INDEX ING VYSYA LIFE INSURANCE SERIAL NO. TOPICS PAGE NO. CHAPTER I INTRODUCTION NEED FOR LIFE INSURANCE. MANAGEMENT TEAM. PARTNERS. 1-11 CHAPTER II PLANS PROTECTION. SAVINGS. INVESTMENT. RETIREMENTS. 12-34 CHAPTER III RIDERS. 35-38 CHAPTER IV EMPLOYEE BENEFITS. GROUP GRATUITY GROUP SUPERANNUATION 39-50 CHAPTER V FAQ,S 50-65 CHAPTER VI SURVEY 66-67 CHAPTER VII QUESTION,S ASKED TO SALES MANAGER 68 CHAPTER VIII CONCLUSION 69 CHAPTER IX METHODOLOGY 70 CHAPTER T.Y.B.B.I (SEM-VI) 1
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INDEX
ING VYSYA LIFE INSURANCE
SERIAL NO. TOPICS PAGE NO.
CHAPTERI
INTRODUCTION NEED FOR LIFE INSURANCE. MANAGEMENT TEAM. PARTNERS.
worthy purpose. On the other hand the payment of life insurance premiums
becomes a habit and comes to be viewed with the same seriousness as the
payment of interest on a mortgage. Thus, insurance in effect brings about
compulsory savings.
Ready marketability and suitability for quick borrowing: After the specified
initial period, if the policyholder finds himself unable to continue payment of
premiums he can surrender the policy for a cash sum, alternatively, he can tide
over a temporary difficulty by taking a loan on the sole security of the policy
without delay. Further, a life insurance policy is sometimes accepted as a
security for a commercial loan.
Tax relief: Subject to certain limits and conditions prescribed by the Income
Tax Act, 1961 (the “Income Tax Act”), a life insurance plan offers tax benefits
in the form of deductions from income/ rebate on income tax and also exempt
from tax the amounts received under a life insurance policy. When the tax relief
is taken into account it will be found that the assured is in effect paying a lower
premium for his insurance.
4. How much insurance cover do you need?
Answer to this question depends on various factors including (i) the reasons for
seeking insurance viz., as an income-protection, savings or investment tool, (ii)
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income sources and amounts other than salary/earnings; (iii) whether or not the
individual is married and, if so, what is the spouse earning capacity; (iv) the
number of individuals who are financially dependent on the life to be insured;
(v) benefits to accrue from an employer-sponsored life insurance plan if
available; (vi) whether any special life insurance needs exist (e.g., mortgage
repayment, education fund, estate planning need); (vii) whether the life to be
insured has any other old-age or super-annuation benefits etc. Rough estimates
suggest an amount of life insurance equal to four to five times of ones annual
earnings.
5. When does the coverage on the policy begin?
Coverage under a life insurance policy begins once the proposal made to the life
insurance company is accepted and communicated and the person making the
proposal has paid the first premium. Most companies provide some temporary
conditional coverage during the application process assuming certain conditions
are met. This temporary coverage is limited in time and amount. The
availability, amount and conditions are described in the application and vary
from company to company. If you are replacing existing coverage, you should
never drop your existing coverage until your new policy has been approved, and
your first premium has been paid.
6. When could a person cover the lives of spouse and children?
There is no single guidance or rule for this. Initially, life insurance for
appropriate amounts should be effected on the family breadwinner(s). It is of
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utmost importance that the income earning capacity of the primary breadwinner
be fully protected, if possible, through the purchase of the required amount of
life insurance before contemplating the purchase of life insurance on children or
on a non-wage earning spouse. In a dual-earning household, it is important to
protect the income earning capacity of both spouses. Life insurance on a non-
wage earning spouse is often recommended for the purpose of paying for
household services lost at this individuals death.
7. What is premium?
Premium is the consideration (price) payable periodically to the life insurance
company for the risk undertaken by it under the insurance policy
8. Who is a proposer?
The person who proposes to enter into a contract of insurance with a life
insurance company to insure himself or another life on whose life he has
insurable interest
9. Who is a life insured?
The person whose life is covered under the contract of insurance.
