38

Report
On
Principles of Insurance

Topic:
American Life Insurance Co. in BD

Assigned By:

Performed By:
MD. RASHEDUZZAMAN

2nd Year; 3rd Semester [BBA]

Date of Submission: Septembers 28, 2004

 38

September 28, 2004

Gazi Md. Hasan Jamil
Course Coordinator
Faculty of Business & Economics
Daffodil International University
102, Sukrabad, Mirpur Road
Dhaka-1207.

Subject: Submission on the report (Principles of Insurance) Of American life insurance

co. in BD”.

Dear Sir:

Here is the report on ALICO that we would like to submit for the partial requirement of
our B.B.A. program.

In preparing the Report, we made sincere efforts to present the relevant information
pertinent to this report and have analyzed them accordingly.

In this connection, may we, urge up on the benign honor of yours to go through the report
and let us know about any change and adjustment on the report, if made.

Thanking You.

Sincerely Yours:

……………………..
ID:
 38

Acknowledgement
At the very onset, we would like to express our deep sense of gratitude to Mr. Md.
Gias Uddin, member of “American life insurance co. in BD” for providing us
valuable information & some recent statistics for the accomplishment of the report.

We are also indebted to our honorable course instructor Gazi Md. Hasan Jamil who
has shown us the proper guideline to proceed on with this report. We would like to
express our sincere gratitude to him for all he has taught us over the whole semester.

Now our special thanks for Dear Sazal or Hasan via who has also put his head to
gather with us for the successful completion of the report. The special thanks also
goes to one of our team members Kanij Fatema & Ismat-Ara who has contributed
their maximum efforts for this report.

Finally, a silent stream of gratitude is for our most adorned parents whose blessings
are always with us in this windy world.
 38

Preface

Theory is obviously a big fact for practical implication. But without practical practice
theory may become useless. Particularly as a student of Business Administration, we
need to practice the theories we learn through a semester for the better understanding
of business & economic environment. Considering the facts, our course instructor Mr.
Gazi Md. Hasan Jamil has taken the initiative to assign every group to analyze
different insurance company in Bangladeshi context.
The need for life insurance is simple; you should consider life insurance if anyone
depends on your income. Essentially, you transfer the risk (loss of your income) to the
insurer by paying a fee, or “premium,” to the insurer. The insurer, with a large capital
base and expertise in risk selection and management, is better able to accept this risk
than any single individual would be.
When our course instructor assigns this job, first we went to the “Alico of
Bangladesh”. We tried to collect all the relevant information & statistics pertinent to
our report.
We enjoyed the fieldwork, library work and done our report in a friendly atmosphere
and under special care of our honorable Jamil Sir.
 38

Table Content
` Executive summary 8
1.0 Introduction 9
1.1.Origin of the report 9
1.2.Objective 9
1.3.Scope of the report 9
1.4.Methodology 9-10
2.0 Background 10
2.1.Life insurance 10
2.2.What is life insurance 10
2.3.About ALICO 10-11
3.0 11
3.1.Our services & network 11
3.2.Our believe & message 11
3.3.Our strength 11
3.4.Strength of insurance 11
4.0 Insurance: needs in life 12
4.1.Personal needs 12
4.1.2.Education costs 12
4.1 4.1.3.Burial expenses & estate planning 13
4.1.4.Investment income 13
4.1.5Charity 13
Business needs 13
4.2.1.A business continuation insurance plan 13
4.2 4.2.2.Buy-self agreement 13
4.2.3.Life insurance as employee benefits 13
5.0 Types of insurance 13
5.1.Term life insurance 13
5.2.Endowment life insurance 14-15
5.3.Whole life insurance 15
5.4.Other types of whole life insurance 15
5.4 5.4.1.Universal life insurance 15
5.4.2.Variable universal life insurance 15-16
6.0 Financial statement 17
6.1Financial stability 17-18
7.0 Policies 19
7.1.0.Education protection plan 20
7.1.1.How the EPP works 20
7.1.2.At maturity 20
7.1 7.1.3Incase of your death 20
 38
7.1.4On death of the child before maturity 20-21
7.1.5Payments on your disability 21
7.1.6Specimen premium amount for DPR 21
7.1.7Bonuses 21
Three payment plan 22
7.2.1.Three payment 22
7.2.2.Premiums 22
7.2.3.Optional benefit 22
7.2 7.2.4.Protection 22
7.2.5Attractive feature’s 23
7.2.6.Contract 23
7.2.7.This policy can cover 23
Lifetime become PLUS 24
7.3.1.Natural death benefit 24
7.3 7.3.2.Additional coverage 24
7.3.3.It has S-Way protection 24
7.3.4.Limitations 24-25
7.3.5.Schedule of benefit & premiums 25
Executive five 26
7.4.1Terms & conditions 26
7.4.2.Definition 26-27
7.4 7.4.3.Policy schedule of benefits 27-29
7.4.4.Special features 29
7.4.5.Condition 29-31
7.4.6.Exceptions 31-32
7.5 Hospital care 33
7.5.1Special features 33-34
7.5.1You need the hospital care 34
7.6 Critical care 35
7.6.1Introduction 35
7.6.2.Stroke 35
7.6.3.Key factor 35
7.6.4.Why depend on critical care
7.6.5.Schedule of benefits
8.0 Income Pamphlet
9.0 Recommendation
10.0 Bibliography
 38

