SHRI RAM LIFE INSURANCE

SMALL REPORT

Summited by: Summited to:

Ashish Verma Mehreen khan
INTRODUCTION
Shriram Group is an Indian conglomerate headquartered in Chennai. It was founded
on 5 April 1974 by R. Thyagarajan AVS Raja and T. Jayaraman. The group had its beginning
in chit funds business and later on entered the lending business through Shriram Transport
Finance (commercial vehicle finance), Shriram City Union Finance (consumer and MSME
finance) and Shriram General Insurance (general insurance).

 Shriram Transport Finance Company is the largest commercial vehicle financier in

India. It disburses loans for new and used commercial vehicles, passenger vehicles,
tractors and construction equipment.
 Shriram City Union Finance is engaged in small and medium enterprise lending and
retail financing including two-wheeler loans.
 Shriram Housing Finance is a subsidiary of Shriram City Union Finance and mainly
provides home loan services.
 Shriram Capital is the holding company of Shriram Group, which has stakes in a
number of group companies.
 Shriram Life Insurance is the life insurance arm of the group, and a joint venture
between Shriram Capital and South African company Sanlam
 Shriram General Insurance is engaged in commercial and retail vehicle insurance,
home insurance and travel insurance. It is a joint venture between Shriram Capital
and Sanlam.
 Shriram Properties is a real estate developer focusing on mid-income housing
projects, primarily in South India.
 Shriram Fortune is the financial services distribution arm of the group.
 Shriram AMC is an asset management company focused on mutual funds.
 Shriram Insight is a retail stockbroker.[14]
 Shriram Wealth provides wealth management advisory services.
 Shriram Automall is a vehicle auction platform started as a subsidiary of Shriram
Transport Finance. In 2018, CarTrade acquired a majority stake in Shriram Automall.

WORK WITH SANLAM GROUP

Sanlam is a South African financial services group headquartered in Bellville, Western
Cape, South Africa. Sanlam is the largest insurance company in Africa. It is listed on
the Johannesburg Stock Exchange, the Namibian Stock Exchange and the A2X. Established in
1918 as a life insurance company,] Sanlam Group has developed into a diversified financial
services business. Its five business clusters comprise Sanlam Personal Finance, Sanlam
Emerging Markets, Sanlam Investments, Sanlam Corporate and Santam.
The group's areas of expertise include insurance (life and general), financial planning, retirement
annuities, trusts, wills, short-term insurance, asset management, risk management and capital
market activities, investment and wealth. The group operates in South
Africa, Namibia, Botswana, Swaziland, Zimbabwe, Mauritius, Malawi, Zambia, Tanzania, Rwand
a, Uganda, Kenya, Ghana, Nigeria, Mozambique, India, Malaysia and the UK, and has business
interests in the US, Australia, Burundi, Lesotho and the Philippines. It has a stake in micro-
insurance specialists, UK-based Micro-Ensure Holdings Limited, which has a footprint across
Africa] and India servicing more than 10 million enrolled clients.
Its 2018 acquisition of SAHAM Finances has made it Africa’s biggest non-banking financial
services player and has given it exposure
to Morocco, Angola, Algeria, Tunisia, Niger, Mali, Senegal, Guinea, Burkina Faso, Cote
D’Ivoire, Togo, Benin, Cameroon, Gabon, Republic of the
Congo, Madagascar, Lebanon and Saudi Arabia.

HISTORY
The Suid-Afrikaanse Nasionale Trusten Assuransie Maatskappij Beperk (South African National
Trust and Assurance Company Limited), Santam, was registered on 28 March 1918. It was then
decided to convert the life assurance department into a separate company, and the Suid-
Afrikaanse Nasionale Lewens Assuransie Maatskappij Beperk (South African National Life
Assurance Company Limited), Sanlam, was registered on 8 June 1918. Sanlam, the subsidiary,
later became the spearhead of the operation, while Santam remained focused on short-term
insurance.
Sanlam showed a small profit at the end of its first year, declared a bonus, and continued to grow
consistently from there.
Santam remained the controlling shareholder until 1954 when Sanlam became an independent
mutual life assurance company, as well as the largest single shareholder in Santam.
Over the years, Sanlam's focus gradually shifted from traditional life insurance to providing a
broader range of financial products and services. In 1998 Sanlam demutualised, listing on
the Johannesburg Stock Exchange (JSE) Ltd and the Namibian Stock Exchange. This changed
Sanlam from a mutual entity into a public company with a share capital, namely Sanlam Life
Insurance Ltd. At the same time a separate company, Sanlam Ltd, was installed as the parent
company of the Sanlam group of businesses. The group was also restructured into several
independent businesses within a federal business structure.
Today, Sanlam is a diversified financial services provider with an extensive product offering
catering for all market segments. The group has consistently grown its local as well as an
international footprint – it now has a presence in 33 African countries also India, Malaysia, the
UK and Ireland, the USA, Australia and the Philippines.
In 2018, Sanlam concluded its $1.1 billion acquisition of SAHAM Finances. Additionally, the
group announced details of its R11 billion BEE deal, which will see it increasing its direct black
shareholding to 18% and black economic ownership to 35%.
In December 2021, The Sanlam Group entered into discussions with Allianz for the acquisition of
the entire group in Africa except South Africa. Discussions are conducted between the group's
headquarters in Cape Town and Munich.

