Term Insurance

• Furnishes protection for a limited no. of years • Terminates with no maturity value • Payable only if death occurred in specified period • Comparable to General Insurance policies • Initial premium rates are lower than other life products • Premium may escalate rapidly, as the duration of policy lengthens

• Comparable on the basis of price unlike other life products • Price sensitive • Lapse rates are generally higher than lapse rates of other policies • Adverse selection problem • Renewability
• • • • Call option For additional limited no of years Stipulated max age Known as - Increasing premium and level benefit term insurance

• Convertibility
• • • • • • Call option For a cash value insurance Without evidence of insurability Rates for conversion Conversion credit Specified time limit

• Reentry
• Paying a lower premium than otherwise • Continuing insurability criteria

• Level Face Amount
• Increasing premium • Level premium

• Non-Level Face Amount
(Face amount decreases/ Increases)

• Persons with low incomes and high insurance needs • Early career development years • In case of new businesses • In case of closely held businesses • In case of loans

• BTID (Buy term and invest the difference)

Endowment Insurance

• Widely sold in countries like Germany, Japan, Korea, Taiwan and Thailand • Promises to pay the policy face amount on the death of the insured, during a fixed term of years after adjusting due premiums • Also promises, to pay the full face amount, if insured survives the term • Two mutually exclusive promises • Endowment Insurance = Term Life Insurance + Pure Endowment • Pure Endowment : Promises to pay the maturity amount only if the insured is living at the end of the specified period, with nothing paid in case of prior death

• Semi Endowment Policy
• Pays one half the sum payable on death

• Modified Endowment Policy
• Periodical benefits as a percentage of insured amount over the policy term and rest as maturity

• Juvenile Endowment Insurance
• Maturity benefits at different ages, as per specified objectives

Uses & Limitations

• Dual Benefits for Policyholders • Sales have declined in comparison to whole life and term policies in most markets • Can be effective, if loadings have been affordable with those of other savings

Whole Life Policy

• Essence – Payment of face amount upon the insured’s death, regardless of when death occurs
• SA typically remains at the same level throughout the policy duration

• Dividends are often used to increase the total amount payable on death
• Premium also remains at the same level throughout the premium payment period • Mostly priced on the basis of mortality table with expected age 100 • LIC has taken terminal age of 80 years

• Pays policy face amount; either at the time of death, or at the terminal age, which ever is earlier

• Involve some prefunding of future mortality cost as a function of premium payment period

• Cash values are available by surrendering the policy • Mostly participating policies in nature

• Provides an option of Insurance cover to Senior Citizens also

• Whole Life Unit linked and Traditional Plans, both are available

• Ordinary whole life policy
• Known as straight line whole life & Continued premium whole life • Premiums payable for whole life

• Limited payment whole life policy
• Premiums payable for a limited no of years • Afterwards policy becomes paid-up for it’s full face amount (Paid-up : is one for which no further premium payments are due contractually, but the policy remains in effect)

Cash Surrender Value
300 30 40 50 60 70 80 400 500 600

Attained Age


• Traditional and Unit linked insurance plans

• Benefits are structured to reach your child at a particular age to meet the significant events of his life

• Premium waiver benefit against death/ disability/ critical illness


• Provision of regular income for take care of Minor child

• 7 Years and plus 2 years ruling

• In case of death of the life assured
– Receive premiums paid (less waiver of premium) – Option to insure another child

• Flexible premium options – term and frequency

• Maturity addition
• Charges include premium allocation, fund management, policy administration, mortality and surrender charges • Tax benefit on paid premium and maturity benefits • Designing of benefits- according to requirements • Min/ Max entry age of parent and child

Pension Plans

• Provides for a lump sum payments at the stipulated retirement age

• Guaranteed returns or as guarantee of capital on pension products (Must disclose at the time of Sales)

• Policyholder can withdraw one-third of the accumulated amount at the time of vesting age (Age to start pension)

• Balance amount can be used for receiving pension

• An effective way of contributing to ones own retirement benefits

• Life Insurance cover can be optional in Pension Plans (Can’t be mandatory for Policyholder)

• Helps in achieving financial independence for ones “Golden Years”

• Unit liked pension plans also available

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