In 1986, Congress passed the Consolidated Omnibus Budget Reconciliation Act, COBRA, as a means for mature employees, spouses, and dependent children to continue the group health insurance previously provided by an employer. The coverage was paid completely by the insured. In many cases, the cost of the coverage was prohibitively high, especially if the premiums were being paid for out of unemployment benefits. In light of the rising unemployment rate and the cost of health insurance, the affordability of COBRA gained government attention. The American Recovery and Reconciliation Act of 2009 (ARRA) includes a provision to cleave the cost of continuation coverage to eligible laid-off workers by 65%.

How the Subsidy Works

The COBRA subsidy became effective as of March 1, 2009 for workers laid-off between September 1, 2008 and December 31, 2009. Anyone who became involuntarily unemployed during this time period and had been covered by group health insurance provided by the old employer must be notified of the availability of the subsidy by April 18, 2009. The subsidy is available for nine months of coverage unless another group health insurance is available or the worker becomes eligible for Medicare. Generally, COBRA is available for 18 months.

The subsidy is in the manufacture of a tax credit for employers at the rate of 65% of the cost of COBRA for archaic employees, eligible spouses and dependent children. Those receiving the abet will only be billed for the remaining 35% of the premium. Employees who lost their job during the qualifying time period and declined coverage before ARRA was enacted are now eligible to receive coverage. The enrollment period for accepting coverage is 60 days from the date of unemployment. The reduced premium is only applicable to payments from March 1, 2009 forward.

Employers with 20 employees or less are not required to provide COBRA continuation coverage under Federal law; however several states do require little businesses to participate if it offers coverage to retained workers. If the primitive employer no longer offers group health insurance either due to dropping the coverage for remaining workers or through business closure, COBRA coverage is no longer available.

Who is Eligible for the COBRA Subsidy

People who became unemployed through no fault of their fill and whose archaic employer maintains group health insurance are eligible for coverage subject to determined income limits. The subsidy is not available for people who have a modified adjusted snide income in excess of $145,000 or $290,000 for those filing a joint return and is phased out beginning at $125,000/$250,000 income level. If a laid-off worker is eligible to receive health insurance through a spouse’s employer or Medicare, the subsidy does not apply.

COBRA Information Resources

As the subsidy and associated changes to COBRA continuation coverage is so unique, there may be a time between when the subsidy became law and when it is actually set into action. The U.S. Department of Labor has a website in state with detailed information about the unique law, how it applies to individual situations, and includes an option to subscribe to the page for notification as updates become available. Benefits Advisers with the Department of Labor are also available toll free (866) 444-3272 for more information.

In 1986, Congress passed the Consolidated Omnibus Budget Reconciliation Act, COBRA, as a means for used employees, spouses, and dependent children to continue the group health insurance previously provided by an employer. The coverage was paid completely by the insured. In many cases, the cost of the coverage was prohibitively high, especially if the premiums were being paid for out of unemployment benefits. In light of the rising unemployment rate and the cost of health insurance, the affordability of COBRA gained government attention. The American Recovery and Reconciliation Act of 2009 (ARRA) includes a provision to prick the cost of continuation coverage to eligible laid-off workers by 65%.

How the Subsidy Works

The COBRA subsidy became effective as of March 1, 2009 for workers laid-off between September 1, 2008 and December 31, 2009. Anyone who became involuntarily unemployed during this time period and had been covered by group health insurance provided by the faded employer must be notified of the availability of the subsidy by April 18, 2009. The subsidy is available for nine months of coverage unless another group health insurance is available or the worker becomes eligible for Medicare. Generally, COBRA is available for 18 months.

The subsidy is in the acquire of a tax credit for employers at the rate of 65% of the cost of COBRA for venerable employees, eligible spouses and dependent children. Those receiving the support will only be billed for the remaining 35% of the premium. Employees who lost their job during the qualifying time period and declined coverage before ARRA was enacted are now eligible to receive coverage. The enrollment period for accepting coverage is 60 days from the date of unemployment. The reduced premium is only applicable to payments from March 1, 2009 forward.