ECONOMIC ENPOWERMENT
Sanlam has since 1993 contributed to broad-based black economic empowerment (B-
BBEE) through the group’s partnership with Ubuntu-Botho Investments.
The Ubuntu-Botho B-BBEE partnership resulted in a broad-based black empowerment
consortium buying a 10% shareholding in Sanlam in what was to become one of the most far-
reaching black empowerment transactions in South Africa to date.
In December 2013, the initial 10-year contractual period of the transaction with Ubuntu-
Botho ended, with a final total of 66.5 million deferred shares qualifying for conversion to ordinary
shares. The deal created value of about R15 billion, making it arguably one of the most
successful transactions of its kind in South African history. In 2014, an agreement was reached
to extend the partnership with Ubuntu-Botho into the future.
In 2018, Sanlam announced details of BEE transactions, which will increase its direct black
shareholding to 18% and black economic ownership to 35%. The Group will sell 5% of its issued
shares to new and existing B-BBEE shareholders, creating a master trust that caters to 80% of
the intended beneficiaries, with Ubuntu-Botho benefitting from the other 20%
OPERATONS
The corporate office of the Sanlam Group is responsible for centralised functions that include
strategic direction, group financial and risk management, group marketing and communications,
group human resources and information technology, group sustainability management, corporate
social investment and general group services.
In addition, the Sanlam group operations are managed through five operating clusters:

 Sanlam Personal Finance

 Sanlam Emerging Markets
 Sanlam Investments
 Sanlam Corporate
 Santam
The core businesses within each cluster are as follows (wholly owned unless otherwise
indicated):

SANLAM PERSONAL FINANCE

The largest business in the Sanlam Group of companies, with 11,406 employees and assets
worth R 472,328 million under management.

 Sanlam Sky Solutions: Financial services for individuals and groups in the entry-level
market
 Sanlam Individual Life: Financial services to the middle-income, professional and
business-owner markets
 Glacier: Financial services for the affluent market
Strategic business development consists of the following diversified financial services: Sanlam
Trust (estate and trust services), Multi-Data (electronic money-transfer activities), Sanlam
Healthcare Management (medical scheme administration services), Sanlam Personal Loans
(70%) (personal loans joint venture), Reality (loyalty programme) and Anglo African Finance
(55%) (trade and bridging finance).

SANLAM INTEGRATED MARKET

The Sanlam Emerging Markets cluster is responsible for Sanlam’s financial business services
(life insurance, general insurance, banking, retail credit, health, bancassurance, asset
management and specialist general insurance products) in emerging markets outside South
Africa:

 Botswana Life, Botswana – 60% via Botswana Insurance Holdings Limited[21] (BIHL)

 Sanlam Life, Namibia – 100%
 Sanlam Namibia Holdings, Namibia – 59%
 NICO Life, Malawi – 62%
 Sanlam Life Insurance, Kenya – 57% via Sanlam Kenya Group
 Sanlam Life Insurance, Tanzania – 64%
 Sanlam Life Insurance, Zambia – 70%
 Sanlam Life Insurance, Uganda – 100%
 FBN Insurance, Nigeria – 35%
 Shriram Life Insurance, India – 42% via Shriram Capital
 Soras Vie, Rwanda – 100%
  MCIS Insurance, Malaysia – 51%
 Sanlam Life Insurance, Mozambique – 51%
 Zimnat Life Assurance, Zimbabwe – 40%
Credit and banking:

 Letshego, operating in a number of African countries – 14% via BIHL

 NBS Bank, Malawi – 13% via NICO Holdings
 Shriram Transport Finance Company, India 10% (3% direct and 7% via Shriram
Capital)
 Shriram City Union Finance – 9% via Shriram Capital
Investment management:

 Sanlam Investments, East Africa, Kenya & Uganda – 56%

 Sanlam Investments, Namibia – 86%
 Botswana Insurance Fund Management – 60% via BIHL
General insurance: Jointly responsible in partnership with Santam for managing general
insurance business through:

 NICO Malawi – 62% (direct 49% and 13% indirect via NICO Holdings)
 Sanlam General Insurance Tanzania[22] – 52% (direct 47% and 5% indirect via NICO
Holdings)
 Sanlam General Insurance Uganda – 84%(direct 79%and 5% indirect via NICO
Holdings)
 NICO Zambia – 62% (direct 49% and 13% indirect via NICO Holdings)
 Shriram General Insurance, India – 43% via Shriram Capital
 Pacific & Orient, Malaysia – 49%
 Legal Guard, Botswana – 60% via BIHL
 Soras AG, Rwanda – 100%
 Santam Namibia – 37%
 Sanlam General Insurance, Kenya – 39%
 FBN Insurance, Nigeria – 35%
 Zimnat Lion Insurance, Zimbabwe – 40%

SANLAM INVESTMENTS
The Sanlam Emerging Markets cluster is responsible for Sanlam’s financial business services
(life insurance, general insurance, banking, retail credit, health, bancassurance, asset
management and specialist general insurance products) in emerging markets outside South
Africa:

 Botswana Life, Botswana – 60% via Botswana Insurance Holdings Limited[21] (BIHL)

 Sanlam Life, Namibia – 100%
 Sanlam Namibia Holdings, Namibia – 59%
 NICO Life, Malawi – 62%
 Sanlam Life Insurance, Kenya – 57% via Sanlam Kenya Group
 Sanlam Life Insurance, Tanzania – 64%
 Sanlam Life Insurance, Zambia – 70%
 Sanlam Life Insurance, Uganda – 100%
 FBN Insurance, Nigeria – 35%
 Shriram Life Insurance, India – 42% via Shriram Capital
 Soras Vie, Rwanda – 100%
  MCIS Insurance, Malaysia – 51%
 Sanlam Life Insurance, Mozambique – 51%
 Zimnat Life Assurance, Zimbabwe – 40%
Credit and banking:

 Letshego, operating in a number of African countries – 14% via BIHL

 NBS Bank, Malawi – 13% via NICO Holdings
 Shriram Transport Finance Company, India 10% (3% direct and 7% via Shriram
Capital)
 Shriram City Union Finance – 9% via Shriram Capital
Investment management:

 Sanlam Investments, East Africa, Kenya & Uganda – 56%

 Sanlam Investments, Namibia – 86%
 Botswana Insurance Fund Management – 60% via BIHL
General insurance: Jointly responsible in partnership with Santam for managing general
insurance business through:

 NICO Malawi – 62% (direct 49% and 13% indirect via NICO Holdings)
 Sanlam General Insurance Tanzania[22] – 52% (direct 47% and 5% indirect via NICO
Holdings)
 Sanlam General Insurance Uganda – 84%(direct 79%and 5% indirect via NICO
Holdings)
 NICO Zambia – 62% (direct 49% and 13% indirect via NICO Holdings)
 Shriram General Insurance, India – 43% via Shriram Capital
 Pacific & Orient, Malaysia – 49%
 Legal Guard, Botswana – 60% via BIHL
 Soras AG, Rwanda – 100%
 Santam Namibia – 37%
 Sanlam General Insurance, Kenya – 39%
 FBN Insurance, Nigeria – 35%
 Zimnat Lion Insurance, Zimbabwe – 40%

