life & general insurance

8/16/2019 Life & General Insurance

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LIFE & GENERAL

INSURANCE


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Insurance

Life Insurance

General Insurance

1. Fire Insurance

2. Marine Insurance

3. Accident/Motor Insurance

4. Health Insurance

5. Liability Insurance1. Indiidual Insurance

2. Grou! Insurance

Types of Insurance

1. "ith #rofits

2. "ithout #rofits


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∗ The contracts of life insurance in India are

governed b the Insurance Act!"#$% and LifeInsurance Cororation Act!"#'()

∗ The life insurance business *as nationali+edon ,anuar "#! "#'() And on Set "st! sa-e

ear! under Sec)$ of the Life InsuranceCororation Act! "#'(! the LIC ca-e in tobeing as an i-ortant ste to*ards-obili+ing savings)

LIFE INSURANCE


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A contract of life insurance is a contract b

*hich the insurer! in consideration of thea-ent of certain su-s!called re-iu-s!underta.es to a a certain su- of -one onthe death of a erson *hose life is insured! or

on the e/ir of a certain eriod! *hicheveris earlier)

The re-iu- -a be aid in a lu- su- or beriodical install-ents)

LIFE INSURANCE CONTRACT


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∗ In life insurance! the assured -ust have

insurable interest in the life insured!other*ise the contract of insurance is void)

∗ A erson has insurable interest in the life ofanother if he *ill sustain so-e ecuniarloss on the death of the erson *hose life isinsured)

∗ The insurable interest -ust e/ist at the ti-e

of contract of insurance)

INSURA0LE INTEREST


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∗ In life insurance! there are three cases in *hich

insurable interest is resu-ed)∗ Ever erson is resu-ed to have insurable

interest in his o*n life u to an a-ount)

∗ Li.e*ise! a husband is resu-ed to haveinsurable interest in the life of his *ife and vice

versa)∗ A erson is dee-ed to have an insurable

interest in the lives of those *ho are deendentuon hi-)

Cont1d22222))3INSURA0LE INTEREST4


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∗ Contract of life insurance! li.e other

contracts of insurance! is a contract ofUberr-ae fedei! and therefore fulldisclosure must be made to the insurer ofever -aterial circu-stance *hich is .no*nto the assured and which would inuence

the ud!ment of a "rudent insurer in#$in! the "remium% or determinin!whether to ta&e ris& )

Right of Insurer2))to Avoid Insurance 5olic


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∗ In the event of failure to disclose an such circu-stance! the insurercan avoid the olic 36ithoolal Naa. vs) L)I)C of India7"#(894)

:The deceased .no*ing that he had su;ered fro- heartsu;ered! had stated in the roosal that he did not su;erfro- an ail-ent)


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∗ Surrender value is the a-ount *hich insurer is

reared to a to the assured in case he doesnot continue a olic for the agreed eriod ofti-e and surrenders his right! title and interestunder the olic to the insurer)

∗ 0efore the olic ac@uires an surrender value itshould have run for a certain nu-ber ofears)The surrender value of the olic goes onincreasing as -ore and -ore re-iu-s are aid)

Surrender alue


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∗ The insurers usuall o;er the assured a facilit of

loan on the life olicies on *hich a certainnu-ber of re-iu-s have been aid)

∗ The loan is granted on the securit of the olic!and is li-ited b the a-ount of surrendervalue)It -a be aid bac. *ithin a certain eriod)

∗ If it is not aid during the ter- of the assurance!it is recovered fro- the a-ent due at the ti-eof the -aturit of the olic)

Loan on 5olicies


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∗ The rates of re-iu- for -ost life olicies deend

uon the age of the life assured at the ti-e ofe;ecting the olic)

∗ It is! therefore! essential that the correct age shouldbe stated in the roosal for-) 5roof of age -a begiven at the ti-e of the roosal or subse@uent tothe issue of the olic)Bhen it is given! the insurer*rites the *ords :age ad-itted on the olic)

∗ Age can be roved b roduction of a certiDed coof an entr in the Register of 0irths .et b thelocal bodies or other available evidences)