Executive summary
At the beginning of the semester, we were assigned this major report writing
assignment. Our honorable faculty provided us a guideline for preparing this report.
We followed this outline in a very strict manner. The introductory part of the report
includes origin of the report, objective, scope of the report, methodology &
limitations. Then we proceeded on with the very primary concept of insurance policy
that means backgrounds &it work with people.
The scenario of insurance policy in BD has focused from different point of view.
After a general look, we concentrated on insurance life, its effects, its recent
situations, and their activities and related other issues. The sequential rate pamphlet
and its information has highlighted accordingly. A list of providing benefits has
represented in the report. Finally, we have analyzed the problems, suggestions or
strategies and recommendations & concluded the report. There are number of
limitations for which we would not able to represent it as we have sketched to do.
 38

1.0Introduction

1.1 Origin of the Report

The term paper “American Life Insurance Company (ALICO) has started at the
beginning of the semester under the instruction of our course instructor (Principle of
Insurance) Gazi Md. Hasan Jamil

1.2 Objective
The main objective of this report is to see what insurance is, the benefits of insurance
and those fields where they implemented, its feasibility, and some policies of
insurance

1.3 Scope of the Report

The report is concentrating on insurance policy based on the Alico insurance company
in Bangladesh and the sources of Internet only. It is not containing enough in-depth
study from any other source.

1.4 Methodology
-The entire report is prepared depending solely on secondary data, taken from the
Internet and Alico of Bangladesh.
-No primary data were obtained.
-The report will be descriptive.

1.5 Limitations
The limitations to prepare this report are as follows:
The accuracy of the report depends upon the accuracy of the information furnished by
the Internet and Alico of Bangladesh.

 Lack of in-depth understanding of certain terms and concepts prevented us

from going into details.
 Lack of vivid research.
 Time limitation has also been there.
 Lack of Alico’s financial statement.
 They do not published annual report.
 38

2.0 Background

2.1Life Insurance
 
In the following, we provide a very general overview of the types of life insurance
products that are offered in the marketplace. Each of these products is offered in some
form by ALICO through its branches and subsidiaries.
 
2.2What is life insurance?
A Life insurance policy is a contract between you (the policyowner-insured) and an
insurance company (the insurer). Under the terms of a life insurance contract, the
insurer promises to pay a certain amount of money (death benefit) to someone you
choose (a beneficiary) when you die, in exchange for your premium payments

2.3 About Alico

American Life Insurance Company (ALICO) incorporated in 1921, is one of the
largest international life insurance company in the world. The company markets a
broad range of life & other insurance product in over 50 countries worldwide. ALICO
is a number of the American International Group, Inc. (AIG), the leading U.S. based
international insurance organization.
ALICO Bangladesh is the oldest operation in the company’s Middle East,
Africa & South Asia (MEASA) division tracing its origin back to 1952 when it
entered Pakistan with business activities also extending to erstwhile East Pakistan.
The company started full service branch operation in BD in 1974 & has since been
marketing individual & group life insurance product with remarkable success. ALICO
has been the market leader in BD since 1997 & as at yearend 2001, had about US$820
million (equivalent) of life insurance in force.
ALICO plays an important role in the economy of BD. Its Assets in BD at
year end 2001 totaled approximately US$153 million, ALICO BD invests its entire
investible surplus locally, mostly in govt. securities / banks, thereby allowing usage of
the progressively increasing fund in such public interests as infrastructure
development, industrialization & employment generation. Besides, with nearly 4000
career agents & 230 dedicated employees, ALICO is a major employer in the country.
 38

3.0

3.1Our Services and Network

Our services are available from individual to massive concern from (life) all risk
analysis by appropriate insurance. At the other end of your telephone call or e-mail
and even of your doorstep.

3.2Our Believe and Messages

We believe the client must stand of the center of all our activities. Our ability to
optimally fulfill the client’s requirement is based on three strategic capabilities: best
risk management advice, maximum security with minimum cost and personalized
service.

3.3Our Strength
Constant pursuit of suitable strategies has mad the company a leading insurer of
Bangladesh for over a decade. Out dividend rate is the highest in the general
insurance industry of Bangladesh 35% for the last 6 years. We have built up a strong
financial base as well as massive reinsurance protection to absorb any size of risk of
any diversification.

3.4Strengths of Insurance:

As the Insurance Company, initially I have the following strengths:

o Sufficient capital
o New technology
o Skilled agents
o Efficient administration
o Customer care
o Regularity in service
o Availability of financing & efficient financial structure
o Advertisement & publicity
o Located in a reputed area
o Marketing research facility
 38

4.0Insurance: Needs in life

The need for life insurance is simple; you should consider life insurance if anyone
depends on your income. Essentially, you transfer the risk (loss of your income) to the
insurer by paying a fee, or “premium,” to the insurer. The insurer, with a large capital
base and expertise in risk selection and management, is better able to accept this risk
than any single individual would be.
 
This risk transfer may be helpful in both personal and business situations.
 