SANLAM INVESTMENT SECTIONS AND ITS

BENEFITS
Asset management

 Sanlam Investment Management (SIM) – manages institutional portfolios and retail

collective investment (unit trust) funds
 Sanlam Structured Solutions – structured products
Multi-management

 Sanlam Multi Manager International (SMMI) – investment management advisory

business
Alternative investments

 Blue Ink – hedge fund manager focusing on both the local and global investment
markets
  Sanlam Alternative Investments – focuses on the compounding of positive
investment returns coupled with downside protection strategies to generate wealth
for retail and institutional clients
 Sanlam Africa Investments – with a presence in 13 African countries, Sanlam Africa
Investments enables investors to capitalise on African growth opportunities by
successfully sourcing and managing investments across a range of asset classes
Passive investments

 Satrix – offers investors easy, cost effective access to the markets through a wide
range of passively managed investment products
Capital management:

 Capital management – manages portions of Sanlam's third-party and policyholders'

funds
 Sanlam Capital Markets (SCM)
 Sanlam Private Equity (SPE)
Employee benefits

 Sanlam Employee Benefits – Provides risk and investment administration services to

institutions and retirement funds
 Sanlam Group Risk (SGR)
 Sanlam Employee Benefits Investments (SEB Investments)
 Sanlam Umbrella Solutions (SUS)
 Sanlam Retirement Fund Administration (RFA)
 Simeka Consultants and Actuaries
Wealth management

 Sanlam Private Wealth (SPW) – Private client wealth management and stockbroking
 Calibre Investments – 50.1% – Australian investment management
 Sanlam Private Investments UK – 97% – UK private wealth management and
stockbroking
 Summit Trust – 65% – International independent trust services group in Switzerland
 Investment Advisory Services and Fiduciary and Tax services
International investments

 Sanlam International Investment Partners – manages established partnerships with

specialist investment management firms abroad
 SIM Global – manages long-only specialist international equity funds
 Sanlam Asset Management Ireland (SAMI) – Sanlam's international investment
management platform in Dublin managing funds domiciled in Ireland
 Sanlam UK – wealth management player in retail financial services in the United
Kingdom, comprising Sanlam Investments and Pensions, Sanlam Distribution,
Sanlam Private Wealth and Investment Management
 P2 International – International Mutual Fund Administration Investment services
 Sanlam Collective Investments – retail, multi-managed, institutional and third-party
collective investment (unit trust) funds
PURPOSE AND VISION OF SRIRAM LIFE
INSURANCE
The Shriram Life insurance company works with the purpose - To bring every family in the
Indian society, especially the segment most vulnerable to the financial impacts of the loss of a
breadwinner, into the safety net of Life Insurance.
Operational efficiency, integrity and a strong focus on catering to the needs of the average
Indian , by offering him high quality and cost-effective products and services, are the core values
that drive the organisation. These values have been strongly adhered to over the decades and are
now an integral part of the organisation’s DNA.
The company prides itself on its deep understanding of the customer. Each product or service is
tailor-made to specifically suit the needs of the customer. It is this guiding philosophy of putting
people first that has brought the group company closer to the grassroots and has made it the
preferred choice for all truck financing requirements amongst the customers.

SHRI RAM LIFE INSURANCE PLANS AND

POLICIES
Insurance helps serve various needs in addition to providing life cover. These
could be saving for children’s future, planning for retirement or ensuring health
coverage along with life insurance. Once you know your specific needs you can
choose from a wide array of investment, savings and protection options under the life
insurance umbrella.
Below are a few broad categories of plans under which insurance products are
devised and customised to meet your exact requirement. For Example: A child plan
can be an endowment plan or a ULIP based on your preference and risk appetite.
Term Plans –
Term insurance is a plain vanilla insurance plan that offers financial security to your
loved ones in the eventuality of your death. These plans are purchased for a fixed
duration wherein in case of the policy holder’s death the nominee or nominees
receive the entire sum assured. If the policy holder outlives the term of the plan then
no maturity benefits or added bonuses can be availed. The premiums for term plans
are typically lower than other insurance policies and can be paid as one single
premium or at regular intervals. The policy holder can avail of tax benefits by
purchasing this plan. Riders such as Waiver of Premium and Accidental Death can
help add to the benefits of the term plan. This is one of the best for someone

Example:
• Pure Term Plan –
Sarnath pays Rs. 10,000 p.a towards a cover of Rs. 1cr, for a period of 30 years.
Assuming he was 30 years old at the time of taking the policy, if he dies at 55 (Any
age below 60), his family gets an assured amount of 1cr. On the other hand, If he
outlives the policy term, he will not receive any money.
So that means this is a pure protection plan.
• Term plan with return of Premium –
Sarninath pays 30,000 per year, towards a cover of 1cr, for a period of 30 years.
Assuming he was 30 years old at the time of taking the policy, if he dies at 55 (any
age below 60), his family gets an assured amount of 1cr. If he survives beyond 60, he
gets back the premium he paid minus the applicable taxes.

Endowment Plans
Endowment plans offer the policy holder the dual benefit of protection and savings.
These plans are most suitable for those individuals who do not want to risk their
investments in market-linked returns. Endowment plans provide a death benefit and a
maturity benefit. In case of the policyholder’s death, the pay-out, along with bonuses
or guaranteed additions, if any, goes to the beneficiary. The bonus usually depends on
the number of years of the policy term that the policyholder has lived.

Example:
Akash decides to invest Rs. 50,000 p.a for 10 years. In an endowment plan, the
returns have 2 components; one is a guaranteed return which could be for example
80% of premium paid and the other is an interest amount that varies between 4-8%
of premium paid. Thus, in an endowment plan Akash can get a maximum return of Rs.
4,40,000/-

Unit Linked Plans (ULIPs)

Unit linked plans give you the flexibility to invest in stocks or bonds while availing life
insurance. Under these plans a portion of the premium paid is invested in stocks, the
returns of which are paid out at the time of maturity. The remaining portion of the
premium is used to offer life cover to the insured. ULIPs offer tax benefits to the
policyholder and under current Indian income tax laws; maturity benefits of ULIPs are
tax free. Depending on how they will be used ULIPs are available for wealth creation,
children’s education, health solutions and retirement planning.

