Expert: Leo Lingham - 4/21/2009

Question
Do a small survey and list the various life and general insurance products available in the
market. Explain the main characteristics of these products.

Answer
PANKAJ,
HERE  IS SOME  USEFUL  MATERIAL.
REGARDS
LEO LINGHAM
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TYPES  OF  LIFE INSURANCE  PRODUCTS
-TERM  ASSURANCE
-WHOLE  OF  LIFE ASSURANCE
-ENDOWMENT  ASSURANCE
-ANNUITIES
- Fixed Annuities
- Variable Annuities
NON  TRADITIONAL  COVERS

TERM  ASSURANCE
Term Insurance provides for life insurance protection for the selected term (period of years) only. In case the person (whose life is insured) dies during the term, the benefits are payable under the policy and in case of his survival till the end of the selected term the policy normally expires without any benefit becoming payable. Term insurance may be regarded as temporary insurance and is more nearly comparable with "Property & Casualty insurance" contracts than the other forms of Life insurance contracts.
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THE WHOLE  OF  LIFE  ASSURANCE
As the name suggests, the whole life insurance policies are intended to provide Life Insurance protection over one's lifetime. The essence of whole life insurance is that it provides for payment of the assured amount upon the insured's death regardless of when it occurs. Under these policies, the payment of the assured sum is a certainty in contrast to the term insurance contracts. Only the time of payment of the assured sum is an uncertainty.
Whole life policies can be either participating type or non-participating type. Participating type policies are those which are entitled to a share in the distributable surplus (profits) of the Life Insurance company, whereby the cash value of the policy can go up, with the announcement of bonus / dividend. Non-participating policies have the same benefit throughout the life of the policy.
There can be the following types of whole life policies: 1. Ordinary Whole Life Insurance 2. Limited Payment Whole Life Insurance 3. Convertible Whole Life Insurance
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ENDOWNMENT  ASSURANCE

These are the most commonly sold policies. These policies assure that the benefits under the policy will be paid on the death of the life insured during the selected term or on his survival to the end of the term. Hence the assured benefits are payable either on the date of maturity or on death of the life insured, if earlier.

Endowment policies assist in providing for the payment of a lump sum amount for a specific purpose, say, provision for retirement, meeting the needs of the child etc. The money required for the purpose will be built up whether the person is alive till that date or not. Like whole life insurance policies, endowment policies can also be of participating and non-participating types.

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ANNUITIES

An annuity is a series of periodic payments. An annuity contract is an insurance policy, under which the annuity provider (insurer) agrees to pay the purchaser of annuity (annuitant)a series of regular periodical payments for a fixed period or during someone's life time.
Classification of Annuities: Annuities can be classified on the basis of
The number of lives covered
Single
Joint
The beginning of the payment of annuity
Immediate annuity
Deferred annuity
Method of premium payment
Single premium
*Regular instalment

NON  TRADITIONAL  COVERS


Universal Life Insurance (ULI) is another non-traditional type of Life Insurance , which had an adjustable face value (insurance coverage), floating interest rates based on market conditions and unbundling of savings and protection elements of Life Insurance. After paying an initial minimum premium, policy owners may thereafter pay whatever amount and at whatever times they wish, or even skip premium payments, provided the cash value will cover policy charges. Similarly they had the option to raise or reduce the face value of the Insurance policy. For increasing the insurance coverage proof of continued insurability was insisted.
Under this type of policy (ULI), the policyholder pays an initial premium, which should not be less than a minimum for the given face value and the attained age of the Life to be Insured. From this premium payment, the mortality charge for the first period and the expenses charges will be deducted and the balance will be the policy's cash value. To this cash value a certain interest (depending upon the rate of interest prevailing in the market) will be credited at the end of the period.
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A health insurance policy will provide a cover to you and your family against sudden medical contingency or bodily injury.
GROUP  INSURANCE
Group medical insurance offers insurance cover to a group with a common trait – it may be employees of a company, members of a club or an association or members of a co-operative society etc. Many employers now provide medical insurance as a perquisite to their employees.
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INDIVIDUAL  INSURANCE
Individual insurance caters to the specific needs of an individual. Premium for an individual insurance is higher than group insurance.
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FLOATER
A floater is a unique plan wherein the value of sum insured opted can be used by all the members of the family or by a single-family member. Basically, the sum insured amount floats over all the members covered. For example: if the policy is bought for 3 lacs, then either all three members of the family can use Rs 1 lac each or one member can use the entire cover of 3 lacs.
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MOTOR  VEHICLE
Motor insurance protects you and your vehicle against every comprehensible risk related to your vehicle – theft or damage to it, death of the driver and passengers in an accident, and damage caused by your vehicle to another person or property (Third Party Liability).
motor insurance policy (Third Party Liability) is mandatory under the Motor Vehicle Act, while other forms of general insurance are optional. The law mandates that every owner of a motor vehicle must have a motor insurance policy
There are two types of motor insurance policies:-

Liability Only Policy : This policy covers Third Party Liability (TPL) for bodily injury and/or death and property damage. Personal accident cover for owner-driver is also included. This cover is mandatory under the Motor Vehicles Act. While the insured is the first party, the insurance company is the second party and all others are third parties.

Package (Comprehensive) Policy: This policy covers loss or damage to the vehicle insured (Own Damage or OD) and TPL. It entitles you to claim compensation in case your vehicle is stolen or damage. In addition, it also covers additional liabilities as provided by the India Motor Tariff.
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TRAVEL  
Travel insurance is a cover for the risks you might face in your trip, overseas or domestic. Typically, it covers death, personal accident, medical expenses, repatriation, loss/ delay of checked baggage, passport loss and third party liability.
There are basically three kinds of travel insurance-
Individual Overseas Travel Insurance
Student’s Travel Insurance
Domestic Travel Insurance
Individual Overseas Travel covers your trip abroad. In most of the countries, it is mandatory for their visitors to have travel insurance.
Generally, death, personal accident, medical expenses, repatriation, loss/ delay of checked baggage, passport loss and third party liability are covered under an Individual Travel Policy.

AGENCIES  offers you an array of products to suit various needs.
Student’s Insurance is designed specifically for students going abroad for higher education. An opportunity to study abroad opens up avenues to a brighter career and future. But while pursuing these dreams emergencies can arise anytime. Student’s insurance covers all these risks and provides the timely assistance and support against any unexpected expenses
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HOME  INSURANCE
1.FIRE  AND  ALLIED PERILS.
Building & contents - Covers not only property, but also contents
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2.BURGLARY  AND  THEFT
Covers loss of house hold contents and expenses Incurred due to damage caused on incidence of house-breaking & theft
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3.JEWELLERY / PRECIOUS ITEMS
All risk coverage for jewellery and precious stones
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4.PLATE  GLASS.
Coverage against accidental breakage of glass
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5.DOMESTIC  APPLIANCES
Covered against any electrical or mechanical breakdown
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6.ELECRONIC  EQUIPMENT
All risk coverage
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7.PEDAL  CYCLES
All risk coverage with a third party liability extension
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8.BAGGAGE  INSURANCE
Covers loss of baggage while traveling
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9.PERSONAL ACCIDENT COVER
Coverage for the insured and his family for any death or disability
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10.PUBLIC  LIABILITY
Covers any injuries or damages caused to third parties
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11.WORKMEN'S COMPENSATION
Covers workmen whom you have employed on wages
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