PERSONAL WEALTH MANAGEMENT

Insure what you can’t afford to lose
INSURANCE PLANNING
Submitted by: Group 5-PWM Section ‘E’ Chitwan Garg (191135) Kantika Gupta (191142) Sampada Mittal(191170) Vineet Verma(191183)

INTRODUCTION
Insurance is a form of risk-management which spreads the risk of many people in exchange for small payments from each individual. Specifically, insurance transfers some type of risk (accident, theft, natural disaster, illness, etc) from one person or group to a more financially-sound entity in exchange for a payment (also known as an insurance premium). Premiums are often annual or monthly, but depending on the type of insurance they can be at other intervals. Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; an insured, or policyholder, is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practise of appraising and controlling risk, has evolved as a discrete field of study and practice. According to Schultz and Bradwill ―Insurance in its technical sense is a social device which employs the use of pooling technique to eliminate uncertainty‖ The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.

Insurability
Risk which can be insured by private companies typically share seven common characteristics: 1. Large number of similar exposure units: Since insurance operates through pooling resources, the majority of insurance policies are provided for individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. 2. Definite loss: The loss takes place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements. 3. Accidental loss: The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it results from

an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks or even purchasing a lottery ticket, are generally not considered insurable. 4. Large loss: The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is hardly any point in paying such costs unless the protection offered has real value to a buyer. 5. Affordable premium: If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that the insurance will be purchased, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance. 6. Calculable loss: There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim. 7. Limited risk of catastrophically large losses: Insurable losses are ideally independent and noncatastrophic, meaning that the losses do not happen all at once and individual losses are not severe enough to bankrupt the insurer; insurers may prefer to limit their exposure to a loss from a single event to some small portion of their capital base. Capital constrains insurers' ability to sell earthquake insurance as well as wind insurance in hurricane zones. In the US, flood risk is insured by the federal government. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer's capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

Legal
When a company insures an individual entity, there are basic legal requirements. Several commonly cited legal principles of insurance include: 1. Indemnity – the insurance company indemnifies, or compensates, the insured in the case of certain losses only up to the insured's interest.

5. Accordingly. life insurance is generally not considered to be indemnity insurance.000). An entity seeking to transfer risk (an individual. to the extent possible. Utmost good faith – the insured and the insurer are bound by a good faith bond of honesty and fairness. 3. Contribution – insurers which have similar obligations to the insured contribute in the indemnification. for example. a visitor to your home slips on a floor that you left wet and sues you for $10.000 to pay for the visitor's fall and then would be "indemnified" by the insurance carrier for the out of pocket costs (the $10. by means of a contract. Under an "indemnity" policy the homeowner would have to come up with the $10. "pay on behalf" or "on behalf of" policy. Insurable interest – the insured typically must directly suffer from the loss. Causa proxima. Insurable interest must exist whether property insurance or insurance on a person is involved. What that "stake" is will be determined by the kind of insurance involved and the nature of the property ownership or relationship between the persons. as if the asset was not insured. The concept requires that the insured have a "stake" in the loss or damage to the life or property insured. a claim arises on the occurrence of a specified event). There are generally two types of insurance contracts that seek to indemnify an insured: 1. The difference is significant on paper. an "indemnity" policy. etc.. or to be reinstated to the position that one was in. a "pay on behalf" policy. Principle of loss minimization . for example. the insuring party. Indemnification To "indemnify" means to make whole again. according to some method. and 2.000 and wins. Most modern liability insurance is written on the basis of "pay on behalf" language. prior to the happening of a specified event or peril. corporation. called . and the dominant cause must not be excluded 7. the asset owner must attempt to keep the loss to a minimum. Subrogation – the insurance company acquires legal rights to pursue recoveries on behalf of the insured. Under the same situation. 4. An "indemnity" policy will never pay claims until the insured has paid out of pocket to some third party. or proximate cause – the cause of loss (the peril) must be covered under the insuring agreement of the policy. the insurer may sue those liable for insured's loss.2. 6. the insurance carrier would pay the claim and the insured (the homeowner in the above example) would not be out of pocket for anything. but rather "contingent" insurance (i. or association of any type. but rarely material in practice.) becomes the 'insured' party once risk is assumed by an 'insurer'.In case of any loss or casualty. Material facts must be disclosed.e.

the particular loss event covered. An insured is thus said to be "indemnified" against the loss covered in the policy. Generally. A single policy may cover risks in one or more of the categories set out below. the premium. Specific kinds of risk that may give rise to claims are known as perils. the amount to be paid to the insured or beneficiary in the event of a loss). TYPES OF INSURANCE Any risk that can be quantified can potentially be insured. the following elements: identification of participating parties (the insurer. which perils are covered by the policy and which are not. When insured parties experience a loss for a specified peril. So long as an insurer maintains adequate funds set aside for anticipated losses (called reserves). The fee paid by the insured to the insurer for assuming the risk is called the premium. and possible discounts for loss mitigation efforts. While in theory insurers could encourage investment in loss reduction. the amount of coverage (i. on the other it can help societies and individuals prepare for catastrophes and mitigate the effects of catastrophes on both households and societies. Insurance scholars have typically used morale hazard to refer to the increased loss due to unintentional carelessness and moral hazard to refer to increased risk due to intentional carelessness or indifference.an insurance policy. . an insurance contract includes. policy provisions requiring certain types of maintenance.e. For example.. Insurance can influence the probability of losses through moral hazard. However. An insurance policy will set out in detail.because of concerns over rate reductions and legal battles. vehicle insurance would typically cover both the property risk (theft or damage to the vehicle) and the liability risk (legal claims arising from an accident). Effects Insurance can have various effects on society through the way that it changes who bears the cost of losses and damage. the remaining margin is an insurer's profit. Below are non-exhaustive lists of the many different types of insurance that exist. On one hand it can increase fraud. the insured. at a minimum. some commentators have argued that in practice insurers had historically not aggressively pursued loss control measures . insurance fraud. and preventive steps by the insurance company. the period of coverage. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims — in theory for a relatively few claimants — and for overhead costs. Insurers attempt to address carelessness through inspections. such as through building codes. the coverage entitles the policyholder to make a claim against the insurer for the covered amount of loss as specified by the policy. the beneficiaries). since about 1996 insurers began to take a more active role in loss mitigation.particularly to prevent disaster losses such as hurricanes . and exclusions (events not covered).

