TYPES OF INSURANCE POLICIES
Insurance provides compensation to a person for an anticipated loss to his life, business or an asset. Insurance is broadly classified into two parts covering different types of risks:
1. Long-term (Life Insurance)
2. General Insurance (Non-life Insurance)
Long-term Insurance
Long term insurance is so called because it is meant for a long-term period which may stretch to several years or whole life-time of the insured. Long-term insurance covers all life insurance policies. Insurance against risk to one's life is covered under ordinary life assurance. Ordinary life assurance can be further clasified into following types:
1. Endowment Policies
In case of endowment assurance, the term of policy is defined for a specified period say 15, 20, 25 or 30 years. The insurance company pays the claim to the family of assured in an event of his death within the policy's term or in an event of the assured surviving the policy's term.
Whole Life Assurance
In whole life assurance, insurance company collects premium from the insured for whole life or till the time of his retirement and pays claim to the family of the insured only after his death.
Whole Life Limited Payment Policy
In whole life Limited Payment Policy plan, insurance company collects premium from the insured for limited period and pays claim to the family of the insured only after his death
2. Child Policies
i). Child's Deferred Assurance: Under this policy, claim by insurance company is paid on the option date which is calculated to coincide with the child's eighteenth or twenty first birthday. In case the parent survives till option date, policy may either be continued or payment may be claimed on the same date. However, if the parent dies before the option date, the policy remains continued until the option date without any need for payment of premiums. If the child dies before the option date, the parent receives back all premiums paid to the insurance company.
ii). School fee policy: School fee policy can be availed by effecting an endowment policy, on the life of the parent with the sum assured, payable in installments’ over the schooling period.
3. Term Assurance
The basic feature of term assurance plans is that they provide death risk-cover. Term assurance policies are only for a limited time, claim for which is paid to the family of the assured only when he dies. In case the assured survives the term of policy, no claim is paid to the assured.
a) Decreasing Term Insurance
A Decreasing Term policy decreases over the life of the term, which could be 10, 15, 20, 25, 30 years. Or it could be decreasing to age 65.
A Decreasing Term policy is designed to cover a financial need or debt, such as a mortgage. The principle loan decreases as you make payments. The Decreasing Term will also decrease along with the principle, and will expire at the end of the term. This insurance would be called Mortgage Decreasing Term, designed to decrease with the principle, based on the interest rate of the loan.
This type of policy could also be used by a business owner to cover a business loan which is financed over a period of time.
Decreasing Term is sometimes also used to provide an income to a surviving spouse, based on life expectancy. As time goes by, the less amount of coverage one would need for an income; taking into account that the surviving spouse also has less time to live.
Although the amount of insurance decreases, the premium remains the same. As the insured gets older, insurance costs more, so each year, the amount of coverage will decrease.
Decreasing Term will have a guaranteed convertible benefit, giving the insured/owner the right to convert the policy to a Whole Life policy at whatever amount is in effect at the time of conversion.
In a Life Insurance Need situation, a Decreasing Term Rider could be added to a participating (pays dividends) Whole Life policy to provide level coverage, at a reduced premium rate than with Whole Life alone
As the name implies, the death benefit paid out for a decreasing term life insurance plan decreases over time. The premiums remain the same for the life of the policy, but the amount of coverage grows smaller over time
b) Increasing Term Insurance
Increasing Premium Term is temporary life insurance protection at an affordable initial premium. This type of policy is renewable each year which means you may renew the policy annually (until the expiry age which varies by state) without providing evidence of insurability, or proof of your good health. As long as you pay the premium, the policy remains in force. Like all term insurance, Increasing Premium Term provides pure insurance protection only. It does not accumulate cash value, nor is it eligible for dividends.
Premiums increase each year you renew the policy. The amount of this increase is guaranteed in the policy for the first ten years. Each year, premiums on the renewed policy will typically be higher, because they are based on your age at the start of the renewal period. You may convert all or part of an Increasing Premium Term policy into a permanent, cash value policy without furnishing evidence of insurability.
· For an extra premium, you can also buy the option to increase the amount you are insured for, either at set intervals, such as on each anniversary of taking out the insurance, or when a particular event occurs – marriage of the birth of a child, for example.
· As you would expect, if you choose to increase the amount you are insured for your premiums will become more expensive.
· The advantage of buying this sort of add-on to a basic policy is that the premiums are worked out on the basis of your health at the time when you first took out the original policy, even if your current health is not so good.