10.What is a claim?
Demand presented for payment of the benefit due under the terms of an
insurance policy .
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11.What is lapse of policy?
The termination of policy caused by the policyholders failure to pay the
premiums within the stipulated period.
12.What is maturity date?
The date on which the policy comes to on end and on which the survival
benefits are payable.
13.What is maturity value?
The amount payable under a life insurance policy on its maturity date.
14.What is a life insurance policy?
A written document issued by a life insurance company to a policyholder,
which expresses the insurance contract between the company and the
policyholder.
15.Who is a policyholder?
A person that has entered into a contract of insurance with the insurance
company.
16.Can you have more than one insurance policy? Why would you need
multiple policies?
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Yes. When one is purchasing an insurance policy to cover the entire risk, it
might be prudent to break the policy into smaller units. Though this increases
the cost of insurance, as the discount in premium for larger sum assured may
not be available, the benefit may offset this cost. Having multiple policies
allows you to discontinue some policies while continuing the others, in case
there is a financial crisis because of which you suddenly find yourself in a tight
spot. After the financial crisis is over, you may reactivate the other discontinued
policies, subject to the terms of those policies.
17.Are moneys payable under a life insurance policy free from attachment?
Section 60(1)(kb) of the Code of Civil Procedure, 1908 states that all moneys
payable under a policy of insurance on the life of the judgment debtor will be
free from attachment. This places an assigned policy outside the reach of the
creditors.
18.What is underwriting?
Underwriting is the process through which a life insurance company takes a
decision whether to accept the risk and if so at what rate of premium, after
considering relevant facts disclosed to it.
19.What is group insurance policy?
An insurance policy that provides coverage for a number of people under one
contract, called a master contract. In a Group insurance policy, the policy holder
is usually the employer who contributes premium which is a certain percentage
of the salary of the employees in the Employers organization. However, the
employees are the beneficiary in such Group insurance policies. In general, in a
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group insurance policy the insurance company ordinarily –cannot turn down
any applicant that is a member of the defined group.
20.What are “with profit” policies?
Policies, where the policyholders receive bonuses, upon the insurance company
generating surplus and declaring them to the policyholder. Only a "with profit"
policy is eligible to bonus. The bonus that may be receivable may vary year to
year according to the surplus generated by the insurance company. ‘With profit’
policies are more popular because of the possibility of getting increasing bonus
every year even though the premium payable is higher than the premium paid in
‘without profit’ policies.
21.What is a paid up policy?
Once the premium on a life insurance policy for a specified period is paid in
full, the policy may not lapse even if no subsequent premiums are paid. Such
policies are known as paid-up policies. In such cases, the sum originally assured
is reduced to a sum bearing the same ratio to the sum originally assured as the
number of premiums actually paid to total number of premiums originally
stipulated as payable under the policy. By way of example, if 6 out of the
originally stipulated 30 premiums are paid, the sum assured under a paid-up
policy could still be 20 percent of the original sum assured by the policy.
22.What is a material fact?
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A fact that would influence the judgment of a prudent insurer in deciding
whether to insure a particular risk, or the terms on which to insure it would be
considered material. Generally, all information required in the proposal form
are considered material and a non-disclosure or misrepresentation in relation to
such information sought could give rise to a right in favour of the insurance
company to repudiate the claim.
23.What is reinsurance?
The practice of insurance companies insuring the risk insured by them is called
reinsurance.
24.What is nomination?
Nomination is a right conferred on the holder of the policy of life insurance on
his own life to appoint a person or persons to receive the policy moneys in the
event of the policy becoming a claim by death.
25.Who is a nominee?
The person designated by the policyholder to receive the proceeds of an
insurance policy, upon the death of the insured.
26.Who can nominate?
Any policyholder, who is a major and the life insured under a policy can make a
Nomination. Nomination is not effective in a policy taken on the life of another
person.
27.When can nomination be done?