Home insurance Home insurance provides coverage for damage or destruction of the policyholder's home. sickness and unemployment insurance  Disability insurance policies provide financial support in the event of the policyholder becoming unable to work because of disabling illness or injury. for damage to or theft of the car. The policy may include inventory. It provides monthly support to help pay such obligations as mortgage loans and credit cards. which packages into one policy many of the kinds of coverage that a business owner needs. insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household. Property coverage. the policy may exclude certain types of risks. Maintenance-related issues are typically the homeowner's responsibility. rehabilitation and sometimes lost wages and funeral expenses. . for the legal responsibility to others for bodily injury or property damage. also called professional indemnity (PI). such as the various kinds of professional liability insurance. 3. Auto Insurance Auto insurance protects the policyholder against financial loss in the event of an incident involving a vehicle they own. long-term policies are generally obtained only by those with at least six-figure incomes. In some countries. especially for people who rent housing. for the cost of treating injuries. along with health insurance. such as in a traffic collision. Short-term disability insurance covers a person for a period typically up to six months. but considering the expense. Health insurance Health insurance policies cover the cost of medical treatments. Liability coverage. Dental insurance. protects policyholders for dental costs. Accident. etc. dental insurance is often part of an employer's benefits package. like medical insurance. lawyers. In some geographical areas. Medical coverage. 2.Business insurance can take a number of different forms. including pets. which are discussed below under that name. In the US and Canada. paying a stipend each month to cover medical bills and other necessities. Coverage typically includes: 1. such as flood or earthquake that require additional coverage. or this can be bought as a separate policy. such as doctors. and the business owner's policy (BOP). in a way analogous to how homeowners' insurance packages the coverages that a homeowner needs. Short-term and long-term disability policies are available to individuals.

from an underwriting perspective. Insurance companies will often try to encourage the person back into employment in preference to and before declaring them unable to work at all and therefore totally disabled.  Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work. a company can obtain crime insurance to cover losses arising from theft or embezzlement. up until such time as they are considered permanently disabled and thereafter. are regulated as insurance. are the mirror image of life insurance. . and may specifically provide for income to an insured person's family. they are the complement of life insurance and. Casualty Casualty insurance insures against accidents. It is a broad spectrum of insurance that a number of other types of insurance could be classified.  Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expenses incurred because of a job-related injury. For example. In that sense. often taken as an adjunct to life insurance. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. and require the same kinds of actuarial and investment management expertise that life insurance requires. burial. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. Life Life insurance provides a monetary benefit to a descendant's family or other designated beneficiary. not necessarily tied to any specific property.  Total permanent disability insurance provides benefits when a person is permanently disabled and can no longer work in their profession. funeral and other final expenses. and some liability insurances. such as auto. Long-term disability insurance covers an individual's expenses for the long term.  Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions could result in a loss. workers compensation.  Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies.

such as passenger and third-party liability. Builder's risk insurance is typically written on an "all risk" basis covering damage arising from any cause (including the negligence of the insured) not otherwise expressly excluded. such as annuities and endowment policies. fixtures and/or equipment being used in the construction or renovation of a building or structure should those items sustain physical loss or damage from an insured peril. home insurance.  Fidelity bond is a form of casualty insurance that covers policyholders for losses incurred as a result of fraudulent acts by specified individuals. drought. flood insurance. or disease. equipment or machinery. The term property insurance may. like casualty insurance.  Builder's risk insurance insures against the risk of physical loss or damage to property during construction. theft or weather damage. Builder's risk insurance is coverage that protects a person's or organization's insurable interest in materials. Rates depend on location and hence the likelihood of an earthquake. inland marine insurance or boiler insurance. are financial instruments to accumulate or liquidate wealth when it is needed.  Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Earthquake insurance policies generally feature a high deductible. earthquake insurance. as well as the construction of the home. It usually insures a business for losses caused by the dishonest acts of its employees. insects. Such risks include crop loss or damage caused by weather. be used as a broad category of various subtypes of insurance. Property Property insurance provides protection against risks to property such as: fire. hail. Some policies. . and associated liability risks. some of which are listed below:  Aviation insurance protects aircraft hulls and spares. including air traffic control and refuelling operations for international airports through to smaller domestic exposures.  Boiler insurance (also known as boiler and machinery insurance. which may be taken by the insured if the policy is surrendered or which may be borrowed against.  Crop insurance may be purchased by farmers to reduce or manage various risks associated with growing crops. Most ordinary home insurance policies do not cover earthquake damage. Airports may also appear under this subcategory. or equipment breakdown insurance) insures against accidental physical damage to boilers. frost damage.Certain life insurance contracts accumulate cash values. This may include specialized forms of insurance such as fire insurance.

or property. Many marine insurance underwriters will include "time element" coverage in such policies. Periodic payments are made directly to the insured until the home is rebuilt or a specified time period has elapsed. or homeowners insurance (often abbreviated in the real estate industry as HOI). The protection offered by a liability . Many types of insurance include an aspect of liability coverage. is the type of property insurance that covers private homes. but excludes losses that can be recovered from the carrier or the carrier's insurance. Most homeowners' insurance covers only owner-occupied homes.  Marine insurance and marine cargo insurance cover the loss or damage of vessels at sea or on inland waterways.  Home insurance. etc. a homeowner's insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property. When the owner of the cargo and the carrier are separate corporations. Volcano insurance is a specialized insurance protecting against damage arising specifically from volcanic eruptions. For example. Liability Liability insurance is a very broad superset that covers legal claims against the insured. In response to this.  Supplemental natural disaster insurance covers specified expenses after a natural disaster renders the policyholder's home uninhabitable.. which extends the indemnity to cover loss of profit and other business expenses attributable to the delay caused by a covered loss. also commonly called hazard insurance. shipwreck. the federal government created the National Flood Insurance Program which serves as the insurer of last resort. and of cargo in transit. marine cargo insurance typically compensates the owner of cargo for losses sustained from fire. health. regardless of the method of transit. automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others' lives. Flood insurance protects against property loss due to flooding. as outlined above.   Surety bond insurance is a three-party insurance guaranteeing the performance of the principal.  Landlord insurance covers residential and commercial properties which are rented to others.  Windstorm insurance is an insurance covering the damage that can be caused by wind events such as hurricanes. Many insurers in the US do not provide flood insurance in some parts of the country.

