Company insurance life
Life insurance is a contract between the insured and the insurer, the life insurance company, where the insurer agrees to pay a sum of money called the sum assured to the insured on the happening of the event- -death during the stipulated term of the policy contract or survival of the insured to the end of the term.
There are many life insurance companies across the world catering to the life insurance needs of the eligible people. While some life insurance companies are state owned, a majority of them are privately owned companies. However all the insurance companies are controlled by the Regulatory authority concerned? The regulatory authority frames all the regulations and guidelines for product formulation, legalities of the life insurance contracting, customer relation services, documentation and stamp duties, publicity activities, product projections, representation of facts, conditions and privileges of the life insurance contract, customer's right to information about the benefits of insurance policy, claim settlement procedures etc.
The life insurance company offered various products suiting different needs of the population and is continuously engaged in market study to deliver better products and services demanded by the changing situations and economic conditions. In pricing their products, the life insurance companies take into account various factors like mortality rate of a given age-group, the interest yield on the investments made, the loading of expenses involved on account of marketing, administrative costs, wage bills, and commissions to the insurance intermediaries like the agents, brokers and field or marketing officials etc.. Pricing of products again depends on the type of policy that is involved. The life insurance company offered multitude of product range which suit different segments of the population. In other words, there is a product available to a cross section of the people. For instance, there is an array of products which provide or take care of the needs of the children's eductional expenses, marriage expenses, higher education for professional courses, collateral security for mortgages, health care, personal accident cover, pension needs, unit-linked plans for inflation- adjusted savings etc.
The life insurance company thus provides plans like endowment, whole life, term life insurance, pension plans, unit-linked life insurance plan which are the major categories under which life insurance can be bought. Under the endowment type of plan, the insurer undertakes to pay a certain agreed sum of money to the insured at the end of the specified term, or upon death of the insured should it occur before the end of the term, together with any guaranteed additions or bonuses as per the design of the plan. Since this type of life insurance has an inbuilt provision for payment of sum assured on both the events i.e. Survival and Death; the product costs a little over the term life insurance or whole life insurance plan where the monies are paid only on death of the insured. There is another marked difference between a term life insurance plan and the whole life plan. In the former case, the premiums are paid for the stipulated term and the assured amount is paid only if the insured dies before the term. But on his survival, no benefit is paid to the insured except in some plans where the premiums paid are returned to the insured, without any additions to it. This plan is the cheapest one.
In the case of whole life insurance plan, the premiums are payable either for a stipulated period or for life, and the sum assured along with bonuses, if any, is paid to the claimant / nominee only on death of the insured. But this type of life insurance plan is slightly costlier than the term life insurance plan in view of the bonus benefit being provided in the contract. Of late there has been a growing demand for pension plans with life insurance cover. This has been necessitated by the absence of social security provision in many countries and also majority of the employers do not provide pension as a benefit at superannuation. Besides this, the non-employed segment of the population look to the life insurance companies for pension providing plans coupled with life risk cover which is a lucrative package for them, as a kind of self-administered pension provision for the old age. Then there is another need of the insuring public to be taken care of, which is addressed by the life insurance companies. That is, the inflation-adjustable investment. This aspect is taken care of by the unit-linked insurance plans offered by almost all the life insurance companies in the world. Under this plan, while a portion of the investment premium is allocated for life insurance cover, a major portion is invested by the life insurance company in debt and equity markets as directed by the insured from time to time. This in turn is expected to set off the inflationary effects on the investments made by the insured.
The life insurance companies are doing a great job in not only providing risk cover to the insured but also in inculcating the habit of thrift and savings in the people who otherwise would not be inclined to save a portion of their income. The companies incidentally provide a major chunk of employment opportunities to scores of agents or brokers or advisors.
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