4.1.Personal needs:
4.1.1Dependent's Support: The major reason people buy life insurance is to replace
income that would be lost because of the death of an income earner. If you support or
help support a family, the loss of income that would result from your death could
mean that your surviving dependents may face financial difficulties. Household
expenses continue, utility bills and school fees must be paid, and food and clothing
must be purchased. Life insurance provides you with a sense of security in the
knowledge that the life insurance money will be available to help support family
members in case of your death.

4.1.2.Education Costs: One of your primary objectives may be to send your children
to a university or college. Due to an untimely death, the tuition may become beyond
your family's reach. Life insurance may be used to provide for the tuition expense.
 
4.1.3 Burial expenses and estate planning: Life insurance may be used to pay funeral
or burial expenses. In addition, it may be used to pay inheritance taxes.
 
4.1.4. Investment Income: Life insurance policies that accumulate savings can also be
used as vehicles for personal savings and investment. Over a period of time, the
accumulated savings in a permanent life insurance policy can grow to a substantial
sum and, while growing, will still provide the insured with life insurance coverage.
 
4.1.5.Charity: You can purchase life insurance in order to donate the proceeds to a
charitable organization, such as a church or an educational institution.
 38

4.2.Business needs:

4.2.1.A business continuation insurance plan: When the owner or a key person (any
person whose death would cause the business a significant financial loss) dies, a
business continuation life insurance plan may be used to provide the necessary fund
for the business' continued operation.
 
4.2.2.Buy-Sell Agreement: If your business partner dies and you don't have enough
money to buy your partner's financial interest in the company, life insurance may be
arranged to cover this cost.
 
4.2.3.Life insurance as Employee Benefits: Businesses often use life insurance to
provide benefits for their employees. Employers pay for all or part of these employee
benefits as part of the total package under which they compensate their employees
 38

5.0Types of insurance
Although you may hear about many names for different types of life insurance
policies, the majority of policies contain benefits derived from one or more of three
basic types. These types are briefly outlined in very general terms below.
 
5.1.Term Life Insurance: Term insurance is issued for a specific period, or “term.”
This term usually ranges from 1 to 30 years. You may choose the length of the term
that best suits you. Term insurance is considered an “affordable” insurance choice. If
you are young with a family and need a large amount of protection without paying
high premiums, this type of life insurance may be of interest to you.
 
Under a Term policy, in case of death during the term of the policy, your beneficiary
receives the cash payment equal to the insurance amount, or “death benefit.” The
death benefit amount is chosen when you buy the policy. Term insurance protection
ends when the period or “term” is over, and only pays out in case of death. For this
reason this product type offers higher protection at a lower cost. It is a pure “risk
transfer” product.
 
Term insurance can be divided into three main types: level term, increasing term, and
decreasing term. Level term means that the death benefit remains the same throughout
the term of the policy. Increasing term means the death benefit gets larger throughout
the term of the policy. Decreasing term means the death benefit gets smaller.
 
5.2.Endowment Life Insurance: Endowment life insurance generally guarantees that
a sum of money will be available to you or your beneficiaries, whether you live until
the policy ends (or “matures,”) or in case of an untimely death. Endowment insurance
usually provides a guaranteed death benefit and has a savings component called the
“cash value.”
 
Generally, if you buy an endowment policy and keep it until maturity, it will provide
a lump-sum cash payout equal to the insurance amount, or “death benefit.” In case of
death before maturity, the death benefit would be paid to your beneficiary.
 
Endowment insurance can be useful for people who know that they will have to incur
a specific expense in the future — like a wedding or college tuition. They know that
regardless of what the future may hold, the expense will have to be paid. Endowment
insurance allows them to be certain that the money will be there.
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5.3.Whole Life Insurance: Whole life insurance has many of the same features as
Endowment insurance, but it is designed to remain in force during the insured's entire
lifetime. Like Endowment insurance, it provides a guaranteed death benefit, and has a
savings component called the “cash value.” As you pay your premiums, a portion of
each payment is set aside to create the cash value. The insurance company typically
invests the cash value, which continues to grow as long as the policy is in force.
 
Some of the advantages of a policy's cash value are that:
 
-         You can cancel or surrender the policy in total or in part and receive the cash
value; however, since this is a long-term policy, in the early years the cash value may
be small or even equal to zero.
-         If you find that you need to skip a premium payment, you can use the cash
value to continue your current insurance protection for some time.
-         In most cases, you may borrow from the insurance company, using the cash
value in your life insurance as collateral.
 
5.4Other types of whole life insurance:
 
5.4.1.Universal Life Insurance: Universal life insurance has all the features of
Whole life insurance. In addition to those features, it offers flexibility in premium
payment and face amount, and it provides current interest rates. Unlike whole life and
term, Universal life allows you, after payment of your initial premium, to pay
premiums at any time, in virtually any amount, subject to certain minimums and
maximums. You also can reduce or increase the death benefit more easily than under
traditional whole life policy.
 
5.4.2.Variable Universal Life Insurance: Variable universal life insurance has all
the features of Universal life insurance coverage, but, instead of earning an interest
rate, its cash value is linked to non-guaranteed equity investment funds, bond
investment funds, or similar investments. Your premiums will be invested in the
various investment options that you have chosen, and you assume the investment
risks. The amount of the policy benefit is dependent on the performance of your
investments.
 
