LIFE INSURANCE

PRODUCT
WHAT IS LIFE INSURANCE ? AN
INTRODUCTION
• WHEN YOU BUY LIFE INSURANCE YOU ENTER A CONTRACT WITH AN
INSURANCE COMPANY THAT PROMISES TO PROVIDE YOUR
BENEFICIARIES WITH A CERTAIN AMOUNT OF MONEY UPON YOUR
DEATH. IN RETURN YOU MAKE PERIODIC PAYMENTS CALLED
PREMIUMS. THE PREMIUM AMOUNT IS BASED ON FACTOR SUCH AS
YOUR AGE, GENDER, MEDICAL HISTORY, AND THE DOLLAR AMOUNT
OF LIFE INSURANCE YOU PURCHASE. THE BENEFICIIARIES CAN USE
MONEY FOR:-
1. MAKING UP FOR YOUR LOST INCOME
2. FUNDING A CHILDS EDUCATION
3. PAYING OFF HOUSEHOLD DEBT
4. PAYING YOUR FUNERAL AND OTHER RELATED EXPENSES
THERE ARE TWO MAIN CATEGORIES OF
LIFE INSURANCE
TERM LIFE INSURANCE:- IT OFFERS PROTECTION FOR YOUR
LOVED ONES FOR A SPECIFIED TIME PERIOD USUALLY FROM ONE
TO 20 YEARS. IF YOU STOP PAYING PREMIUMS THE INSURANCE
STOPS. TERM POLICIES PAY BENEFITS IF YOU DIE DURING THE
PERIOD COVERED BY THE POLICY BUT THEY DO NOT BUILD CASH
VALUE.
PERMANENT LIFE INSURANCE:- THIS POLICIY DO NOT EXPIRE
THEY ARE INTED=NDED TO PROTECT YOUR LOVED ONES
PERMANENTLY IF YOU PAY YOUR PREMIUMS. SOME OF THESE
POLICIES ACCUMULATE CASH VALUE.
PRODUCTS OF LIFE
INSURANCE POLICY
• WHOLE LIFE INSURANCE = UNDER THIS POLICY THE WHOLE LIFE OF A
PERSON IS INSURED. THE INSURED CANNOT RECEIVE MONEY FROM
INSURANCE COMPANY TILL HE IS ALIVE. THE RATE OF PREMIUM IS
NORMALLY LOW. THE MONEY BECOMES PAYABLE ON THE DEATH OF INSURED
TO THE NOMINEE OR THE LEGAL HEIR OF THE DECEASED POLICY HOLDER.
• ENDOWMENT INSURANCE POLICY = INSURANCE IS TAKEN FOR A SPECIFIC
PERIOD UNDER THIS POLICY. THE SUM ASSURED ALONG WITH BONUS IS
GIVEN ON THE DEATH OF THE INSURED TO DEPENDENTS OR ON THE EXPIRY
OF THE SPEDCIFIC PERIOD TO THE INSURED.
• TERM LIFE INSURANCE = TERM LIFE INSURANCE IS TAKEN FOR A SPECIFIC
PERIOD. TERM LIFE INSURANCE HAVE THE LOWEST PREMIUM AMONG ALL
THE INSURANCE POLICIES. PREMIUM IS FIXED AND DO NOT CHANGE DURING
THE
TERM OF THE POLICY. IN CASE OF UNTIMELY DEATH THE
DEPENDENTS WILL RECEIVE THE BENEFIT AMOUNT
SPECIFIED IN THE TERM LIFE INSURANCE AGREEMENT.
• ANNUITY POLICY = THE INSURED HAS TO PAY THE
PREMIUM IN LUMP SUM OR IN INSTALLMENTS OVER A
CERTAIN PERIOD OF TIME. THE INSURED WILL
RECEIVE BACK A SPECIFIC SUM PERIODICALLY FROM
SPECIFIED DATE ONWARDS EITHER FOR LIFE OR FOR A
FIXED NUMBER OF YEARS. IT IS LIKE PENSION
PAYMENT SCHEME.
TRADITIONAL LIFE
INSURANCE PRODUCTS
TRADITIONAL PLANS OR CONVENTIONAL PLANS ARE THE OLDEST TYPES OF
INSURANCE PLANS AVAILABLE. TERM INSURANCE PLANS , PENSION PLAN, CHILD
PLAN AND MONEY BACK POLICY ETC. ARE CONSIDERED AS CONVENTIONAL
PLANS. TRADITIONAL PLANS ARE CONSIDERED AS RISH FREE , AS THEY PROVIDE
FIXED RETURN IN CASE OF DEATH OR POLICY MATURITY.

