Amount recoverable under Life Insurance policy (LIC)

What is Insurance?

According to Justice Tindall, "Insurance is a contract in

which a sum of money is paid to the assured in consideration of
insurer's incurring the risk of paying a large sum upon a given
contingency."

Life Insurance policy -

Life Insurance guarantees a specific promised sum of

money to a designated beneficiary upon the death of the
insured, or to the insured if he survives the term of the policy.
Life being the most important asset of an individual, life
insurance at the maximum scope. If a child, a spouse, a life
partner, or a parent depends on you and your income, you
need life insurance.

Amount recoverable under Life Insurance policy -

The following amounts are recoverable under a life

insurance policy

1. Maturity of policy -

On maturity of the policy, i.e. Completion of the term

for which the insurance was taken in case of endowment
policies, the processing of claims by maturity is normally
undertaken by Divisional office of Life Insurance Corporation
(LIC) about 2 months before the 8date of maturity.

2. Happening of certain event -

On the death of the life insured, if it occurs before the

maturity of the policy, provided policy is in force on the date of
death, the death claims action begins with an intimation being
received in the Insurer's office. The intimation may be received
by the nominee, assignee, relatives, the employer, agent or
Development Officer of the area.

3. Bonus -

Bonus is payable if declared by the insurance company.

If a surplus is shown in the valuation of Corporation, The Life
Insurance Corporation(LIC) distributes its profit among its
policyholders every year in the form of bonus/profit share.

4. Share in profits -

if it is a participation policy, a share in the profits,

declared by the board of directors of the insurance company
may be recovered in addition to the sum assured. It is
noteworthy that share in the profit does not make the
policyholder liable for the acts of the company.

5. Surrender value -

Surrendering a life insurance policy means complete

cancellation of the policy. One needs not to pay any premium
to the insurance company after surrendering the policy. Earlier
surrender value is payable by the insurer only after three
consecutive years premiums are paid. If the policy is canceled
before the lapse of 3 years, no amount is returned to the
insured.

6. Paid-up value -

When the policyholder wants to terminate the policy, he may

convert the same into paid-up policy. In this case, the amount
of paid-up value is payable to the insured only after the full
term (maturity) of the policy.