Because the fire was caused by negligence, the court awards that the factory owner shall pay compensation to the owner of the godown

INTRODUCTIONWho is not familiar with the saying? 'Man proposes and god disposes.' The uncertaincy of the results of human activity has been a favorite theme of poets and philosophers of all ages. From the moment of birth until the life ends, all men live in uncertainty. Human life and material possessions are continually exposed to loss or damage by may destructive forces. There is a great deal of uncertainty in life, in industry and in commerce. It is an undisputed fact that risk is inherent in the modern complex society. Uncertainty is a fundamental fact of life.

The people are aware of this uncertainty about what the future holds for them and therefore they show a strong desire for security both for their lives and their possessions. The desire for security is sought to be satisfied by taking all the precautions possible to avoid the consequences of Risk. Inspite of all precautions, accidents do occur. Inspite of No smoking rule a worker may carelessly through a lighted cigarette and which may cause a fire in a godown. A motor cyclist may drive very carefully and yet may be knocked down by another vehicle whose driver loses control. The earthquakes, floods and cyclones occur frequently causing loss of lives and damage to property. Inspite of advances in aviation technology air crashes occur. The titanic a ship which was built to be an unsinkable ship sank on her very first voyage. Annual losses to individuals from untimely death accidents, sickness and unemployment, or to property from fire, windstorms, sea perils, earthquakes, floods dishonesty negligence etc; when estimated in monetary terms would amount to a big figure and indicates the importance of recognising and meeting intelligently such risks.

DEFINITIONS OF INSURANCE

(1) According to Prof. R.S. Sharma "Insurance is a Co-operative device to spread the loss caused by a particular risk over a number of persons who are exposed to it who agree to insure themselves against that risk." (2) According to Ghosh and Agarwal "Insurance is a cooperative form of distributing a certain risk over a group of persons who are exposed to it".

(3) According toE.W. Fitterson "Insurance is a contact by which one party for a compensation called in the premium assumes particular risks of the other party and promises to pay to him or his nominee a certain or ascertainable sum of money on a specified contingency."

(4) According to Encyclopaedia Britannica "Insurance may be described as a social device whereby a large group of individuals through a system of equitable contributions, may reduce or eliminate certain measurable risk of economic loss common to all member of the group."

(5) According to Disnadle Insurance is an instrument of distributing the loss of few among many."

(6) According to Thosmas "A provision which is a prudent man makes against fortuitous or inevitable contingencies, loss or misfortune. "

The above definitions clearly show that insurance is a co-operative device to spread the loss caused by a particular risk over a number of persons who are exposed to it and who agree to insure themselves against the risk. Insurance not only equalises loss and distributes heavy sudden loses over a long period of time and it takes the amount of losses from a business in such amounts and at such times that no essential want is left unsatisfied.

LIFE INSURANCELife Insurance is different from other forms of insurance in the sense that the subject matter of insurance is life of human being. Life insurance today commands the greatest popularly and importance in the insurance world because the life is the most important property of the Society or an individual who is not familiar with the saying 'Man proposes and God disposes? From the moment of birth until life has ceased (ended), all man live in uncertainty. In other word we can say that death is certain, but the time is uncertain. So there is uncertainty of the time when the suffering and financial crises may be fall on the family. Therefore, the provision for children up to their reaching earning period and for window up to long life should be made. Life insurance will adequately meet this financial requirement of the family.

The provision for old age is required where the person is surviving more than his earning period. The reduction of income in old age is serious to the person and his family. At the time of reduction in income whether by loss of employment, disability, or death adjustment in the standard of living of family is required.

CHARACTERISTICS OR FEATURES OF LIFE INSURANCE CONTRACT

Main features of life insurance contract are as under:

(1)FEATURE OR CHARACTERISTICS OF GENERAL CONTRACT: Since the life insurance contract is a sort of contract. It is approved by the Indian Contract Act. According to section 2 (H) and Section 10 of Indian Contract Act, the valid contracts must have the following characteristics:

(a) Agreement offer and acceptance.

(b) Free consent of the parties.

(c) Legal consideration.

(d) Competency of the parties to enter into agreement.

(e) Legal object.

Life insurance contract must fulfill the above requirement.

(2)INSURABLE INTEREST:For a valid contract insurable interest must be present. With out insurable interest, contract become void. This insurable interest must be present in all types of insurance contract. Insurable interest is the Economic Interest and the amount is to be measured by the economic loss which the person for whose benefit the insurance is effected will suffer by reason of the death of the life assured. Insurable interest arise out of the Economic relationship that exist between the policy holder and the life assured so that the former stands to loose by the death of the latter and/or continues to gain by his survival. If such relationship exists, then the former has insurable interest in the life of latter.

Insurance interest in life insurance may be divided into two categories.

(A)INSURABLE INTEREST IN OWN LIFE

An individual always has an insurable interest in his own life and can take an insurance policy on his life to any extent that suit to the circumstances and means of the applicant. Its presence is not required to be proved. Bunyon says, every man is presumed to possess an insurable interest in his estate for the loss of his future gains or saving which might be the result of his premature death.

(B)INSURABLE INTEREST IN OTHER'S LIFE

Life insurance policy can be taken on the lives of third parties provided the applicant has insurable interest in the party. There are two types of insurable interest in other's life. First where proof is not required and second where proof is required. Such third parties must have some relationship with the applicant say family or commercial. Following are the parties having insurable interest in other's life:

(a) Wife has insurable interest in the life of her husband.