5roof of Age and eath


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Assi!nment ' Nominationistinction

∗ ASSIGN6ENT

")Assign-ent -a be-ade b anendorse-ent on theolic itself or b asearate instru-ent)

8)n assign-ent! the

roert in the olicasses to theassignee)

∗ N6INATIN

")No-ination -a be-ade b -entioning thena-e of the no-inee inthe olic orendorse-ent thereon)

8)In case of no-ination!the olic continues tobe at the disosal of theassured during hislifeti-e)


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∗ $)An assignee gets the

right of the o*ner ofthe olic and he -adeal *ith the olic inan -anner he li.es)

∗

=)In case ofassign-ent! the-one is to be aid tothe assignee)

∗ $)A no-inee gets onl

beneDcial interest in theolic)


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∗ ')An assign-ent is

-ade for the uroseof transferring therights! etc) under theolic to the

assignee)∗ ()Assign-ent is

irrevocable)

∗ ')A no-ination is -ade

so that the beneDciar-a recover the a-ount*hen the olic -aturesafter the death of theassured)

∗

()No-ination can berevo.ed at an ti-ebefore the -aturit ofthe olic b giving anotice to the insurer)


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∗ The t*o basic ele-ents in a life insurance cover

are 7a9 death cover and 7b9 ris. cover) The insurance lans that rovide onl the death

covers i)e)! the beneDts are aid on the death ofthe insured erson are called as Ter- Assurance5lans! else! the lans under *hich the beneDts

are aid on the survival of the insured *ithin aseciDed eriod are called as 5ure Endo*-ent5lans) All insurance covers are a -i/ of thesebasic ele-entar lans) 22)) 3Cont1d4

Tes of 5olicies


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∗ ")ClassiDcation based on time

a)Bhole life Bhole ter-!Li-ited Ter-! Convertible b)Li-ited! Convertible!Rene*able

∗ 8)ClassiDcation based on in(estment obecti(e

a)Endo*-ent 5lans 5ure! ,oint! ouble! Anticiated

b)5articiating lans 6one bac. olicies∗ $)ClassiDcation based on "remium "a)ment

a)Single re-iu- olicies

b)Level re-iu- olicies

Tes of 5olicies


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∗ =)ClassiDcation based on claim "a)ment

a) Fi/ed Su- 5olicies

b) Annuit 5olicies

∗ ')ClassiDcation based on number of"ersons assured

a)Single life

b)6ultile Life

c)Last survivorshi olic

Tes of 5olicies


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LET US FIRST TR* AN+ UN+ERSTAN+ ,-AT A ULI. IS

ULIP: IT IS A MARKET LINKED INVESTMENT WHERE THE PREMIUM PAID IS INVESTED

IN FUNDS

DIFFERENT OPTIONS ARE AVAILABLE, LIKE 100% EQUITY, BALANCED, DEBT, LIQUID

ETC AND ACCORDING TO THE FUND SELECTED, THE RISKS AND RETURNS VARY.

THE COSTS ARE UPFRONT AND ARE TRANSPARENT, THE INVESTMENT MADE IS

KNOWN TO THE INVESTOR (AS HE IS THE ONE WHO DECIDES WHERE HIS MONEYSHOULD BE INVESTED.

THERE IS A GREATER FLE!IBILITY IN TERMS OF PREMIUM PAYMENTS WHICH MEANS A

PREMIUM HOLIDAY IS POSSIBLE.

YOU CAN ALSO INVEST SURPLUS MONEY BY WAY OF TOP UPS WHICH WILL INCREASE

YOUR INVESTMENT IN THE FUND AND THEREBY PROVIDE A PUSH TO RETURNS AS

WELL.

THE HIGHER OF THE SUM ASSURED OR FUND VALUE IS PAID AT THE MATURITY OR

INCASE OF DEATH.


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EATURES O ULIP

MAIN FEATURESLIFE PROTECTIONDISABILITYCRITICAL ILLNESSSURGERIESDEATH DUE TO ACCIDENT

ADDITIONAL FEATURESINVESTMENT AND SAVINGSCAPITAL GAINSMORTALITY CHARGES

FLE!IBILITYAD"USTABLE LIFE COVERINVESTMENT OPTIONSTRANSPARENCYOPTIONS TO TAKE ADDITIONAL COVER AGAINST

LIQUIDITYTA! PLANNING


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U L I .