TYPES OF TRADITIONAL LIFE INSURANCE PLANS:-

• MONEY BACK LIFE INSURANCE POLICY= MONEY BACK
INSURANCE PLAN PROVIDE LIFE COVERAGE DURING THE TERM OF THE
POLICY AND THE MATURITY BENEFITS PAID IN INSTALLMENTS BY WAY OF
THE SURVIVAL BENEFITS. A PERCENTAGE OF THE SUM ASSURED IS PAID BACK
TO THE INSURED ON PERIODIC INTERVALS AS A SURVIVAL BENEFITS. THESE
ARE ELIGIBLE TO R=RECEIVE THE BONUSES DECLARED FROM TIME TO
TIME.
• CHILD INSURANCE POLICY= CHILD INSURANCE POLICY
IS AN INVESTMENT CUM INSURANCE PLAN WHICH OFFERS
FINANCIAL SAFETY TO YOUR CHILDS DREAMS AND GOALS. YOU
CAN ALSO USE THIS PLAN TO INVEST IN THE BIG LIFE GOALS OF
YOUR CHILD LIKE HIGHER EDUCATION AND MARRIAGE. CHILD
INSURANCE PLANS ARE A MIX OF INSURANCE AND INVESTMENT
PROCUTS WHICH INSURES THE FINANCIAL SECURITY OF YOUR
CHILDS FUTURE.
HOW DOES A CHILD INSURANCE PLAN WORK?
• FUTURE FINANCIAL NEED FOR THE HIGHER EDUCATION GOAL
OF YOUR CHILD.
• NEED FOR THE FINANCIAL PROTECTION OF THIS GOAL FROM YOUR
UNTIMELY DEATH.
BENEFITS OF CHILD INSURANCE PLAN
• GUARANTEE OF SUPPORT TO CHILDS GOAL= CHILD PLAN WILL HELP
YOU PROVIDE FOR YOUR CHILDS IMPORTANT LIFE GOALS
REGARDLESS OF YOUR PRESENCE IN HIS OR HER LIFE. WITH LIFE
COVER AND GOAL PROTECTION OPTIONS, CHILD PLAN ALONE IS
ENOUGH TO PROTECT YOUR CHILDS FUTURE WHETHER THROUGH
INVESTMENT OR LIFE COVER.
• BOOST TO THE GROWTH OF THE INVESTMENT= CHILD EDUCATION
PLANS LIKE INVEST 4G FROM CANARA HSBC LIFE INSURANCE, OFFER
LOYALTY ADDITIONS AND OTHER BONUSES FOR LONG TERM
• TAX BENEFITS= YOU CAN REDUCE YOUR TAXABLE
INCOME BY UP TO RS. 1.5 LAKHS EVERY YEAR IF YOU
INVEST IN CHILD PLANS. THE MATURITY AND PARTIAL
WITHDRAWALS FROM THE PLANS ARE ALSO EXEMPTED
FROM TAX.
• PENSION PLAN= IT IS AN INVESTMENT PLAN OFFERED
BY LIFE INSURANCE COMPANIES TO HELP CREATE
RETIREMENT FUNDS. THE PLAN PROVIDE A PRE SPECIFIED
AND REGULAR PENSION, PREVENTING FINANCIAL
SHORTFALLS IN POST EMPLOYMENT YEARS.
 ULIP= UNIT LINKED
INSURANCE PLAN
• ULIP full form is Unit Linked Insurance Plans. ULIP plan is a life insurance
product that offers insurance coverage to the insured along with the benefit
of investment returns. In ULIP plan a part of the premium is used to provide
insurance coverage to the insured’s family, whereas the other half of the
premium amount is invested in market-linked securities as chosen by the
insured like equity, debt and money market funds to gain profitable returns on
investment in a long-term.
TYPES OF ULIPS:-
• ULIP for Retirement
In this plan, the insured need to make the payment while being in service which is gradually
collected in a corpus amount. The amount collected is later paid to the insured in the form of
annuities after retirement.
• ULIP for Children Education
As a parent, one wants to secure the future of their child financially, so that