Example:
Mr. Banerjee pays Rs. 1 lakh p.a for a period of 20 years, thus making the total
premium paid Rs. 20 Lakh. In this case, depending on Mr. Banerjee’s risk appetite, the
company invests the money into, Blue Chip, Govt. Bonds/ Securities and the
Insurance Co. shares in a 50:25:25 ratio.
The corpus benefit received by Mr. Banerjee depends entirely upon the funds’
performance.
There is always a minimum investment limit in a ULIP.

Pension Plans
Pension plans are also known as retirement plans. These life insurance plans are an
effective way of building a corpus for the retirement years and ensuring a steady
income even when one has stopped earning. There are several options to consider for
pension plans including investing in the government’s National Pension Scheme and
ULIPs. Plans “with life cover” and “without life cover” are also available. Annuities can
be deferred, immediate, guaranteed for a certain period or can also be received for
life depending on the policyholder’s preference. The most popular is usually the
deferred annuity option where the insured builds a corpus by paying single or timely
premiums over a set period, which is fixed under the policy terms. The pension starts
as soon as the policy term is over.

Example:
Harpreet Singh at 30 years, decides to buy a pension plan. He pays 2000 p.m i.e.
24,000 p.a, for a 25-year policy term. At the end of 25 years, the returns are
accumulated but are not paid to Harpreet because the contract may specify an age
limit after which he can get the money. The company sometimes pays bonus for
another 5 years, and he gets money only when he is 60. There is always a minimum
period specification in case of Pension Plans and some plans have death benefits too.

Money Back Plan

A money back policy is a more complex life insurance policy in comparison with a
term plan or a standard life insurance cover that pays the sum assured to the insured
party on maturity. It provides
certain amounts called survival benefits in addition to the sum assured and a bonus
from
the insurance company based on its performance.
These are participating plans, and also declare reversionary bonuses and once
declared they form a part of the Guaranteed Benefits.

Example:
In this case there are 2 different periods we need to understand – One is the Policy
term (20 years) and the other is the Premium paying term (PPT) (10 years).
Let us assume Sarita pays a premium of Rs. 10,000 p.a for a period of 10 years. She
then receives the following benefits;
a. Maturity benefit – 8-10% of the premium for a period of 5 years, after PPT
i.e 11th to 15th year – Rs. 5,000/-
b. Money back value – 60% of Premium paid after 20 years i.e Rs. 60,000 /-
c. Death Benefit – 10 times annual premium i.e Rs. 10,00,000/- (in case of death
during the policy term)
• Policy term – Overall duration of the policy
• Premium paying term – The duration for which premium must be paid. (PPT)

*Please Note:
1) All figures mentioned are for illustration purposes only
2) The benefits in all plans are obtained only on payment of regular premiums.
WHAT IS LIFE INSURANCE
Life insurance is a financial product that allows you to provide Life insurance is
a financial product that allows you to provide for your dependents in the unfortunate
event of your death and helps your family maintain the standard living that they are
accustomed to. If you have any family members financially dependent on you then
you should consider purchasing a life insurance policy. This will help make up for the
income your family loses when they lose you.

How does a life insurance policy work?

When you buy insurance, you enter into a contract wherein you pay a monthly
amount to the life insurance company in return for which your beneficiaries receive a
death benefit when you die. A death benefit is the amount of insurance coverage that
you have purchased. Not paying the monthly amount (premium) can lead to a lapse in
your policy and the insurance company will not be required to pay your death benefit
in such an instance.

Why do I need an insurance plan?

Insurance plans serve different purposes at different stages of one’s life. As a young
individual, one can use them as a tax planning tool. Insurance plans help save for
future needs like marriage, higher education and health insurance provides protection
against the unknown.  For married individuals with children, life insurance plans can
double as savings plans for higher education and marriage. Health insurance that
protects the family are also to be considered at this stage in your life. Once you start
earning, it is equally important to consider retirement plans and pension plans that
provide for steady income in your retirement years and help you stay financially
independent.

When should I consider buying life insurance?

You need to ask yourself; “If I die today will someone be directly affected by the loss
of my income?” If the answer to that is “Yes”, you need to consider buying life
insurance immediately to reduce the financial blow on your loved ones.  Planning for
your retirement, saving for your future goals are also some of the things life insurance
does for you in which case life insurance should be considered the day you begin
earning.

How much life insurance cover should I have?

As a rule of thumb your dependents should be able to maintain the same lifestyle as
when you are alive for a minimum of 10 years . A multiplication of your annual
income by ten  is usually the first step. However, there are other things to consider
like inflation, college expenses and healthcare which are probably not part of your
current expenditure.  Reach out to our advisors to do the analysis for you  or  use the calculator. 
What is the difference between protection and investment?

In insurance terms, “protection” is the act of securing your family/loved ones. This is
very different from an “Investment”, which is the purchase of an asset
(tangible/intangible) with the expectation that it will generate some income or
appreciate in the future.  An insurance policy with an investment option could
provide the dual benefit of protection and investment. However, a pure insurance
policy is a means of financially securing your loved ones in the face of an unfortunate
event.

Difference Between Unit Linked Insurance Policy (ULIP) & Equity Linked Savings
Scheme (ELSS)?

A ULIP is an insurance cum investment plan, that provides the investor an option to
invest in equity, debt, hybrid and money market funds. The minimum sum assured
under a ULIP is 10 times the Premium (7 if age at entry is more than 45).
ELSS on the other hand, are diversified equity funds that invest in stock i.e. pure
Investment options.
ULIP offers a switch option i.e. a change in the ratio of invested amounts, as per risk
appetite, however, ELSS does not permit any switch until the lock-in period is
over.  Often the two are confused with each other as both provide investment and
tax saving options.