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A number of supplementary benefits can also be added to the various forms of life
insurance policies. Adding riders to the life insurance policy usually provide these
additional benefits. The most common supplementary benefits include:
 
-   Accidental Death Benefit: If the insured dies as a result of an accident, the insurer
will pay an amount of money in addition to the basic death benefit provided by the
life insurance policy.
 
-   Waiver of Premium for Disability Benefits: The insurer waives its right to collect
premiums that become due while the insured is totally disabled.
 
-  Disability Income Benefits: The insurer provides a monthly income benefit to the
policy owner insured if he becomes totally disabled.
 
- Critical Illness Benefits: The insurer agrees to pay a portion of the policy's face
amount to a policy owner insured that suffers from one of a number of specific,
critical illnesses
 38

6.Financial statement

6.1Financial stability

FINANCIAL STABILITY   The financial condition of a life insurance organization is an important

element in public confidence. In this regard we believe the fundamental factors listed below are
significant. The following is a COMPARATIVE ANALYSIS of these basic factors, comparing
AMERICAN LIFE INSURANCE COMPANY
with 25 of the largest United States life insurance companies issuing life insurance to the general
public. Since these 25 companies have an average of over 100 years of life insurance experience, and
own a major portion of the invested assets and life insurance in force of all the companies, a favorable
comparison of these factors can be indicative of financial stability.
BASIC SIGNIFICANT FACTORS -- AS OF DECEMBER 31, 2001 DERIVED FROM THE
ANNUAL STATEMENT
SOLVENCY   A wide margin of Assets over
SURPLUS FUNDS   (including Capital, if any)
Liabilities can be a significant safety factor. This
Per $100 of Policy Reserves: A high surplus ratio
indicates financial soundness and a Company's
may indicate a company's ability to take
ability to meet all obligations as they become due.
emergencies in stride. It shows the proportion of
Assets for each $100 of Liabilities as of
surplus funds to the policy reserve liabilities.
December 31, 2001.
Avg 25 of the largest U.S. Life Co's $ 105.12 Avg 25 of the largest U.S. Life Co's $ 11.60
American Life Insurance Co $ 119.79 American Life Insurance Co $ 48.72

SURPLUS TO LIFE INSURANCE IN LIQUID ASSETS Assets in Bonds, Stocks, Cash

FORCE Ratio of surplus for each $1,000 of Life
Insurance in Force: A high ratio of surplus to life
insurance in force may indicate further proof of
financial strength and stability.
Avg 25 of the largest U.S. Life Co's $ 8.88
American Life Insurance Co $ 26.15
and Short-Term Investments for each $100 of
Liabilities: A high ratio may indicate a more
liquid investment position to cover unforseen
emergency cash requirements that may arise.
Avg 25 of the largest U.S. Life Co's $ 46.89
American Life Insurance Co $ 69.24
 38

FINANCIAL STATEMENT SUMMARY

AS OF DECEMBER 31, 2001

Admitted Assets Policy Reserves

$28,471,147,993 $9,654,681,593
Total Liabilities Total Income
$23,767,231,153 $8,906,190,017

Gross Surplus (inc. Capital, if

Insurance in Force
any)
$179,864,000,000
$4,703,916,840
 38

7.Policies

Plans of ALICO

#Education Protection Plan

#Three payment plan

#Income Growth Plan

#Endowments

#Hospital care

#Critical Care

#Lifetime Income plus

#Executive Five

#The facilities of Accidental Loss

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7.1.Education Protection Plan

EDUCATION PROTECTION PLAN (EPP) is the foundation on which you can

build your Child’s future and career.
Your child depends on YOU and the INCOME you provide for education and other
necessities of life. You want your child to have higher education to give him/her a
good start in this increasingly competitive world. The cost of higher education has
been on the rise for many years now. How can you make sure that the needed amount
is available at the time your Child is ready to go to College / University? You may
find it difficult to come up with the funds unless you plan for it and save regularly.
Even if you do save regularly, you can still not be sure that you will live long enough
to complete the savings plan.

7.1.1 HOW the EPP Works:

You select the period of the Plan to suit the AGE of your
CHILD at which you want the Policy Proceeds to be paid. The options are many; you
can select any period from 10 to 25 Years.

The benefits of this PLAN are as follows:

7.1.2. AT MATURITY
On survival of the insured Child at Maturity, the Full Face Amount of the Policy
PLUS Bonuses is paid. The money can be used to pay for his/her higher education.
On if he/she will find the money very helpful in starting a career. It can also be used
for expenses such as marriage

7.1.3 IN CASE OF YOUR DEATH

A) All future PREMIUMS under the policy will be WAIVED and the policy
would continue in full force.
B) INCOME for EDUCATION equal to1% of the Face Amount will be paid
EVERY MONTH to the insured child till the Maturity of the Policy.
C) At Maturity, he/she would receive the benefits stated above.
 38

7.1.4.ON DEATH OF THE CHILD BEFORE MATURITY

Full face Amount PLUS Accrued Bonuses are payable, subject to Juvenile
Endorsement.

