Welcome to Webinar on Insurance

Financial Services Banking Shares,Debentures,Bonds Mutual Funds Commodities Derivatives Insurance

Difference between Insurance and other Financial Services Protection against risk or hazard Securing an amount or estate for your family Tax concessions Social Security Provide funds for the development of nation

Insurance is a contract whereby a certain sum of money is paid on the happening of a contingent event It is sharing of financial losses of a few out of the contribution of many who are exposed to the same loss It is spreading the loss of an individual over group of individuals

Need for Insurance Protection of property Coverage against liability Savings with tax benefits Capital formation for the country Life is full of uncertain events Creation of Employment

What is Insurance Insurance is a contract whereby the insurer agrees to pay the insured a certain sum of money on the happening of a contingent event It is a method of sharing the financial losses of a few from a common fund formed out of many It is a contract of utmost good faith

Types of Insurance Life Insurance Health Insurance Pension Group Insurance

Types of Insurance Non Life Insurance Marine Insurance Fire Insurance Auto Insurance Others

(Types of Insurance) Marine Insurance Location Risks Handling Risks Operational Risks Risk of Human Element Act of God

(Types of Insurance) Actual Ignition Fire Insurance Actual Ignition Damage of the property which was not in fire Under accidental circumstances

(Types of Insurance) Auto Insurance Unlimited liability towards third party injury Unlimited liability towards the passengers of vehicle Damage to the vehicle and its accessories Employees using the vehicle of the owner under Workmen compensation

Life Insurance Principles Insurable Interest Utmost Good faith Moral Hazard Warranty Indemnity Subrogation

Concepts of Life Insurance Insurer Insured Proposal Policy Premium Evidence (Policy Document)

Concepts of Life Insurance Sum Assured Proximate Loss Human Life Value Annuity Present value

Concepts of Life Insurance Calculation of Human Life Value A person aged 30 has Annual salary 2lacs His personal expenses annually is 1lac He give for the family 1lac His earning span is 30 years, so the family requires 30lacs(this is over a period of 30years) Human Life value= 100000*1-(1/(1+i)^30)/i I=present bank rate of interest so at 8% it will be 1lac*11.2578=1125780

Underwriting First Line Underwriter Proposal - Name and Address - Age - Object of Insurance - Family History - Personal History - Declaration and Witness

Underwriting Non Medical General -Basic Education, cap on limits of SA Non Medical Special - Employees of reputed companies Professionals Medical & Special Reports Financial Underwriting Acceptance & Communication

Nomination Appointee Policy Document Clauses Green Channel or Across the Counter Cooling off Minor & Women Lives

Claims What is a Claim Types of Claim - Survival Benefit - Maturity Claim - Death Claim - Annuity Claim - Disability Claim

Claim Payment of Full Sum Assured Payment of Sum Assured in Installments Payment of Double Sum Assured Payment of partial Sum Assured Payment of Annuity for a specified period Payment of Annuity for a specified period and capital on the happening of contingent event

Claims Claimant Form Evidence of Burial Medical Attendant Report Police inquest report Claim investigation report Policy Document or indemnity

Plans Term Assurance Whole Life policies Endowment Policies Money Back Policies Children policies Marriage/Educational Policies Annuity Plans

Premium What is Premium Mode of Premium - Single - Yearly - Half Yearly - Quarterly - Monthly

Premiums Factors Affecting Premiums - Mortality - Interest - Expenses - Profits Types of Premiums Basic AB Premiums,Rider Premiums,

Premiums Mortatlity Table Out of 1lac persons age30 1st year 2nd year 3rd year 4th year 1956 1999 Mortality1999 326 117 .00117 343 355 120 .00120 370 125 .00125

(Premiums) Person Aged 30 wants take a term assurance of Rs. 1lacs for 1 year Premium= Sum Assured * Mortality Rate for 1 year from the table Premium=100000*0.00117=Rs.117(1999) Premium=100000*0.00326=Rs.326(1956)

Premiums Person aged 30 wants to take a term assurance of Rs.100000 for 4 year Premium for 1st year= 100000*0.00117=117 2nd year 100000*0.00117=117 3rd year 100000*0.00120=120 4th year 100000*0.00125=125 Uniform premium=(117+117+120+125)/4=120

Premiums In the same example if it is made endowment that is Rs.100000 will be death cover for 4 years and 1lac will be paid on maturity at the end of 4 years Term Assurance Premium for 4 years=120 Endowment premium = 100000/4 = 25000 Total premium to be paid 25000+120=25120

Premiums Calculation with interest @6% the above example Term Assurance premium=120 Endowment premium = 25000/(1.06)^1 = 25000/(1.06)^2 = 25000/(1.06)^3 = 25000/(1.06)^4 Total Endowment premium =21658 Net Premium=21658+120+21778

Premiums Expenses loading in premium First year premium Renewal premium Premium Related expenses Policy Related expenses

Premiums Expenses Loading We arrived at the premium rate for a person Aged 30 for 1lac endowment as 21778 Cost of premium expenses=5% Loading of expense =21778/0.95=22924 Cost of premium including expenses of premium=22924

Premiums Cost of expenses per policy Average expenses per policy=Total Administrative cost/No of policies issued Suppose 200000 policies issued and administrative cost =40000 Average cost per policy=200000/40000=5

Premiums Calculation of loading for the example of person aged 30 Sum Assured 1lac for 5 years endowment Premium with interest = 21778 Premium expense is 5% Administrative expense per policy is Rs. 5 Premium+Interest+expense=(21778+5)/0.95=21929

Servicing Concepts Days of Grace Paid up Value: Sum Assured*No of years premium paid/Total premium payable Surrender Value Loans Revival Assignment

Bonus What is Bonus Why it arises Types of Bonus - Reversionary Bonus - Guaranteed Additions - Loyalty Bonus - Compounded Guarantee Additions - Cash Bonus

Insurance Intermediary Agents Brokers Consultants Surveyors Corporate Agents

Your Voluntary Contribution To enhance the service by improving bandwidth and improve the e-learning methodology needs an investment, in case you feel this helps you, kindly contribute any amount to the below mentioned account. “Little drops of water make the mighty ocean”. Expecting your support, it is absolutely voluntary and optional Company : Softsmith Infotech Pvt Ltd. Bank Name : HDFC Bank Ltd Account Type : Current A/C Account No : 05742320000031 Branch : Chennai - Kodambakkam - Tamilnadu Cust ID : 25417385 Branch Code : 0574 When remitting kindly mention your name and course You can also send DD to the above mentioned name in case direct transfer is not possible. Address is available at www.softsmith.com