This document discusses key concepts related to life insurance premiums, including:
- Premium components include interest, expenses, mortality, benefits, bonus loading, taxation, and inflation.
- There are different types of premiums such as risk premium, net premium, and office premium. Premium calculation is complex and involves actuarial and statistical principles.
- Insurers establish a life fund to hold all income from life insurance policies to exclusively meet liabilities and claims expenses.
- Insurers conduct annual actuarial valuations to ensure assumptions about mortality, interest, and expenses are valid and the business remains financially sound. Bonus may be distributed if valuations show surplus funds.
Helps customer find the best policy according to their suitable needs
Features,pros,cons and suitability of various policies are given :-
1. Term Policy
2. Whole Life Policy
3. Unit Linked Insurance Policy (ULIP)
4. Money Back Policy
5. Endowment Policy
Helps customer find the best policy according to their suitable needs
Features,pros,cons and suitability of various policies are given :-
1. Term Policy
2. Whole Life Policy
3. Unit Linked Insurance Policy (ULIP)
4. Money Back Policy
5. Endowment Policy
What is Fire Insurance. A fire insurance policy involves an insurance company agreeing to pay a certain amount equivalent to the estimated loss caused by fire to the insured, within the time specified in the contract
All you need to know about money back policy is described smartly. Don't forget, money is the mirror that reflects our personal strength & weakness with amazing clarity, Build it strong...Be smart, have some money backup plan for your life.
Watch full video on link given below-
https://youtu.be/jPZpvgUSL2Q
Motor Vehicle Insurance is the insurance coverage of risk arising out of the use of motor vehicle such as car, truck or other vehicles causing damage and loss to oneself as well as other’s property in an accident.
Motor Insurance is mandatory as per the Motor Vehicles Act passed in the year 1938 and subsequently amended.
Motor Insurance provides coverage related to property damage, bodily injury, medical expenses and any other sort of compensation in legal proceedings.
It is also referred as Auto Insurance, Vehicle Insurance and Car Insurance.
Types of Motor Insurance are -
Private Car Insurance
Commercial Vehicle Insurance
Defense Vehicle Insurance
Two Wheeler Insurance
Motor Vehicle Insurance generally comprises of following two components –
Third party liability coverage is the part of insurance policy which protects you in case you are sued or asked compensation for any physical injury or damage to someone else’s property by your vehicle accidently.
Third party liability could be of following nature – Bodily injury liability and Property damage liability.
Factors affecting premium of Insurance Policy-
Type of vehicle
Physical condition of driver
Geographical area of use
Age of vehicle
Losses Covered under Motor Insurance -
Loss or damage by accident, fire, lightning, theft, malicious act, natural disaster
Third party liability in form of injury ,death and damage to property
Medical Expenses
Exclusions under Motor Insurance-
Normal wear and tear
Damage when person was driving without license
Damage when person was driving in influence of alcohol
Damage due to a war
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What is Fire Insurance. A fire insurance policy involves an insurance company agreeing to pay a certain amount equivalent to the estimated loss caused by fire to the insured, within the time specified in the contract
All you need to know about money back policy is described smartly. Don't forget, money is the mirror that reflects our personal strength & weakness with amazing clarity, Build it strong...Be smart, have some money backup plan for your life.
Watch full video on link given below-
https://youtu.be/jPZpvgUSL2Q
Motor Vehicle Insurance is the insurance coverage of risk arising out of the use of motor vehicle such as car, truck or other vehicles causing damage and loss to oneself as well as other’s property in an accident.
Motor Insurance is mandatory as per the Motor Vehicles Act passed in the year 1938 and subsequently amended.
Motor Insurance provides coverage related to property damage, bodily injury, medical expenses and any other sort of compensation in legal proceedings.
It is also referred as Auto Insurance, Vehicle Insurance and Car Insurance.
Types of Motor Insurance are -
Private Car Insurance
Commercial Vehicle Insurance
Defense Vehicle Insurance
Two Wheeler Insurance
Motor Vehicle Insurance generally comprises of following two components –
Third party liability coverage is the part of insurance policy which protects you in case you are sued or asked compensation for any physical injury or damage to someone else’s property by your vehicle accidently.
Third party liability could be of following nature – Bodily injury liability and Property damage liability.