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Nomination can be done at the inception of the policy itself. All that a
policyholder has to do is to provide the details of the nominee in the proposal
form. If a nomination was not done at the time of filing the proposal, it can be
done at a later date either by an endorsement made at the back of the policy
document or by making the endorsement of nomination on a piece of paper
pasted on the policy.
28.How can nomination be changed?
Subject to the provisions contained in Section 39 of the Insurance Act, 1938,
there are no restrictions on the policyholder regarding changing his nomination
at any point of time, any number of times. The life-assured is free to change or
cancel a nomination and make a fresh nomination any number of times during
the currency of the policy. Transfer or assignment of a policy (except when it is
made to an insurer in specified cases) automatically cancels a nomination.
29.What is successive nomination?
Successive nomination means that money should be paid to nominee A; failing
him, to nominee B; failing whom, to nominee C, etc. Such a nomination is
treated in favour of one individual in the order mentioned and is acceptable in
law.
30.What are the details to be provided about the nominee(s)?
The following precautions are necessary at the time of filling in the proposal:
Mention the Full Name, Address, age, relationship to yourself of the nominee.
31.What is transfer or assignment of a life insurance policy?
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Transfer or Assignment is a method of transferring ones transferable interest in
a life insurance policy to another person or institution including as security for
repayment of loans.
32.What is the difference between nomination and assignment?
While the nomination is an authorization to receive the policy moneys in the
event of the death of the life assured, it does not give the nominee an absolute
right over the money received to the exclusion of other legal heirs. Further, the
Nomination can be revoked or cancelled at any time during the lifetime of the
policyholder at his will and pleasure or by a subsequent assignment. On the
other hand, assignment of an insurance policy is a transfer or assignment of all
rights and liabilities to the insurance policy in favour of the assignee.
33.How to make an assignment or transfer of a life insurance policy?
Assignment or transfer of a life insurance policy may be made by simply
making an endorsement to that effect in the policy document. Another way of
transferring or assigning the life insurance policy is by getting a separate
assignment deed executed. The former case is a preferred mode of assignment
as it is exempt from further stamp duty. An assignment should be signed by the
Assignor or his duly authorised agent specifically stating the fact of transfer or
assignment and attested by at least one witness.
34.What are the advantages of raising loans on an insurance policy?
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One of the advantages of a life insurance policy is the facility of loan that it
offers in times of need. At a time when there is a dire necessity and no other
funds are available, it is best to go in for loan on your life insurance policy.
However, most policies stipulate a limit as to the amount that could be taken on
loan. Generally the limit is 90 percent of the available cash surrender value on
the policy. It is much easier and a more economical source of borrowing. And
above all, it does not hurt your self-esteem. It is after all your own money that
your are withdrawing
35.What are the tax benefits on purchasing policies?
Subject to certain limits and conditions prescribed by the Income Tax Act,
premiums paid to effect or to keep in force an insurance policy on the life of the
assesses or on the life of the wife or husband or any child (whether minor or
major) of the assessed irrespective of the status of the child, enjoys tax rebate
under section 88 of the income tax act. In the case of contribution to pension
funds, deduction is available under Section 80CCC of the Income Tax Act
36.Does a beneficiary on receipt of death benefits or when an individual
receives maturity benefits pay taxes?
Section 10(10D) of the Income-tax Act, 1961, provides total exemption on any
sum received under a life insurance policy, including the sum allocated by way
of bonus on such policy, other than any sum received under Sub-section (3) of
Section 80 DD or sub-section (3) of Section 80DDA, any sum received under a
Keyman Insurance Policy, or under a policy issued in respect of which the
T.Y.B.B.I (SEM-VI) 63
premium payable for any of the years during the term of the policy exceeds
20% of the actual capital sum insured.
37.What does Add-on Benefits or Riders mean?
The additional benefits, over and above the benefits available under the
insurance policy that a policyholder may be entitled to at an extra cost are
called Add - on Benefits or Riders. One could opt for any one or more of the
benefits at a little extra cost. This additional protection for your loved ones
ensures that you receive a sum additional to the assured sum in case of any
untoward event in your life.
