Life Insurance

LIFE INSURANCE BY R.R.JOSHI

LIFE INSURANCE PRODUCTS • • • •

TERM ASSURANCE PLANS WHOLE LIFE PLANS ENDOWMENT TYPE PLANS COMBINATIONS OF WHOLE LIFE AND ENDOWMENT TYPE PLANS • CHILDREN ASSURANCE PLANS • ANNUITIES AND PENSIONS • GROUP SCHEMES—GRATUITY/LEAVE ENCASHMENT/TERM LIFE/ PENSION

TERM ASSURANCE PLANS •

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TERM ASSURANCE PLANS OFFER PURE RISK COVER WITHOUT ANY ELEMENT OF SAVING, HENCE THEY ARE VERY CHEAP.THEY PROVIDE DEATH COVER FOR A GIVEN PERIOD WITHOUT REFUND OF PREMIUM.THEY ARE USEFUL UNDER CERTAIN SITUATIONS AS COLLATERAL SECURITY AGAINST LONG TERM LOANS,MORTGAGE etc. Examples of TERM ASSURANCE PLANS— LEVEL TERM –LONGTERM PLANS SUBJECT TO LEVEL PREMIUMS eg. BIMA SANDESH(ALSO REFUNDS ALL PREMIUMS ON SURVIVAL OF LIFE ASSURED. CONVERTIBLE TERM —INSURED HAS OPTION TO CONVERT POLICY INTO EITHER LIMITED PAYMENT OR ENDOWMENT MORTGAGE REDEMPTION PLAN --ENSURES THAT OUTSTANDING LOAN IS AUTOMATICALLY SETTLED IN THE EVENT OF DEATH OF THE BORROWER.

WHOLE LIFE PLANS • THIS IS THE CHEAPEST FORM OF LIFE INSURANCE. THE PLANS PROVIDE MAXIMUM DEATH COVER TO THE DEPENDENTS FOR THE PREMIUM PAID.THE PREMIUM IS PAYABLE FOR THE LIFE-TIME OF THE ASSURED OR A LIMITED PERIOD AND THE SUM ASSURED IS PAYABLE ONLY ON THE DEATH OF THE LIFE ASSURED. • EXAMPLES OF WHOLE LIFE PLANS— • Whole Life Plan—with and without profit • Convertible Whole Life Plan—after 5yrs.assured can convert it into endowment plan

ENDOWMENT TYPE PLANS •

THESE ARE VERY POPULAR AS THEY NOT ONLY MAKE PROVISION FOR THE FAMILY OF THE LIFE ASSURED IN THE EVENT OF HIS EARLY DEATH BUT ASSURE A LUMPSUM AT ANY DESIRED AGE.AMOUNT ASSURED BECOMES PAYABLE AT THE END OF THE ENDOWMENT TERM IF IT HAS NOT ALREADY BEEN PAID BY REASON OF HIS EARLIER DEATH.PREMIUMS ARE PAYABLE FOR A PERIOD EQUAL TO THE ENDOWMENT TERM OR UNTIL DEATH,IF EARLIER.

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Examples of Endowment plans— Double Endowment Plan—S/A is payable if death occurs before selected term and double the S/A is payable if life assured survives the period Jan Raksha Plan Special Endowment Plan—for artists/professionals Marriage Endowment/Education Annuity Plan Jeevan Saathi—Double Cover Joint Life Plan Jeevan Shree—guaranteed addition to the S/A +loyalty addition Jeevan Mitra—Double Cover Endowment Plan

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COMBINATIONS OF WHOLE LIFE AND ENDOWMENT TYPE PLANS • COMBINATIONS PROVIDE FOR PERIODIC PAYMENTS AS WELL AS HIGHER S/A BENEFITS IN CASE OF DEATH DURING POLICY PERIOD • Examples of Combination plans— • Money Back Policy—policy is issued for a selected term of say 20 yrs.1/5th of S/A is payable on surviving 5 yrs., further 1/5th on surviving 10 yrs. ,further 1/5th on surviving 15 yrs. and balance 2/5 on surviving the term. Full S/A is payable without any adjustment of survival benefits in case of death during policy term. • Modified Plans—Jeevan Sanchay,Jeevan Sneha,

