Life insuranceee
The industry consists of insurers,insurance agencies,brokerages and policy holders.The new trend is that financial institutions like banks and securities firms can sell one another's product.Internet is a current trend for reaching existing and potential customers.
Meaning:
Life Insurance is insuring your uncertain,unpredictable life. It is a legal contract. It specifies the terms and conditions of risk assumed. Life Insurance is the most popular form of investments/savings made by human beings. It offers not just tax planning and investment returns but is a way of giving life time financial security to your loved ones rather than taking a chance. But it is always a difficult question to answer for how much amount to insure,as the human life is priceless. It is always good to take up a policy that covers the entire family keeping in mind that you shouldn't overpay insurance companies. There is ?No Rule of Thumb? of how much you should take up. Insurance companies provide both individual,joint and group insurance policies.
Parties in Insurance:
» The Insurance Broker
» The Insurer
» The Insured
» The Policy Holder
» The Beneficiary
The insured and the policyholder are the same person.
An Insurance Broker is the agent creating contracts of insurance on behalf of their customers. Insurance broking is carried out in many ways including traditional brokerages, Financial Advisers and telephone or web-based firms.
How it Works:
It is a legal contract and contract is ified if the insured commits suicide or makes misrepresentation.
The policy becomes mature whichever happens earlier:when the insured dies or the policy reaches a specified age. The Insurance Company receives premiums from policyholders, invests them profitably calculating the time value of money, creates a pool of money and pays claims, and finances the company?s operations. The Life Insurance premium paid for each policy are sensitive to insured person's age. Upon the death, the insurer accepts proof of death before paying the claims. The death proof of the insured is the death certificate issued by the concerned authority. In case they feel suspicious about death, they may investigate and get clear evidence before settling the claims.
Types of Insurance Policies:
Term Life Insurance: It covers the insured person's life for a certain number of years for a specified premium.
Permanent Life Insurance: It remains in action until the policy matures.
Universal Life Insurance : is a new product which ensures flexibility in premium payments and higher rate of returns.
Joint Life Insurance: policy taken in the name of two or three persons and the claims are settled on the event of first death
Group Life Insurance: is a policy take in the name of group of employees in an organization.
Benefits of Life Insurance:
» Tax Savings
» Unforeseen needs can be met
» Policyholders can take loans from banks
False Insurance Claims:
Insurance frauds are false insurance claims made with the intent to defraud the insurance provider. Two types of
Insurance frauds are:
Hard Frauds: Some deliberately fakes accidents, theft or injury and collects money from insurance companies.
Soft Frauds: White lies results in soft frauds and raises everyone's cost.
Insurance fraud is difficult to identify and many go undetected and it is always an expensive investigation.
Fighting Back:
» Educate the consumers
» Train employees
» Track down cheaters
Protect yourself from Insurance Scams:
» Never sign blank insurance forms
» Check "free services" are not hidden costs
» Make sure that the agent and the company is licensed
» Keep your insurance identification number secret
Everyone should be aware of insurance frauds and should help in detecting frauds. Consumers, lawmakers, and doctors all part of the insurance industry should play their part with honesty. Insurance fraud will never disappear as criminals feel it is always a road to riches. It disappears only when human heart is true and pure.
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