Employers with 20 employees or less are not required to provide COBRA continuation coverage under Federal law; however several states do require petite businesses to participate if it offers coverage to retained workers. If the extinct employer no longer offers group health insurance either due to dropping the coverage for remaining workers or through business closure, COBRA coverage is no longer available.

Who is Eligible for the COBRA Subsidy

People who became unemployed through no fault of their acquire and whose outmoded employer maintains group health insurance are eligible for coverage subject to definite income limits. The subsidy is not available for people who have a modified adjusted inferior income in excess of $145,000 or $290,000 for those filing a joint return and is phased out beginning at $125,000/$250,000 income level. If a laid-off worker is eligible to receive health insurance through a spouse’s employer or Medicare, the subsidy does not apply.

COBRA Information Resources

As the subsidy and associated changes to COBRA continuation coverage is so fresh, there may be a time between when the subsidy became law and when it is actually save into action. The U.S. Department of Labor has a website in area with detailed information about the original law, how it applies to individual situations, and includes an option to subscribe to the page for notification as updates become available. Benefits Advisers with the Department of Labor are also available toll free (866) 444-3272 for more information.

Do you possess your enjoy business, or freelance?   Are you working part-time and, therefore, not eligible for benefits?   Health insurance is extremely principal as healthcare costs are going through the roof.  One of the ways to bag health insurance is to join a trade association or some kind of formal group that provides health insurance for it’s members.  The American Automobile Association  (AAA) offers short term medical insurance for between 30 – 185 days which is cheaper than COBRA.  This is a splendid map to hold yourself insured without breaking the bank (crucial at a time when saving every penny counts).  They also offer permanent insurance for college students (up to age 63).  This is huge for students who can’t go on their parent’s view as dependents, or are international students, and can be a cheaper alternative to the college health insurance plans.   eHealth Insurance offers quotes for comparison for people seeking insurance for themselves and their families.  It allows you the flexibility to decide your deductible, compare coinsurance rates and contemplate what your monthly payments will be.  Healthinsurance.org offers you the same options as well as links to websites that offer risk pools (insurance for people who cannot rep insurance because of their medical/pre-existing conditions, or a change in their circumstances that makes them ineligible for benefits).  

Freelancers can join the National Association of the Self-Employed (NASE) and join their Health Reimbursement Arrangement (HRA) that allows you to write off 100% of your medical expenses, including the cost of the health insurance premium.  Health Savings Accounts (HSA) are another diagram to go.  You would have to pay a deductible but you score pre-tax savings.  BibleHealthcare.com and  Samaritan Ministries, offer a medical sharing program that covers bills by having a group of people pool money to assist each other pay for medical costs.  People construct a monthly contribution and can choose from several plans. You will want to check if this option is available in your set.  You will also want to compare the benefits you find to the regular insurance rates and peer if this is an option that will work for you.

Your chamber of commerce, trade association, or parenting club or organization are always top-notch places to commence in your quest for affordable insurance.   Discontinue healthy and prosper.

Do you beget your maintain business, or freelance?   Are you working part-time and, therefore, not eligible for benefits?   Health insurance is extremely necessary as healthcare costs are going through the roof.  One of the ways to obtain health insurance is to join a trade association or some kind of formal group that provides health insurance for it’s members.  The American Automobile Association  (AAA) offers short term medical insurance for between 30 – 185 days which is cheaper than COBRA.  This is a fine intention to retain yourself insured without breaking the bank (crucial at a time when saving every penny counts).  They also offer permanent insurance for college students (up to age 63).  This is astronomical for students who can’t go on their parent’s concept as dependents, or are international students, and can be a cheaper alternative to the college health insurance plans.   eHealth Insurance offers quotes for comparison for people seeking insurance for themselves and their families.  It allows you the flexibility to resolve your deductible, compare coinsurance rates and leer what your monthly payments will be.  Healthinsurance.org offers you the same options as well as links to websites that offer risk pools (insurance for people who cannot pick up insurance because of their medical/pre-existing conditions, or a change in their circumstances that makes them ineligible for benefits).  