WHAT IS A UNIT FUND?

THE ALLOCATED (INVESTED) PORTIONS OF THE PREMIUMS AFTER DEDUCTING

FOR ALL THE CHARGES AND PREMIUM FOR RISK COVER UNDER ALL POLICIES INA PARTICULAR FUND AS CHOSEN BY THE POLICY HOLDERS ARE POOLED

TOGETHER TO FORM A UNIT FUND.

WHAT IS A UNIT?

IT IS A COMPONENT OF THE FUND IN A UNIT LINKED POLICY.


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U L I .

WHAT IS A UNIT FUND?

THE ALLOCATED (INVESTED) PORTIONS OF THE PREMIUMS AFTER DEDUCTING

FOR ALL THE CHARGES AND PREMIUM FOR RISK COVER UNDER ALL POLICIES INA PARTICULAR FUND AS CHOSEN BY THE POLICY HOLDERS ARE POOLED

TOGETHER TO FORM A UNIT FUND.

WHAT IS A UNIT?

IT IS A COMPONENT OF THE FUND IN A UNIT LINKED POLICY.


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THE INVESTMENT IS DENOTED AS UNITS AND IS

REPRESENTED BY THE VALUE THAT IT HAS

ATTAINED AT THAT POINT OF TIME .THIS IS

KNOWN AS NET ASSET VALUE (NAV.

FOR E!AMPLE : AN INVESTOR HAD INVESTED

RS.10,000#$ IN A UNIT LINKED PLAN AND THE

NAV AT THE TIME OF INVESTMENT WAS RS.10#$

THEN THE NUMBER OF UNITS HELD BY THE

INVESTOR WILL BE

10,000#10

1000 UNITS

NAV (NET ASSET VALUE)


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ULI. o"tions related to life sta!e

A/0 ULI.s FOR RETIRE1ENT .LANNIN2

3/0 ULI.s FOR LON2 TER1 ,EALT- CREATION

")9 Single re-iu- H Regular re-iu- lan

8)9 Guarantee lans Non guarantee lans

$)9 Life Stage based Non life Stage based

C/0 ULI.s FOR C-IL+REN4S E+UCATION

+/0 ULI.s FOR -EALT- SOLUTIONS


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∗ 5rotection and safet as in an insurance olic

∗

Savings∗ Fle/ibilit

∗ AdJustable Life Cover

∗ Invest-ent tions

∗ Transarenc

∗ eath 0eneDts

∗ isabilit

∗ 0eneDts over critical illnesses

∗ Surgeries

∗ Ta/ 0eneDts K And 6ore

Features of ULI5 lan


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,h) ULI. is soattracti(e5 TRANS.ARENC* 5lan as er life stage needs through -ar.et led

invest-ents as co-ared to traditional invest-ent lan

INSURANCE CO6ER "lus IN6EST1ENT

FLE7I3ILIT* H s*itching as er -ar.et -ove-ents to caitali+e on

invest-ent oortunities across the e@uit and debt -ar.ets and beneDtfro- the vagaries of stoc.debt -ar.ets

1ULTI.LE IN6EST1ENT O.TIONS8

A!!ressi(e ULI.s 7*hich invest %MH"MM in e@uities!balance

in debt9

3alanced ULI.s 7invest around =MH(M in e@uities9

Conser(ati(e ULI.s 7invest u to 8M in e@uities9


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∗ Introduction: The object of all laws is to

protect the person and property of allindividuals in any society. Risk is inherent in

various facets of human life and there is an

incessant urge among human beings to lead a

protected and secured life.∗ According to Abraham Maslow, a famous psychologist, net to

survival comes !safety and security" in the hierarchy of needs

of any human being.