How is Life Insurance different from Mutual Fund?

Life insurance is a protection plan for the holder and his/her beneficiaries. They can
be classified into 2 types; Term Plan – Pay premiums over a specified period in
exchange for benefits when you die) and Whole Life Insurance, which not only
protects you throughout your life but also earns an income through investments.
These are low risk – low return options, that provide tax rebates and tax-free benefits
to you and your beneficiaries. High fees and administrative costs make it a less likely
investment option.

Mutual Funds on the other hand are pools of money provided by an investor,
invested in diverse portfolios and investment options. These are handled by fund
managers who also have the liberty to invest them as they deem fit. These are high
risk – high return options, and thus cannot be treated as a protection plans. Not all
mutual funds are tax free.  Only one’s invested in government approved funds have
tax exemption. Mutual fund earnings are often reduced by taxes and fees.

What is the difference between a rider and a policy?

A policy is the standard policy that the insurance company offers providing pre-
determined benefits to all its subscribers. A rider is an add-on or a supplementary
policy to the basic insurance policy, that provides specific added benefits at an
additional cost. Basic policies sometimes do not cater to the individual needs of a
buyer, a rider allows the buyer to customise the insurance plan to suit his/ her needs.
What is the difference between a term plan and an endowment plan?

A term plan is a pure life cover, that is essential to have if you have dependents. The
plan is for a specified period and you get money only in the event of the policy
holder’s death. If the policy holder survives beyond the term of the insurance plan no
benefit is received. The premiums for a term plan are relatively lower. An endowment
plan on the other hand is a combination of insurance and an investment. It provides a
life cover as well as an investment opportunity. Premiums under this plan tend to be
higher.

What is the difference between a linked plan and a non-linked plan?

Linked insurance plans basically refer to ULIPs where a part of your premium is
invested into equity based funds and the money market. This is done by a fund
manager. Non-linked plans are conventional insurance plans like term plans and
health insurance. These usually invest in low risk-return options and often, offer
guaranteed returns.  The benefits under linked and non-linked plans also differ. ULIPs
offer the flexibility of investment and switching between funds and withdrawals.
Non-linked plans allow you a fixed premium based on sum assured and offer bonuses,
depending upon policy terms.

What is the difference between a participating plan and a non-participating plan?

Participating plans not only offer you the standard sum assured, but also allow you to
participate in the profits of the Company i.e. it pays you dividends in case of profits.
In this case the premiums are pooled together and invested by the insurance
company itself and not a third-party fund manager.  These dividends are not
guaranteed. Non-Participating plans only pay you guaranteed benefits on death /
maturity.

What is a ‘Whole Life Insurance Policy’?

Whole life insurance policy is one, with both insurance and investment components.
The insurance component pays the sum assured in the event of death/ maturity of
the policy, while the investment component develops a secure cash fund the policy
holder can borrow against or withdraw whenever required. This is the most basic
type of life insurance and essentially provides security for the ‘whole life’ of the life
assured.
WHAT IS MEAN BY INSURANCE CONTRACT
An Insurance Contract may be defined as an agreement between two
parties whereby one party is called an insurer and the other is called
insured.  The Insurer which is the Insurance Company undertakes, in
exchange of fixed premium to pay the Insured fixed amount of money on the
happening of a certain event.

As per the Insurance Act, 1938

Section 2(8) : ‘Insurance Company’ means any insurer being a company,

association or partnership which may be wound up under 18 [the Companies
Act, 1956 (1 of 1956)], or to which the Indian Partnership Act, 1932 (9 of
1932), applies;

Section 2(9) : ‘Insurer’ means any individual or unincorporated body of

individuals or body corporate incorporated under the law of any country
carrying on Insurance business.

Any Agreement can be termed as Contract if it has the essentials of a valid

contract specified under the Contracts Act, 1872 i.e.

Offer and acceptance

The Offer for entering into contract generally comes from Insured.  In some
cases offer comes from the Insurance Company also in the form of
publication of prospectus, canvassing by Agents etc.  So, it is clear that Offer
can come from both the sides.  The main element of acceptance should be
there.  The Insured has to accept the payment of premium of the sum
assured/insured and the Insurance Company has to agree to pay the
compensation in the event of loss occurred to the Insured during the period
of contract.  The insurance can be for Life or for property.

Consideration
Certain sum is charged as premium from the Insured and against the
consideration, a large sum is guaranteed to be paid by the Insurer who
received the premium. Insurance contracts are Unilateral contracts, where
only the insurer makes legally enforceable promises to pay for covered
losses.  The Company cannot sue the Insured for breach of contract. 
However, Insurance contracts are also Conditional Contracts i.e. if the
Insured fails to abide the contract, then the Insurer is not obligated to pay
for any Insured’s losses.

Competenet parties:
The Section and Rules as applicable in case of General Contract Act, 1872
related to competent parties is applicable in case of Insurance Contract also. 
Say for example, both the parties to the contract must have attained the age
of Majority and the Minor cannot sign the Insurance Contract.  Both the
parties should be of sound mind. 

Legal purpose
All contracts must have a legal purpose to be enforceable by the courts i.e.
the objects are not forbidden by law or are not immoral or opposed to public
policy.   If the object of Insurance, like the consideration, is found to be
unlawful, the policy is said to be Void.

Now let us see some elements of insurance contract –

 indemnity
 insurable interest
 utmost good faith
 subrogation
 assignment and nomination
 warranties
 proximate cause
 return of premium.
It can be said that if any contract lacks any of these essential elements and
other elements, then it is a Void Contract.  It is also to be noted that
insurance companies often void a contract because the applicant’s i.e. the
Insured provides wrong and false information. 

The Insurance Agreement should specify the risks that are covered, the
limits of the Policy and the term of the policy.  Additionally all insurance
contracts should specify: Conditions, Limitations and exclusions.  The
Insurance policy can be for Life or for Property.