Freelancers can join the National Association of the Self-Employed (NASE) and join their Health Reimbursement Arrangement (HRA) that allows you to write off 100% of your medical expenses, including the cost of the health insurance premium.  Health Savings Accounts (HSA) are another diagram to go.  You would have to pay a deductible but you gain pre-tax savings.  BibleHealthcare.com and  Samaritan Ministries, offer a medical sharing program that covers bills by having a group of people pool money to relieve each other pay for medical costs.  People create a monthly contribution and can choose from several plans. You will want to check if this option is available in your residence.  You will also want to compare the benefits you score to the regular insurance rates and gaze if this is an option that will work for you.

Your chamber of commerce, trade association, or parenting club or organization are always marvelous places to initiate in your quest for affordable insurance.   Discontinue healthy and prosper.

The use of private health insurance has risen hugely over the very last 30 years. This is because it is the only channel to pay for the rising charges of health care in hospitals, clinics and private clinics. Health insurance cover premiums are similarly becoming more expensive. How can they not? The high price goes in line with the ever-increasing cost of health care which is now considerably above inflation levels. So as the cost of medical succor continues to rise, finding reasonable health protection is becoming more and more difficult.

Some individuals are fortunate ample to have their health insurance cover set through their employer. Usuthe entiretyy, the employer also contributes a bulky percent of the cost. Unfortunately, some companies that offer health protection to their workers are beginning to find it hard to continue as health care plan costs rise. There are many people who place the importance of a companys health insurance plan above other employment aspects such as pay and vacation days. In other words, its the companys health insurance benefit that makes the job enticing. For some, finding a low cost health cover provider is the next advantageous step to take anytime a company health care program is not an choice.

Those who fall under the styles of self in a job, unemployed or the low paid, have an even harder task finding inexpensive health cover. As a first step, it is a good idea to make an application for your health insurance cover on the internet. Doing so, you should be able to assemble all the information you need to compare the advantages of solitary health insurance policy over another. Yes, you will have to do some studying. But you cannot dash into selecting the right health cover, especially if you have a family.

The good news is that people are learning they have to be more selective. You must look cautiously at every aspect of your potential health insurance cover plans to get the best possible premiums. Many national and local organizations of self-employed workers are now banding together to form cooperatives and merge their purchasing power. This route enables them to get affordable health insurance protection premiums through group policies. If you are a member of an association or organization, confer with if they have group health cover. If they do, go for it as its usually much more inexpensive than purchasing individual health cover on your own.

Your health protection policy will also list the kind of services your insurance provider does not cope with. You need to be aware about stipulations and restrictions a health insurance protection policy have about emergencies and who you can visit for medical treatments. It may noise like a good contract to check on but this is an deep-seated decision. You need to be careful in picking which health cover and supplier to employ. before now there is much discussion about successive troubles possible to be caused by an increasing number of the population who do not have any health protection. Available statistics show the rise in loss rates for those without health insurance protection is a high 25 percent higher come close to someone covered by a healthcare policy.

By shopping around it is possible to find cheap health insurance that will join your requirements.

The insurance companies try to provide for different budgets and in doing so they offer cheap health insurance for folks who cannot afford comprehensive insurance coverage.

Think about discussing to your brand new insurance company first if you have other items already insured , as this is a go offod way to get cheap health insurance coverage by including it in your current insurance policy.

Make sure that you read all the terms of the insurance engagementcause quite often cheap health insurance doesnt cover all the areas of health that you could require to satisfy your needs.

With the competitive rates that are given by many of the insurance companies surf the net these time it has become a lot easier to find cheap health insurance that will cover the essentials that are necessary for most workforce.

Family health insurance allows you to get reduced rates by insuring all members of the family in one combination policy.

It is well cost considering getting family health insurance if you have young members in the family as the everyday cost of living will regularly have most family budgets stretched to the limit and the additional expense of medical fees can push your expenditure beyond levels where you are able to cope comfortably.

If the just alternative is that your familys health will suffer due to a lack of resources then you will understand the vital importance of having family health insurance to bicker optimal health cover for all members of the family while growing up.

