Page 135 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Insurance Laws and Practices

Notes and the sum assured is paid on death at any time. The following are the modifications that have
taken place over a period of time.
1. Whole life: Here the Sum assured is paid on death and the premiums are to be paid, as long
the Life assured is alive.
2. Whole life Limited payment: In this, the assured has a choice of limiting the premium
payment period and the sum assured however is paid on death only.
The Insurers thought the above two do not serve the need of many and decided that the
premium payment automatically stops after 35 annual premiums are paid or the Life
Assured reaching 80 years of age, whichever is later and the Sum assured is also payable
on reaching age 100. Now this has also been modified and the sum assured is payable on
reaching 80 years of age.
3. Convertible Whole life: In this plan, the life assured has the option of converting the policy
into an endowment plan after 5 years from the date of commencement. The premium will
be less during the first 5 years and will increase according to the term selected. If however
the conversion is not exercised, the policy will run as whole life limited payment with
premiums ceasing at age 70 of the assured and the sum assured payable on death.

Endowment Type

These are the most popular plans of Insurance as the very definition of life insurance is found
here. That is the sum assured is paid on the event contingent upon the duration of human life,
death or survival.
1. Endowment policy: The sum assured is paid on death or survival to the end of term
whichever earlier.
2. Endowment limited payment: Here the Life Assured has choice of limiting the premium
payment period.
3. Endowment double or triple cover: In this policy, the sum assured payable on death within
the term will be two or three times the basic sum assured. But the sum on maturity will be
the basic amount only.
4. Marriage endowment: Here the sum assured is due only at the end of the term and the
payment of premiums stops at death of the assured. The objective of insurance to provide
for the marriage of daughter is met under the policy

Combination of whole life, endowment and money back

1. Endowment & whole life: In this policy, the sum assured is paid on survival to the end of
term and the contract does not end and another sum assured is paid at death any time.
If however the assured dies before the expiry of the term, sum assured is paid.
2. Money Back & whole life: Under this plan a percentage of sum assured is paid every 5
years as long the assured is alive and full sum assured is paid on death at any time
irrespective of the survival benefits paid earlier.

Money Back Type

1. Ordinary money back: These are fixed term policies where under, part of the Sum Assured
is paid at periodical intervals. Full Sum Assured is paid at death any time within the term
irrespective of the survival benefits paid.

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