Life insurance provides a death benefit to beneficiaries that is paid out by an insurance company in exchange for premium payments from the insured. It is important for protecting dependents from financial loss if the primary income earner dies. There are two main types of life insurance - term insurance, which provides coverage for a set period of time without cash value accumulation, and permanent insurance, which provides lifetime coverage and allows cash value to grow within the policy. Factors like income needs of dependents and existing debts are considered to determine how much life insurance coverage is appropriate for an individual.

1. Life Insurance: The Basics
Rabi Rehman
Sharyar Awan
Mirza Waqas
Adil Ramzan
Anum Inayat
Syeda husnaina
Kainat Raees
Rubab Naseem

2. Life Insurance: Definition
Insurance is a legal contract that transfers risk
from a policyholder to an insurance company.
Risk is what makes you decide whether or not
you need insurance.
> Risk = > Cost

3. Life Insurance: The Basics
Insurer: An insurer is an insurance company who is providing
policy
Insured: Policy holder
Beneficiary: A beneficiary is the person or legal entity such as a
charity, designated to receive the death benefit

4. Life Insurance: Importance
Life Insurance is to protect the people who depend
on you and would suffer a financial loss when you
die.
The death benefit is the sum paid to the beneficiary
by the insurance company.

5. Life Insurance: The Purpose
Provide safety and security
Generates financial resources
Life insurance encourages saving
Promotes economic growth
Medical support
Spreading of risk
Source of collecting funds

6. Life Insurance: Reasons to Buy Life
Insurance
•To provide immediate cash to pay for a funeral, any other costs
arising from the death, or pressing debts.
•To pay off a mortgage or other loans.
•To provide housekeeping and child care services so that the
surviving spouse can enter the workforce
•To provide the surviving spouse sufficient funds to stay at home
or reduce work hours
•To provide dependents with an emergency fund.

7. How Life Insurance Works
A legally binding contract between an insurance
company (insurer) and an individual (insured)
In exchange for payment of premiums, the insurer
agrees to pay a specified death benefit
The premiums collected from all policy holders are
placed in an insurance pool
The Insurance Company can invest the money in the
pool but must have enough on hand to pay out a
large number of claims

8. Life Insurance: Reduction of Risk
Insurance companies want to enroll low-risk people
If a person dies shortly after they are insured, the
company has not had enough time to collect enough
premiums to cover the loss

9. Life Insurance: Underwriting
Underwriting is the process of assessing applicants
to determine whether they are good risks
An underwriter’s job is to minimize the risk the
company takes
Factors in underwriting:
•Present health
•Medical history
•Family medical history
•Lifestyle
•Occupation

10. Life Insurance: Criteria
How much life insurance should a person have?
Factors:
•Number of dependents
•Ages and needs of dependents
•Balance on mortgage or monthly rent payments
•Balance of loans
•Health insurance
•Mortality
•Basic necessities/Life

11. Life Insurance: Why ?
Some employers offer it as a
benefit.
Insurance companies sell
insurance through experienced
agents.
You can buy life insurance through
the internet.

12. Life Insurance: Policy Types
Two Basic Types

13. Life Insurance: Basic Policy Types
Term Insurance
•Simplest
•Usually most inexpensive
•A policy that is limited to a specific length of
time, or term
•Does not accumulate cash value
•Usually term is 1,5,10,15,20,25,or 30 years

14. Life Insurance: Policy Types
Permanent Life Insurance
Covers the insured for a lifetime or until age 100
If you live to 100 insurer pays individual the
death benefit
Three types of Permanent Insurance:
•Whole life
•Universal life
•Variable life

15. Life Insurance: Policy Types
Permanent Life Insurance
Cash Value
•Cash reserves accumulate in the policy
•You can take a loan out on the policy
•You can cash in your policy

16. Life Insurance: Insurer
•EFU House
•Allianz Insurance
•Jubilee Life Insurance
•State Life Insurance
•Adamjee Insurance
•Askari Insurance
•Habib Insurance