If you can combine your family health insurance with your other home and contents insurance you can quite often get reduced rates however it is also well worth considering researching into companies that specifically offer family health insurance simply because they have packages that are often cheaper than those you would be able to get elsewhere.

Most insurance companies will offer a group health insurance calendar that can be tailored to the requirements of the particular group.

A group health insurance plan can save a considerable amount of money for the individuals of the group and insurance companies are generally happy to offer discounts for group health insurance plans because they can often get additional sources of revenue for other kinds of insurance for the individuals of that group.

A Group health insurance plan can benefit both parties in the transaction by introducing existing people to the insurance company who would not otherwise give them their insurance interest if it werent for the fact that they were participating in a group health insurance plan.

Many of the smaller insurance companies have built their business rapidly by focusing on group health insurance plans as a way to build up their customer base.

For any make of insurance discuss with your insurance representative whether they can prepare a group health insurance plan that will suit your needs and the needs of those people who you can introduce to their business and see what discounts they can offer.

earlier you get a health and medical insurance talk about consider checking out a couple of the within sight options on the Internet first before you go to your insurance company as this will give you something to compare with the rates that your own insurance Company is bestowing with their health and medical insurance quotes.

Once you have this information in hand it will give you a lot better bargaining power and you will be quite astounded to know that most insurance companies will reduce their health and medical insurance quotes if they are provoked to do so when you reveal a more competitive price elsewhere.

There is lot of profit being produced in the insurance sector and there is room to amendment for most insurance companies when they give you a health and medical insurance quote but they wont do so unless they are forced to by people like you presenting them with better options that you have got hold of available elsewhere.

So keep that in mind this fact next time you are planning to get a health and medical insurance quote.

ABOUT LIFE
Life is an Excellent Gift of God to Mankind. But nothing in life is eternally certain. Unexpected accidents, hospitalisations, business setbacks, ever cutting short work-force (resulting in retrenchments), terrorism can all mar our well-laid diarys. In extreme cases we end up with loss of earning electricity. Thus the future may be unsure. But one thing is certain. One needs to plan for it. It is a human tendency to postpone planning till retirement. But the later one starts saving the harder it is to do so. With longer life expectancy, rising inflation and declining interest rates, it is imperative that we start planning now.
Conversely life is also full of opportunities for all of us to seize, like:
1.
Financing our childrens education (children are our biggest assets),
2.
Buying our dream home (a place of protective roof on our head),
3.
Taking a well-earned vacation (after all why we are earning – we need to enjoy life and need to recharge our energy for earning our livelihood),
4.
To save for the time when we cannot earn sufficiently to sustain ourselves (saving for the rainy day, old age, retirement),
5.
We may request we could safeguard our opportunities and protect against the uncertainties,
6.
And on balance, for our sheer investment needs.
This is where “INSURANCE” comes in. This is explained in short in the following :
ABOUT INSURANCE