GENERAL INSURANCE:


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GENERAL INSURANCE:

∗ ne of the ideal devices for avoiding such

e/igencies of insecurit is the concet ofinsurance)

∗ Bhereas! life insurance ta.es care about thecontingencies that a;ect life! generalinsurance e-braces a *ide range of ris.sertaining to subJect -atters other than life)

∗ General Insurance e-braces *ithin it1s foldinsurance of di;erent .inds of roert!*hich include Dre! -arine! contingenc!

liabilit! -otor and accident insurances etc


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EFINITIN F FIRE INSURANCE 3USINESS

∗ PFire Insurance1 has not been deDned in the

Insurance Act!"#$% instead! #re insurance business is deDned! as 9the businesse:ectin!% otherwise than incidentall) tosome other class of insurance business%

contracts of insurance a!ainst the ris&sinsured a!ainst in #re insurance"olicies;

Insurance Act!"#$%3Sec)87(97a94)


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Characteristics ofFire Insurance Contract

∗


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∗ $)The assured must ha(e insurable

interest in the subect matter both atthe time of insurance and at the time ofloss)This insurable interest -ust be caableof valuation in ter-s of -one)

∗

>/The ris& co(ered b) #re insurancecontract is the loss resultin! from #re orsome cause which is the "ro$imatecause of loss)


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∗ ?)It is subJect to the rinciles ofsubrogation and contribution)

∗ ()It is a contract fro- ear toearIt can! ho*ever! be rene*ed

if the assured as the re-iu-during the das of grace)


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Need of 6arine Insurance

∗ nce the goods are -oved out fro- the

*arehouse of the seller! the are no -ore inthe custod of the seller or the buer) Theare rather in the hands of a third art calledthe carrier) uring the transit loss can arise

fro-∗ Fire! e/losion

∗ Contact *ith *ater

$$


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Contd))

∗ Accident

∗ 0rea.age∗ Theft

∗ 5ilferage

∗ NonHdeliver

E/osure to these ris.s and the fact that thegoods are in ossession of a third artenhances the chances of loss/


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Marine Insurance

PropertyInsurance

LiabilityInsurance

CargoInsurance

Loss of IncomeInsurance

Hull & Machi-

nary Insurance

Collision LiabilityInsurance

Other LiabilityInsurance

Protection &

Indemnity Ins.


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istinction 0et*een Fire & 6arine Insurance onthe one hand! and Life Insurance on the other)

Fire Insurane an!

Marine Insurane Li"e Insurane

1.C&')*+ - &/&+:

I+ )2& - F*'& )+3 M)'*+&I+24')+& 5& &/&+ *+24'&36) -' 6) +- 5)77&+ ) )88

1.C&')*+ - &/&+:

T5& &/&+ (3&)5 *2 9-4+3 - 5)77&+ 2--+&'-' 8)&'.

.I+3&6+*:

T5& -+') - *'& )+36)'*+& *+24')+& )'&

-+')2 - *+3&6+*.

.I+3&6+*: T5& 246 )224'&3 *2 7))98&*''&27&*/& - )+ 7'-- -8-22 )+3 - 5& 488 &;&+ -5& )6-4+ )224'&3 *+ 5&

&/&+ - 3&)5 - 5& )224'&3.


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.T*6& - I+24')98& I+&'&2:

I+ *'& *+24')+&, 5& *+24')98&*+&'&2 642 9& 7'&2&+ 9-5 )5& *6& - *+24')+& )+3 ) 5&

*6& - 8-22.

I+ 6)'*+& *+24')+&, * 642 9& 7'&2&+ ) 5& *6& - 8-22.

>.T*6& - I+24')98& I+&'&2:

I+ L*& *+24')+&, * 642 &;*2 )5& *6& - 5& -+').I +&&3 +-

9& 7'&2&+ ) 5& *6& ?5&+ 5&

7-8* )882 34&.


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@.D4')*-+ - C-+') -I+24')+&:

A -+') - *'& *+24')+& *2 )-+') '-6 &)' - &)'.I -6&2

- )+ &+3 )&' 5& &;7*' - 5&&)'.T5-45 * )+ 9& '&+&?&3 *5& *+24'&3 &;7'&22&2 5*2?*88*++&22 - 3- 2- )+3 7)2 5&

7'&6*46.

