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.

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, if it occurs earlier. b)Periodical payments of insurance premium by the insured, to the corporation which provides the insurance. Any person above 18 years of age is eligible to enter into a valid contract. Subject to certain conditions, a policy can be taken on the life of a spouse or children.

LIFE INSURANCE POLICIES

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

LIFE INSURANCE POLICIES

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

LIFE INSURANCE POLICIES

3. Term life policy  It is a policy for a chosen period.  The risk is covered only for that period. 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, but would be able to pay for a policy in the near future.

LIFE INSURANCE POLICIES

4.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, at fixed intervals before the maturity date.  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

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

LIFE INSURANCE POLICIES

6.CHILDRENS INSURANCE POLICY.  Childrens 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, as per the policy document.

LIFE INSURANCE POLICIES

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

MATTERS TO BE STATED IN A LIFE INSURANCE POLICY

1.According to Insurance Regulatory and Development Authority (IRDA) Act, the following have to be stated in a life insurance policy. a) Name of the plan governing the policy, its terms and conditions. b) Whether it is participating in the profits or not. c) Basis of [participation in profits such as cash bonus, deferred bonus, simple or compound reversionary bonus. d) Benefits payable, 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

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

MATTERS TO BE STATED IN A LIFE INSURANCE POLICY

(j) contingencies excluded from the scope of the cover, both in respect of the main policy and the riders; (k)the provisions for nomination, assignment, 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; (l)any special clauses or conditions, such as, first pregnancy clause, suicide clause etc.; and (m)the address of the insurer to which all communications in respect of the policy shall be sent. (n)the documents that are normally required to be submitted by a claimant in support of a claim under the policy.

MATTERS TO BE STATED IN A LIFE INSURANCE POLICY

2.While acting under Regulation 6(1) in forwarding the policy to the insured, the insurer shall inform by a letter forwarding the policy, 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. 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.

MATTERS TO BE STATED IN A LIFE INSURANCE POLICY

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

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. A life insurance company, upon receiving a claim, shall process the claim without delay. Any queries or requirement of additional documents, to the extent possible, shall be raised all at once and not in a piece-meal manner, within a period of 15 days of the receipt of 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, within 30 days from the date of receipt of all relevant papers and clarifications required. However, where the circumstances of a claim warrant an investigation in the opinion of the insurance company, 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, it shall initiate and complete such investigation at the earliest, in any case not later than 6 months from the time of lodging the claim.

CLAIMS PROCEDURE OF A LIFE INSURANCE POLICY



Subject to the provisions of section 47 of the Act, Where a claim is ready for payment but the payment cannot be made due to any reasons of a proper identification of the payee, 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).

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.

LIFE INSURANCE PROVIDERS



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

LIFE INSURANCE PROVIDERS



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

LIFE INSURERS (AS OF SEPT, 2008)



 

Apart from Life Insurance Corporation, the public sector life insurer, there are 22 other private sector life insurers, most of them joint ventures between Indian groups and global insurance giants. Life Insurer in Public Sector Life Insurance Corporation of India

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