Insurance ensures protection of economic value of assets. Assets are insured against the risk of being destroyed or made non-functional due to any accidental occurrence. Risk is defined as the possibility of adverse results flowing from any occurrence. Insurance is used with reference to economic protection against a possibility, such as fire, accidental damage, theft, or medical bills: motor insurance, household insurance, travel insurance, health insurance. Insurance reduces the impact of risk on the owner, and those who depend on the asset. Integral to the concept of insurance is the concept of risk. In insurance parlance, “RISK” is called “PERIL”. just where risk prevails, is insurance applicable. Basically there are two types of Insurance : “LIFE” and “NON-LIFE”. We are now concentrating on LIFE Insurance only.
ABOUT LIFE INSURANCE
The economic value of a human life arises out of its relation to other lives. Whenever continuance of a life is financially valuable to others, either to family dependents, business associates, or educational and philanthropic situations, the necessity for life insurance is present. Human life is also imagined as an income generating asset. This asset can be wasted thru unexpected death or made non-functional thru complication or disability caused by an accident. There is no certainty that an accident shall happen. Events that must occur at some time, such as death, are provided for by assurance.
We all know that “DEATH” is the ultimate truth of life, but NOT its timing. Life Insurance exists because of this element of “UNCERTAINTY”. Life Insurance protects against loss of income of an individual. But it DOESNT (1) protect the asset, (2) bog down its loss. Life insurance is designed to make an attempt to compensate a policyholder for a loss suffered, by the hire of money, repair, substitute, or reinstatement. In every case the policyholder is entitled to be put back in the same financial position as he or she was immediately before the event insured against occurred. There must be no element of profit or loss to the policyholder.
Most, but not all insurance policies are indemnity contracts. For example, personal accident and life assurance policies are not contracts of indemnity as it is impossible to calculate the value of a lost life or limb (whereas the value of a car or other property can be calculated). Insurance works on the principle of transferring risk from an individual to a group.
INSURANCE NOT FOR RISK COVER ONLY
Initially, Insurance started as guard or security against risk. Slowly, the elements of savings & investment opportunities have been added to make it an integrated approach for personal or family needs. Accordingly, Schemes were designed for various needs for various types of clientele. Some Companies have even tailor-make the schemes to suit particular individuals. Broadly speaking the Insurance Schemes can be divided into a few basic types, which are given in the following :
1.
Pure Risk Cover – Term Insurance – No other benefit except Risk Cover.
2.
Endowment Schemes – Risk Cover with returns ( Like Guaranteed Addition, Money-Back, Bonuses etc. ).
3.
Whole Life Schemes – restrained Period Premium Payment and whole life cover with or without benefits.
4.
Pension / Annuity type Retirement Schemes.
5.
Health & Hospitalisation Cover.
6.
And lately ULIPs- a combination of Mutual Funds & Life Insurance.
Thus the whole lot of Life Insurance Schemes can be a permutation & combination of these types of basic schemes at varying proportions. In addition to this certain extra benefits are added for a marginally extra premium to the basic scheme. These are called Riders.
UNDERSTANDING PREMIUM
Insurance is operated as a contract between two parties :
1.
The INSURER who promises to cover the risk and give back other benefits if any to, and
2.
The INSURED or ASSURED who promises to make a specific periodical payment for the service manufactured to the Insured.
This contract is based on the guiding principles of :
1.
The Indian Contract Act – 1872,