A -+') - 6)'*+& *+24')+& *2-' ) 7)'*48)' /-)&.

@. D4')*-+ - C-+') -I+24')+&:

A -+') - 8*& *+24')+& *2 )

-+*+4*+ -+').I 8)72&2 * 7'&6*46 *2 +- 7)*3 '&48)'8 )5& 27&**&3 *6&2.


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,hat is 3ancassurance5

∗ istribution of insurance roducts through a ban.1sdistribution channels)

∗ According to IRDA! Pbancassurance1 refers to ban.s

acting as cororate agents for insurers to distributeinsurance roducts

∗ Life Insurance Marketing and Research Association’s insurance dictionar deDnesbancassurance as :the rovision of life insurance

services b ban.ing and building societies)


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3ancassurance in India

∗ In the ear 8MM8 the ban.s of India *ere

er-itted to do insurance business for theDrst ti-e)

∗ It is regulated b both R0I and IRA as it isco-bination of ban. and insurance)

∗ It is a BinHBin Strateg∗ E$am"le8 S0I Life Insurance Co-an Ltd

has tie u *ith S0I)


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R3I !uideline for ban&senterin! into insurance sector

∗ ,oint venture *ill be allo*ed for Dnanciallstrong ban.s *ishing to underta.e insurancebusiness *ith ris. articiationK

∗ For ban.s *hich are not eligible for this JointH

venture otion! an invest-ent otion of u to"M of the net *orth of the ban. or Rs) 'Mcrore! *hichever is lo*er! is available)

∗ An co--ercial ban. *ill be allo*ed to

underta.e insure business as agent ofinsurance co-anies) This *ill be on a feebasis *ith noHris. articiation)


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The Insurance Re!ulator) and+e(elo"ment Authorit) @IR+A0!uidelines for the bancassurance are8

∗ Each ban. that sells insurance -ust have achief insurance e/ecutive to handle all theinsurance activitiesK

∗

All the eole involved in selling shouldunderHgo -andator training at an instituteaccredited b IRA and ass the e/a-inationconducted b the authoritK

∗ Co--ercial ban.s -a beco-e cororateagents for one insurance co-an

∗ 0an.s cannot beco-e insurance bro.ers)

S l


43/59

3ancassurance Sales1odels

∗ Se"arate Sales Force6ini-u- integration bet*een the sta; of theartners and -erel utili+e the custo-er databasefor insurance roduct rosecting)

∗

-and in 2lo(e∗ Sales force of the insurer utili+ing the resources of

the ban. 7custo-er base! brand infrastructure !ban. sta; e/ertise9)

∗ 0an. sta; sells si-l ac.age roduct! but act asintroducers & in the case of -ore co-le/ roductsthe insurer1s Dnancial lanner underta.e theconstructive selling rocess and Dnal lead closure)

∗


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∗ Full) Inte!rated

∗ Insurance sales rocess is *hollo*ned b the ban. sta; *hile theinsurer acts onl as a roduct andservice rovider)

∗ E/loitation of ban.1s strength and

does not utili+e the s.ills of theinsurer)


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Ad(anta!e for the 3an&s

∗ Revenue diversiDcation

∗ Satisfaction of -ore Dnancial needs underthe sa-e roof

∗ Custo-er retentionHIncrease in custo-erloalt

∗ 6ore roDtable resource utili+ation∗ Enriched *or. environ-ent

∗ Establish sales oriented culture


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Ad(anta!e for the InsuranceCom"anies

∗ Revenue and channel diversiDcation

∗ Qualit custo-er access∗ Quic.er geograhical reach creation of brand

e@uit

∗ Increase in volu-e and roDt

∗ I-roved brand e@uit


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Ad(anta!e for theConsumer

∗ Enhanced convenience

∗ ne sto shoing for all Dnancial services∗ Innovative and better roduct ranges

∗ 6ore credible solution


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#$AT %& '(A%M )))

Clai- is a right of insured to receivethe a-ount secured under the olic ofinsurance contract ro-ised b Insurer)