7.1.5 Payments on Your Disability:

For a small additional premium, you can add a very
valuable benefit – Disability Protection Rider, that will provide (1) In event of your
total and permanent DISABILITY DUE TO SICKNESS OR ACCIDENT, all future
premiums will be WAIVED, (2) Income equal to 1% of the face Amount will be paid,
EVERY MONTH, to the child till the maturity of the policy, and (3) At Maturity,
he/she would receive the benefits stated above.

7.1.6 Specimen Premium Amount for DPR:

If you wish to add the Disability Protection Rider (DPR) to this policy, the ALICO
Agent will provide you necessary and Rates. As an example, if your age is 25 Years
and you wish to buy a 18-Year Term EPP Policy for your 2-year Old Child with the
Face Amount of Tk. 100000, your EPP Yearly premium with DPR would be Tk
6,864.

7.1.7 BONUSES:
The policy will participate in profits declared in the form of Reversionary
Bonus and Capital b Growth Bonus (Terminal Bonus), if applicable.

Other Attractive Features:

-Cash Value, Paid-Up Value, and Extended Term Insurance
Value are guaranteed.
-Your premium will never increase.
 38

7.2Three payment plan

ALICO’S Three-payment plan provides very high insurance protection & attractive
returns on your investment at a very low cost.

7.2.1 Three payments:

The unique feature of the plan is that ALICO pays the face amount in 3
installments.
-25%of the face amount is paid at the end of 1/3of the term of the policy.
-Another 25% is paid at the end of 2/3rd of the term of the policy.
-You can use the money to meet any of your needs or invest it wherever you want to
get maximum returns.
-At maturity the remaining 50% of the face amount is paid with bonus.
7.2.2 Premiums:
You can provide the premiums at yearly, semiannually, even or quarterly.
Bonus:
Your policy will participate in the profits declared in from of Reversionary
Bonuses & Capital Growth Dividends. These are based on our current scales, which
may change in the future.
7.2.3 Optional benefit:
24-HOUR Accidental Death Benefit (ADB)
Provides for double the face amount in case of death by accident.
ALICO representatives will provide you are the detail of the policy & optional
benefit & assist you in planning a well-balanced program of saving & protection to
suit your particular needs.
7.2.4 Protection:
For the entire duration of the policy you are insured for the FULL FACE
AMOUNT PLUS the accrued BONUS. In the event of death, NO DEDUCTION is
made for the installments already paid. You are insured for the FULL AMOUNT till
the last day.
7.2.5 Attractive features:
-Your premiums will never increase.
-Cash values, paid-up values, extended term insurance values are guaranteed.
-Like all other policies, the premium is INCOME TAX DEDUCTABLE.
7.2.6 Contract:
Under the policy, various types of policies can adjust with this policy.
-HOSPITAL CARE
-CRITICAL CARE
-EXECUTIVE FIVE etc
But extra premium should pay for these policies.
7.2.7 This policy can cover:
Following decease, can cover this policy-
1.Stroks, first heart attack
2.Cancer
3.Koronarry artery surgery
38
 38

7.3Lifetime Income PLUS:

Monthly income benefit up toTk.20000 with Plan1

The lifetime income plus guarantees a cheque-a-month for the lifetime of your spouse
or children or yourself if you suffer an Accidental loss of life or Permanent Total disability as
per policy definition.

Accident medical expense reimbursement up to tk.100000 per injury with plan1:

Your original bills directly related to the treatment of a covered Accidental
injury will be reimbursed to you in full, subject to the limits under each plan, whether
incurred for in-patient treatment, including private doctor’s visit, laboratory tests, X-
ray, physiotherapy or prescribed medicine.

7.3.1 Natural death benefit:

In case of natural loss of life, the beneficiary will receive a cash payment of
tk.10000 in one lump sum.
7.3.2 Additional coverage:
Accidental in hospital income up to tk.1000 everyday under plan1:
In case you are confined in an eligible hospital due to a covered accident, a
daily in-hospital income will be payable to you as per schedule of benefits. This
benefit is payable regardless of bills & even if confined in a free but eligible hospital.

7.3.3 It has 5-way protection:

1.In case of natural death, the beneficiary will receive a cash payment in one
lump sum.
2.In case of accidental death, the beneficiary will receive a lifetime income
with 20 years guaranteed.
3.in case of permanent total disability, the insured will get a lifetime income
with 20 years guaranteed.
4.In case of treatment of accidental injury, the insured will get accident
medical expanse reimbursement.
5.In case of hospitalization due to accident, the insured will receive accident
in-hospital daily income.
 38

7.3.4 Limitations:
-There are a few exclusions such as suicide, murder, war risk, serving in the Armed
Forces, etc. Full details will be in the policy.
-The lifetime monthly income benefit should not exceed an insured’s monthly income
with a maximum of tK.20000.
-Maximum lifetime income amount under all your policies with ALICO should not
exceed TK.20000 per month.
-Maximum principal sum under all your policies with ALICO under single premium
is TK.6000000
-The special offer rates available to most occupations. However, ALICO reserves the
right to decline or restrict the amount of coverage’s for certain occupations.