2.
The Insurance Act – 1938,
3.
The buyer Protection Act – 1986,

4.
The Insurance Regulatory and Development Authority Act – 1999.
This periodic payment is known as Premium. This Premium varies in relation with
1.
The Amount of Assurance (Sum Assured),

2.
Paying period (Term) of the Policy,
3.
The age of the Assured at the starting of Policy,

4.
The Occupation of the Assured,
5.
Any additional benefits (Riders),

6.
Type of Policy / Scheme,
7.
The status of the Policy,

8.
The amount of risk involved, and several other factors.
The Insurer is in the position of a Trustee, managing a common fund. The Insurer checks that nobody gets undue profit. Therefore, care is taken to ensure that those in the group have akin risk; and if not, they pay more contribution because their risk is greater.
Thus the premium which the Assured pays has three basic parts, as explained below :
1.
Administrative, Marketing and Management expenses – These are the common expenses of running the Insurance Company = (to the extent of approx. 20 % of the annual premium),
2.
Expense for the cover of the RISK Element only = (to the extent of approx. 0.5 % of the Sum Assured, annually),
3.
The Saving or Investment Element which is invested in the set areas according to strict guiding principles of IRDA (Insurance Regulatory and Development Authority). This is the element which earns profits for the Insurance Company. And again according to the strict guiding principles of IRDA this is distributed amongst the policy holders as Bonus, and the Insurance Company as Surplus.
These elements are present in various proportions in the premiums according to the type of schemes like whether it is a pure risk, endowment, whole life or annuity schemes or participatory (with benefits) or non-participatory (without benefits).
LIFE INSURANCE OPEN TO PRIVATE PLAYERS
The Indian Life Insurance Companies Act, 1912 was the first statutory measure to regulate life insurance business. Later, in 1928 the Indian Insurance Companies Act was enacted, inter alia, to enable the admin to collect statistical information about life and non-life insurance business transacted in India and foreign insurers, including the provident insurance societies. In 1938, with a view to protecting the interest of the insuring public, earlier legislation was consolidated and amended by Insurance Act – 1938 with finish provisions for detailed and effective control over the activities of insurers.
By 1956, 154 Indian Insurers, 16 non-Indian Insurers and 75 Provident Societies were carrying on life insurance business in India. Life insurance business was confined mainly to cities and the better-off segments of the society. On 19th., January 1956, the management of life insurance business of 245 Insurers then operating in India, were taken over by the innate Govt. and then nationalised on 1st., September 1956. LICI (Life Insurance Corporation of India) was formed in September 1956 by an act of Parliament, with a capital contribution of Rs. 5 Crores from the Govt. of India. The objectives of LICI were thus outlined: to conduct the business with utmost economy, in a sprit of trusteeship; to charge premium no higher than warranted by strict actuarial considerations; to invest the funds for obtaining maximum yield for the policy holders consistent with safety of the capital.
But by 2000 AD, the performance and the social obligations fell short of the Objectives and expectations of the GoI. Because of all round globalisation, which started in 1991-92 and involved introduction of healthy competition and privatisation, the business of Insurance was thrown open to private players like the Banking Sector, with a Foreign Investment participation of 26 % max. The IRDA is the controlling authority and oversees each and every aspect of it. Between July 2000 and September 2003, sixteen (16) private Life Insurance Companies have registered with the IRDA and started their operations in India.
IMPORTANT POINTS ABOUT INSURANCE
1.
Insurance ensures protection of economic value of assets. Assets are insured against the risk of being destroyed or made non-functional due to any accidental occurrence.
2.
Risk is defined as the possibility of adverse results flowing from any occurrence.
3.
Insurance is used with reference to financial protection against a possibility, such as fire, accidental damage, theft, or medical expenses: motor insurance, household insurance, travel insurance, health insurance.
4.
Events that must occur at some time, such as death, are provided for by assurance.
5.
Any insurance is designed to compensate a policyholder for a loss suffered, by the payment of money, repair, replacement, or reinstatement. In every case the policyholder is entitled to be put back in the same financial position as he or she was immediately before the event insured against occurred. There must be no element of profit or loss to the policyholder. Most, but not all insurance policies are indemnity contracts.
6.
For example, personal accident and life assurance policies are not contracts of indemnity as it is impossible to calculate the value of a lost life or limb(whereas the value of a car or other property can be calculated).
7.
Definition(s) of insurable Interest
a.
The legal right of the Insurer arising out of a financial relationship recognised under the law, between the insured and the subject question of insurance.
b.
An interest (financial or in our own way) in the subject matter of a contract of insurance, which gives the person insured with the right to enforce the contract. An insurable interest (e.g. ownership of yield insured) distinguishes a contract of insurance from a wager or bet. An interest is required by statute for various types of insurance contract (e.g. life insurance).
8.
Insurable interest exists if the policy owner or the nominee is likely to benefit financially if the insured continues to live and is likely to suffer from an economical loss if the insured dies.
9.
Definition of Utmost faith or Uberrima Fides
a.
The job to disclose all material facts relating to the risk to be covered.