Factors affecting premium of Insurance Policy-
Type of vehicle
Physical condition of driver
Geographical area of use
Age of vehicle
Losses Covered under Motor Insurance -
Loss or damage by accident, fire, lightning, theft, malicious act, natural disaster
Third party liability in form of injury ,death and damage to property
Medical Expenses
Exclusions under Motor Insurance-
Normal wear and tear
Damage when person was driving without license
Damage when person was driving in influence of alcohol
Damage due to a war
Thank you for Watching
Subscribe to DevTech Finance
Prediction of house price using multiple regressionvinovk
- Constructed a mathematical model using Multiple Regression to estimate the Selling price of the house based on a set of predictor variables.
- SAS was used for Variable profiling, data transformations, data preparation, regression modeling, fitting data, model diagnostics, and outlier detection.
What are the the main areas of analytics and how can they benefit your business? Learn the value of SAS analytics and how you can get better insight into your data to make more profitable decisions.
By getting a better understanding of your data you will know which part of the data can be reliably forecast using time series methods and which cannot. You will also gain an understanding of any hierarchical structure in the data that can be used.
Presentation at SAS Analytics conference 2014
Predictive analytics has been applied to solve a wide range of real-world problems. Nevertheless, current state-of-the-art predictive analytics models are not well aligned with business needs since they don't include the real financial costs and benefits during the training and evaluation phases. Churn modeling does not yield the best results when it's measured by investment per subscriber on a loyalty campaign and the financial impact of failing to detect a churner versus wrongly predicting a non-churner. This presentation will show how using a cost-sensitive modeling approach leads to better results in terms of profitability and predictive power – and is applicable to many other business challenges.
Credit card fraud is a growing problem that affects card holders around the world. Fraud detection has been an interesting topic in machine learning. Nevertheless, current state of the art credit card fraud detection algorithms miss to include the real costs of credit card fraud as a measure to evaluate algorithms. In this paper a new comparison measure that realistically represents the monetary gains and losses due to fraud detection is proposed. Moreover, using the proposed cost measure a cost sensitive method based on Bayes minimum risk is presented. This method is compared with state of the art algorithms and shows improvements up to 23% measured by cost. The results of this paper are based on real life transactional data provided by a large European card processing company.
What is an annuity?
An annuity is an insurance-based contract between you, the owner, and the contract issuer.
This is basically how annuities work: You pay after-tax dollars to the issuer, the issuer invests the money for you, and any earnings accumulate tax deferred. At some point, the issuer pays out the principal and earnings to you or to your beneficiaries. Earnings are taxed as ordinary income when they’re distributed.
Planning for the old age when the ability to earn diminishes while the expenses to live a dignified and healthy life start rising is of utmost importance.
E-Brochure For Kotak Assured Savings Plan - Kotak LifeShaunakPatel19
Kotak Assured Savings Plan provides reasonable insurance, but it also assists in the accumulation of money for future financial goals by providing assured rewards.
Non-Qualified Deferred Compensation Programs for Private CompaniesSkoda Minotti
Paying annual bonuses may not keep the executives around after the bonus is paid. Should executives be rewarded if the employer is not doing well? How can employers attract and retain key executives while creating a system that will reward them if the company is profitable?
Types of Insurance Policies Owned by SingaporeansChew Zhan Lun
A project presentation for Money 101, a module offered in Nanyang Technological University on managing our personal finance.
Credits to my group members, Lam Hui Ping, Lee Tyng Tyng, Yvonne, Lui Wei Siang
Money Back Plan in India | Money Back InsuranceHarshit2014
Bajaj Allianz Invest Assure is a plan that gives you assured protection with financial benefits It takes only a moment to make promises and a lifetime to keep them. When you promise to see your family through thick and thin, you need to make sure that you have planned for all the eventualities that may befall on them.
2. Learning outcomes
After this discussion, you shall be familiar
with :
• Definitions of premium & renewal premium
• Components of premium
• Types of premium
• Premium calculation
• Valuation
• Bonus
• Life fund
3. What is premium ?
• Premium – consideration against insurance
contract
• First premium – consideration for contract to
COME into force
• Subsequent premia - for contract to REMAIN
in force
• Insurance policies priced first, cost of
production known later
• Calculation is very complex involving
statistical and actuarial principles.
5. Types
• Risk premium - covers risk of death
• Net or pure - Risk premium plus interest
• Office premium – Net premium plus
management expenses
6. Risk Premium
• Risk premium adequate to pay claims if all
policies were term policies for one year
• Risk premium based on probability of death
at various ages , using mortality tables
containing data for such probabilities.
