Plan Your Insurance Prudently

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Whole Life Insurance Policy In Life Insurance Corporation (LIC)

Whole Life Plan Under Life Insurance Corporation Of India (Introduction):-

Generally speaking a whole life policy is one in which the premium is paid throughout life till death or there is a particular period on which such premium paying stops. It is the cheapest form of Life Insurance due to such large payment period. Here till the payment is made the policy is continued.

Whole Life Plan in LIC:- In LIC whole life plan has a maximum sum assured of Rs 5 Lacs. If premium is paid for at least 3 years then, if one stops premium payment. The policy will be supplemented with a free paid up policy of such reduced sum as may be allowed.

When Sum Assured is Paid :-

1. Attainment of age 80 or completion of 40 years from commencement of policy
2. In case of limited payment On attainment of Age 80 , provided premium is paid for at least agreed limited period.
3. In both cases option will be with the insured to take money on completion of (1) and (2) or on death.

What is the Benefit of Whole Life Insurance:-

1. Cheap Premium
2. Good Bonus
3. Proper Risk Coverage at Low Cost

What is Limited Payment Life Policy:-

It is covered under whole life policy of LIC, but here there is premium payment up to a defined period and coverage is till death. So it is the best form of policy to leave an estate after death. It is available in both Single Premium and Distributed Premium Mode.

Benefits of Limited Payment Life Policy:-

1. Easy Estate Creation tool
2. Death Benefit
3. Limited Payment Paying Term
4. Whole life cover

So from the discussion above it is clear that whole life policies are advantageous to those who are looking to leave something for their family. Its an important part of estate creation. It’s a must for all people portfolio as the bonus is very rich.

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Difference Between Insurance Agent and Insurance Broker

Who is a Insurance Agent?

Economic Times defines Insurance Agent as "An agent is a person who represents an insurance firm and sells insurance policies on its behalf. Generally, there are two types of such agents who reach the prospective parties that may be interested in buying insurance. These are independent agents and captive or exclusive agents"

In Insurance Act, 1938 Insurance Agent is defined as follows " an insurance agent licensed

under section 42, who receives or agrees to receive payment by way of commission or 

other remuneration in consideration of his soliciting or procuring insurance business 

including business relating to the continuance, renewal or revival of policies of insurance"

Under Section 42 Following Has To Be Kept In Mind Before Giving License:-

"The Authority or an officer authorised by it in this behalf shall, in the manner determined by the regulations made by it and on payment of the fee determined by the regulations, which shall not be more than two hundred and fifty rupees, issue to any person making an application in the manner determined by the regulations, a licence to act as an insurance agent for the purpose of soliciting or procuring insurance business: Provided that,—a) in the case of an individual, he does not suffer from any of the disqualifications mentioned in sub-section (4); and
b) in the case of a company or firm, any of its directors or partners does not suffer from any of the said disqualifications:
The disqualifications above referred in section 42(4) to shall be the following:—(a) that the person is a minor;
(b) that he is found to be of unsound mind by a court of competent jurisdiction;
(c) that he has been found guilty of criminal misappropriation or criminal breach of trust or cheating 1 or forgery or an abutment of or attempt to commit any such offence by a court of competent jurisdiction:
Provided that where at least five years have elapsed since the completion of the sentence imposed on any person in respect of any such offence, the Authority shall ordinarily declare in respect of such person that his conviction shall cease to operate as a disqualification under this clause(d) that in the course of any judicial proceeding relating to any policy of insurance or the winding up of an insurance company or in the course of an investigation of the affairs of an insurer it has been found that he has been guilty of or has knowingly participated in or connived at any fraud, dishonesty or misrepresentation against an insurer or an insured.
(e) that in the case of an individual, he does not possess the requisite qualifications and practical training for a period not exceeding twelve months, as may be specified by the regulations made by the Authority in this behalf;
(ea) that in the case of a company or firm making an application under sub-section (1) or sub-section (3), a director or a partner or one or more of its officers or other employees so designated by it and in the case of any other person, the chief executive, by whatever name called, or one or more of his employees designated by him, do not possess the requisite qualifications and practical training and have not passed such an examination as required under clauses (e) and (f);]
(f) that he has not passed such examination as may be specified by the regulations made by the Authority in this behalf:
Provided that a person who had been issued a licence under sub-section (1) of this section or sub-section (1) of section 64UM shall not be required to possess the requisite qualifications, practical training and pass such examination as required by clauses (e) and (f);(g) that he violates the code of conduct as may be specified by the regulations made by the Authority."

