Page 23 - Mega Digi Page: General Awareness - Jan 2016
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www.bankersguru.org
(General Awareness)
Life Insurance – II
Life Insurance is a financial cover for a contingency linked with human life, like death, disability,
accident, retirement etc. Though human life cannot be valued, a monetary sum could be determined
based on the loss of income in future years.
Hence, in life insurance, the Sum Assured (or the amount guaranteed to be paid in the event of a
loss) is by way of a ‘benefit’.
Kinds of Life Insurance Policies:
Term Insurance
You can choose to have protection for a set period of time with Term Insurance.
(In the event of death or Total and Permanent Disability if the benefit is offered), your dependants
will be paid a benefit.
In Term Insurance, no benefit is normally payable if the life assured survives the term.
Whole Life Insurance
With whole life insurance, you are guaranteed lifelong protection.
Whole life insurance pays out a death benefit so you can be assured that your family is protected
against financial loss that can happen after your death.
It is also an ideal way of creating an estate for your heirs as an inheritance.
Endowment Policy
An Endowment Policy is a savings linked insurance policy with a specific maturity date.
Should an unfortunate event by way of death or disability occur to you during the period, the Sum
Assured will be paid to your beneficiaries.
On your surviving the term, the maturity proceeds on the policy become payable.
Money back plans or cash back plans:
Under this plan, certain percent of the sum assured is returned to the insured person periodically
as survival benefit. On the expiry of the term, the balance amount is paid as maturity value.
The life risk may be covered for the full sum assured during the term of the policy irrespective of
the survival benefits paid.
Children Policies
These types of policies are taken on the life of the parent/children for the benefit of the child.
By such policy the parent can plan to get funds when the child attains various stages in life.
Some insurers offer waiver of premiums in case of unfortunate death of the parent/proposer during
the term of the policy.
Annuity (Pension) Plans
When an employee retires he no longer gets his salary while his need for a regular income
continues.
Retirement benefits like Provident Fund and gratuity are paid in lump sum which are often spent too
quickly or not invested prudently with the result that the employee finds himself without regular
income in his post - retirement days.
Pension is therefore an ideal method of retirement provision because the benefit is in the form of
regular income.
It is wise to provide for old age, when we have regular income during our earning period to take
care of rainy days.
Financial independence during old age is a must for everybody.
Date of Release -29-Jan-16 SUBJECT: GA www.bankersguru.org
(General Awareness)
Life Insurance – II
Life Insurance is a financial cover for a contingency linked with human life, like death, disability,
accident, retirement etc. Though human life cannot be valued, a monetary sum could be determined
based on the loss of income in future years.
Hence, in life insurance, the Sum Assured (or the amount guaranteed to be paid in the event of a
loss) is by way of a ‘benefit’.
Kinds of Life Insurance Policies:
Term Insurance
You can choose to have protection for a set period of time with Term Insurance.
(In the event of death or Total and Permanent Disability if the benefit is offered), your dependants
will be paid a benefit.
In Term Insurance, no benefit is normally payable if the life assured survives the term.
Whole Life Insurance
With whole life insurance, you are guaranteed lifelong protection.
Whole life insurance pays out a death benefit so you can be assured that your family is protected
against financial loss that can happen after your death.
It is also an ideal way of creating an estate for your heirs as an inheritance.
Endowment Policy
An Endowment Policy is a savings linked insurance policy with a specific maturity date.
Should an unfortunate event by way of death or disability occur to you during the period, the Sum
Assured will be paid to your beneficiaries.
On your surviving the term, the maturity proceeds on the policy become payable.
Money back plans or cash back plans:
Under this plan, certain percent of the sum assured is returned to the insured person periodically
as survival benefit. On the expiry of the term, the balance amount is paid as maturity value.
The life risk may be covered for the full sum assured during the term of the policy irrespective of
the survival benefits paid.
Children Policies
These types of policies are taken on the life of the parent/children for the benefit of the child.
By such policy the parent can plan to get funds when the child attains various stages in life.
Some insurers offer waiver of premiums in case of unfortunate death of the parent/proposer during
the term of the policy.
Annuity (Pension) Plans
When an employee retires he no longer gets his salary while his need for a regular income
continues.
Retirement benefits like Provident Fund and gratuity are paid in lump sum which are often spent too
quickly or not invested prudently with the result that the employee finds himself without regular
income in his post - retirement days.
Pension is therefore an ideal method of retirement provision because the benefit is in the form of
regular income.
It is wise to provide for old age, when we have regular income during our earning period to take
care of rainy days.
Financial independence during old age is a must for everybody.
Date of Release -29-Jan-16 SUBJECT: GA www.bankersguru.org