• In Endowment cases, claims to be paid on
survival after some years
• Actual premium collected would have to be
more than risk premium
7. Net premium
• Premium collected are not utilised every year
for payment of claims
• Reasons -
Real experience may not be exactly as per
mortality tables
Premiums collected in Endowment plans will
be much higher initially than required since
company has to cover risk & pay survival
amount if policyholder survives term.
8. Contd……
• Hence premium should provide for the
Pure Endowment part of the policy also.
• Excess premium collected, in either case,
is invested by insurer
• This belongs to policyholders and will be
passed on to them
• Co assumes a certain rate of interest,
based on its experience, while computing
premium rates.
9. Contd…..
• Since life insurance contracts are very
long-term contracts, investments made by
company also will be long-term.
• Higher the interest earned, lower will be
premium
• Premium based on combination of
mortality rate and interest factor is Net
Premium
10. Office Premium
• If co was to charge only NP, then no
provision for expenses, hence certain
loadings to NP.
• In life insurance, expenses of procuring
business very high
• Cost of maintaining a policy is low
• Lesser RP goes towards expenses
• Uneven distribution of expenses in FYP & RP
11. Contd…..
• Expenses of a life insurance company
Salaries
Commission
Medical fee
Stamp duty
Printing & stationary
Postage
Advertisement/publicity
12. Contd….
• Establishment charges
Legal fees
Consultancy/training
Taxation
• When expenses are loaded, the premium
arrived at is the office premium.
This premium is now ready for use.
Is printed in promotional literature/
brochures
13. Level premium
• Insurers spread risk premium uniformly
throughout term of policy
• Premium remains same throughout term
• This is level premium
• Implies that premium collected in early years
of policy would be more than necessary for
risk and less than necessary towards latter
part of policy
• If premia were to increase with age, difficult
for policyholders to continue.
14. Premium calculation
• Calculate age ( less/more than 6 mos )
• Find correct tabular premium per Rs 1000
SA
• Rebate/adjustment for mode ( subtract for
Yly/Hly , no rebate for Qly/Mly )
• Arrive at balance
• Allow high SA rebate
• Multiply balance by SA & divide by 1000
15. Contd….
• Add rider premiums by multiplying with
SA/ ltd SA & divide by 1000
• Add extra premium like HE/OE
• Add above to get annual premium
• Calculate instalment premium (Yly/ Hly …..)
• Round off to nearest rupee
16. Life fund
• Insurance contracts are long-term
• Profit determined only after contract ends
• Premiums are yet to be paid, liability
continues & insurer has to keep aside
funds
• Practice of level premium implies that part
of a premium collected in any year is
meant to cover higher risks of future
years & kept till such risks arise
17. Life fund
• Hence, all income from life insurance
business , including earnings from
investments, are kept aside in a LIFE
FUND to exclusively meet liabilities
• IRDA stipulates this requirement
• Life fund used only to pay claims & the
expenses of running the business
• It represents the RESERVE for life
insurance policies
18. Valuation
• Premium is calculated considering likely
future experiences in respect of mortality,
interest & expenses
• These are assumptions or expectations
• Reality could be different from expectations
• If expectations conform, business properly
funded
• If experience is worse ( mortality/expenses are
more or interest earnings are less ), premium
would be inadequate & problems for co.
19. Contd…..
• All insurers check validity of these
assumptions annually to ensure business is
on sound footing .
• Process called ACTUARIAL VALUATION
• In any valuation actuary estimates liabilities
of insurer in respect of business in it’s books
& estimates amount of premia receivable
• Difference between the two is the fund
insurer must have to remain solvent.
20. • Data compared to existing life fund.
• If present fund more, insurer solvent.
• Method of valuation very complex.
• Each co to have full-time actuary.
21. Bonus /types
• If valuation shows fund is more than
estimated liabilities, insurer has a SURPLUS
• Valuation surplus is distributed to
policyholders through BONUS
• Participating policyholders pay extra
premium due to “bonus loading”
• Simple reversionary bonus – Bonus plus SA
• Compound reversionary bonus – Bonus plus
(SA plus bonus)
22. Types
• Vesting bonus – payable only when claim
arises, not if policy terminated for other
reasons.
• Terminal / final additional bonus – one-time
bonus for policies in force for at least 15
years
• Interim bonus - payable only to policies
maturing between a declared valuation &
valuation next year i.e mid-year