LIFE INSURANCE

LIFE INSURANCE
The subject matter of insurance is life of human beings. Life Insurance is a contract which provides risk coverage to the insurer. The purchaser of life insurance pays a fixed premium in exchange of a promise of compensation in the event of some specified loss. Thus life insurance is a contract for payment of money to the person assured(or to the person entitled to receive the same) on the occurrence of the event insured against.

Subject to certain conditions. b)Periodical payments of insurance premium by the insured. . to the corporation which provides the insurance. if it occurs earlier.LIFE INSURANCE Usually the contract provides for: a)The payment of an amount on the date of maturity or at specified period intervals or at death. Any person above 18 years of age is eligible to enter into a valid contract. a policy can be taken on the life of a spouse or children.

LIFE INSURANCE POLICIES 1. . the sum assured is paid back to the policy holder. along with the bonus accumulated during the term of the policy.ENDOWMENT POLICY  An endowment policy covers risk for a period specified by the insurer.  At the end of the specified period.

Whole life policy  A typical whole life policy remains as long as the policyholder is alive.  Hence it is known as a whole life policy. The risk is covered for the entire life of the policyholder.LIFE INSURANCE POLICIES 2. .

LIFE INSURANCE POLICIES 3. but would be able to pay for a policy in the near future. A term plan meets the needs of people who are initially unable to pay a larger premium required for a whole life or an endowment assurance policy.  The risk is covered only for that period. . Term life policy  It is a policy for a chosen period.

at fixed intervals before the maturity date. .MONEY BACK POLICY  This basically an endowment policy for which a part of the sum assured is paid to policyholder in the form of survival benefits.  The risk cover on life continues for the full sum assured even after the payment of survival benefits and bonus is calculated on the full sum assured.LIFE INSURANCE POLICIES 4.

. joint life policies are categorized separately as they cover two lives simultaneously.JOINT LIFE POLICY  These are similar to endowment policies. apart from covering the risks just like all the other life insurance policies.  They offer a unique advantage for a married couple or for the partners in a business firm.LIFE INSURANCE POLICIES 5.  However. They too offer maturity benefits to the policyholder.

 Children·s insurance policies include those through which parents or legal guardians provide for life insurance for their child from birth.  The risk cover commences when the child attains the age of 12. 17. .18 or 21.LIFE INSURANCE POLICIES 6.CHILDREN·S INSURANCE POLICY. as per the policy document.

 It also provides insurance coverage at lowest possible premium cost for people in certain approved occupations.GROUP POLICY  Life insurance protection under the group policies is provided to various groups such as employersemployee.LIFE INSURANCE POLICIES 7. . professionals. weaker sections of the society etc. cooperatives.

. simple or compound reversionary bonus. b) Whether it is participating in the profits or not. a) Name of the plan governing the policy. d) Benefits payable.According to Insurance Regulatory and Development Authority (IRDA) Act. its terms and conditions. the contingencies upon which these are payable and the other terms and conditions of the insurance contract.MATTERS TO BE STATED IN A LIFE INSURANCE POLICY 1. deferred bonus. the following have to be stated in a life insurance policy. c) Basis of [participation in profits such as cash bonus.

periodicity of payment. the implication of discontinuing the payment of an installment(s) of premium and also the provisions of a guaranteed surrender value. the date the last installment of premium.MATTERS TO BE STATED IN A LIFE INSURANCE POLICY (e) the details of the riders attaching to the main policy. (g) the premiums payable. grace period allowed for payment of the premium. (f) the date of commencement of risk and the date of maturity or date(s) on which the benefits are payable. .

both in respect of the main policy and the riders. and (m)the address of the insurer to which all communications in respect of the policy shall be sent. (k)the provisions for nomination. (l)any special clauses or conditions..MATTERS TO BE STATED IN A LIFE INSURANCE POLICY (j) contingencies excluded from the scope of the cover. assignment. (n)the documents that are normally required to be submitted by a claimant in support of a claim under the policy. suicide clause etc. and loans on security of the policy and a statement that the rate of interest payable on such loan amount shall be as prescribed by the insurer at the time of taking the loan. such as. . first pregnancy clause.

that he has a period of fifteen days from the date of receipt of the policy document to review the terms and conditions of the policy. . He shall then be entitled to a refund of the premium paid.MATTERS TO BE STATED IN A LIFE INSURANCE POLICY 2. This is subject to a deduction of a proportionate risk premium for the period on cover and the expenses incurred by the insurer on medical examination of the proposer and stamp duty charges.While acting under Regulation 6(1) in forwarding the policy to the insured. the insurer shall inform by a letter forwarding the policy.

the insurer shall ensure that the age is admitted as far as possible before the insurance of the policy document. where the premium is charged is dependent on age. In case where age has not been admitted by the time the policy is issued . the insurer shall also be entitled to repurchase the unit at the price of the units on the date on cancellation 4.MATTERS TO BE STATED IN A LIFE INSURANCE POLICY 3. in addition to the deductions under sub-registration(2) of this Regulation. In respect of a cover. In respect of a unit linked policy.

upon receiving a claim. A life insurance company. shall process the claim without delay.CLAIMS PROCEDURE OF A LIFE INSURANCE POLICY   A life insurance policy shall -state the primary documents which are normally required to be submitted by a claimant in support of a claim. within a period of 15 days of the receipt of the claim. . to the extent possible. shall be raised all at once and not in a piece-meal manner. Any queries or requirement of additional documents.

it shall initiate and complete such investigation at the earliest. Where in the opinion of the insurance company the circumstances of a claim warrant an investigation. where the circumstances of a claim warrant an investigation in the opinion of the insurance company. However. within 30 days from the date of receipt of all relevant papers and clarifications required. . in any case not later than 6 months from the time of lodging the claim.CLAIMS PROCEDURE OF A LIFE INSURANCE POLICY  A claim under a life policy shall be paid or be disputed giving all the relevant reasons. it shall initiate and complete such investigation at the earliest.

the life insurer shall hold the amount for the benefit of the payee and such an amount shall earn interest at the rate applicable to a savings bank account with a scheduled bank (effective from 30 days following the submission of all papers and information). . Where a claim is ready for payment but the payment cannot be made due to any reasons of a proper identification of the payee.CLAIMS PROCEDURE OF A LIFE INSURANCE POLICY  Subject to the provisions of section 47 of the Act.

CLAIMS PROCEDURE OF A LIFE INSURANCE POLICY  Where there is a delay on the part of the insurer in processing a claim for a reason. . the life insurance company shall pay interest on the claim amount at a rate which is 2% above the bank rate prevalent at the beginning of the financial year in which the claim is reviewed by it.

with capital contribution from the Government of India. An act of Parliament.. viz. Life Insurance Corporation Act formed the Life Insurance Corporation of India in September 1956.LIFE INSURANCE PROVIDERS    Life insurance was the monopoly of the Life Insurance Corporation (LIC) for a long period time. Since nationalisation LIC has built up a vast network of 2048 branches. 100 divisions and 7 zonal offices spread over the country .

Bahrain.LIFE INSURANCE PROVIDERS   Life insurance corporation of India also transacts business abroad and has offices in Fiji. namely Ken-India Assurance and Life Insurance Corporation(International) E. LIC is associated with joint ventures abroad in the field of insurance .C. Mauritius and United kingdom. .

2008)    Apart from Life Insurance Corporation. the public sector life insurer. Life Insurer in Public Sector Life Insurance Corporation of India . most of them joint ventures between Indian groups and global insurance giants. there are 22 other private sector life insurers.LIFE INSURERS (AS OF SEPT.

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