· Keeping your options open while increasable insurance lets you increase the amount you are insured for during the policy term, renewable insurance allows you to take out another policy regardless of your state of health at the time.
· Premiums will be based on your age at the time you renew but there will be no increase if your health deteriorates.
· Although you may pay more for this option, it could be worth considering if you are worried about future health problems which would make life insurance expensive (or even unobtainable).
· However, the option of renewing your policy may not be available if you want the renewed policy to end after your 65th birthday.
· Term extension as well as – or instead of – being able to increase the amount you are insured for, it may be possible to extend the term of the policy (i.e. increase the length of time it runs for). This should be cheaper than taking out a new policy at the end of the term: premiums increase as you get older
· Renewable annually, which means you may renew the policy annually (until the expiry age which varies by state) without providing evidence of insurability, or proof of your good health.
· Premiums increase each year. The amount of this increase is guaranteed in the policy for the first ten years.
· Premiums on the renewed policy will typically be higher, because they are based on your age at the start of the renewal period
· There are limited funds: in situations where life insurance is essential but dollars are scarce, IPT could serve as a stop-gap. Young people starting their careers can choose IPT, then covert to a permanent policy as their finances improve.
· There is a need for supplemental insurance. IPT is an affordable way to increase total insurance coverage. IPT can also be added as a rider to a permanent plan to boost death benefits.
· There is a need for family coverage. Optional riders such as the Children’s Insurance can be added to the policy to extend coverage to your children (see “Available Riders” below for more Information.)
Advantages of Term Life Insurance
· Initial premiums generally are lower than those for permanent insurance...allowing you to buy higher amounts of coverage at a younger age when the need for protection often is greatest.
· It's good for covering needs that will disappear in time, such as mortgages or car loans.
Disadvantages of Term Insurance
· Premiums increase as you grow older.
· Coverage may terminate at the end of the term or become too expensive to continue.
· The policy generally doesn't offer cash value or paid-up insurance.
4. Annuities
Annuities are just opposite to life insurance. A person entering into an annuity contract agrees to pay a specified sum of capital (lump sum or by instalments) to the insurer. The insurer in return promises to pay the insured a series of payments untill insured's death. Generally, life annuity is opted by a person having surplus wealth and wants to use this money after his retirement.
There are two types of annuities, namely:
A. Immediate Annuity:
In an immediate annuity, the insured pays a lump sum amount (known as purchase price) and in return the insurer promises to pay him in instalments a specified sum on a monthly/quarterly/half-yearly/yearly basis.
B. Deferred Annuity:
A deferred anuuity can be purchased by paying a single premium or by way of instalments. The insured starts receiving annuity payment after a lapse of a selected period (also known as Deferment period).
5. Money Back Policy
Money back policy is a policy opted by people who want periodical payments. A money back policy is generally issued for a particular period, and the sum assured is paid through periodical payments to the insured, spread over this time period. In case of death of the insured within the term of the policy, full sum assured along with bonus accruing on it is payable by hte insurance company to the nominee of the deceased.
6. Combination of Term Assurance and Pure Endowment
Life Insurance Companies in India
1. Bajaj Allianz Life Insurance Company Limited .
GE Plaza, Airport Road , YerawadaPune 411 006
2. Birla Sun Life Insurance Co. Ltd
One India Bulls Centre, Tower 1, 16th Floor, Jupiter Mill Compound, 841 , Senapati Bapat Marg, Elphinstone Road, Mumbai-400013.
3. HDFC Standard Life Insurance Co. Ltd
2nd Floor, Trade Star,Kondivita Junction,Andheri Kurla Road, Andheri East, Mumbai 400059
4. ICICI Prudential Life Insurance Co. Ltd
ICICI Prulife Towers , 1089, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025.
5. ING Vysya Life Insurance Company Ltd.
ING Vysya Home, 5th Floor, #22 Mahatma gandhi Road Bangalore-560 001.
6. Life Insurance Corporation of India
Yogakshema, Jeeva Bima Marg, Post Box No. 19953 MUMBAI 400 021
7.Max New York Life Insurance Co. Ltd
11th Floor, DLF Square , Jacaranda Marg, DLF City , Phase-II, GURGAON 122 002.
8. Met Life India Insurance Company Ltd.
Brigade Seshamahal, No. 5, Vani Vilas Road , Basavanagudi, BANGALORE-560 004.