CHILDREN ASSURANCE PLANS • •

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NEW PLANS HAVE BEEN SPECIALLY DESIGNED FOR CHILDREN WHERE THE RISK MAY START AS EARLY AS 7yrs. AS CHILDREN CANNOT ENTER INTO CONTRACTS, POLICIES WILL BE TAKEN OUT BY ELDERS.WHEN THE CHILD ATTAINS THE AGE OF MAJORITY,HE MAY ASSUME THE OWNERSHIP OF THE POLICY.THE POLICY IS THEN SAID TO VEST IN THE CHILD. Examples of Children Assurance Plans— Children Deferred Endowment Plan (with profit) Children Money Back Assurance Plan— specially designed for those parents who desire to make advance provision for education/ marriage/other contingencies in the life of the child Jeevan Sukanya---plan designed exclusively for female child. Plan provides risk cover not only on the life assured but also extends to the life of her husband when she gets married. Jeevan Kishore--- This is a novel plan which covers the life of the child from an early age.Both male and female children between the ages of 1 and 12 yrs.are eligible to be proposed for Insurance under this plan.

ANNUITIES AND PENSIONS •

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AN ANNUITY CONTRACT PROVIDES FOR REGULAR PERIODIC PAYMENTS DURING A SPECIFIED PERIOD.ANNUITY MAY BE IMMEDIATE,LIFE ANNUITY OR CERTAIN FOR A PERIOD AND THEREAFTER FOR LIFE OR IT MAY BE DEFERRED. A PENSION IS ALSO AN ANNUITY.IT IS PROVIDED BY AN EMPLOYER TO THE EMPLOYEES OR THEIR DEPENDENTS IN CONSIDERATION OF THE SERVICE RENDERED. IMMEDIATE ANNUITY-- IS PURCHASED BY A SINGLE PREMIUM CALLED CONSIDERATION AND THE ANNUITY MAY BE PAID YEARLY,HALF-YEARLY,QUARTERLY OR MONTHLY.Eg.Jeevan Akshay Plan. VARIATIONS AND COMBINATIONS IN PLANS ARE AVAILABLE. DEFERRED ANNUITY— ANNUITY PAYMENTS COMMENCE AFTER THE DEFERMENT PERIOD AND MAY BE PAID YEARLY,HALFYEARLY,QUARTERLY OR MONTHLY. Eg.Jeevan Dhara Plan VARIATIONS AND COMBINATIONS IN PLANS ARE AVAILABLE

GROUP SCHEMES—GRATUITY/LEAVE ENCASHMENT/TERM LIFE/ PENSION •

GROUP INSURANCE PROVIDES COVER TO A NUMBER OF PERSONS UNDER A SINGLE POLICY CALLED MASTER POLICY.

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GROUP GRATUITY SCHEME – PAYMENT OF GRATUITY UNDER PAYMENT OF GRATUITY ACT-1972 IS COMPULSORY.EMPLOYER MAY PAY GRATUITY OUT OF HIS OWN REVENUES OR FORM A TRUST AND ADMINISTER THE SCHEME WITH AN INSURANCE COMPANY,WHICH WILL ALWAYS PROVE MORE BENEFICIAL.. GROUP PENSION/SUPERANNUATION— OBJECT OF THE SCHEME IS TO PROVIDE AN EMPLOYEE PENSION ON RETIREMENT.THE PENSION IS PAYABLE DURING THE LIFETIME OF THE RETIRED EMPLOYEE AND VARIOUS OPTIONS ARE AVAILABLE. GROUP TERM LIFE – IS A TERM ASSURANCE PLAN FOR THE GROUP AND PROVIDES LIFE COVER WITH OR WITHOUT RIDERS. GROUP LEAVE ENCASHMENT –AS PER AMENDMENTS TO THE COMPANIES ACT,EMPLOYERS HAVE TO FUND LEAVE ENCASHMENT FACILITY AND THIS CAN ALSO ARRANGED WITH A LIFE INSURER AT COMPETITIVE PREMIUM RATES.

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