Page 142 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Unit 8: Life Insurance

Rural Insurance Notes

Rural insurance covers take care of areas like fisheries, horticulture, floriculture, sericulture and
cattle and livestock. In India considering the factors like continuum of economic activity between
rural and urban areas, the insurance sector has penetrated into the rural area. The premiums
collected are low and it is slightly costlier to the insurers. The various products offered under
this are: Comprehensive Crop Insurance, Experimental Crop Insurance Scheme and National
Agriculture Insurance Scheme.

8.3.8 Plans Offered in the Current Market in India

You must remember that the current plans offered in the market by various players are:

Term assurance
Endowment assurance
Whole Life assurance

Cash Flow or Money Back assurance
Health insurance plan, etc.
Even the pension plans can also be opted. The premiums can be paid as (1) Single premium or
(2) Regular premium (yearly etc.). The tax benefits are available under Section 80C, 80D and 10
(10D) of the Income Tax Act, 1961.The above mentioned plans are offered along with additional
benefits offered known as Riders. The meaning of the term Riders and its details is further
explained.

Riders

Rider is an extra benefit under the policy. Extra premium has to be paid to secure the extra
benefit. The rider benefit is available only on certain conditions to be decided by the insurer.
Riders also enhance the value of the policy. Riders can be availed only if the premium for the
basic benefit (sum assured) is being paid. Once the basic premium for the sum assured stops the
rider benefit also stops. In some cases the rider benefit ceases earlier to Date of Maturity (DOM)
though the basic premium for the sum assured is continuing. The rider benefit shall not exceed
the basic sum assured in case of critical illness or accident benefit.

!
Caution The total extra premiums for all other benefits should not exceed 30 per cent of the
basic premium for the basic sum assured.
The common riders granted by the insurers are:
1. Term rider

2. (Double) Accident (death) Benefit
3. Accident disability benefit
4. Critical illness benefit
5. Major surgeries benefit

6. Premium waiver benefit
7. Dreaded diseases cover benefit

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