Skip to main content

Insurance Notes - Life Insurance

What is a Life Insurance and Why it's neccessary?

  • Life Insurance is a contract providing for payment of a sum of money to the person assured or, following him to the person entitled to receive the same, on the happening of a certain event.  
  • If somebody suffer economic hardship and dies, at that time Dependent Survivors needs life Insurance. Life Insurance is a way to replace the loss of Income that occurs when the earning member of family dies.  If insured person dies while the contract is in force, the insurance company pays a specified sum of money to the person on persons you name as beneficiaries.


TYPES OF LIFE INSURANCE :
• Term Life Insurance
• Permanent Life Insurance

TERM LIFE INSURANCE :  

Under a Term Life contract, the insurance company pays a specific lump sum to the designated beneficiary in case of the death of the insured. These policies are usually for  5, 10, 15, 20 or 30 years.
Term life insurance are the most popular in advance countries but were not so popular in India.   However, after the entry of the private operators and aggressive marketing by few players this kind of policies are becoming popular. The premium on such type of policies is comparatively quite low when compared with other types of life insurance policies, mainly  due to the fact that these policies do not  carry cash value. 


PLUS OF TERM LIFE INSURANCE

MINUSES OF TERM LIFE INSURANCE
·     The premium payable on these policies is low as they do not carry any cash value.
·   One can afford for quite high value insurance policies
·   If one survives the period of the policy, he / she does not get any money at the end of the policy.
· The premium on such policies keeps on increasing with age mainly because the risk of death of older people is more. Over the page of 60, these policies become difficult to afford.

PERMANENT LIFE INSURANCE :  
In a Permanent Life contract, a portion of the money paid as  premiums is invested in a fund that earns interest on a tax-deferred basis.  Thus, over a period of time, this policy will accumulate certain "cash value" which you will be able to get back either during the period of the policy or at the end of the policy.  

Type of Insurance Policies - 

1. ENDOWMENT POLICIES
These policies provide for period payment of premiums and a lump sum amount either in the event of death of the insured or on the date of expiry of the policy, whichever occurs earlier.

2. MONEY BACK POLICIES
These policies provide for periodic payments of partial survival benefits during the term of the policy itself.  A unique feature associated with this type of  policies is that in the event of death of the insured during the policy term, the designated beneficiary will get the full sum assured without deducting any of the survival benefit amounts, which have already been paid as money-back components.  Moreover, the bonus on such policies is also calculated on the full sum assured.

3. ANNUITY / PENSION POLICIES / FUNDS
This policies / funds require the insured to pay the premium as a single lump sum or through installments paid over a certain number of years. The insured  in return will receive back a specific sum periodically from a specified date onwards (the returns can be monthly, half yearly or annually), either for life or for a fixed number of years. 


LIFE INSURERS in India
Life Insurance Corporation of India (LIC)
HDFC Standard Life Insurance Company Ltd.
Max New York Life Insurance Co. Ltd.
Om Kotak Mahindra Life Insurance Co. Ltd.
Birla Sun Life Insurance Company Ltd.
Tata AIG Life Insurance Company Ltd.
SBI Life Insurance Company Limited .
ING Vysya Life Insurance Company Private Limited
Allianz Bajaj Life Insurance Company Ltd.
Metlife India Insurance Company Pvt. Ltd.


Popular posts from this blog

Easy way to understand Direct and Indirect speech rules

Introduction. There two ways to convey a message of a person, or the words spoken by a person to other person. 1.       Direct speech 2.       Indirect speech Suppose your friend whose name is Vipul tells you in College , “I will give you a pen”. You come to home and you want to tell your brother what your friend told you. There are two ways to tell him. Direct speech:   Vipul said, “I will give you a pen”. Indirect Speech:  Vipul said that he would give me a pen. In direct speech   the original words of person are narrated (no change is made) and are enclosed in quotation mark. While in indirect speech some changes are made in original words of the person because these words have been spoken in past so the tense will change accordingly and pronoun may also be changed accordingly. In indirect speech  the statement of the person is not enclosed in quotation marks, the word “ that ” may be used before the statement to show that it is indirect sp

English Error Spotting - Previous Year Questions of SSC CGL

Competition Zenith brings you a post on Error Spotting to boost your English for competitive exams. We are providing you the specifically chosen questions from previous year papers of SSC CGL with the best possible explanation in simplest of the language. Below are some questions with explanation: Questions 1. Have trust on(a)/God and everything(b) /will be right.(c) /(d) No error 2. The cattles (a) /are grazing (b) /in the fields.(c) /(d) No error 3. He is one of (a)/ the best novelists (b) /that has ever lived. Do you agree? (c)/no error (d) 4. On a rainy day (a) /I enjoy to watch TV (b) / with a hot cup of tea.(c ) /no error(d) 5. No sooner did (a)/I reach (b)/ Patna railway station than the train departed(c)/no error (d) 6. There is no agreement (a) / between you and I (b) /so we are free to go our way(c) /no error (d) 7. A variety of books (a) / is available in the market (b) / to help the students qualify the competitive examinations.(c) /no error 8.

Spotting Error Quiz IV - With Explanation For SSC Exam 2015

  Hello Readers, As you know that Spotting Error types question is an important part of competitive examinations and seldom any book provide you the detailed solution. So we have decided to provide you the previous year questions of  spotting error along with the Explanation . If you like it let us know, you can also ask for detailed solutions of questions that are bothering you. 1.     I found (a)/ the two first chapters of the book (b)/ particularly interesting. (c)/ No error (d) Answer    (b) Explanation : It should be   ‘the first two chapters’ . 2.     Bacon, the father of the English easy (a) / had a thirst (b) / of knowledge (c) / No error (d) Answer    (a) Explanation : The English means the citizen of England.   Article is not used before language