b.
A positive duty to disclose, accurately and fully, all facts material to the risk being proposed, whether requested or not.
10.
A material fact is a fact, which would influence the mind of a prudent underwriter in deciding whether to accept a risk for insurance and on what terms.
11.
An insurance agent is an agent licensed under section 42 of the Insurance Act, 1938.
12.
The primary function of the agent is to procure business for the insurance company. Prior to offering the policy, the agent has to check out on the insurability of the proposer based on the principles of insurable interest and utmost good faith. The relevant information can be :
a.
Paying capacity
b.
Health and Habits
c.
Age
Once the insurance contract has been put into force, the agent is supposed to ensure continuance of policy through regular payment of renewal premiums.
In case of a criticism the agent should help the insured or his family in proper settlement of claims.
RELEVANT POINTS
1.
An agent is appointed by the insurer, but he acts as the agent of the proposer while following up a proposal
2.
It is the duty of the proposer to insure that the agent provides all the information to the insurer. In case the agent omits certain information, the proposer can not shift the blame to the agent, when a question of suppression of information is raised by the insurer
3.
Giving money to the agent is not equivalent to giving money
4.
Mortality table is an actuarial table prepared on the basis of mortality rates for people in different regions of a country. It provides life-assurance companies with the information they require to quote for life-assurance policies, annuities, etc. Based on the mortality tables the premium rates are calculated.
5.
Morbidity is the state of being diseased. The morbidity rate is the total of cases of a disease came across to occur in a stated number of the population, usually given as cases per 100,000 or per million (the number may be smaller for common diseases). Annual figures for morbidity rate give the incidence of the disease, which is the number of new cases reported in the year.
SECTION 64VB
1.
No risk to be assumed unless the premium is received in advance
2.
Advance payment of premium before acceptance of the risk: Section 64VB of Insurance Act, 1938
3.
The first premium paid is the consideration for the life insurance contract to come in to force.
4.
Subsequent premiums is the condition necessary for the contract to remain in force.
5.
Therefore, if a policy holder has not paid the premium and has died, -then the insurer is not liable to pay as per the contract.
6.
A policy should remain in force till the claims happen. In case of a lapse of a policy, a revival brings it back to life. For a policy to remain in force, the premiums needs to be paid routinely as per the contract and within the stipulated grace period. Non payment of premium leads to a lapse of the policy (lapsation may occur due to sheer neglect to pay or due to financial difficulties). Insurance facilitates revival of the lapsed policies.
POINTS TO REMEMBER
1.
The role of an Insurance Advisor (Agent) :
a.
The role of the agent starts right from the time the Insurance contract is sold to the time the claim takes place.
b.
The three forms which need to be filled up are proposal form, personal statement and moral hazard report.
c.
Underwriting uniqueness needs to be provided with medical and financial information of the proposer by the agent.
d.
A material fact is information which might make a difference in the insurance premium or of acceptance of risk.
e.
Section 64VB states that no risk is to be assumed unless premium is received in advance.
f.
An agent has to urge the insured on revivals, loans, foreclosure.
g.
Nomination can be done before the policy comes in to force
h.
Assignment can be done after the policy comes in to force
i.
There are three types of claims- maturity claims, survival benefits and death claims
j.
Claim concessions are provided by insurers.
2.
Term insurance pays a death benefit to the legal heirs if the person insured, dies all the way through the term of the policy.
3.
Whole life insurance guarantees death benefit cover throughout the course of life, provided the required premiums are paid.
4.
Endowment assurance pays out either on the death of the assured, whenever it occurs, or after a fixed number of years (e.g. when the assured reaches the age of 75).
5.
A form of pension in which an insurance company makes a series of periodic payments to a person(annuitant) or his or her departments over a number of years (term), in return for the money paid to the insurance company either in a lump sum or in instalments.
6.
A unit linked policy is a life assurance policy in which the benefits depend on the performance of portfolio of shares or mutual funds.
7.
A life assurance policy, that has additional amounts added to the sum assured, or paid separately as cash bonuses, as a result of a surplus or profit made on the investment of the fund of the life assurance office, is called a with profits policy.
8.
The surplus generated by the insurance company is retained and also distributed as bonus to policyholders. Policies may be :
a.
With profits, entitling the assured to a share in the assurers profits (which is added to the sum assured when it is paid out).In a with profits policy, it is possible to offset subsequent premiums against accumulated profits.
b.
Without profits, in which case only the sum assured is paid out (which in times of inflation may have considerably less purchasing power than the assured intended). Without profit policies are not entitled to bonus.
9.
The combination plans combine whole life insurance with term insurance.
10.
Group life assurance is a life assurance policy that covers a number of people, usually a group of employees or the members of a particular club or association.
REFERENCE
1.
IRDA Website.
2.
LICI Website.
3.
Websites of other Private Insurance Companies.

[ End of Part 1 of 4 Parts. To be continued in Part 2 ]
Himansu S M / 18-Feb-2009