38.When are the benefits of the Life Insurance plan withheld?
Suicide: No benefits will be payable if death occurs due to suicide, within a
specified period from the date of commencement of risk. In addition benefits
under a life insurance policy may not be granted if the insurer has the right to
repudiate the claim
39.What is Survival Benefit?
Survival benefit is a benefit payable on survival of the life assured to a
particular pre-defined point of time in the insurance contract. For example, in
the Money-Back Policy, the life assured is paid a certain percentage of the sum
assured every few years. This survival benefit is payable only when the life
assured is alive. It does not matter if the life assured is suffering from any
illness or not. However, if the life assured dies, the benefit payable is Death
Benefit and not survival benefit.
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40.What is the Death Benefit?
In the event of death during the plan term, your family would receive the full
sum assured.
41.What is Accidental Death Benefit?
This benefit is an ‘Add-on’ (Rider) benefit. When you opt for this benefit, the
amount payable in the unfortunate event of death due to accident, would be
substantially higher than the basic sum assured that may be payable in the case
of a policy that merely provides for death benefit. As an illustration, if a person
Mr. A has opted for Accidental Death Benefit along with the basic cover on life
dies in an accident, then his nominee would be paid an extra benefit called the
‘Accidental Death Benefit’ which is additional to the benefit receivable under
the basic policy
42.What is Accidental Death, Disability and Dismemberment Benefit?
If you want more than regular accident death protection, you can choose this
add-on benefit. A helping hand for the family, the assured sum would be
paid to you or to your beneficiary in the event of your death, disability or
dismemberment due to an accident. The percentage of the sum assured you
receive would depend on the extent of disability. This amount would be over
and above the basic assured sum. For instance, If Mr. A has opted for the
‘Accidental Death, Disability and Dismemberment Benefit’ then the life
assured will receive a certain percentage of the rider benefit if the life
assured has suffered on his earning capacity by loss of his limb, sight,
hearing capacity, speech, etc due to an accident. While the regular accident
T.Y.B.B.I (SEM-VI) 65
43.death protection rider provides the assured certain increased sum after death,
it does not provide any benefit if the life assured survives an accident but
suffers from dismemberment or disability due to the accident. The rider in
“Accidental Death Disability and Dismemberment” covers situations, in
addition to covering Accidental Death, where the life assured survives an
accident but suffers from disability and/or dismemberment.
44.What is Waiver of Premiums benefit?
In the unfortunate case that you become totally disabled, thisadd on benefit
waives off all future premiums both on the basic cover and on all add-on
benefits during the disability period. All benefits of the original insurance plan
would remain valid until maturity, without your being required to continue to
pay the premiums for the base policy or the Add-ons.
45.What is term Benefit?
For a small additional premium, the amount received on death would be higher.
The additional sum assured could be upto the amount assured by the basic plan.
46.What does Accidental disability mean ?
A person who has opted for the ‘add-on’ benefit called ‘Accidental Death,
Disability and Dismemberment Benefit’, suffers from ‘Total and Permanent
Disability’ due to an accident, then he eligible for certain benefits under the
rider. A person would be said to be suffering from ‘Total and Permanent
Disability’ when the disability results from bodily injury caused by accident
within 180 days of the accident. Further the disability prevents the life assured
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from engaging in any work continuously, completely and permanently.
Depending on the extent of disability, the life assured will receive a certain
percentage of the sum assured under this Rider.
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SHRI CHINAI COLLEGE OF COMMERCE & ECONOMICSQuestionnaire for Survey of Ing Vysya Life Insurance
NAME:- DESIGNATION: - CONTACT NO.:-
1. Are You Aware Of Insurance?Yes No
2. Do You Have Life Insurance Plan Of Any Company?If Yes Than Which Co. _______________________________Reason: - ________________________________________
3. Did you benefit yourself from this policy? Yes No
4. Do You Have Any Ing Vysya Life Insurance Plan? Yes No