Group insurance plans

Group insurance plans

• A group insurance policy provides insurance protection to a group of people who are brought together for a common objective. 
• The group of people can be: 

1. employees of an organization; 
2. customers of a bank; 
3. members of a trade union; 
4. members of a professional body like an association of accountants; or 
5. any other group of people who have come together with a commonality of purpose or are linked to each other for a common objective. 

• In a group insurance policy the insurance company issues one master policy covering all the members of the group. For example, the insurance company will issue a master policy to an employer covering all the employees of the company. The employer would be known as the ‘master policyholder’. 
• The contract of insurance is between the master policyholder and the insurance company. The employees are not a direct party to the insurance contract. 
• Group insurance schemes are also used by the Government as instruments of social welfare to provide insurance cover to the masses (people who are below the poverty line). 
• In July 2005 the insurance industry regulator (IRDA) issued guidelines on group insurance policies.

Anand Khemka
+91-9910936925
+91-8287041341

Annuities

Annuities
An annuity is a series of regular payments from an annuity provider (insurance company) to an individual (called the annuitant) in return for a lump sum (purchase price) or instalment premiums for a specified number of years.
According to the manner in which the purchase price is paid, annuities can be either: 

• an immediate annuity; or 
• a deferred annuity.

An annuity is the reverse of a life insurance policy. In life insurance the insurance company takes on the risk, but with an annuity the annuitant takes on the risk that they won’t die in a very short space of time after paying the purchase price.

There are a number of different types of annuity available (such as a joint life, last survivor/life annuity with return of purchase price/increasing annuity).

Anand Khemka
+91-9910936925
+91-8287041341

Joint life insurance plans

Joint life insurance plans 

• Joint life insurance plans offer insurance coverage for two persons under one policy. This plan is ideal for married couples or partners in a business firm. 
• With some joint life insurance plans the death cover (sum insured) is payable on the death of the first joint policyholder and then again on the death of the surviving policyholder, along with the accumulated bonuses up to that date, if the death of both the policyholders happens during the tenure of the policy. 
• If both the joint policyholders survive until maturity or one of the joint policyholders survives until the maturity of the policy, then the maturity benefit along with the bonuses accumulated until that date is paid. 
• For some joint life policies the premiums have to be paid until the selected term or premium payment ceases on the death of the first joint policyholder. 
• In the case of joint life policies each life will be underwritten separately.

Anand Khemka
+91-9910936925
+91-8287041341

Convertible insurance plans

Convertible insurance plans

As the name suggests, this insurance plan can be converted from one type to another. For example, a term insurance plan can be converted into an endowment plan or a whole life plan or any other plan as allowed by the insurance company.

A convertible plan is useful when the life insured cannot initially afford to pay a higher premium. They can therefore start with a term insurance plan with a lower premium and then later convert it into an endowment plan or a whole life plan with a higher premium. Also, at the time of the plan conversion the life insured is not required to undergo a medical check-up.

Another advantage of convertible plans is that at the time of conversion there is no further underwriting decision to be made. 

Anand Khemka
+91-9910936925
+91-8287041341

Whole life insurance plans

Whole life insurance plans 

• A term insurance plan with an unspecified period is called a whole life plan. Some plans also have a savings element to them. The insurance company declares bonuses for these plans based on the returns earned on investments. 
• As the name of the plan specifies, this plan covers the individual throughout their entire life. 
• On the death of the life insured, the nominee/beneficiary is paid the sum insured along with the bonuses accumulated up until that point in time. 
• During the individual’s lifetime they can make partial withdrawals to meet emergency requirements. An individual can also take out loans against the policy. 

Anand Khemka
+91-9910936925
+91-8287041341

Endowment insurance plan

Endowment insurance plan

An endowment insurance plan is basically a combination of a term insurance plan and a pure endowment plan. It offers death cover if the life insured dies during the term of the policy or survival benefit if the life insured survives until the maturity of the policy. 

Key points 

• Endowment insurance plans pay a specified amount on maturity of the plan if the life insured survives the entire term of the plan. 
• Death cover: these plans also have a death cover element. If the life insured dies before the maturity of the plan then the death cover benefit is paid to the nominee/beneficiary. 
• Savings element: these plans, apart from the death cover, also have a savings element. After deducting the death cover charges and administration charges from the premium, the remaining amount is invested by the insurance company on behalf of the life insured. The returns earned are later paid back to the life insured in the form of bonuses. 
• Goal-based investment: these plans can also be bought for accumulating money for specific plans like a child’s higher education or marriage etc. 
• Some insurance companies also allow partial withdrawal or loans against these policies. 
• This plan also comes in different variants. Some plans have a higher death cover than the maturity benefit and vice versa. 
• In some plans the maturity benefit is double the death cover. This type of plan is known as a double endowment insurance plan. 

Anand Khemka
+91-9910936925
+91-8287041341