Credit Credit insurance repays some or all of a loan when certain circumstances arise to the borrower such as unemployment.  Prize indemnity insurance protects the insured from giving away a large prize at a specific event. Accounts Receivable insurance also known as Credit or Trade Credit insurance is business insurance over the accounts receivables of the insured.   Many credit cards offer payment protection plans which are a form of credit insurance.  Environmental liability insurance protects the insured from bodily injury. and will not apply to results of wilful or intentional acts by the insured. or death. property damage and cleanup costs as a result of the dispersal.  Errors and omissions insurance is business liability insurance for professionals such as insurance agents. protects insured professionals such as architectural corporations and medical practitioners against potential negligence claims made by their patients/clients. Professional liability insurance may take on different names depending on the profession. Examples would include offering prizes to contestants who can make a half-court shot at a basketball game. or a holein-one at a golf tournament.  Professional liability insurance. professional liability insurance in reference to the medical profession may be called medical malpractice insurance. .  Mortgage insurance insures the lender against default by the borrower. real estate agents and brokers.insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. The policy pays the policy holder for covered accounts receivable if the debtor defaults on payment.  Public liability insurance covers a business or organization against claims should its operations injure a member of the public or damage their property in some way. Liability policies typically cover only the negligence of the insured. release or escape of pollutants.  Directors and officers liability insurance (D&O) protects an organization (usually a corporation) from costs associated with litigation resulting from errors made by directors and officers for which they are liable. For example. architects. Mortgage insurance is a form of credit insurance. disability. also called professional indemnity insurance (PI). although the name "credit insurance" more often is used to refer to policies that cover other kinds of debt. third-party administrators (TPAs) and other business professionals.

If all uncertainty could be removed from business. They also support several medical programme in order to make the public safety minded. theft and robbery and suggest some measures to prevent them. 5. Similarly marine insurance is an essential requirement for every transaction of import and export. Source of credit Modem business depends largely on credit. Stimulant of business enterprise Insurance facilitates to maintain the large size commercial and industrial organizations. Credit extension is also obtained by means of various kinds of property insurance. A businessman who stock of goods has been properly insured can get credit easily. Insurance policy is often very suitable way of providing for the future. So it gives a sense of security. the chances of loss would have been greater than they are at present days. which is real gift to the business man. income would be sure. Promotion of saving Saving is a device of preparing for the bad consequences of the future.ADVANTAGES OF INSURANCE 1. insurance has contributed 'a lot in this regard. Solution of social problems . It safeguards capital and at the same time it avoids the necessity on the part of industrialists. 3. A life insurance policy increases the credit worthiness of the assured person because it can provide funds for repayment if he dies. Without such losses preventive activities of insurance companies. Insurance removed many uncertainties and to that extent is profitable. 4. 6. This type of policy is found particularly in life assurance. Reduction of the chances of loss Insurance companies spend large sums of money with a view to finding out the reasons of fire accidents. Removal of uncertainties Insurance company takes the risks of large but uncertain losses in exchange for small premium. They are therefore free to use their capital as may seem best. 2. It promotes savings by making it compulsory which have a beneficial effect both for the individual and nation. No large scale industrial undertaking could function in the modern world without the transfer of many of its risks to insurer.

9. Insurance as an investment A life policy is a combination of protection and investment which serves a useful purpose. The sum so accumulated by the insurance company earns interest. . The premium that the insured pays goes on accumulating in a fund every year. This facilitates considerably in over all development of the economy. but the benefit is very real.Insurance serves as a useful device for solving complex social problems e. Productive utilization of fund Insurer accumulates large resources from the various insurance funds. Such resources are generally invested in the country.g. either in the public or private sector. Therefore. Removing fear Insurance helps to remove various types of fear from the mind of the people. insurance may be regarded as an investment. compensation is available to victims of Industrial injuries and road accident while the financial difficulties arising from old age. 8. disability or death are minimized. The insured is secured in the knowledge that the protection of the insurance fund is behind him if some sad event happens. It thus creates confidence and eliminates worries which is difficult to evaluate. Under life assurance a person may also invest his capital in a annuity which will pay him an income every year till death. It thus enables many families and business units to continue intact even after a loss. 7.

it is suggested that you should have an insurance cover of around 5 to 10 times of your annual income. car loan. LIFE STAGE PROFILER All through your life. you will quite naturally be prepared when they occur. The following factors should be considered before buying a life insurance policy: Before buying an insurance policy.HOW MUCH INSURANCE DOES ONE NEED? Before buying an insurance policy. several significant events the birth of your child. Your investments / savings Your lifestyle expenses Monies you would require in future As a thumb rule. it is always important to find out the amount of life insurancee cover you need. A good financial advisor in your neighborhood can help you ascertain your appropriate insurance cover. his or her education and wedding. If you plan in advance for these events. . moving to a larger home. The following factors should be considered before buying a life insurance policy:       Your age and number of dependents Your annual income and annual expenses Your outstanding liabilities like home loan. buying a new car. etc. Life insurance is an effective tool that assists you to plan for your future such that you are financially equipped to meet all your goals. retiring from work will occur at various stages and demand your financial commitment. it is always important to find out the amount of life insurance cover you need.

which will serve as a steady stream of income. the Payout stage of the plan begins. o o Savings: Savings plans allow you to steadily save towards a pre-decided goal in a secure manner. Life Insurance What is a life insurance policy? A life insurance policy provides financial protection to your family in the unfortunate event of your death. Buying Life insurance assures that your family receives a lumpsum that safely tides them over any financial crises that might occur in your absence. You then purchase an annuity. At a .WHICH IMPORTANT GOALS SHOULD YOU PLAN FOR IN ADVANCE? o Your family's protection: so that your loved ones are secure should an unfortunate event happen to you. When you retire. Hence. o Child's education: As parent. It is important to ensure your child receives money at key stages of his or her education even in your absence. for the rest of your life. o Health: An integral part for financial planning is protecting oneself against any medical emergencies as well. a very prudent decision would be to choose a combination of plans that look after your finances and offer you a protective health cover to ensure your financial planning is in track despite any major illnesses. Retirement: Retirement plans help you secure regular income for your retired life. During the Accumulation phase. you systematically save while you are working. your primary responsibility is to ensure your children's future.

