LIFE INSURANCE FOR UNDER PRIVILEGED
Life Insurance for the Under-Privileged Under-Privileged Under-Privileged persons are those persons whose income are too low to purchase life insurance policies, who have no adequate provision for old age and family security and who become incapable to earn adequate income due to accident, injury or disease. For these peoples five alternatives generally provided in life insurance which are- i. Industrial insurance ii. Group life insurance policies iii. Disability benefit policies iv. Pension plans v. Micro insurance Industrial Life Insurance Industrial life insurance is a form of life insurance specially designed to meet the requirement of wage earning population of industry. It also applies to low income classes of business or even of the population. It may be insured without medical examination. The premium is collected by agents on weekly or monthly basis. It should not be confused with social insurance which means workmen’s compensation, employers, liabilities etc. Purpose The main purpose of industrial life insurance is to provide at least clean up funds to meet lest expense of the assured. The amount of life insurance is not much so family protection is not always possible. The second aim is to educate the habit of saving among the low income group to meet their contingencies. Weekly premium can be easily saved and it may provide fund to create property. Comparison of Industrial and Other Forms of Life Insurance Industrial insurance is a form of life insurance therefore, most of the characteristics of life insurance are present in this insurance apart from the following dissimilarities: i. The premiums in industrial insurance are payable weekly and monthly whereas in ordinarily life insurance, they are payable annually, semi-annually, quarterly and monthly. ii. The premiums instead of being payable at the office of the insurer are collected in most of the cases at the house of the assured persons by insurance agents. iii. The amount of a policy in an industrial insurance is generally not more than Rs. 1000 whereas in other form of insurance it is usually more than Rs. 1000. iv. In industrial insurance medical examination is not essential but in other form of insurance medical examination is essential. v. Industrial insurance is extended to every member of the family thus it covers more areas then other insurance. Characteristics of Industrial Life Insurance Type of Contract Generally policies under this form of insurance are limited payment life or endowment plans because saving elements in these plans are maximum. Cash Values The industrial policy should be in force for a longer period for getting cash or paid up values. It may be from 3 to 5 years. Extended term assurance is available after payments of premiums for at least six weeks. Loan Values Since the servicing cost of loan value is higher and the protection element is elapsed in granting loan so the policy does not bear the provision of loan.