Generally the Insurance Company through the guidelines, terms and

conditions in the Agreement Form frames the terms of the contracts.  Once
the application is signed by the Insured it means that he has agreed to the
terms and conditions in the contract and is bound by the same.  The
Insurance Company should be very careful while framing the guidelines,
terms and conditions in the agreement because there are no specific Act and
differing legal definitions, rulings provided by different courts and different
guidelines framed by the State Governments.  Therefore the insurance
companies have to take utmost care in framing the words so that it can be
legally effective and at the same time it must provide a wide range of
coverage to the Insured.  Before signing the contract agreement, it is the
duty of every Insured to go through these terms and conditions because the
insurance contracts are not negotiable.  There are so many case laws which
benefit the Insured. 

It is to be noted that all contracts except personal insurance are contracts of

Indemnity and the principles laid down for Indemnity Contract is applicable
to these contracts. According to  these principles, the Insurer indemnifies the
insured for payment of the Insured sum at the occurrence of the event
specified in the terms of the contract.  In such cases the Insured has to
prove that.  The amount of compensation should be the actual value of the
goods insured and if the Insured claims more than what is the actual value
then the Insurance Company has the right to get the extra money back from
the Insured.

Most insurance contracts, viz.  Policies for property, liability and health
insurance are indemnity contracts, where insurance companies are required
to compensate for the actual losses, up to the policy limits. However for
policies like life insurance contracts, they will have to pay the face amount of
the policy. An insured person if required to do few things, before and after
the loss, and if he fails to perform those duties, or satisfy those conditions,
then the insurance company need not be obligated to pay the claim amount,
claiming that the insured has breached the contract of the policy. If breach is
material, then the court can grant relief to the insured.

The condition precedent are

1. The insured has to notify the insurer of any loss that has occurred to
him.
2. For property insurance, the insured has to provide inventory of
losses.
3. For disability insurance, they have to provide proof of any kind of
disability to the insurer.
Insurance policy contracts can be ended mutually, i.e. recession. However, if
the insured fails to pay the insurance premium amount, the insurance
company can file a case in court to cancel the insurance policy. But the life
insurance policy has an incontestable clause which prevents life insurance for
cancelling its policy after a period 1 to 2 years.
INSURANCE CONTRACT
REQUIRMENT
An insurance policy is a legal contract that is agreed upon by two or more parties. The
purpose of insurance is to indemnify you, or to bring you back to the same financial
position you were in before you suffered the covered loss. Since insurance can have major
financial implications, certain guidelines exist to make an insurance agreement valid.

Insurable Interest
You have a right to insure anything for which you have an insurable interest. An insurable
interest exists when loss of the item being insured will cause a significant financial setback
or hardship, or create a legal liability. For example, you might pay hundreds of thousands
of dollars for your home, therefore the monetary investment in the home is an insurable
interest to you.

Consideration
Each party to the insurance contract, typically you and the insurance company, must have
considerations in the policy. This is what determines the value each party brings to the
contract. For you, the consideration is the premiums paid throughout the contract term. For
the insurance company, it is the potential money paid to you when you file a claim.

Legal Capacity
The insurance agreement must be made between two competent and legal parties. If you are
a minor, or if someone else is legally responsible for your decisions due to a mental illness
or restriction, you are not eligible to enter into an insurance contract by yourself. You do
not have the legal capacity to make this agreement.

Meeting of the Minds

Sometimes called the doctrine of "utmost good faith," the meeting of the minds means that
each party to the contract agrees to be honest with the other and gives personal attention to
the details of the contract. In good faith you agree not to misrepresent material information
to the insurer and it agrees not to unfairly cancel your contract as a result.

Offer And Acceptance

In order for the contract to be valid, you must make an offer to buy an insurance policy
through a signed or electronic application accompanied by an appropriate premium, and the
insurance company must accept your offer by issuing the policy. The contract is not valid
without this step, even if the other factors exist.

An insurance policy is a legal contract between an insurance company

(insurer) and a person, company, or other entity (insured). Policies can vary
slightly as to what specific parts are included in the contract, but all follow the
same general format. The National Association of Insurance Commissioners
(NAIC) states that reading and understanding your insurance contract is
essential in helping to reduce any confusion and avoid problems or
disagreements with the insurance company.

Declarations
The declarations page is usually the first part of an insurance contract. It lists the name of
the insurance company, the name(s) and address of the insured, what risks or properties are
covered and the amount of that coverage, the period of time that the insurance is in effect,
and the premium (amount that the insurance will cost for the policy period).

Definitions
This section includes definitions of the various words, terms and phrases used in the
insurance policy.

Insurance Agreement
The agreement section summarizes what the insurer promises to do. It states what risks, or
perils, are covered and the extent and nature of the coverage. It also states what services are
provided by the insurer and, when applicable, the extent to which the insurer will go to (if
any) to protect the insured against a liability lawsuit by a third party.

Exclusions
Certain risks may be excluded from coverage and are listed in this section. Examples of
exclusions, depending on the type of insurance coverage (homeowner's/renter's/auto,
medical, life), can include flooding or other "acts of God" such as tornadoes, hurricanes, or
earthquakes. These risks require special policies. Other exclusions include intentional acts
and pre-existing conditions.

Conditions
This section describes the provisions in the policy required to be met for the insurer to pay
claims. It includes rules of conduct, obligations, and duties required to be met by the
insured. If the conditions are not met, the insurer can deny the claim.

Endorsements
Additional forms known as endorsements can be attached to policies. They detail any
modifications, additions, or deletions to the standard policy that have been approved by the
insurer.

COMMUNICATION SKILLS
Communication skills are important in any job because they
allow you to understand and be understood by others. These
can include but are not limited to effectively communicating
ideas to others, actively listening in conversations, giving and
receiving critical feedback and speaking in front of groups. In
this article, we discuss different communication skills and
provide examples of each.

WHAT IS MEAN BY
COMMUNICATON SKILLS
Communication skills are abilities that allow you to give and
receive different types of information. Some examples include
communicating ideas, feelings or what's happening around you.
Being able to communicate with those around you is important
because it can help you work together as a team or relay ideas
that you might have to a broader group.

Communication skills involve listening, speaking, observing and

empathizing. Two of the most important communication skills
are listening and speaking. Whether you work independently or
in a big team, you likely use both skills in some capacity. For
example, you need to listen and understand client requests in
order to do your job. In that same manner, being able to explain
your work or strategy to your team helps create a more efficient
process.