the policyholder pays regular premiums until his death. it involves paying small sums each month (called premiums) to cover the risk of your untimely demise during the tenure of the policy. if a person buys a Rs 2 lakh policy for 15 years. In such an event. In such type of a life insurance policy. he gets back the premiums paid with other investment returns and benefits like bonuses. Premiums paid under the whole life policies are tax exempt. Increasingly. . apart from the financial security for an individual’s family is that the premiums paid are exempt from tax. a fixed sum of money called the Sum Assured is paid to the beneficiaries (family) if the policyholder expires within the policy term. upon which the corpus is paid to the family. The advantage that an individual gets when he / she opts for a whole life policy is that the validity of this life insurance policy is not defined and hence the individual enjoys the life cover throughout his or her life. his family is entitled to the sum of Rs 2 Lakh if he dies within that 15-year period. and insurance policies cater to a wide variety of needs Various types of life insurance plans Term Insurance Policy A term insurance policy is a pure risk cover policy that protects the person insured for a specific period of time. Policy holders benefit in two ways from a pure endowment insurance policy. the beneficiary gets the sum assured. etc. depending on the type of life insurance policy you have opted for. you will receive returns the policy may have earned over the years. If the policy holder survives the 15-year period. throughout his life term. Under this life insurance policy. Endowment Policy Combining risk cover with financial savings. For instance. Whole Life Policy A whole life policy covers a policyholder against death. The policy does not expire till the time any unfortunate event occurs with the individual. endowment policies are among the popular life insurance policies. This makes premiums paid under such life insurance policies the lowest in the life insurance category. whole life policies are being combined with other insurance products to address a variety of needs such as retirement planning. Today. the premiums paid are not returned back. The advantage. your family (or the beneficiaries you have named in the policy) will receive a lump-sum amount. If the individual survives the policy tenure. In addition to the basic policy.basic level. the concept of providing the customers with better returns has been gaining importance. These insurance policies are designed to provide 100 per cent risk cover and hence they do not have any additional charges other than the basic ones. In recent times. In case you live till the maturity of the policy. there are many variations to this basic theme. insurers offer various benefits such as double endowment and marriage/ education endowment plans. Hence. In case of death during the tenure.

child’s education. In other words. cash. Money Back Policy This life insurance policy is favored by many people because it gives periodic payments during the term of policy. a portion of the sum assured is paid out at regular intervals. bank deposits and other instruments. ULIPs ULIPs are market-linked life insurance products that provide a combination of life cover and wealth creation options. One can opt from aggressive funds (invested largely in the equity market with the objective of high capital appreciation) to conservative funds (invested in debt markets. while the rest is invested in the equity & debt instruments for maximizing returns. Annuities and Pension In these types of life insurance policies. ULIPs can be useful for achieving various long term financial goals such as planning for retirement. the insurer agrees to pay the insured a stipulated sum of money periodically.insurance companies have been coming out with new and better ULIP versions of endowment policies. The purpose of an annuity is to protect against financial risks as well as provide money in the form of pension at regular intervals. the beneficiary gets the full sum assured. The premiums paid and the returns accumulated though a money back policy or its ULIP variants are tax exempt. he gets the balance sum assured. If the policy holder survives the term. The premiums paid and the returns accumulated through pure endowment policies and their ULIP variants are tax exempt. They provide the flexibility of choosing from a variety of fund options depending on the customers risk appetite. depending on their risk appetite. A part of the amount that people invest in a ULIP goes toward providing life cover. Under such life insurance policies the customers are also provided with an option of investing their premiums into the markets. using various fund options provided by the insurer. with the aim of preserving capital while providing steady returns). marriage etc. In case of death during the policy term. New ULIP versions of money back policies are also being offered by various life insurers. these life insurance policies help the customer profit from rising markets. Roles played by a life insurance policy .

before comparing with other schemes. One can withdraw 50 per cent of the initial deposit only after 4 years. the access to your funds will be limited. . While most people recognize the risk hedging and tax saving potential of insurance. The same amount of Rs 10. unlike non-life products. your money grows to Rs 10.5 per cent interest over a year. the amount invested as premium in the policy will come back to you with added returns.000 in PPF. many are not aware of its advantages as an investment option as well. let us compare insurance as an investment options. while the rest is used for savings. In other words. age and medical condition of the life insured. In life insurance. something that is missing in non-insurance products.000 can give you an insurance cover of up to approximately Rs 5-12 lakh (depending upon the plan. if you take a life insurance policy for 20 years and survive the term. the family of the deceased will receive the sum assured. In the unfortunate event of death within the tenure of the policy. Now.Life Insurance as "Investment" Life insurance as "Risk Cover" Life insurance as "Tax Planning" Role 1: Life insurance as "Investment" Insurance is an attractive option for investment. and this is besides the added incentives (read bonuses) offered by insurers. You cannot compare an insurance product with other investment schemes for the simple reason that it offers financial protection from risks. you must accept that a part of the total amount invested in life insurance goes towards providing for the risk cover. But in this case. the premium you pay for an insurance policy is an investment against risk. If you invest Rs 10. you get maturity benefits on survival at the end of the term.950 at 9. In fact. Thus. etc) and this amount can become immediately available to the nominee of the policyholder on death. Insurance products yield more compared to regular investment options.

To provide such protection. . and an insurance policy can lend timely support to the family in such times. The rebate is deductible from the tax payable by an individual or a Hindu Undivided Family. Designed to safeguard against losses suffered on account of any unforeseen event. An accident or disability can be devastating. it's worth buying some extra sleep. insurance provides you with that unique sense of security that no other form of investment provides. By buying life insurance.000 a year. Further.000 on payment of yearly premium of Rs 60. (depending upon the age of the insured and term of the policy) This means that you get Rs 12. Insurance also provides a safeguard in the case of accidents or a drop in income after retirement.financial protection. It also comes as a great help when you retire. an individual is entitled to a rebate of 20 per cent on the annual premium payable on his/her life and life of his/her children or adult children. you can buy anything upwards of Rs 10 lakhs in sum assured. Considering the amount you have to pay now. Role 2: Life insurance as "Risk cover" First and foremost. to be more precise .000. many of these can be further customized to fit individual/group specific needs. With the entry of private sector players in insurance. By paying Rs 60. who act as trustees to the monies. The rebate is deductible from tax payable by the individual or a Hindu Undivided Family.Thus insurance is a unique investment avenue that delivers sound returns in addition to protection. A loss claim is paid out of the total premium collected by the insurance companies. Role 3: Life insurance as "Tax planning" Insurance serves as an excellent tax saving mechanism too. you buy peace of mind and are prepared to face any financial demand that would hit the family in case of an untimely demise. The Government of India has offered tax incentives to life insurance products in order to facilitate the flow of funds into productive assets.000 tax benefit. Under Section 88 of Income Tax Act 1961. This rebate is can be availed upto a maximum of Rs 12. in case no untoward incident happens during the term of the policy. you have a wide range of products and services to choose from. insurance is about risk cover and protection . insurance firms collect contributions from many people who face the same risk.to help outlast life's unpredictable losses.