9. Kotak Mahindra Old Mutual Life Insurance Limited
9th Floor, Godrej Coliseum,Behind Everard Nagar,Sion (East),MUMBAI-400 022..
10.SBI Life Insurance Co. Ltd
Turner Morrison Building, 2nd Floor, 16, Bank Street, Fort Mumbai-400 023.
11. Tata AIG Life Insurance Company Limited
5th 7 6th Floor, Peninsula Tower, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, MUMBAI 400 013.
12. Reliance Life Insurance Company Limited.
1st Floor, Midas, Sahar Plaza,Andheri Kurla Road, Andheri East, Mumbai 400059.
13. Aviva Life Insurance Company India Limited
Aviva Tower, Sector Road, Opposit Golf Course, DLF-Phase V, Sector-43,Gurgaon - 122 003
14.Sahara India Life Insurance Co, Ltd.
Sahara India Bhawan, Kopoorthala Complex,Lucknow 226024
15. Shriram Life Insurance Co, Ltd.
3-6-478, 3rd Floor, Anand Estate, Liberty Road, Himayat Nagar, Hyderabad - 500029
16. Bharti AXA Life Insurance Company Ltd.
601-602 6th Floor,Raheja Titanium Off Western Express Highway Goregaon (E) Mumbai – 400 063
17.Future Generali India Life Insurance Company Limited
001, Delta Plaza, Ground Floor, 414, Veer Sarvarkar Marg, Prabhadevi, Mumbai 400 025.
18. IDBI Fortis Life Insurance Company Ltd.,
Tradeview, Oasis Complex, Kamala City, P.B. Marg, Lower Panel (W),Mumbai-400 013
19.Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.
C/o. HSBC at Amsoft Systems, Unitech Trade Centre, Sector-43, Sushant Lok-1,Opp. Park Plaza Hotel,Gurgaon-122 001.
20. AEGON Religare Life Insurance Company Limited.
GYS Heights, 2nd Floor, Paranjpe “B” Scheme, Subhash Road, Near Garware House,
Vile Parle (E), Mumbai – 400 057
21. DLF Pramerica Life Insurance Co. Ltd.
4th Floor Tower B, Building No.-9,DLF Cyber City, Phase-III, Gurgaon-122002.
22. Star Union Dai-ichi Life Insurance Co. Ltd.,
Star House, 3rd Floor, (West Wing), C-5,Bandra-Kurla Complex, Bandra (East), Mumbai 400 051
23.IndiaFirst Life Insurance Company Limited
301, 'B' Wing, The Qube, Infinity Park,Dindoshi - Film City Road,Malad (East), Mumbai - 400 097.
General Insurance
Also known as non-life insurance, general insurance is normally meant for a short-term period of twelve months or less. Recently, longer-term insurance agreements have made an entry into the business of general insurance but their term does not exceed five years. General insurance can be classified as follows:
Fire Insurance:
Fire insurance provides protection against damage to property caused by accidents due to fire, lightening or explosion, whereby the explosion is caused by boilers not being used for industrial purposes. Fire insurance also includes damage caused due to other perils like strom tempest or flood; burst pipes; earthquake; aircraft; riot, civil commotion; malicious damage; explosion; impact.
Marine Insurance
Marine insurance basically covers three risk areas, namely, hull, cargo and freight. The risks which these areas are exposed to are collectively known as "Perils of the Sea". These perils include theft, fire, collision etc.
Marine Cargo:
Marine cargo policy provides protection to the goods loaded on a ship against all perils between the departure and arrival warehouse. Therefore, marine cargo covers carriage of goods by sea as well as transportation of goods by land.
Marine Hull:
Marine hull policy provides protection against damage to ship caused due to the perils of the sea. Marine hull policy covers three-fourth of the liability of the hull owner (shipowner) against loss due to collisions at sea. The remaining 1/4th of the liability is looked after by associations formed by ship owners for the purpose (P and I clubs).
Miscellaneous As per the Insurance Act, all types of general insurance other than fire and marine insurance are covered under miscellaneous insurance. Some of the examples of general insurance are motor insurance, theft insurance, health insurance, personal accident insurance, money insurance, engineering insurance etc.
General Insurance Companies in India
1. Bajaj Allianz General Insurance Co. Ltd.
GE Plaza, Airport Road, Yerawada, Pune411 006.
2. ICICI Lombard General Insurance Co. Ltd.
Zenith House,Keshavrao Khade Marg,MahalaxmiMUMBAI-400 034.
