RENUKA MEHRA LECTURER IN B.B.A. GCCBA-42

 LIFE INSURANCE  Purchase policy ; insurance company promises to pay a lump sum at  the time of the policy holder death, or sometime while they are still  alive.  PURPOSE OF LIFE INSURANCE  Protect someone who depends on you from financial loss related to  your death. Other reasons are:  To leave at part of your estate.  To save money for retirement or for income or education for  children.  To pay off a mortgage or debts at the time of death

1 Outcome of an offer 2. Payment of Sum Assured 3.Payment of Premium 4.Contract of Contingency 5. Insurable Interest 6.Provides Financially help 7.Encouragement of savings 8. Wide Scope

1) Proposal 2.Proof of age 3. Medical Examination 4.Confidential Report by the agent 5.Acceptance of Proposal 6.Payment of First Premium 7. Insurance Policy

 Basically there are 2 types of life insurance: Term and Whole Life

 Term Insurance The most basic and least expensive least expensive type of life insurance. type of life insurance.  You buy coverage for a certain amount of time, such as 10, 15, 20 or 30 You buy coverage for a certain amount of time, such as 10, 15, 20 or 30 years. If you die before the term is over, your beneficiary gets the benefit years. If you die before the term is over, your beneficiary gets the benefit stated in your policy. If you live beyond the term, the policy expires. stated in your policy. If you live beyond the term, the policy expires. Therefore, if you purchase a 30 year term policy at the age  Therefore, if you purchase a 30 year term policy at the age of 20 you will not have any life insurance beyond the age of 50 of 20 you will not have any life insurance beyond the age of 50

 Whole life or or Permanent Insurance Permanent InsuranceThis type of policy never expires. As This type of policy never expires. As long as premiums are paid, it remains in force. Premiums are usually based long as premiums are paid, it remains in force. Premiums are usually based on your age at the time of purchase and generally remain level.  In addition o on your age at the time of purchase and generally remain level. In addition o to providing a death benefit, premiums are also invested to produce returns o adding cash value to your policy.There are three major types of whole life o or permanent life insurance: traditional whole life, universal life, and variable o universal life. o universal life

 Traditional Whole Life You'll pay the same amount of premium for the rest of You'll pay the same amount of premium for the rest of your life. (Start young and the less expensive the premiums will be.) Your cash your life. (Start young and the less expensive the premiums will be.) Your cash value will accumulate based on a guaranteed rate. As long as your policy is value will accumulate based on a guaranteed rate. As long as your policy is current, you can borrow against the current, you can borrow against the cash value cash value at the current policy loan interest at the current policy loan interest rate. rate. Universal Life Universal Life gives you more flexibility. You pay a set initial premium, but after gives you more flexibility. You pay a set initial premium, but after that, you decide when and how much you want to pay. How does this work.The that, you decide when and how much you want to pay.  How does this work ? The insurance company simply charges the insurance cost from your insurance company simply charges the insurance cost from your cash value account.

 In some cases there are four settlement options:  Lump sum: You receive the entire death benefit in a single amount, which You receive the entire death benefit in a single amount, which  allows you to use what you need for immediate expenses and invest the rest.  Specific income provision: The life insurance company pays you both The life insurance company pays you both principal and interest on a predetermined schedule. .  Life income option: You receive a guaranteed income for life.The amount of You receive a guaranteed income for income depends on the death benefit specified in the life insurance policy, your gender, and your age at the time of the insured's death.  Interest income option:The company holds onto the proceeds and pays you The company holds onto the proceeds and pays you interest.The death benefit remains intact and goes to a secondary beneficiary interest. The death benefit remains intact and goes to a secondary beneficiary  upon your death.