ailing mother. Total income: 2160000 Selecting a plan for Mr. Wife stops working. Keval Gupta.PROFILE OF THE PERSON 24-26 years Working in IT company after passing out of IIM Calcutta Income: Rs. 720000 27 years Starts business with partner and uses savings 31 years Father expires. it is essential to understand his requirements so as to identify and select an ideal insurance plan for him. Some of the parameters which should be looked at before selecting any insurance plan are:              Age Stability of job / in business Number of dependants Your share in the total family income For how long can you sustain without a job (on your savings) Existing loans Present investments Break-up of investments Emergency fund Do you have your own house Existing insurance plans Number of children Profession . Keval Gupta While selecting an insurance plan that suits the needs of Mr. Total income: 1920000 32 years Second child: Son. mother joins the family 33-36 years Children in school. business doing well. Total income: 2400000 26 years Married Dual income as both work Total income: 1260000 29 years First child: Daughter.

etc and risk faced as borrower as lender encourages borrower to take credit insurance 31 Father’s death. Health insurance for family Number of dependents increase and more expenses person for aged Life insurance (protection + Investment). dual income to single income Life insurance (protection + investment). Number of dependents increase. Wife stops working 30 Takes for home loan buying Insure home against the risks like fire.Age in years 26 Significant Life Event Risk Exposure Possible Risk Strategy Marriage Not much Money back insurance from joining job only 27 Change career of Quite large as income becoming irregular Can use surrender value of money back insurance as collateral for taking loan for business or for using the regular contributions made to infuse money into business 29 Birth of first child. some amount of insuring property against damage by fire or theft etc. mother joins family (unexpected) 32 Birth of Increase in dependents Life insurance (protection + savings). Property insurance and life insurance (term assurance) with same value as home loan second child .

3. right before starting job. Suggestions: We suggest a money back life assurance policy with disability cover for Mr. Keval Gupta. This will serve purposes like: 1. Also this means that he needs to insure himself against disability and death (when he gets married) as it is quite possible at this stage. Parameters Company Type of insurance Type of policy Amount of coverage Jeevan Surabhi LIC Money back Individual Minimum: 50000 Maximum: No limit Bonuses: Reversionary thousand HDFC Money Back Plan HDFC Money back Individual Can choose your own sum assured Simple Maturity Bonus Sum per benefit benefit: due + Survival attaching Assured bonuses on full sum assured . 4. Can use surrender value of life insurance policy as collateral for loan for new business 2. his earlier regular income stream in terms of salary is being traded for irregular revenue stream. He can also use these regular payments for the fact that because of change of career. carefree bachelor. we assume that Mr. He can make his wife as nominee. He leads the life of a young.3336 Mother’s health deteriorates. children start going Health-related expenditure for mother. Also. We also assume that he is saving money so that he can start his business later. Can also use regular contributions for investments in business. Financial goal: Undertake insurance such that he has enough money for investment in possible new business venture. expenditure for children’s education Health plan for ailing mother+ Plan for children’s education to school At Age 24 At age 24. Gupta is self-dependent and has no dependents. it provides risk cover in terms of untimely death and accident benefit and makes more sense when he gets married at 26.

20 and 25 years with corresponding premium paying terms of 12. quarterly deductions Premium amount 2. maximum:55 70 12 years Minimum:14.annually and Final (additional Death benefit: Sum assured + bonus) attaching bonuses Death benefit: Sum assured + Bonuses: Reversionary Bonus additional cover + all bonuses and Terminal Bonus payable Frequency of payment Yearly.367 per month. assuming 15 Annual premium for sum year term. half yearly. A life insurance cover is available throughout the term of the plan which increases after every five yearly intervals.   A proportion of Sum Assured as cash payout at regular 4 year intervals during the policy term A lump sum payment upto survival on maturity date Valuable protection family financial to your ICICI Lombard Key highlights HDFC Ergo for both your home Avail 15% discount on a  Protection 3 . Annually. maximum:53 65 30% of sum assured after 4 40% of sum assured after 4 years years  Benefits of insurance as This is a with profits plan With profits plan that offers: stated in ad or by agent available for three different terms of 15. accident benefit assured-200000 for 12 year and sum assured-250000 for term is 20956 24 year old Term Entry age Maximum Maturity age First contribution 15 years Minimum: 14. monthly or through salary monthly. half-yearly. quarterly. 15 and 18 years. The plan provides a specified percentage of Sum Assured on survival up to specified durations.

Malicious and Terrorist Damages o Bursting and overflowing of water tanks. Aircraft Fire Lightning Aircraft Damage Impact Damage Explosion/Implosion Storm. pipes o Storm.malicious o Impact damage by rail/road vehicle and animal and Terrorism damage  Subsidence Landslide Rockslide and o Subsidence and Landslide including Rockslide Missile testing operations Leakage from automatic sprinklers installations including o  Bursting and/or o overflowing of water tanks. apparatus and . o Riot Strike. Cyclone. Hurricane. covered are :       The calamities Fire. Inundation Earthquake. Optional covers available  Cost Optional Cover for Burglary including Theft and Lar ceny Avail upto 15% premium discount for Security Features Terrorism and additional expenses of rent for alternative accommodation. Volcanic Eruption & other Convulsions of Nature Tornado. apparatus. o Explosion/Implosion. Flood and Cyclone. Typhoon. Tempest. strike . o Flood and Inundation  Riot. Tornado. Tempest. Damage Lightning. Coverage available Fire and Special  The policy covers:Fire and Special I) Perils:and IA) Perils(Structure and/or Contents) Building(Section Covers losses to the structure of Contents(Section the house and the contents due Covers the structure of your home to any natural and man-made and contents against calamities. Typhoon. Hurricane.years home insurance policy structure and the household contents and 25% discount on 5 years Low  policy.

Flood and so on. . Riots.pipes  o Bush fire Missile operations testing The sum insured for the structure of house is based on Quite be the  Leakage from automatic the sprinkler installations the Reinstatement Value. This. Storm. and loss of jewellery. Covers the loss of contents due to burglary. construction cost. simply. however. Jewellery kept in Locked Safe within the Home premises can also be covered. gold ornaments. would not include the cost of Land. theft or an The reconstruction value for the structure is determined by the attempted burglary.Contents (as defined by Indian Penal Code) You can also insure the contents of your home against loss due to burglary and /or housebreaking or any attempted burglary. The reconstruction cost is based on two parameters which are mentioned below:- silver articles and precious stones kept under lock and keys o Built Up Area of the House (Square Feet) o Cost of Construction in your area / locality  Burglary including and Housebreaking and Theft Larceny (Section II) . it would   Bush fire Earthquake and reconstruction cost of the house in the event of any loss/damage due to Burglary theft(Contents) any of the insured events like Fire.