It is also helpful to understand how to communicate through in-

person interactions, phone conversations and digital
communication. Each method of communication involves
different skills in order to have meaningful conversations.

Examples of communication skills

Here are some communication skills you can practice to be

more effective in the workplace:

 Active listening

 Adapting your communication style

 Friendliness

 Confidence

 Giving and receiving feedback

 Volume and clarity

 Empathy

 Respect

 Understanding nonverbal cues

 Responsiveness

Active listening

Active listening means paying close attention to the person that

you are speaking with. When you listen actively, you also pay
attention to the speaker's face, posture and gestures to learn
more about the meaning of the message. This ability helps you
better understand your colleagues and clients, which allows you
to form better connections.

You can be an active listener by focusing on the speaker,

avoiding distractions and preparing questions, comments or
ideas to thoughtfully respond. When a colleague comes to
speak to you about something, make eye contact with them so
they know you are participating in the conversation. You can
even nod or make other affirmations, like nodding or smiling, to
show you are listening.

Adapting your communication style

All situations are different, so it's important to know when and

how to communicate in different scenarios. To make the best
use of your communication skills, consider your audience and
the most effective format to communicate with them.

For example, if you are communicating with your direct

manager, it's better to send a formal email or call them on the
phone. If you are communicating with a colleague that you have
a good rapport with, you can use less formal means of
communication, like a text or online message. In the workplace,
you may find it's easier to communicate complex information in
person or via a video conference than in an email.

Friendliness

In friendships, characteristics such as honesty and kindness

often foster trust and understanding. The same character traits
are important in workplace relationships. When working with
others, try to approach your interactions with a positive
attitude. Keep an open mind, and ask questions to help you
understand the speaker's message. Small gestures, such as
asking someone how they're doing, smiling as they speak or
offering praise for work well done can help you foster
productive relationships with both colleagues and managers.

Confidence

People are more likely to respond to ideas and individuals that

present confidence because they are more engaging. When you
speak confidently, you can capture and maintain your
audience's attention, making it easier for you to convey your
message.

Body language that can help you feel and look more confident
includes making eye contact when you're addressing someone,
sitting up straight with your shoulders back and preparing ahead
of time so your thoughts are clear and easy to understand.
Make sure to also enunciate your words clearly so your
audience can hear you.

Giving and receiving feedback

A good communicator is someone that is able to not only give

but also receive feedback. Accepting constructive criticism
allows you to learn where you can improve to become a better
colleague. You should also be able to give constructive feedback
that your employees can use.

When providing feedback to other people, be sure to use a

positive tone and language. Start with a compliment about the
person's work, then follow it with feedback on what they could
improve. Close the feedback with more praise. This method,
sometimes called the feedback sandwich, praises and
encourages the person to continue working hard.

Related: Feedback Examples (Plus Why it Is Important and

Tips)

Volume and clarity

Any time you are communicating with someone, it's important

to make sure that your voice is clear and audible. Adjusting your
speaking voice so you can be heard in a variety of settings is a
skill, and it's critical to communicating effectively.

Ensure you speak loudly enough for your audience to hear

without interrupting other conversations. If you're unsure of
what volume is appropriate, read the room to see how others
are communicating. Enunciate each word carefully so everyone
can hear you without repeating yourself.

Related: Guide to Verbal Communication Skills

Empathy

Being empathetic means that you have the ability to understand

and share the emotions of others. This communication skill is
important in both team and one-on-one settings. In both cases,
you will need to understand other people's emotions and select
an appropriate response. Being able to empathize with them will
make your colleagues feel heard and respected, making a more
positive workplace.

For example, if you worked in a customer service role and had a

frustrated client call you, empathy can help you acknowledge
and diffuse their emotion and the situation. At the same time,
being able to understand when someone is feeling positive and
enthusiastic can help you get support for your ideas and
projects.

Respect

Another important communication skill in the workplace is

respect, both giving it and receiving it. A key aspect of respect is
knowing when to initiate communication and also when to
respond. In a team or group setting, allowing others to speak
without interruption is a necessary communication skill tied to
respectfulness.

Being able to communicate respectfully also means using your

time with someone else wisely. You should always aim to stay
on topic, ask clear questions and respond fully to any questions.

Related: 12 Tips for How To Show Respect in the Workplace

Understanding nonverbal cues

A great deal of communication happens through nonverbal
cues, such as body language, facial expressions and eye contact.
When you're listening to someone, you should be paying
attention to what they're saying as well as their nonverbal
language.

You should also be conscious of your body language when

you're communicating to ensure you're sending appropriate
cues to others. Standing in front of a mirror when you're talking
on the phone is a great way to get a sense of your nonverbal
cues. Try to pretend as if the person is standing right in front of
you and work on perfecting your eye contact, facial expressions
and body language.

Related: Understanding Nonverbal Communication With

Examples of Eight Nonverbal Forms

Responsiveness

Whether you're returning a phone call or sending a reply to an

email, your colleagues will appreciate it when you respond
quickly. People will feel more respected if you get back to them
promptly.

One method is to consider how long your response will take: Is

this a request or question you can answer in the next five
minutes? If so, it may be a good idea to address it as soon as
you see it. If it's a more complex request or question, feel free
to still acknowledge that you've received the message and let
the other person know you will respond in full later.

How to improve your communication skills

With practice, you can learn and improve your communication

skills. Here are some processes you can try to develop your
communication skills:
 1. Ask for constructive criticism. To get an objective opinion
about your abilities, ask a trusted friend or colleague for
their honest feedback. Understanding where you can
improve allows you to identify certain areas, like being
more responsive or practicing your enunciation, that you
can practice.

2. Practice your communication habits. Many

communication skills are habits you develop over time.
You can improve those skills by practicing new routines
that make you a better communicator. That might include
making more eye contact, reminding yourself to focus on
the speaker, practicing giving positive feedback and asking
questions in conversations.

3. Attend workshops or classes. Seek an online class or

workshop on communication or other skills involved in
communication. These classes may include instruction,
roleplay, written assignments and open discussions.

