What are the basic elements & plans of insurance?

Life insurance products are usually referred to as a Plan of insurance. These plans have two
basic elements. One of the death cover &the other is Survival Benefits. Plans of insurance
that provide the death cover only are called Pure Endowment.if the insured does not die within
the specified period ,no payment is made under a endowment plan. All traditional life insurance
plans are combination of these two basics plans .A term assurance plan with an unspecified
period is called a Whole Life Policy In recent time linked policy have become popular.
These are very different from the traditional plans. We have different types of plans in insurance
policy like A Convertible Plans, Children Plans, Variable Plans, Industrial Assurance Plans
,Salary Saving schemes etc.
Essential feature of Group Insurance Scheme
The most important requirement is that the group must not have been formed for the purpose of
the insurance scheme. The group must have some other reasons of bonding. Entry into or exit
from the group must be for reasons other than the availability of insurance cover under the
scheme .Examples would be the holders of credit card issued by a company or customers of a
particular business where is offered as an add-on benefits. Also there must be a minimum
numbers of members in the group. Twenty five would be considered adequate. In many cases
members would be in hundreds.
The individual beneficiary will not be allowed to choose the amount of insurance cover. The
amount will be determined on criteria, which are applied uniformly to all the members of the
group. For example the cover may depend on age or years of membership, or income or rank. If
the criteria of age or rank, than all the individuals of same age or rank will get the same cover. If
the criterion is of income, the cover can be fixed multiple of income. The income depending on
output may be suitable criterion, when the group consists of say, farmers of beedi workers or
milkman supplying milk to dairy.
What do you mean by Short Term Senior Health Insurance
Scheme?
From the previous few years, the short term insurances have become rather well-liked in the
United States. Two of the most significant reasons that have guide to this improved status are
that these are a lot cheaper and a lot more reasonable in contrast to many of the other insurance
policies out there. There are a enormous number of varied alternatives available that one can opt
from. Again this plenty availability of options often tends to confuse people as then it becomes
rather hard as people find it hard to settle with any one policy. On the other hand, the one good
news for senior citizens in this view is that now there are the short term health insurance plans to
help them out. These are unique coverage plans offered by the insurance companies for the
welfare and benefit of these aged persons. There are a number of companies in the market who
offer value policies that are cost efficient and suit the financial standards of the people of this age
group most of whom are supposedly unemployed. The insurance companies in general have two
types of health insurance plans. The first category is available for people who are above the age
of 65 and the ones who are below 65 age group.
Medicare has formulated some special plans for the senior citizens which are accurately short
term health insurance policies. The issues that are taken into concern whereas providing
reporting to the senior citizens include-(1) Height,(2) Family history,(3) Blood pressure,(4)
Weight(5) Cholesterol levels(6) a variety of other considerations in terms of physical and
physiological conditions
Furthermore, the short term senior health insurance plans suggests some truly profitable rates to
the senior citizens which can help them put aside a lot of their hard earned money. Often termed
as temporary insurance policies, these plans offer the exposure only for a predetermined period
of time.
What is difference between ULIP and Traditional
Insurance?
ULIPs differ from other traditional insurance plans in matters of documents, lapse and revival
conditions, and in claim settlement procedures. Underwriting practices are similar .The proposal
forms will have questions about family history and personal history. The agents report is also
called for.
The proposal is more elaborate and has questions about the nature of fund which is preferred
.The policy document will state different conditions .The premium is not a fixed figure. The
amount at maturity and on death will be differently stated. In the event of a non-payment of
premium during the days of grace,30,15 or zero days as the case may be ,the policy lapses. In
some plans, the risk covers ceases after six months
Reinsurance
Insurance companies are taking risks. They have to pay claims as and when they occur. They
cannot be sure when the claim will occur and how big the claim may be. This is so because of
the very nature of perils. Insurers normally are financially sound enough to be able to pay claims.
But there are limits .An event like the tsunami or a hurricane may generate claims amounting to
crores of rupees, which may put a very heavy strains on the reserves of the insurers. Insurers
protect themselves from such situations, which may be beyond their capacity by reinsuring the
risk with other insurers. If there is a claim, the burden is shared by the primary insurer and the
reinsurers.
There the some companies which are exclusively in the business of reinsurance. In India the
general insurance corporation of Indias is the national reinsurer. Reinsurance business is placed
globally. When there is major clamity,the claim affect several insurers all over the world,
through the system of reinsurance
Role of Insurance in Economic Development
For economic development, investments are necessary. Investments are made out of saving. A
life insurance company is a major instrument for the mobilization of saving of the people,
particularly from the middle and lower income groups. These savings are channeled into
investments for economic growth. The insurance act has strict provisions to insure that insurance
funds are invested in safe avenues, like government bonds, companies with record of profits and
so on.
The LIC is not an exception. All good life insurance have huge funds, accumulated through the
payment of small amounts of premia of individuals .Theses funds are invested in ways that
contribute substantially for the economic development of the countries in which they do
business. The private Insurer in India are new and have accumulated funds equal to about one-
eighth of the L.I.Cs.But even their investment in the various sectors and contributing the
directly and indirectly to the countrys economic development, would be of similar proportion.
Survivor BenefitsDefinition:
A survivor benefit is a benefit which is paid by a pension plan to the designated beneficiary of an
employee (usually a spouse) upon the death of the employee. Survivor benefits can be placed in two
categories: pre-retirement survivor benefits and post-retirement survivor benefits. A pre-retirement
survivor benefit is paid to the designated beneficiary of an employee in the event of the employees
death prior to retirement. A post-retirement survivor benefit is paid to a designated beneficiary upon
the death of the employee after retirement. In most cases, the employee must make an affirmative
election to establish these survivor benefits, and must always keep a current beneficiary designation on
file with the Plan.