension plan or an annuity is an investment that is made either in a single lump sum payment or through instalments paid over a certain number of years, in return for a specific sum that is received every year, every half-year or every month, either for life or for a fixed number of years. ? Annuities differ from all the other forms of life insurance in that an annuity does not provide any life insurance cover but, instead, offers a guaranteed income either for life or a certain period
?
Types of Annuities / Pension Plans
?
Life Annuity: Guarantees you a specified amount of income for your life. After death, the amount invested is refunded to your nominee. Guaranteed Period Annuity: Provides specified income for your lifetime and guarantees that your nominee will receive payments for a certain minimum number of years, even if you should die earlier. In case you live longer than the specified minimum number of years, you are entitled to receive annuity payments for your lifetime.
?
?
Annuity Certain: Under this plan, the stipulated annuity is paid for a fixed number of years. The annuity payments stop at the end of that period, irrespective of how much longer you may live. Deferred Annuities: The premiums paid into such plans may be deducted from one’s taxable income at the time of payment. In addition, the interest earned on the annuities is not taxed immediately. But the proceeds of the annuity will be taxable when they are paid to you.
?
Unit Linked Insurance Plan (ULIP) provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time. ULIP is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). ? ULIP came into play in the 1960s and is popular in many countries in the world. The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it offers.
?
As times progressed the plans were also successfully mapped along with life insurance need to retirement planning. In today's times, ULIP provides solutions for insurance planning, financial needs, and many types of financial planning including children’s marriage planning. ? Unit Linked Insurance Plan - is a financial product that offers you life insurance as well as an investment like a mutual fund. Part of the premium you pay goes towards the sum assured (amount you get in a life insurance policy) and the balance will be invested in whichever investments you desire - equity, fixed-return or a mixture of both.
?
IRDA has till now provided registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are considered then there are presently 13 insurance companies in the life side and 13 companies functioning in general insurance business. General Insurance Corporation has been sanctioned as the "Indian reinsurer" for underwriting only reinsurance business.
Life insurers ? Life Insurance Corporation of India ? Allianz Bajaj Life Insurance Company Limited ? Birla Sun-Life Insurance Company Limited ? HDFC Standard Life Insurance Co. Limited ? ICICI Prudential Life Insurance Co. Limited ? ING Vysya Life Insurance Company Limited ? Max New York Life Insurance Co. Limited ? MetLife Insurance Company Limited ? Om Kotak Mahindra Life Insurance Co. Ltd. ? SBI Life Insurance Company Limited ? TATA AIG Life Insurance Company Limited ? AMP Sanmar Assurance Company Limited ? Dabur CGU Life Insurance Co. Pvt. Limited
doc_572658883.pptx