4. Seek different opportunities to communicate. Find

opportunities that require you to use communication skills.
For example, you could volunteer to lead a presentation or
participate more in team meetings.

WHO TO SELL ANY

INSURANCE POLICY
TO ANYONE
QUICK FACTS
  Some people think selling your life insurance will give
you fast cash
 You can sell life insurance online
 Life settlements and viatical settlements help people
get money that’s locked away
There are many reasons why someone may want to sell their life
insurance policy. If you want to cash out quickly, you found the
right guide for answers.

Before you start, it’s essential to know the market before you
sell your life insurance policy for cash. Understanding who you
are selling to will help you stay alert for scammers. Also, you
might find it difficult to cash out your term life insurance if
you’re not a senior and have a low-value policy.

If you aren’t eligible for a sizeable payout from a broker, you still
have other options. Keep reading to learn more about selling
your life insurance. 

Use our free tool if you’re ready to connect with someone to

help you sell your life insurance policy. Enter your ZIP code to
find a local life settlement broker or insurance settlement
company in your area.  

Table of Contents

How to Sell Your Life Insurance Policy

Online
Buyers looking to reap the reward of a death benefit are looking
for sellers who are at least 65 years old. These sellers may also
have a limited life expectancy and a high-value life insurance
policy. 
To find your buyer, you will need to go through a broker or a life
insurance settlement company. Keep reading to learn more
about the best company to sell your life insurance policy to and
where to find it.  

Understanding Life Settlements 

When someone sells their life insurance policy, they carry out a
life settlement. This sale is sometimes called a “senior
settlement” because the typical buyer is an investor interested
in your death benefit. 

A life settlement is when you sell a life insurance policy to a third

party for a one-time cash payment. According to the Financial
Industry Regulatory Authority (FINRA), a government-recognized
non-profit that oversees brokers, the sale proceeds are more
than the policy’s cash surrender value but less than the death
benefit. 

Another type of life insurance payout is called a viatical

settlement. This situation is an arrangement between someone
who is terminally ill and a third party for the purchase of a life
insurance policy for less than its mature value. 

If your insurance needs have changed or you would otherwise

surrender your policies, a life settlement is a great option.
However, if you’re looking for fast cash, it may not be the
recommended action for your needs. 

Life Settlement Companies 

Life settlements have unintended consequences, and it’s easy to
get scammed or shorted in a deal. You want to make sure you
find a trusted source to sell a life insurance policy to. 
If you choose to go through a broker, your state’s insurance
department might have a list of licensed professionals that can
help you sell a life insurance policy for cash. You may also find a
life settlement broker at a financial consulting agency or
insurance agency in your town. 

Some of the most trusted life insurance companies and brokers

are listed below: 

 Abacus Life Settlements 

 Coventry Direct

 Habersham Funding

 Institutional Life Services 

 Harbor Life Settlements 

Some areas in your life insurance policy that could affect its
price or sale include your premium rate, policy terms, and the
accreditation of the issuing company. 

Your policy’s value amount will be an essential piece to your

final sale proceeds. A high-value policy is likely to sell faster than
a low-value policy. 

Remember, you’re shopping for a settlement just as you were

shopping for the initial life insurance policy. Get a few quotes,
and don’t take the first offer you receive without considering all
your options. 

Alternatives to Life Settlements 

There are other options to selling your life insurance, depending
on your needs. Two options that are immediately at your
fingertips are using the policy’s cash value and/or accelerating
your policy’s death benefits provision. 

Borrowing money against your life insurance policy is a quick

way to get money fast if you aren’t sure about selling. Some
whole life insurance plans have an investment addition that
allows you to take out a loan on the cash value. Often, taking a
loan from your policy will result in high-interest repayments. 

There are also policy options in which you can keep living with
life insurance benefits. Accelerating your death benefits may be
subject to fees and taxes that would undervalue your policy
amount. 

Another option is to surrender your policy. This alternative to

selling your life insurance may be riddled with fees and may not
result in the most value, but it offers fast cash. 

Advice for Selling Life Insurance 

No matter how you get rid of your policy, you can count on
losing money. 

In a life settlement, you’re likely not going to receive what you

agreed upon because you need to pay that third-party
negotiator. The proceeds from your sale are subject to taxes
and possible fees if you use a company or broker to sell your
policy. 

Creditors also have a right to the proceeds for your sale in some
states. For tax and legal information, it’s best to speak with a
financial or tax advisor. 

In some states, sellers have 15 days to change their minds,

return the sale proceeds, and reinstate their life insurance
policy. 

You should also be aware that your private information may be

subject to third-party sharing after the sale. 

Selling Life Insurance: The Bottom Line 

Whether you are 65 years and up or someone facing
overwhelming medical bills, life insurance settlements are fast
ways to get cash from your life insurance policy. However, this
money comes with a laundry list of warnings. When you’re
shopping around for the best price, make sure you’re also
speaking with tax advisors so that you’re not surprised by
hidden charges later on. 

If you think selling a life insurance policy is your next move, let
us help you. Enter your ZIP code now to get in touch with a life
settlement expert. 

Frequently Asked Questions About

Sellling a Life Insurance Policy
Those who sell life insurance policy values have rights. Some
rules and regulations make sure that life settlements are fair
and consumers stay protected. 

Keep reading for frequently asked questions. 

#1 — Is selling your life insurance a good

idea?
There are many reasons to sell your life insurance policy. Some
of these include: 

 You need the money you’ve been investing

immediately
 You no longer require or want life insurance 

 You can’t afford the monthly premiums

 You need help paying for medical bills

 You’ve run out of options 

Refer to the guide for more information on alternatives to

selling your life insurance policy. 
#2 — How much can I get for my life
insurance policy?
Payouts are based on your age, health, the value of your policy,
coverage amount, the financial performance of your insurance
company, etc. 

#3 — How long does it take to sell a life

insurance policy?
Don’t rush selling your life insurance policy at the risk of getting
scammed. If you link up with a company, you could have the
cash in several days or several months. 

# 4 — How do I find a reputable broker?

Brokers can be found in various financial institutions in your
hometown. Look at what businesses you have available and who
your friends and family trust. You may even bank with someone
who can help you out.