- What is Life Insurance ?
Life insurance is an agreement between insurer and the insured where by the insurer guarantees payment of stated amount of benefits at the end of the term or on the death of the insured, and insured agrees to pay a series of payments called premiums, as consideration for the agreement.
- Why do I need insurance ?
Life insurance offers financial security to the insured in the event of death or disability of the insured within the tenure of the policy. In addition to financial security it can also be used as an effective tax savings instrument, to accumulate funds towards post retirement life and to systematically build assets for child’s education etc.
- How can I apply for the insurance policy with Star Union Dai-Ichi Life Insurance ?
Customers can contact and discuss with the representatives of our channel partners in any branch of Bank of India or Union bank of India. We have a bouquet of products catering to suit the needs of customer at every phase of his/her life.
- What are the general considerations for accepting a risk when a proposal is received ?
When a proposal for insurance is received at life office, it undergoes the process of ‘Underwriting’. Underwriting is the process of evaluating the risk involved with reference to many factors like age, health, occupation, family history (longevity), social & financial status of the person seeking the life insurance. For the obvious reasons that the premium rates depend on mortality table, premium goes up with the increase of age
- How Much Life Insurance is needed ?
life insured. How much Life insurance is needed is a question which needs to be addressed with what one can afford. ‘Human Life Value’ is a methodology to determine the appropriate amount of Sum Assured required in order to avoid future loss of income. Human Life Value is determined by 3 main factors:
1) Age
2) Current and future income
3) Current and future expenses
(Annual Gross Income Less Expenses including tax) is multiplied by a factor which depends on age
Add: his future liabilities & expenses.
Less: Liquid assets
The result is taken as the Human Life Value. The value arrived at using this formula comes close to 6 to 10 times annual income. Hence a general Rule of Thumb to determine the amount of insurance required is six to ten times of the annual earnings. For example if the annual salary is Rs. 5 lakhs then this approach states that life insurance is required from Rs. 30 lakhs to Rs.50 lakhs
- What are the different types of Life Insurance plans ?
a. Conventional Plans
- Term Insurance: The type of policy which provides the insurance benefit only in case the insured dies within the policy period
- Endowment: This is a combination of term and pure endowment. The benefits are payable either at the time of the death of insured within the policy period or at the time of maturity of the policy.
- Whole life policy: The policy for which the premiums are paid throughout the life of insured. The policy proceeds are always paid to the nominee on the death of the insured.
b. Unit Linked Insurance Plans [ULIPs]
These provide the twin benefits of investment and insurance cover. These are market linked insurance plans in which the premium is invested as per the mandate received from the customer in Equity, Debt and Cash by way of allocating Units, which are have a Net Asset Value [NAV]. Customers can switch between the different classes depending upon their risk appetites. ULIPs can be paid by single premium or regular premiums.
c. Group Life Insurance
Group insurance refers to the insurance coverage offered to a group of people with the caveat that the group is not formed for the purpose of taking insurance.
The salient features of Group Life Insurance are:
- The group must be an organized homogeneous group which is active. In other words, it should have a regular inflow and outflow of members
- The group must comprise a minimum number of members which is decided by the insurance company offering group insurance coverage
- All members of the group are covered under a single policy which is called ‘Master Policy’
- Premium under a group insurance policy is much lower than the premium payable under an individual insurance policy for the same sum assured. Premium is more often decided on the experience of the insurer with similar groups.