7.3.5 Schedule of benefit & premiums

Plan 1 Plan 2 Plan 3 Plan4 Plan5

Benefits
Lifetime monthly 20000 15000 10000 5000 2500
income
Accident monthly Up to Up to Up to Up to Up to
reimbursement tk.1000000 tk.50000 tk.30000 tk.20000 tk.10000
Natural loss of Tk10000 Tk.10000 Tk.10000 Tk.10000 Tk.10000
life
Accident in Tk.1000 Tk.750 Tk.500 Tk.250 Tk.150
hospital daily

Premium
Plan1 Plan2 Plan3 Plan4 Plan5
Single Tk.33183 Tk.22969 Tk.15266 Tk.8400 Tk.4588
premium for3
years
Single Tk.53521 Tk.37047 Tk.24623 Tk.13549 Tk.7401
premium for5
years

Lifetime income plus is offered to any employed person with good health & aged between
18 $ 59 years.
 38

7.4 Executive Five

7.4.1 Terms & conditions

It is hereby agreed that in consideration of the of the payments in full of the
total premium applicable & if after the policy executive date, the named insured shall
be die from natural causes prior to the expiry date or sustain accident bodily directly
& independently of illness & all other causes which results within three hundred sixty
five (365) days in losses covered hereunder, the company shall pay the amount of
benefit specified in the policy schedule of benefit, subject to the terms, conditions,
exceptions, & provisions contained in the policy.

7.4.2 Definitions:

Policy effective date wherever used in this policy shall mean 12:01A.M. (Local
territory time) on 7 day following the Policy Application Date.

Named insured wherever used in this policy shall mean the insured, as stated in
the application.
Injury wherever used in this policy means accidental bodily injury occurring
while this policy is in force as to the named insured whose injury is the basis of claim,
& resulting, directly & independently of all other causes, in loss covered by the
policy.

Permanent partial disability wherever used in this policy shall means the total
loss of functional use or complete & permanent severance.
With reference to hand or foot: at or above the wrist or ankle joint.
With reference to thumb & index: at or above the metacarpo phalangeal joint.
With reference to the eyes, hearing or speech: the entire & irrecoverable loss of sight,
hearing or speech as certified by a licensed physician specializing in Ophthalmology
or Otolaryngology:

Permanent total disability wherever used in this policy means the named
insured is unable to engage in any occupation or employment for compensation or
profit for which the named insured is reasonably qualified by education, training or
experience. If at the time of the loss, the named insured is unemployed, permanent
total disability shall mean the total & permanent inability to perform all of the usual &
customary duties & activities of a person of like age & sex.

Hospital wherever used in this policy means an establishment which meets all
of the following requirement:
 38

-Holds a license as a hospital, if licensing is required in the country or govt.

jurisdiction
-Operates primarily for the reception, care & treatment of sick, ailing or injured
persons as in-patients
-Provides 24-houres a day nursing service by registered or graduate nurses
-Has a staff of one or more physicians available at all times
-Provides organized facilities for diagnosis & major surgical procedures
-Is not primarily a clinic, nursing, rest or convalescent home or similar establishment
& is not, other than incidentally, a place for alcoholics or drug addicts
-Maintains X-ray equipment & operating room facilities.
In-patients wherever used in this policy means a person who is confined in a
hospital as a resident patient & who is charged at least one (1) day’s room & board in
the hospital.
Physician wherever used in this policy means a person legally licensed to
practice medicine & surgery other the insured or a member of the insured’s immediate
family.

7.4.3 Policy schedule of Benefits

Benefit A
Loss of life
When death results from natural causes,
the beneficiaries receive………..tk.10000

Benefit B
Accidental Loss of life
When death results from accidental injuries
sustained by the insured, the beneficiaries
receive………..tk.50000
 38

Benefit C
Permanent partial disability
The insured receives cash payment
when accidental injuries result in any
of the following losses:
Loss of both hands & feet …………. Tk.75000
Loss of both eyes……………………Tk.75000
Loss of one hand & feet……………. Tk.75000
Loss of one hand & sight of one eye..Tk.75000
Loss of one feet & sight of one eye…Tk.75000
Loss of hearing in both ears…………Tk.75000
Loss of speech……………………….Tk.75000
Loss of either hand or feet…………...Tk.37500
Loss of sight of either eye…………...Tk.37500
Loss of thumb & index fingers………Tk.18750

Benefit D
Permanent total disability
If, as a result of any accident, the insured
is totally disabled for a period of 12
consecutive months from doing each &
every job that he/she is reasonably
qualified for by training, experience or
education, & if at the end of 12 months is
beyond hope of recovery, the insured
receives a cash payment of……….100,000

Benefit E
In-hospital daily income due to accident
When as the result of accidental injuries
the named insured shall be necessarily
confined within a hospital as an in-patient
under the continuous attendance of a
physician, the company will pay daily
benefit for each day of hospitalization upto
365 days………………….tk.100
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Premium
Total premium for 5 years by age
Age …………………… premium
18-34years……………………tk.1510
35-39years……………………tk.1630
40-44years……………………tk.1790
45-49years……………………tk.2070
50-55years……………………tk.2550

7.4.4 Special features

-24 hours worldwide coverage
-One single payment-no renewal billing
-Worldwide claim service
-Pays in addition to any other insurance coverage you may have
-Coverage remains in effect even if you move away, change your job or become
uninsurable due to health problems
-Non-cancelable for 5 years except in case of fraud, misrepresentation or non-
payment of premium
-A bonus of 20% of the premium paid will be refunded at the expiry of the policy
term, provide that no claims have been submitted

7.4.5 Condition

1.this policy shall commence on the policy effective date & shall remain in effect for
5 years from said date.