The Sum Insured for Contents / Valuables is based on the market value. Keval Gupta: 1. You could cover a host of household items like Electronic Equipments. Family is growing with addition due to birth of first child. Jewellery. Fire and theft insurance for inventory . Furniture & Furnishings. Keval Gupta has got married and is about to start his business during this phase of his life. We suggest the following three insurance plans for Mr. Addition in family so number of dependents increase. 3. Thus it is imperative for him to choose a plan suits his needs and is in sync with his future requirements. 2. Premium Not available 3539 assuming same as home loan amount Age group 27 – 30 We can assess from the case that at this age Mr. Life Insurance Financial goal: To remove the risk relating to untimely death or accident due to:   Double income family becomes single income as wife leaves job after having a child. Clothes and so on. therefore. Health Insurance Financial goal: To ensure adequate medi-claim cover for family because:   Since he has left his job.Sum Insured for Contents under Section I A Fire & Special Perils and Section II Burglary & Theft should be the same. his mediclaim cover from job is eliminated.

hospitalization and other benefit for Mr. surgery. hospitalization and other benefit 3. Gupta will be starting a new firm he’ll be strained in terms of available funds at disposal in case of accident/hospitalization Some of the policies available for catering to his life Insurance needs are: 1. Keval and his wife and children because of the following reasons   Family is expecting two babies thus medical expenses/illnesses should be covered for. hospitalization and other benefit for Mr. Since both of them are in an early stage of their lives the impact of a disability will be huge. Business needs frequent injection of money. Endowment policy 4. death. Some of the policies available for catering to his health Insurance needs are: 1. Money back policy 5. Some of the policies available for catering to his Fire and theft insurance needs are: . Detailed insurance policy covering illness. The reasons for suggesting the same would be:        Initial stage of start up Success of the business in not known Alternate fixed income through investment in fixed income bearing securities would be of assistance Sole earner after the birth of children 4 dependents Age is less thus loss for family would be more. surgery. Term insurance policy 2. Keval and his wife and children We suggest Detailed insurance policy covering illness.Financial goal: To insure business against uncertain events because family’s dependence on income from business is huge and number of dependents are increasing. Pension schemes At this stage of his life he should go in for a money back policy at the age of 27 with larger cover. ULIPS 6. Plain health insurance with hospital cover 2. Detailed insurance policy covering illness. Also since Mr. death. Whole life policy 3. surgery. death.

Keval is starting his business it is essential to secure it from fire and theft. extremely affordable Term Life Insurance Plan offers you protection against your loan amount with complete convinience in application. 25. the financial security of your family is not affected. Property insurance for home loan Parameters Company Plan nature ICICI Pru Home Assure ICICI prudential Traditional Plan category Protection plan About plan Home Assure. Your family will continue to retain the home purchased by your hard earned money.000 25 years . Vanilla schemes covering only loss due to fire and theft 2. ICICI Prudential will pay the outstanding amount to the bank directly. In case of an unfortunate event of death. for this requirement we suggest a vanilla scheme which covers losses due to fire and theft for the following reasons:   A detailed scheme is not required since the business is not exposed to so many risks It being a start up cost would be high and thus difficult to imitate without support in case of theft/fire break-out. The family need not direct their savings towards paying off the outstanding loan. 18yrs Minimum entry age Minimum policy term Minimum sum assured Maximum policy term 2 years Rs. Schemes covering natural calamities and post calamity assistance Since Mr.1.

Quarterly.000/ No limit Minimum / Maximum Sum Assured Rs. Money back policy: 28 years INSURANCE POLICY ICICI PRU CASH. Max 60 years Minimum / Maximum age at entry 15 yrs.4000 .a. Half Yearly. 6.1040 Rs.000 / No limit Min 18 years. Halfyearly. 50 yrs 16 / 55 years Max 75 years Minimum / Maximum age at maturity 70 years Max 31 / 70 years .Key benefits On survival upto the end of term.2040. ICICI Prudential will pay the outstanding amount to the bank directly.75.BAK KODAK MONEY BACK PLAN LIC MONEY BACK WITH PROFIT Minimum Premium Yearly –Rs. The family need not direct their savings towards paying off the outstanding loan. Monthly. In case of an unfortunate event of death. Quarterly-Rs. Rs 4000/..000 p. Your family will continue to retain the home purchased by your hard earned money.min per annum Yearly / Half yearly / Monthly Modes of Premium Payment Yearly / Half yearly / Monthly Yearly. no benefit will be payable.Rs. Salary Saving Scheme Rs 50. the financial security of your family is not affected.

Supplementary/Extra Benefits : These are the optional benefits that can be added to your basic plan for extra protection/option. the beneficiary will get the Sum Assured. An additional premium is required to be paid for these benefits. The insurance cover that you enjoy on the money back policy will automatically increase by 7% of sum assured at the end of each year so that your life cover can keep pace with the rate of inflation. irrespective of the survival benefits already paid. if any is payable over and above these benefits. additions. Survival Benefit Payouts (percentage of sum assured) 15 years 20 Year At the End Of the Year Survival Survival Payment Payment At the End as a % of as a % of Of the Year basic Sum basic Sum Assured Assured 10% 15% 20% 25% 4 8 12 16 10% 15% 20% 25% Death Benefit: The Sum Assured plus all bonuses to date is payable in a lump sum upon the death of the life assured during the policy term irrespective of the Survival benefit /benefits paid earlier. 15(Maturity) 20(Maturity) plus plus vested vested bonuses bonuses BENEFITS 20 year Plan Survival Benefit Guaranteed Addition 5 20% 20% 20% 40% 30% 10 15 20 25  Death benefit : On the death of the life assured. you are concerned about the falling value of money and therefore the eroding value of your life cover. o o o  Accident and Disability Benefit Rider Accident Benefit Rider Critical Illness Benefit Rider Can I take a loan against my policy? No loans are available under the policy. 20 & 25 years Fixed at 20 for plan 75 and 25 for plan 93 Policy Term 15 / 20 years Maturity Benefit  Survival Benefits : The survival benefits will be paid to you as shown in the table given below: Policy Term Policy Term This is a participating money back plan that has been designed to offer you cash at regular intervals of 5 years.Min 15. by paying a marginal extra cost.5% compounded annually for the first 4 years and the vested bonuses. the guaranteed additions @3. The riders offered are: * Bonus. Increasing Death Benefit We realize that with increasing inflation. . Survival Benefits: The percentage of Sum Assured as mentioned below will be paid on survival to the end of specified durations : % of Sum Assured paid at the end of specified duration Duration Plan 75 93 20% 15% 20% 15% 20% 15% 40% 15% 40% 3 6 9 12 5th yr 15 year Plan Survival Benefit Guaranteed Addition 10th yr 15th yr 20th yr 25th yr 25% - 25% - 50% 20% 50% 50% guaranteed guaranteed additions. The table illustrates the Survival Benefits as a percentage of the sum assured. The Kotak Money Back Plan has been designed to take care of this concern of yours.  Additional Rider Benefits : This is an additional benefit which can be availed along with the base plan. 25 Year Plan Survival Benefit Guaranteed Addition 15% - 15% - 15% - 15% - 40% 40% All bonuses declared upto the maturity date will also be paid alongwith the final survival benefit.

