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Insurance
- 1. Presented By : Naresh Kumar M Subhasish Mahakud Rajesh Mondal Soumya Ranjan Pradhan Samrudh T.R
- 2. INTRODUCTION Insurance is a contract in which an individual or entity receives financial protection or reimbursement against lossesfrom an insurance company.
- 3. Life Insurance can be termed as an agreement between the policy owner andthe insurer, where the insurer for aconsideration agrees to pay a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness, critical illness or maturity ofthe policy.
- 4. MEANING • Lifeinsurance is acontract between an insured (insurance policy holder) and an insurer or assurer, where the insurer promises to pay adesignated beneficiary asum of money in exchangefor apremium, upon the death of theinsured person. • Depending on the contract, other events such asterminal illness or critical illness can also be the reason for the payment. • Thepolicy holder typically paysapremium, either regularly or asone lump sum. Other expenses (such asfuneral expenses) canalso be included in thebenefits. 3
- 6. TYPESOF LIFE INSURANCE POLICIES INSURANCE POLICIES PURE INSURANCE TERMPLANS INSURANCECUM INVESTMENT POLICIES WHOLELIFE PLANS UNITLINKED INSURANCE MONEYBACK ENDOWMENT PLANS
- 8. Term insurance is the simplest and oldest form of assurance and provides for payment of the sum assured on death, provided death occurs within the policy tenure or term Should the life assured survive to the end of the term then the cover ceases and nothing is payable. Term insurance is not investment. It is expenditure. Like the premiums you pay for your car you do not get any 'benefit' if the event for which the cover is taken does not happen and there is no claim. What you buy in term insurance is peace of mind and risk cover when it is basically needed. In life insurance term policies you get tax benefit on the premiums paid and tax-free payment to your beneficiary in case of death. Thus, the purchase of term insurance is comparable to purchase of property or car insurance where the premiums are paid every year. In its purest form term insurance coversrisk and risk only for one year and can be renewed every year by paying increasing premium and this form is called annual 'Renewable Term Assurance'.
- 9. Sum assured is payable only in the event of death during the term. In case of survival, the contract comes to an end at the end of term. Term Life Insurance can be for period as long as 40 years and as short as 1 year. No refund of premium Non-participating policies Low premium as only death risk is covered.
- 10. Increasing Term Insurance Decreasing Term Insurance
- 11. Convertible term assurance policy Under this plan a policyholder is entitled to exchange the term policy for an endowment insurance or a whole life policy. Conversion can be done at any time during the term except last 2 years. Level Term Life Insurance The sum assured throughout the term of the policy does not change.
- 12. Renewable Term Life Insurance With renewable term insurance, the insurance company automatically allows you to renew your coverage after the term of the policy is over (generally 5 to 20 years)
- 13. TERMPOLICY FEATURES • CoversAmount of protection against death of an Individual for agivenperiod. • Insuranceamount is to be paid to the Nomineesin case of death • LOW COST- CheapestFormof LifeInsurance • CONVERTIBILTY- FromOriginal TermInsurancePolicy to Whole Life Termetc. • CHANGES IN PREMIUM – It mayeither increaseor decreasebasedon period of the policy, age etc FEATURES Protection against death Insurance amountto bepaid LowcostConvertibility Changesin premium
- 14. TERMPOLICY PROS/ ADVANTAGES • High amount of coverageat lowpremium • DEATHBENEFIT – Payableto the beneficiary whenthe annuitant passesaway. • TAXBENEFIT - anypayment made by atax payer on account of TermInsurancePolicywill be allowed deduction asper section 80Cof the Income-taxAct, 1961 with enhancedtax deduction up to Rs1,50,000. • RENEWABILTY– Oncethe policy is expired , it canbe renewed with samepremium andrates PROS HIGH COVERAGE DEATH BENEFIT TAXBENEFIT RENEWABILITY
- 15. TERMPOLICY CONS/ DISADVANTAGES • LIMITED TOCONVERSION PERIOD - Theconversion options for anumber of term life polices expire prior to the term period’smidpoint. • PURE INSURANCE ,NO INVESTMENT- In term insurance policy if policy holder survive to the maturity date no amount is payable( premium paid is not returnedback) • NO SURRENDERVALUE CONS PURE INSURANCE ,NO INVESTMENT LIMITED TO CONVERSION PERIOD NO SURRENDE R VALUE
- 17. TERMPOLICY SUITABILITY • SUITED FORINVESTORSWITHSHORTTERM LIFE INSURANCE NEEDS(10YRSORLESS) LIKE 1. Who cannot afford highpremium 2. Students who want to take education loan and bank require coverage 3. Housing Loan 4. Suitable for investors who want to demarcate between risk coverageand investment options .
- 18. 11 FEATURES PROS CONS SUITABILITY •CoversAmount of protection against death of an Individual for agiven period. •Insuranceamount is to be paid to the Nomineesincase of death •LOW COST- Cheapest Formof LifeInsurance •CONVERTIBILTY- From Original TermInsurance Policy to Whole LifeTerm etc. •CHANGES IN PREMIUM– It mayeither increaseor decreasebasedon period of the police, ageetc •High amount of coverageat low premium •DEATH BENEFIT – Payable to the beneficiary when the annuitant passesaway. •TAXBENEFIT - anypayment made by atax payer on account of TermInsurance Policy will be allowed deduction asper section 80C of the Income-taxAct, 1961 with enhancedtax deduction up to Rs1,50,000. •RENEWABILTY– Oncethe policy is expired , it canbe renewed with same premium andrates •LIMITED TOCONVERSION PERIOD - Theconversion options for anumber of term life polices expireprior to the term period’s midpoint. •PURE INSURANCE ,NO INVESTEMENT - In term insurance policy if policy holder survive to the maturity date no amountis payable( premium paid is not returned back) •NO SURRENDERVALUE •Suited for investors with short term life insurance needs(10YRSORLESS)like 1.Who cannot afford high premium 2. Students who want to take education loan and bank acquires coverage 3.HousingLoan– life cover equal to value of theloan 4. Suitable for investors who want to demarcate between risk coverageand investment options SUMMARYOFTERMPOLICY