Welcome to Webinar on Insurance

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• Welcome to Webinar on Insurance

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Financial Services

• Banking
• Shares,Debentures,Bonds
• Mutual Funds
• Commodities
• Derivatives
• Insurance

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Difference between Insurance and other Financial
Services

• Protection against risk or hazard
• Securing an amount or estate for your family
• Tax concessions
• Social Security
• Provide funds for the development of nation

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• Insurance is a contract whereby a certain sum of
  money is paid on the happening of a contingent
  event
• It is sharing of financial losses of a few out of
  the contribution of many who are exposed to the
  same loss
• It is spreading the loss of an individual over
  group of individuals

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Need for Insurance

• Protection of property
• Coverage against liability
• Savings with tax benefits
• Capital formation for the country
• Life is full of uncertain events
• Creation of Employment

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What is Insurance

• Insurance is a contract whereby the insurer
  agrees to pay the insured a certain sum of money
  on the happening of a contingent event
• It is a method of sharing the financial losses of
  a few from a common fund formed out of many
• It is a contract of utmost good faith

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Types of Insurance

• Life Insurance
• Health Insurance
• Pension
• Group Insurance

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Types of Insurance

• Non Life Insurance
• Marine Insurance
• Fire Insurance
• Auto Insurance
• Others

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(Types of Insurance)

• Marine Insurance
• Location Risks
• Handling Risks
• Operational Risks
• Risk of Human Element
• Act of God

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(Types of Insurance)

• Fire Insurance
• Actual Ignition
• Damage of the property which was not in fire
• Under accidental circumstances

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(Types of Insurance)

• Auto Insurance
• Unlimited liability towards third party injury
• Unlimited liability towards the passengers of
  vehicle
• Damage to the vehicle and its accessories
• Employees using the vehicle of the owner under
  Workmen compensation

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Life Insurance Principles

• Insurable Interest
• Utmost Good faith
• Moral Hazard
• Warranty
• Indemnity
• Subrogation

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Concepts of Life Insurance

• Insurer
• Insured
• Proposal
• Policy
• Premium
• Evidence (Policy Document)

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Concepts of Life Insurance

• Sum Assured
• Proximate Loss
• Human Life Value
• Annuity
• Present value

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Concepts of Life Insurance

• Calculation of Human Life Value
• A person aged 30 has Annual salary 2lacs
• His personal expenses annually is 1lac
• He give for the family 1lac
• His earning span is 30 years, so the family
  requires 30lacs(this is over a period of 30years)
• Human Life value 1000001-(1/(1i)30)/i
• Ipresent bank rate of interest so at 8 it will
  be 1lac11.25781125780

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Underwriting

• First Line Underwriter
• Proposal
• - Name and Address
• - Age
• - Object of Insurance
• - Family History
• - Personal History
• - Declaration and Witness

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Underwriting

• Non Medical General
• -Basic Education, cap on limits of SA
  
• Non Medical Special
• - Employees of reputed companies
• Professionals
• Medical Special Reports
• Financial Underwriting
• Acceptance Communication

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• Nomination
• Appointee
• Policy Document
• Clauses
• Green Channel or Across the Counter
• Cooling off
• Minor Women Lives

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Claims

• What is a Claim
• Types of Claim
• - Survival Benefit
• - Maturity Claim
• - Death Claim
• - Annuity Claim
• - Disability Claim

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Claim

• Payment of Full Sum Assured
• Payment of Sum Assured in Installments
• Payment of Double Sum Assured
• Payment of partial Sum Assured
• Payment of Annuity for a specified period
• Payment of Annuity for a specified period and
  capital on the happening of contingent event

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Claims

• Claimant Form
• Evidence of Burial
• Medical Attendant Report
• Police inquest report
• Claim investigation report
• Policy Document or indemnity

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Plans

• Term Assurance
• Whole Life policies
• Endowment Policies
• Money Back Policies
• Children policies
• Marriage/Educational Policies
• Annuity Plans

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Premium

• What is Premium
• Mode of Premium
• - Single
• - Yearly
• - Half Yearly
• - Quarterly
• - Monthly

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Premiums

• Factors Affecting Premiums
• - Mortality
• - Interest
• - Expenses
• - Profits
• Types of Premiums
• Basic
• AB Premiums,Rider Premiums,

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Premiums

• Mortatlity Table Out of 1lac persons

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(Premiums)

• Person Aged 30 wants take a term assurance of Rs.
  1lacs for 1 year
• Premium Sum Assured Mortality Rate for 1 year
  from the table
• Premium1000000.00117Rs.117(1999)
• Premium1000000.00326Rs.326(1956)

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Premiums

• Person aged 30 wants to take a term assurance of
  Rs.100000 for 4 year
• Premium for 1st year 1000000.00117117
• 2nd year 1000000.00117117
• 3rd year 1000000.00120120
• 4th year 1000000.00125125
• Uniform premium(117117120125)/4120

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Premiums

• In the same example if it is made endowment that
  is Rs.100000 will be death cover for 4 years and
  1lac will be paid on maturity at the end of 4
  years
• Term Assurance Premium for 4 years120
• Endowment premium 100000/4 25000
• Total premium to be paid 2500012025120

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Premiums

• Calculation with interest _at_6 the above example
• Term Assurance premium120
• Endowment premium 25000/(1.06)1
• 
  25000/(1.06)2
• 
  25000/(1.06)3
• 
  25000/(1.06)4
• Total Endowment premium 21658
• Net Premium2165812021778

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Premiums

• Expenses loading in premium
• First year premium
• Renewal premium
• Premium Related expenses
• Policy Related expenses

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Premiums

• Expenses Loading
• We arrived at the premium rate for a person
• Aged 30 for 1lac endowment as 21778
• Cost of premium expenses5
• Loading of expense 21778/0.9522924
• Cost of premium including expenses of
  premium22924

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Premiums

• Cost of expenses per policy
• Average expenses per policyTotal
  Administrative cost/No of policies issued
• Suppose 200000 policies issued and administrative
  cost 40000
• Average cost per policy200000/400005

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Premiums

• Calculation of loading for the example of person
  aged 30 Sum Assured 1lac for 5 years endowment
• Premium with interest 21778
• Premium expense is 5
• Administrative expense
• per policy is Rs. 5
• PremiumInterestexpense(217785)/0.9521929

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Servicing Concepts

• Days of Grace
• Paid up Value Sum AssuredNo of years premium
  paid/Total premium payable
• Surrender Value
• Loans
• Revival
• Assignment

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Bonus

• What is Bonus
• Why it arises
• Types of Bonus
• - Reversionary Bonus
• - Guaranteed Additions
• - Loyalty Bonus
• - Compounded Guarantee Additions
• - Cash Bonus

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Insurance Intermediary

• Agents
• Brokers
• Consultants
• Surveyors
• Corporate Agents

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Your Voluntary Contribution

• To enhance the service by improving bandwidth and
  improve the e-learning methodology needs an
  investment, in case you feel this helps you,
  kindly contribute any amount to the below
  mentioned account.
• Little drops of water make the mighty ocean.
• Expecting your support, it is absolutely
  voluntary and optional
• Company Softsmith Infotech Pvt Ltd.
• Bank Name HDFC Bank Ltd
• Account Type Current A/C
• Account No 05742320000031
• Branch Chennai - Kodambakkam -
  Tamilnadu
• Cust ID 25417385
• Branch Code 0574
• When remitting kindly mention your name and
  course
• You can also send DD to the above mentioned name
  in case direct transfer is not possible.
• Address is available at www.softsmith.com