Endowment policy Reasons for suggestingTerm insurance policy          Sole earner of the family Since his age is 36 a disability/loss of life will have huge impact on his life 4 dependants including two small children and an ailing mother New family thus expenditures would be high and saving rate low Loan against house In a business. Whole life policy 3. Money back policy 5. Term Insurance policy 2. Pension schemes In the case of Mr. you are neither required to undergo any further medical tests nor does your premium commitment change. Keval Gupta. Age group 30-36 Some of the life insurance options available with us are: 1. ULIPS 6. Term insurance policy 2. we would suggest one of the following two plans 1. the returns of which are fairly stable This plan is a plain vanilla scheme and thus provides life cover at the most competitive cost WRT other plans Tax benefits Total cover would be huge and taken for the same amount as the home loan amount. Endowment policy 4.What makes this feature attractive is that while we increase your cover by 7% of sum assured each year. Endowment policy .

          Combining it with education policy for securing the future of children Providing cover for life Sole earner 4 dependents Ease off burden School going children Better tax planning Business is doing well Since children are young. In the event of his untimely death. he has a good 15-18 years to plan for their higher education expenditure. at least children’s future would be secured.30-31 years . Health policy .

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From the regular premium paid by you. the Company will maintain two accounts. buying term insurance is not only more affordable but also easier and quicker than ever before. if any. Life Insurance Risk Premium forthe Sum Assured chosen and Additional Rider Benefits premium. Plan category Term plan Plan nature About plan Traditional At the inception of the policy. an AccruedMaturity Value (AMV) account for regular premiums paid and anAdditional Accrued Maturity Value (AAMV) account for any additionalpremiums paid.For Your policy. Now.You can pay additional premium over and above the regular premiumany time (except during last three years before maturity) which shall be added to your AAMV account. you can choose a sum assured of 10 time15 times or 20 times of the annualized regular premium. after multiplying the Additional Premiumpaid by you with the Additional Premium Factor. So. is payable in case of death due to accident. it is important to ensure that your family is protected should something unfortunate happen to you. You can customise the plan according to your protection needs. 5000000. ICICI Prudential Life Insurance is proud to present ICICI Pru iProtect a term assurance plan that you can buy online at your convenience. life is full of uncertainties. However. Minimum entry age Maximum entry age Minimum policy term Maximum policy term 18yrs 20 yrs 60 years - 15 years - 25 years Not applicable .will be deducted upfront and 95% of the resulting Net Premium shall beadded to your AMV (as and when the regular premium is received by theCompany).Term assurance plan – 32 years (large cover) Parameters Company Bajaj Allianz Invest Plus Premier Bajaj Allianz I product ICICI Prudential Term plan Traditional You have always fulfilled your responsibilities and given your family the comforts they wanted. You can now secure your family's future at the click of a button. by choosing from the following two options:OptionI: Where the Death Benefit is equal to the Sum AssuredOptionII: Where an Additional Death Benfit equal to the base Sum Assured or Rs. whichever is lower.

only if all due regular premiums have been paid and the policy is in force. if any. The following Death Benefit shall be payable to the Nominee on the death of the Life Assured (provided policy is in-force or in the Cover Continuance Period) :i.Minimum premium Key benefits Rs. if any. Plus the AAMV. the maturity benefit shall be AMV as on maturity date Plus 75% of the total life insurance risk premium paid till the due date of first unpaid regular premium (excluding any extra premium) Plus the AAMV.The Guaranteed Maturity Value (GMV) shall be equal to the total regular premium paid till maturity date excluding any extra premium. Your policy shall acquire surrender value only after payment of three years regular premium in full and you may surrender the policy only after three policy years. if any. and subject to application of Market Value Adjustment (MVA).In case of a lapsed policy. as on the date of receipt of intimation of death. The above benefits will be payable. as on maturity date. if any. the death benefit shall be equal to the AAMV. as on date of receipt of intimation of death at the office of the Companyii. rider premium & applicable service tax. an amount equal to Sum Assured under the Policy Plus the AMV Plus the AAMV. 2000(excluding service tax and education cess) In the unfortunate event of death of the Life Assured during the term of the policy the nominee shall receive the following benefits: An amount equal to the Sum Assured will be paid out in the unfortunate event of death of the Life Assured only if due to an accident. A lump sum payment .Rs 1. 5.Rs 500 per monthely installment(Monthely mode is available through ESC and salary saving only) The following maturity benefit shall be payable.000 per yearly installment. Rs. ENDOWMENT PLAN (age of 35-36 years) Parameters Company Plan nature About plan CDA Endowment Vesting At 18 LIC Traditional This is an Endowment Assurance plan designed to enable a parent or a legal guardian or any near HDFC SL Endowment Gain Insurance Plan HDFC Traditional Financial protection to your loved ones by way of lump payment in case of your unfortunate demise within the policy term.Rs 2.· The AMV as on maturity date Plus 75% of the total life insurance risk premium paid (excluding any extra premium). an amount equal to the total life insurance risk premiums paid till date Plus the AMV Plus the AAMV. subject to a minimum of the Guaranteed Maturity Value (GMV)· Plus the AAMV. if any. as on date of receipt of intimation of death at the office of the Company. If the age of the life assured is 7 years or above at death. as on maturity date. lessapplicable Surrender Penalty.In the case of a Cover Continuance policy. if any.500 per halfyearly installment..250 per quarterly installment. if any. and is applicable only if all the due regular premiums till maturity have been paid under the policy. The Surrender Value shall be equal to the AMV less applicable Premium Discontinuance Penalty. If the age of the life assured is less than 7 years at death.