3. IFFCO Tokio General Insurance Co. Ltd.
4 and 5th Floors, IFFCO Tower, Plot No.3, Sector 29,GURGAON-122001(Haryana)
4. National Insurance Co.Ltd.
3, Middleton Street, P.B. No. 9229, KOLKATA 700 071.
5. The New India Assurance Co. Ltd.
New India Assurance Bldg. 87, M.G. Road, Fort, Mumbai 400 001.
6. The Oriental Insurance Co. Ltd.
A-25/27, Asaf Ali Road,New Delhi 110 002.
7. Reliance General Insurance Co. Ltd.
570, Naigaum Cross Road , Next to Royal Industrial Estate, Wadala(West), MUMBAI – 400 031
8. Royal Sundaram Alliance Insurance Co. Ltd
"Sundaram Towers" 45-46, Whites Road, Royapetah,CHENNAI-600 014.
9. Tata AIG General Insurance Co. Ltd.
Peninsula Corporate Park,Nicholas Piramal Tower, 9th Floor Ganpatrao Kadam Marg Lower Parel
MUMBAI 400 013.
10. United India Insurance Co. Ltd.
24, Whites Road, CHENNAI – 600 014.
11. Cholamandalam MS General Insurance Co. Ltd.
"Dare House" 2nd Floor, New No.2 (Old No. 234) N.S.C. Bose Road, Chennai - 600 001
12. HDFC ERGO General Insurance Co. Ltd.
6th Floor, Leela Business Park, Andheri Kurla Road,Andheri (East),Mumbai - 400 059.
13. Export Credit Guarantee Corporation of India Ltd.
10th Floor, Express Towers, Nariman Point,Mumbai – 400021
14. Agriculture Insurance Co. of India Ltd.
13th Floor, 14 K.G Marg, Connaught Place,New Delhi - 110001
15. Star Health and Allied Insurance Company Limited
No.1, New Tank Street,Vlluvarkottam High Road,,Nungambakkam, Chennai - 600 034
16. Apollo Munich Health Insurance Company Limited
Building No. 10B,10th Floor, DLF Cybercity, Gurgaon 122001 Haryana, India
17. Future Generali India Insurance Company Limited
001, Trade Plaza, Ground Floor,414, Veer Sarvarkar Marg,Prabhadevi, Mumbai 400 025
18. Universal Sompo General Insurance Co. Ltd.
310-311, Trade Centre,Opp. MTNL Building,Bandra Kurla Complex,Bandra(E),Mumbai-400 051.
19. Shriram General Insurance Company Limited,
Greams Dugar,5th Floor, No.-149,Greams Road,Chennai-600 006
20.Bharti AXA General Insurance Company Limited
First Floor, The Ferns Icon,Survey No.28, Next to Akme Ballet,Doddanekundi, Off Outer Ring Road,Bangalore – 560 037
21. Raheja QBE General Insurance Company Limited,
Commerz, 10th Floor, International Business Park,Oberoi Garden City,Western Express Highway, Goregaon (East),Mumbai-400 063.
22. SBI General Insurance Company Limited
The IL & FS Financial Centre,7th Floor, Plot C 22, G Block,Bandra Kurla Complex,,
Bandra East,Mumbai – 400 051
23. Max Bupa Health Insurance Company Ltd.
Max House,1, Dr. Jha Marg, Okhla,New Delhi-110020
Reinsurance
Reinsurance balances risk over large groups that may be united only through the re-insurance link. By reducing the risk of random fluctuations in claims, reinsurance reduces the probability of insolvency in the ceding insurer.
The Social Re model of reinsurance proposes a relationships between Social Re and the MIU based on:
— how Social Re can stabilize the MIU;
— method of reinsurance;
— the MIUs attitude to risk (how much risk to cede and how much to retain).
Social Re will be solvent if the total premium income received from MIU suffices to cover all claims plus administrative costs. Setting premium levels requires estimation of:
— the risk that the MIU will submit a claim;
— the average claim that will be presented by the MIU;
— administration costs.
The first two depend on the financial management of the MIU, the last on Social Re's management. In order to assess the first two, Social Re has developed a Data Template to standardise data and reporting capacities.
Reinsure Companies in India
GENERAL INSURANCE CORPORATION OF INDIA
Suraksha, 170, J Tata Road Church Gate,Mumbai 400 020
No comments:
Post a Comment