2.this policy shall terminate at the earliest of

-The expiration of the five years period
-When any of the named insured attains 70 years ago

3.this policy may not be cancelled by the insured or by the company except in the
case of fraud, misrepresentation or non-payment of premium

4.the premium for this policy shall be considered fully earned by the company when
collected.
 38

5.As soon as practicable after the happening of any event which could give rise to a
claim under this Policy and in any case within one calendar month written notice there
of must be given to the company, but notice of death must be given forthwith and the
company shall have the right to have a post mortem examination of the body.

6.completed claim forms and written proof of loss must be furnished to the company
within 90 days after the data of such loss. Failure to furnish such proof within the time
required shall not invalidate nor reduce any claim if it was not possible to give proof
within such time. However no proof will be accepted if furnished later than 1 year
from the time the loss occurred.

7. Death shall not be presumed by reason of the disappearance of the Named Insured
unless a competent authority issues a Certificate of Presumption of death, and only
after 12 months have elapsed since the date of disappearance.

8. The company shall not be bound to notice or be affected by any notice of any trust
charge or alienation relating to the Policy but the receipt of the insured or legal
personal reprehensive shall in any case effectually discharge the Company.

9.The due observance and fulfillment of the terms, conditions and Endorsements of
the policy shall be a condition precedent to any liability of the company hereunder.

10.this Policy becomes effective only if countersigned by an authorized representative

of the company. No waiver of alteration in any of the terms of this Policy or neither
any of its conditions nor any endorsement thereon will be held valid unless the same
is signed by an officer of the company.

11. Indemnity, if any, for loss of life of a Named Insured is payable to the Beneficiary
for such Named Insured named in the Application provided such beneficiary survives
the Named Insured by 30 days, otherwise to the estate of the Named Insured. All
other indemnities of this Policy are payable to the Insured. Any payment made by the
company in good faith pursuant to this condition, shall fully discharge the company to
the extent of the payment.
 38

12.the company, at its own expense, shall have the right and opportunity to examine a
Named Insured when and as often as the company may reasonably require during the
pendency of a claim hereunder, and also the right and opportunity to make any
autopsy in case of death where it is not forbidden by law.

13. No action at law or in equity shall be brought to recover on this Policy prior to the
expiration of 60 days after written proof of loss has been furnished in accordance with
the requirements of this Policy. No such action shall be brought after the expiration of
3 years after the time written proof of loss is required to be furnished.

14. This Policy and the application for it, together with any supplementary contract
applied for which are attached hereto and stated to be apart hereof, constitute the
entire contract. All statements made in applying for the contract will be deemed, in
the absence of fraud, representation and not warranties. No statement will be used to
invalid the contract or to defend against a claim under it unless contained in the
written application.

15. Age of the insured must be proved to the satisfaction of the Company before
payment of any benefits under this policy. If the age of the insured has been
misstated, any amount payable under thus policy shall be such as the premium paid
would have purchased at the correct age.

** In witness whereof ALICO has caused this policy to be executed as of the policy
effective date.

7.4.6 Exceptions:
This policy does not cover any loss or expense caused by or resulting from:
1. Intentionally self-inflicted injury, suicide or any attempt thereat while sane or
insane; nor
2. Assault or murder; nor
3. War, invasion, act of foreign enemy, hostilities or warlike operations and all
acts of similar nature, conspiracy, military or usurped power , or any weapon
or instrument employing atomic fission or radioactive force weather in tme of
peace or war; nor
 38

4.any period a Named Insured is serving in the Armed forces of any country or
international authority, whether in peace or war, and in such an event the
Company, upon written notification by the Named Insured, shall return the pro-
rata premium for any such period of service, nor
5.any loss sustained while flying in any aircraft or device for aerial navigation; nor
6.congenital anomalies and conditions arising out of or resulting there from; nor
7.bacterial infections or any other kind of disease; nor
8.medical or surgical treatment except as may be necessary solely as a result of
injury; nor
9. Any bodily injury which shall result in hernia; nor
10.Stay in sanitariums for whatever reason and whatever treatment; nor
11.if the Named Insured is admitted to Hospital for the treatment of drug addiction,
alcoholism, acquired immune Deficiency Syndrome, any mental disorder or for
cosmetic surgery.
 38

7.5Hospital Care

The Hospital Care Accident and Sickness Hospital Income Supplementary Contract
pays you the amount you selected when you or your insured family members are
hospitalized, regardless of expenses, even in a free hospital. The cash income starts
from the very first day of hospitalization and continues for up to 52 weeks for each
confinement. For example, this can pay you up to Tk. 547,500 under plan 1.

The money you receive is paid in addition to any other insurance you may have. Use
the additional cash anyway you wish- to replace lost income, to assist with family
expenses or to help pay for the best possible medical care.

Remember, this cash income is paid directly to you regardless of expenses, even if
you or any insured member of your family is hospitalized in a free hospital.

Even if you are enjoying other medical plans, you will always need EXTRA CASH to
pay for the incidental expenses when you are hospital confined –that no medical plan
will pay for, such as:

Upgrading the Hospital Facility Hotel and Travel Expenses

Companion’s Expenses Child Minding and Care

7.5.1 Special Features

 Your choice of six coverage packages to supplement your life insurance cover.

