Life Insurance Help Guide In Hindi

Anand Khemka

+91-9910936925

Salary saving schemes (SSS)

Salary saving schemes (SSS) 

• Salary saving schemes (SSS) are intended to cater to the needs of the working classes.
• In these schemes the insurance company has an arrangement with the employer, whereby the employer deducts the premium from the employee’s salary and passes it on to the insurance company every month. 
• As the premium is deducted from their salary before it reaches the employee they do not need to worry about defaulting on the premium. 
• The insurance company also benefits as it receives the consolidated premium from the employer for all the employees who have enrolled on the scheme. 
• The employer makes the deduction for the premium from the employee’s salary based on an authority letter signed by the employee, which is collected with the proposal form and is sent to the employer by the insurer, when the policy is accepted. 
• A demand list containing the list of employees, their designation along with the amount to be deducted is sent to the organisation periodically by the insurance company. 
• A salary saving scheme is not a specific insurance plan. It is just a convenient arrangement to collect the premium. It can be used for a term plan, an endowment plan or any other plan as offered by the insurer under the SSS arrangement.

Anand Khemka
+91-9910936925
+91-8287041341

Money-back policies

Money-back policies 

• Money-back policies combine the dual benefits of savings and insurance, and are somewhat similar to endowment plans in terms of features. 
• In an endowment plan, the policyholder receives the maturity benefit at the end of the policy term. However, in money-back policies ‘partial survival benefits’ are paid to the policyholder during the term of the policy at specific intervals.
• The policyholder may receive the survival benefits in fixed proportions or variable proportions during the policy term as per the terms and conditions of the policy. 
• The benefits received by the policyholder at specific intervals are tax-free according to prevailing tax laws. 
• If the policyholder dies during the policy term, the nominee or beneficiary receives the entire sum insured along with the accrued bonus (if any) without the deduction of survival benefits that have already been paid to the insured.

Anand Khemka
+91-9910936925
+91-8287041341

Child plans

Child plans 

• Child insurance plans help parents to save for their children’s future financial needs such as education, marriage etc. 
• Child insurance plans offer the dual benefit of savings along with insurance. 
• It is important to note that the child does not have any income of their own. Instead, they are entirely financially dependent on their parents. The parent pays the premium to the insurance company towards accumulating money for the child’s future financial needs. 
• The child is the beneficiary who is entitled to receive the benefit on the maturity of the policy. 
• In these plans, risk on the life of the insured child will begin only when the child reaches a specified age as stated in the policy. The time gap between the policy start date and the date of commencement of risk is called the deferment period. 
• The date on which the risk will commence at the end of the deferment period is known as the deferred date. The deferred date will be a policy anniversary. 
• There is no insurance cover during the deferment period. 
• When the child reaches the age of majority (18 years old) the title of the policy will be automatically passed on to the insured child. This process is known as vesting. The date on which the policy title passes to the child is known as the vesting date. 
• After vesting the policy becomes a contract between the insurer and the insured person (the child in this case).
• Some child insurance plans come with a built-in ‘waiver of premium’ rider, whereas in the case of other child insurance plans the parent can opt for the waiver of premium rider for a small additional premium. In this case if the parent dies during the policy term the insurance company will continue to pay the premiums on behalf of the parent (until the child reaches the age of majority) and the policy is left intact. The child receives the benefit at the end of the policy term according to the policy terms and conditions. More details on riders will be discussed in chapter 7. 
• Child insurance plans can be taken out in the form of endowment plans, money-back plans or ULIPs. 

Anand Khemka
+91-9910936925
+91-8287041341

Unit-linked insurance plans (ULIPs)

Unit-linked insurance plans (ULIPs) 
Unit-linked policies carry a higher risk than with-profit policies and contain fewer guarantees. However, they are much more flexible. Unit-linked policies are suited to people prepared to undertake some investment risk to obtain the benefits of flexibility. Returns are subject to movements in the capital markets where investments such as equities (shares) are traded (shares will be discussed fully in chapter 6). 

Key points 

• Unit-linked insurance plans (ULIPs) offer the benefits of both life insurance and returns on investment. 
• In traditional plans the insurance company takes a decision on the investments to be made on behalf of the insured. However, in a ULIP the insured has a variety of funds to choose from like equity funds, debt funds, balanced funds and money market funds etc. for their investments. 
• ULIPs give the insured the option to participate in the growth of the capital markets. 
• On the death of the insured the sum insured or the market value of the investment (fund value), whichever is higher, is paid. 
• On maturity of the plan the fund value is payable. 
• Settlement option: instead of taking a lump sum amount, some plans provide the policyholder with the option to receive the maturity benefit amount as a structured payout (periodic instalments) over a period of time (say, 5 years or any time up to 5 years) after maturity. This is known as the settlement option. If the policyholder wishes to take the settlement option they need to inform the insurance company well in advance.

Anand Khemka
+91-9910936925
+91-8287041341

Micro-insurance plans

Micro-insurance plans 

• In November 2005 the IRDA issued guidelines for micro-insurance through the IRDA (Micro-insurance) Regulations 2005. Micro-insurance aims at providing insurance cover to low income groups. 
• The IRDA has specified that the life cover provided under micro-insurance products should range from Rs. 5,000 to Rs. 50,000. 
• A life insurer may offer life micro-insurance products as well as general micro-insurance products and vice versa. (This is only allowed for micro-insurance products, and no other types of general insurance products.) 

Anand Khemka
+91-9910936925
+91-8287041341