49/59

Clai- 5a-ent

.rocedure for Claim settlement

∗ 5olic docu-ent sub-ission∗ Age 5roof

∗ Internal en@uir

∗ riginal eed of assign-ent 7if an9

∗ ther docu-ents 7Receit of 5a-ent etc9


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Clai- 5rocedure


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Clai- 5rocedure

∗ nce the docu-ents are received! the

insurer sends a ostHdated che@ue fe* dasin advance)

∗ In case! the original olic is reorted to belost! the -atter is e/a-ined in detail to

ascertain the genuineness of clai- and issettled on the basis of inde-nit and ublicnotiDcation! if found genuine)


52/59

∗ If an individual has to Dle his o*n insurance clai-!

the follo*ing oints should be borne in -indH∗ a9 >ee all receits and arrange the- in

chronological order

∗ b9 Get the clai- for- fro- the insurance co-an

∗ c9 5reare coies of the original for the urose of

clai- sub-ission

∗ d9 Revie* and disatch docu-ents

∗ e9 Understand the Dne rint in the olic docu-ent


53/59

Filling Clai- For-

∗ Clai- for- is then Dlled *hich is usuall selfHe/lanatorin nature) In this clai- for-! @ueries such as theindividual1s healthHinsurance cover details! rei-burse-entof the -edical e/enses state-ent details! urose ofhositali+ation! ersonal details and identiDcation roofand si-ilar details are as.ed fro- the custo-er)

∗ After Dlling the necessar details! it -ust be acco-anied

*ith the relevant docu-ents) These relevant docu-entscan be further classiDed into 8 grous

i9 6edical ocu-ents

ii9 5olic ocu-ents


54/59

*A'T+R& A**'T%-T$ '(A%M


55/59

T5& 7-8* 25-483 9& *+ -'& -+ 5& 3)& - 5&

&/&+.

T5& '*2 )+3 )42& - &/&+ 25-483 9& -/&'&3 9

5& 7-8*.

T5& )42& - 8-22 -' 5& &/&+ 25-483 9& 3*'&8

'&8)&3 - 5& 8-22. A '&6-& )42& 5)2 +- 78)& *+

5& 2&8&6&+.

T5& 8-22 25-483 +- 5)/& 9&&+ )42&3 ?*5 )+ *+&+*-+ - )*+ '-6 5& 2*4)*-+.


56/59

Sucient docu-entar evidence of loss should be

resented along *ith the alication for-)

6ultile clai-s and recirocal clai-s *ill be settled as er the ter-s of the contract of insurance)

5resence of insurable interest! in case of the roert insurances! at least at the ti-e of haening of event

or loss su;erings) Bithout having the insurableinterest in the subJect -atter! no erson can getbeneDt or co-ensation)


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GUIELINES FRCLAI6S SETTLE6ENT 0

IRA


58/59

E/cet in cases of a -arine insurance cover! *herecurrent -ar.et ractices do not insist on a *ritten roosalfor-! in all cases! a roosal for grant of a cover! either forlife business or for general business! -ust be evidenced ba *ritten docu-ent) It is the dut of an insurer to furnishto the insured free of charge! *ithin $M das of theaccetance of a roosal! a co of the roosal for-)

For-s and docu-ents used in the grant of cover -a!deending uon the circu-stances of each case! be -ade available in

languages recogni+ed under the Constitution of India) In Dlling the for- of roosal! the rosect is to be guided

b therovisions of Section =' of the Act) An roosal for-see.ing

infor-ation for grant of life cover -a ro-inentl statetherein the re@uire-ents of Section =' of the Act)


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Bhere a roosal for- is not used! the insurer shallrecord the infor-ation obtained orall or in *riting! andconDr- it *ithin a eriod of "' das thereof *ith the

rooser and incororate the infor-ation in its covernote or olic)

Bherever the beneDt of no-ination is available tothe rooser! in ter-s of the Act or the conditions of

olic! the insurer shall dra* the attention of therooser to it and encourage the rosect to avail thefacilit)

5roosals shall be rocessed b the insurer *ith

seed and ecienc and all decisions thereof shall beco--unicated b it in *riting *ithin a reasonableeriod not e/ceeding "' das fro- receit of roosalsb the insurer)

life & general insurance

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