2673 - Sum assured along with all bonuses declared up to maturity date is payable in lump sum. On maturity. Choice of Additional Optional Benefit & paymentoptions Minimum entry age Minimum policy term Minimum sum assured Minimum premium Key benefits 18 yrs 25 years 10 years Rs. On unfortunate death of life assured during the polic y term. There are two types of insurance plans available for children’s insurance. one covering the period from the date of commencement of policy to the Deferred Date (called deferment period) and the other covering the period from the Deferred Date to the date of maturity. Supplementary/Extra Benefits: These are the optional benefits that can be added to your basic plan for extra protection.. 10yrs (basic Sum Assured plus any bonus additions) onsurvival up to the Maturity Date.. Investment linked plans . which are: 1. 1.relative of the child (called proposer) to provide insurance cover on the life of the child (called life assured). you will receive survival benfit of Sum Assured along withattaching bonuses. The plan has two stages. An additional premium is required to be paid for these benefits. he has two school going children and thus it is essential for him to plan about their future as well.00. The Sum Assured along with vested bonuses is payable in a lump sum upon the death of the life assured after the deferrement period. we would pay the Sum Assured plus attaching bonuses to the nominee. surrender values are available on the plan on earlier termination of the contract. Plans for Mr. Keval Gupta’s children As mentioned in the case.000 Not applicable Rs. The insurance cover on the child's life starts from the Deferred Date and is available during the latter period..

since his mother is ailing. Optional covers available  years home insurance policy structure and the household contents Cost Optional Cover for Burglary including Theft and Lar ceny Avail upto 15% premium discount for Security Features Terrorism and additional expenses of rent for alternative accommodation. insurance policy can be claimed for paying off the loan. But this may be difficult as his mother is aged and suffering from heart disease and all these factors may also have an impact on the premium that may be charged. ICICI Lombard Key highlights HDFC Ergo for both your home Avail 15% discount on a  Protection 3 and 25% discount on 5 years Low  policy. Home Insurance suggested Home Insurance may be taken as a necessary requirement for the home loan taken. Keval Gupta. it is suggested that he avails a full family health cover for his children and also.2. Coverage available Fire and Special  The policy covers:Fire and Special I) Perils:and Perils(Structure and/or Contents) Building(Section . if he can. we believe that he should go in for investment linked plans for the following reasons:     No visible shortage of funds for meeting education and other expenses of the children Investment planning will be done simultaneously and the benefits would be reaped much later Wealth creation can only take place through investments Investment can later be forgone for immediate and uncertain cash requirements Health Plans suggested As mentioned in the case. It should be commensurate with the amount of home loan taken. This is known as creditor’s indemnity policy that in the case of untimely death of borrower or accident. Lump sum pay plans For Mr. avail a special hospitalization expenditure-related insurance cover for his mother.

Cyclone. Tempest. covered are :       The calamities Fire Lightning Aircraft Damage Impact Damage Explosion/Implosion Storm.Contents(Section Covers losses to the structure of the house and the contents due to any natural and man-made o IA) Covers the structure of your home and contents against Fire. Hurricane. pipes  apparatus and Missile operations testing The sum insured for the structure of the house is based on Quite be the  Leakage from automatic sprinkler installations the Reinstatement Value. strike . apparatus. o Riot Strike. o o Flood and Inundation  Riot. Tempest. Typhoon. Flood and Cyclone. The reconstruction value for the . Malicious and Terrorist Damages o Bursting and overflowing of water tanks.malicious and Terrorism damage o Impact damage by rail/road vehicle and animal Subsidence and Landslide including Rockslide Missile testing operations Leakage from automatic sprinklers installations Bush fire  Subsidence Landslide Rockslide and including o o  Bursting and/or o overflowing of water tanks. Damage Lightning. Typhoon. simply. Flood and so on. Hurricane. Burglary theft(Contents) Riots. pipes o Storm. it would   Bush fire Earthquake and reconstruction cost of the house in the event of any loss/damage due to any of the insured events like Fire. Inundation Earthquake. Volcanic Eruption & other Convulsions of Nature Tornado. Aircraft calamities. Tornado. Storm. Explosion/Implosion.

The reconstruction cost is based on two parameters which are mentioned below:Built Up Area of the House (Square Feet) attempted burglary. theft or an is determined by the construction cost. gold ornaments. Furniture & Furnishings. however. . This.structure Covers the loss of contents due to burglary. and loss of jewellery. silver articles and precious stones kept under lock and keys o o Cost of Construction in your area / locality  Burglary including and Housebreaking and Theft Larceny (Section II) . The Sum Insured for Contents / Valuables is based on the market value. Jewellery. would not include the cost of Land. Jewellery kept in Locked Safe within the Home premises can also be covered. You could cover a host of household items like Electronic Equipments.Contents (as defined by Indian Penal Code) You can also insure the contents of your home against loss due to burglary and /or housebreaking or any attempted burglary. Sum Insured for Contents under Section I A Fire & Special Perils and Section II Burglary & Theft should be the same.

http://www.allbankingsolutions.hdfclife.co.com/home-insurance/silver-plan.sbilife.com/life-insurance/moneyback-insurance-india.aspx 16.html .com/individual/protect/saral-suraksha-one. http://www.aspx 12.com/public/Life-plans/iCare.com/public/Life-plans/Tax-Benefits-BI.Clothes and so on.avivaindia.kotak.kotak.co. http://www.html 7.iffcotokio.policybazaar.htm 5. Mayank Aggarwal.ehow. Premium Not available 3539 assuming same as home loan amount References 1.com/insuresub2.wikipedia.com/HomeInsurance.com/insurance-guide/type-of-insurance.php#3 15.aspx 14.iciciprulife.html 4. http://insurance. ICICI Prudential Life Insurance Company Limited. http://www.cms 18. http://www. Mob : 9871603690 2.html 13.com/public/Tools/Tools. Insurance Advisor. http://www.mylifeinsuranceplace.com/ToolsAndCalculators/CompareProducts.in/sbilife/content/9_4186 8. http://www.htm 9. http://www.icicilombard. http://www. http://www.com/insurance-purposes. http://insurance.php (Visited on 9 October 2011) 3. http://www. http://en.iciciprulife.com/Products/SavingsPlans/SavingsPlans.com/list_6402528_types-insurance-india.htm 10.htm 11.hdfcergo. https://www. http://www.html 17.apnapaisa. Mr.com/insurance/money-back-policy-india/index.org/wiki/Insurance 6. http://www.iciciprulife.in/ind_medisheild.

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