they can achieve the major milestones of life. Many ULIP plans offer money
in instalment at a particular interval of time. Child insurance ULIP plans to
ensure that all financial requirements of the child are taken care of even in
the absence of the parents.
• ULIPs for Wealth Collection
• This plan is specifically designed with an objective to create wealth over a
long period of time. ULIP for wealth collection is recommended for
individuals who are young and by investing in this plan the insurance
buyers get the flexibility to fund their future financial goals.
RECENT TRENDS IN TRADITIONAL LIFE
INSURANCE PLAN
• OPENING OF AN INSURANCE SECTOR
INSURANCE SECTOR HAS BEEN OPENED UP FOR COMPETITON FROM
INDIAN PRIVATE INSURANCE COMPANIES WITH THE ENACMENT OF
INSURANCE REGULATORY AUTHORITY ACT 1999. ITS ROLE IS TO PROTECT
THE INTEREST OF HOLDERS OF INSURANCE POLICY AND TO REGULATE .
PROMOTE AND ENSURE GROWTH OF THE INSURANCE INDUSTRY.
• FDI IN INSURANCE
THE FOREIGN COMPANIES ARE ALLOWED TO ENTER THE INSURANCE
INDUSTRY WITH SOME LIMIT ON DIRECT FOREIGN OWNERSHIP. FOREIGN
INVESTMENT WAS ALLOWED ONLY UPTO 26% HOLDINGS IN THE INDIAN
INSURANCE COMPANIES.
• GROWTH OF LIFE INSURANCE
THE POST LIBERALIZATION PERIOD HAS WITNESSED
TREMENDOUS GROWTH IN THE INSURANCE INDUSTRY, MORE
PARTICULARLY IN THE LIFE SEGMENT. THE FIRST YEAR PREMIUM
WHICH IS MEASURE OF NEW BUSINESS SECURED , UNDERWRITTEN
BY THE LIFE INSURER HAS MADE SUBSTANTIAL PROGRESS.
• CUSTOMER GRIEVANCE REDRESSAL CELL
THE CUSTOMER GRIEVANCE REDRESSAL CELL OF THE
IDRA LOOKS INTO COMPLAINTS FROM POLICY HOLDERS.
TYPES OF LIFE INSURANCE PRODUCTS

• UNIVERSAL LIFE INSURANCE

Universal life (UL) insurance is a type of permanent life insurance that, like other
permanent insurance, has a cash value element and offers lifetime coverage as long
as you pay your premiums. Unlike whole life insurance, universal life allows you to
raise or lower your premiums within certain limits, and it can be cheaper than whole
life coverage.
• HEALTH INSURANCE
A health insurance policy extends coverage against medical expenses incurred owing
to accidents, illness or injury. An individual can avail such a policy against monthly
or annual premium payments, for a specified tenure.
• PERMANENT LIFE INSURANCE POLICY
Permanent life insurance policies essentially last your entire life.
They typically build cash value, which you can withdraw or borrow
against while you’re alive.
• ACCIDENTAL DEATH INSURANCE POLICY
An accidental insurance policy is designed keeping to offer some
relief to the injured person or a dependent. Personal Accident Cover
offers compensation in the event of demise, bodily injuries,
impairment or mutilation resulting from an accident.