concept of 4 cs in life insurance selling

CONCEPT OF 4 CS

Prepared by

SANJAY R. SAWANTDevelopment officer

LIC BR.906

1ST

CREATION OF INCOMEEarning span of life people have two options to earn money

1. SERVICE 2. BUSINESS 3. Profession

2ND

CONSUMPTION OF INCOME

People earn money and spend on

1) FOOD 2) SHELTER 3) CLOTHING4) EDUCATION 5) COMFORTS

3RD C

WHAT IS THAT

4TH

CONSERVATION OF INCOME

I. WEALTH ACCUMULATION

II. ESTATE CREATION

CONTINGENCIES

DEATHDISABILITYRETIREMENT

CONCEPT OF CREATION OF LIFE

CAPITAL FUNDSanjay R. Sawant

Dev. Officer, Br.906

WHAT IS LIFE INSURANCE?

Replacement for RETIREMENT

Replacement for DEATH (Nat./Acc.)

Replacement for DISABILITY

REPLACEMENT FOR RETIREMENT

Suppose the person who earns Rs.25,000/- per month.

Out of which his personal expenses are of Rs.5,000/- p.m.

Therefore his home made expenses are of Rs. 20,000/- p.m. (basic financial requirement per month)

After his retirement his earning will stop but he has to survive his life in old age with his life partner if she is alive.

REPLACEMENT FOR RETIREMENT

Therefore he requires some specific amount to his old age i.e.Rs.25,000/- p.m. means 3,00,000/- per annum.

6% of amt. X = 3,00,000 X = 300000 x 100/6 X = 50,00,000/- should be the total risk cover

amount that person should have.

REPLACEMENT FOR NATURAL DEATH

If the same person dies then his earning of Rs.25,000/-will never come to his family but his family has to survive.

Now his family’s basic financial requirement is 25000-5000=20000 p.m.

Therefore his family should get Rs.20000 in very next month after bread winner’s death and that is for longer period at least for more than 20 years. Such provision should be done by bread winner before leaving this world.

HOW? That bread winner should have the life

insurance with risk coverage of ------ 20000 x 200 times = 40,00,000 40,00,000 x 6% (puts in FD at nationalise

bank) = 2,40,000 per annum interest will be received by nominee i.e. 20,000/- p.m.

REPLACEMENT FOR ACC. DEATH

On accidental death nominee receives additional sum assured equal to basic sum assured but Max. up to 50 lakhs of basic S.A. here in our case total amount receivable by nominee is 80 Lakhs.

Therefore his family will receive Rs.40,000/- p.m. till that amount is in that nationalise bank FD.

REPLACEMENT FOR DISABILITY.

When the life assured meets with an accident he might not be died but he may be alive with permanent disability.

Permanent disability means he must be totally disable to earn money.

In such situation income stops.

REPLACEMENT FOR DISABILITY

After disablement further premium of policy will be waived ( no need to pay further prem. ) and the life assured will get the additional sum assured in 120 monthly installments with 100% risk cover till maturity of the policy.

In such case if maturity comes then (S.A.- the amount given under 120 monthly installments) will be given.

5000000 / 120 =41,666/- p.m.

HOW MUCH LIFE CAPITAL FUND IS REQUIRED IN OUR ILLUSTRATION?

That is

50,00,000/-

CREATION OF INCOMETRADITIONAL MODEL

CREATION OF INCOMEHARSHAD MEHTA MODEL

CREATION OF INCOME

BALANCED BOAT(A LIFEGUARD FOR YOUR FAMILY SAFETY)

LIFE IS GAME OF CHESS In this game your opponent is time

Make the right move

WEALTH OF NATIONS

THE GREAT ECONOMIST Adam Smith SAYS “the wealth of nation/human being should not be divided into many parts but should be whole and parallel/double to existing one.”

1 2 3 4 5 6 7 8 9 10 11 12 13 14 1502468

10121416

IF DREAM

1,50,00000

TEN LACS Column1 Column2

CREATION OF ASSETS IN TWO WAYS(IF…………………DREAM)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 150

2

4

6

8

10

12

14

16

1,50,00000 IS REALITY

TEN LACS Column1 Column2

CREATION OF ASSETS IN TWO WAYS(IS …………………..REALITY)

CONTINUATION OF INCOME (THE 3RD C)

THANK YOU