Who is a Insurance Broker?

Wikipedia defines insurance broker as "An insurance broker sells, solicits, or negotiates insurance for compensation" 

Difference Between Insurance Agent and Broker:-

There is a relation of Agency between agent and insurer. So Insurer is the principal. One can sue the insurer for defaults of agent. In the case of insurance broker this relation is of a advisor that's too, towards  insured and not insurer. So there is no fiduciary relation between broker and insurer.

The agent's primary alliance is with the insurance carrier, not the insurance buyer. In contrast, an insurance broker represents the insured, generally has no contractual agreements with insurance carriers, and relies on common or direct methods of perfecting business transactions with insurance carriers. This can have a significant beneficial impact on insurance negotiations obtained through a broker (vs. those obtained from an agent).

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What is General Insurance?

General Insurance is a contract of insurance, by which insurer agree's to INDEMNIFY the insured in exchange of a sum we call premium, on happening of event against which insurance is done.

It is a contract of Indemnity. All essential of a normal contract are to be observed here. It is invoked to re instate status quo. So for an exchange of premium the insurer will indemnify the insured against loss or injury that is caused due to happening of the event against which the insurance is taken.

What is contract of indemnity?

Indemnity means “when a person promises to the save the other from loss caused from the conduct of promisor himself or by the conduct of any other person”. Though the definition is itself not complete in the Indian Contract Act. The courts have held that the definition in English law is to be followed. This was held in the case of GAJANAN MORESHWAR V. MORESHWAR MADAN.

Indemnity is a type of contingent contract. It also depends on happening of events.  The contract of insurance is also a contract that is contingent to the happening of an event. Insurance is a contingent contract but is not a wager. There is a huge difference between the contract of wager and a contingent contract. The major event of wager is not causing any loss to the promisee. A contingent contract on the other hand is contingent on the happening of any event that may result in loss of the promise.

The contract of insurance is indeed a contact of indemnity. As the following is noticed in both the contracts:

1) Both are contingent on happening of an event.

2) Both are special contracts, but the general principal applies to both.

3) A promise to compensate is common.

4) Consideration must be there.

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What is Life Insurance?

Life insurance is a contract where insurer in exchange of a sum we call premium, agrees to pay a agreed sum to beneficiary, on the death of the insured or to insured himself on expiration of a predetermined period we call term.

Life insurance is very important for any person. There are some risks that each individual face. To mitigate these risk one must know them properly. They are :-

Three Significant Risks:-

1) Danger of dying too soon.

2) Danger of dying too old.

3) Danger of Disability and Sickness.

How Life Insurance Mitigates Them:-

If one dies too soon insurance company will pay the amount of insurance to his family. It mitigates the hardship of the family and helps them to survive. If one dies too old, he will get maturity value of insurance if the policy has this feature other than term insurance. So he will be supported on old age. So insurance covers both long life and short life risks.

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Why You Need Insurance?

What is risk?

Anything that cannot be predicted is risky. Risk means uncertainty. Insurance is a contract that helps you to shift the burden of injury caused by this uncertainty. Like while driving a car you have Third Party Insurance to cover any injury that you may cause to any vehicle or person on the road. As there is a level of uncertainty involved in driving a car and accidents may took place. There is a insurance policy to mitigate the risk.

What is a Contract of Insurance?

 Insurance is a contract by which the Insurer agree's to pay a predetermined amount or any amount that is determined by method that is predetermined to the insured against the happening of an event against which the policy of insurance is taken, in exchange of a consideration we call Premium.

Insurer:- Person who is assuming the risk.and who is getting the premium.

Insured:- The person against whose lose insurer will pay money and who pays the premium

Insurance Amount:- The amount paid by insurer on happening of event.

Premium Amount:- The consideration of contract of insurance.

How Insurance Protect's You?

Insurance helps you to attain status quo. This means you are returned to the same position in which you where had the event does not take place. The money the insurance company pay to you can be diverted to reinstatement of the injury that is caused.

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