 You can select the Plan of your choice for you and your family.

 The Daily Cash income continues for up to 52 weeks from the very first day to
hospitalization.

 The Cash Income is paid directly to you, to use any way you wish.

 The Cash Income is payable regardless of expenses, even if you are confined in a
free hospital.

 No deductible amount or waiting period.

 Benefits are payable in addition to any other insurance plan that you may have.
 38

7.5.2YOU NEED THE HOSPITAL CARE

THE HOSPITAL CARE

In-Hospital Weekly Cash Income for You and Your Family

Benefits Plan 1 Plan 2 Plan 3 Plan 4

Plan 5 Plan 6

Accident & Sickness Tk.10, 500 Tk.7, 000 Tk.5,250 Tk.3,500

Tk.2100 Tk.1,750
Weekly Benefit

Double Benefit Tk.21, 000 Tk.14, 000 Tk.10, 500 Tk.7, 000
Tk.4, 200 Tk.3, 500
For 9 Dread Diseases

Annual Premium for Tk.5, 445 Tk.3, 629 Tk.2,723 Tk.1,815

Tk.1,089 Tk.908
Adults Under Age 40:

40-49: Tk.6,804 Tk.4,536 Tk.3,402 Tk.2,268

Tk.1,361 Tk.1,134

50-59: Tk.7, 710 Tk.5, 141 Tk.3, 855 Tk.2, 570

Tk.1, 542 Tk.1, 285

(Renewals Only) 60-65: Tk.8, 769 Tk.5,846 Tk.4,389 Tk.2,923

Tk.1,754 Tk.1,462

Dependent Children: Tk.4, 083 Tk.2, 722 Tk.2, 042 Tk.1, 360
Tk.817 Tk.680
(Ages 1-19 or 23 if full time student)
 38
7.6 Critical Care

Critical Care

7.6.1Introduction: Critical Care is a special scheme designed to provide you and

your family with the necessary financial protection if you are diagnosed and proved as
suffering from any of the following twenty-five critical illnesses.

7.6.2 Stroke
Cancer (except cancer)
First heart attack
Coronary artery surgery
Other serious coronary artery diseases
Heart valve replacement
Major burns
Blindness
Pulmonary arterial hypertension (primary)
End-stage lung disease
Kidney failure
Surgery to aorta
Aplastic anaemia
Major organ transplant
Loss of hearing
Loss of speech
Muscular dystrophy
Alzheimer’s disease/irreversible organic degenerative brain disorders
Motor neurone disease
Parkinson’s disease
Coma
Benign brain tumour
Major head trauma
Bacterial meningitis
Paralysis

7.6.3.Key Factor

 Critical illness will affect more than 1 in 3 of us at some time in our lives. Source:
Imperial Cancer Research, 1995.
 1 in 4 men and 1 in 5 women die of heart disease, the most common cause of
death. Source: The Independent (UK), July 1997.
 An estimated 1 in 8 people aged 30 will contract cancer before age 65. Sources:
ERC Frankona Reassurance, 1997.
 38

7.6.4 why we depend on critical care

At ALICO we care and believe that the most important thing for us is to make sure
that all our clients are well protected in case they are diagnosed with any of the 25
critical illnesses listed in Section I.
When time is critical and you require immediate medical attention, Critical care will
provide you with Lump Sum Payment of up to Tk. 5,00,000 payable upon
diagnosis
And receipt of proof for one Critical Illness only.

7.6.5 Schedule of Benefits

Benefits

 Critical Care Offers a Maximum Benefit of Tk. 5,00,000 and a Minimum benefit
of Tk. 1,50,000.
 The Critical Illness Lump Sum Payment will be made only once under this policy
if you are diagnosed and proved with any of the 25 illnesses listed in Section.

Benefit & Premium Table

Age Range Plin-1 Plin-2 Plin-3 Plin-4 Plin-5 Plin-6
BENEFITS: (In Taka)
500,000 4,00,000 300,000 250,000 200,000 150,000
ANNUAL PREMIUM: (In Taka)
18-29 1848 1478 109 924 739 554
30-34 2518 2014 1511 1259 1007 755
35-39 3990 3192 2394 1995 1596 1197
40-44 7706 6164 4623 3853 3082 2312
45-49 13401 10721 8041 6701 5360 4020
50-54 23452 18761 14071 11726 9381 7036
55-59 39533 31626 23720 19766 15813 11860
60-64 59635 47708 35781 29817 23854 17890
(Renewals
Only)

Note:
This is an illustrative brochure- not a contract. Your policy will contain the exact
terms of coverage and exclusions. Your ALICO Agent will assist you in planning a
well-balanced program of saving and protection to suit your particular needs.
 38

8.Rate pamphlet
38
 38
Endowment at age
 38
Endowment plans
 38
Income growth plan
 38
Hospital care

Critical care
 38
Education Protection Plan (EPP) & Disability* Protection Plan (DPP)
Annual Premium Per Tk 1000
 38

8. Recommendation
 38

Bibliography:
 38
 Report on ALICO.
 Books from library

 Internet sources

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