(b) Husband has insurable interest in the life of his wife.

(c) Father has insurable interest in the life of his son if he depend upon son.

(d) Son has insurable interest in the life of his father if he depend upon father.

(e) A creditor has insurable interest in the life of his debtor upto the amount of outstanding loan plus interest there on.

(f) A surety has insurable interest in the life of his principal upto the amount of outstanding loan and interest.

(g) A trustee has insurable interest in respect of the interest of which he is trustee because at the survival of the other person the Trustee is benefited and at his death he will suffer.

(h) A partner has insurable interest in the life of each partner.

(i) An employee has an insurable interest in the life of his employee.

(j) An employee has an insurable interest in the life of his employer.

(3) UTMOST GOOD FAITH

Life insurance contract is base on the principle of utmost of Good faith. The utmost good faith says that both the parties, insured and insurer, must be of the same minds at the time of contract. Both the parties must make full and True disclosure of the facts material to the Risk. The life insurance requires that the principle of utmost good faith should be preserved by both the parties. In life insurance material facts are age, income, occupation, health, habits, family history. Insured should disclose all the information to the insurer. It is the duty of the insurer also to disclose all the material facts which are going to influence the decision of the insured.

In the absence of utmost good faith the contract will be voidable at the option of the person who suffered loss due to nondisclosure. Once the voidable contract has been validated by the party not at fault, the contract cannot be avoided by him later on. For Example, if the insurer has continued to accept the premium when certain mis-statement of age has been disclosed, the insurer cannot invalid the contract and cannot refuse to pay the amount of claim. If the party not at fault does not exercise its Right the contract will remain valid.

(4) ELEMENT OF SAFETY

The insurance provides safety and security against the loss on a particular even. In case of life insurance payment is made When death occurs or the term of insurance is expired. Life insurance policies are generally taken for longer period of time. The loss to the family at a premature death and payment in old age are adequately provided by life insurance. In other words, security against premature death and old age suffering are provided by life insurance. In other insurance like fire insurance and marine insurance this security is provided against the loss at given time. In other word we can say that the insurance provides safety and security against the loss of earning at death or in old age, against the loss at fire, against the loss at damage, disappearance of property, good, furniture and machines etc.

(5) ELEMENT OF INVESTMENT

Investment element lies only in life insurance contract. Under life insurance the insurer in consideration of a premium under takes to pay a certain sum of money either of the death of the insured or on the expiry of a fixed period. In life insurance, the policy holder is required to pay premium at regular intervals. This payment of premium is a type of investment with the insurer. With the payment of each premium the amount of investment increases. The elements of investment and return of the capital along with certain additional return are perfectly observed in life insurance.

SAFETY AS WELL AS INVESTMENT

The life insurance contract provides protection against loss if early death and investment to meet the old age requirements. But other forms of insurance like fire insurance and marine insurance do not provide investment because the premium paid is not (loss) returnable if the incident do not occur within the period. The fire insurance and the marine insurance provide only protection against loss on damage of the property against the insured risk. In simple word we can say that other insurance (fire insurance and marine insurance) includes only the element of safety whereas the life insurance includes the element of safety and investment because the premium paid or sum assured is returnable in the life insurance whereas no premium or amount is returnable in fire insurance.

(6) WARRANTIES

In life insurance contract those representations which are given in the policy and expressly or impliedly forming part of the basis of the contract are called warranties. Every information given by the insured for insurance to the insurer during the negotiation is a representation. The representation may be material or non-material. The material representation is the basis of insurance contract. If the insured representation is false or untrue the contract may be violable. At the option of the insurer. Warranties are an integral part of the contract. These are the basis of the contract between the insured and insurer and if any statement whether material or non-material is untrue the contract shall be null and void and the premium paid by him may be forfeited by the insurer. The policy issued will contain that the proposal and personal statement shall form part of the policy and be the basis of the contract. So that the representation will be warranty.

OBJECTS OF LIFE INSURANCE

Life insurance is the only way to end the uncertainty of life. Those who do not insured day repent at later stage. Main object of life insurance are as under:

(1)FAMILY PROTECTION:Death is certain but the time is uncertain. So, there is uncertainty of the time when the suffering and financial crises may be fall on the family. Every head of family rich or poor, wishes his wife and children to be happy. He plans for them with respect to their education marriage and general welfare but if he is snatched away before the expected time his dependents are to put up with hardship. But if he has taken a whole life policy, there will be sufficient help to the dependent. Thus only life insurance will adequately meet this financial requirement of the family. It has been rightly remarked that for a middle class family. Life insurance is a husband's privilege, a wife's right, and a child's claim."

(2)PROVISION OF OLD AGE: Life insurance also makes a good provision for old age. The reduction of income in old age is serious to the person and his family. An endowment policy afford a comfortable support in old age and the money is available just when it is most urgently required. With this policy insured can provide for the higher education of children marriage of daughters, pilgrimage in retired life etc. and at the same time providing for full protection against early death. In simple word we can say life insurance is in yardstick for old age.

(3)PROVISION FOR CHILDREN: The huge sum is required for education marriage and for resettlement of children. If the member becomes disable to earn the income due to old age or death, these needs may remain unfulfilled and the family will suffer. There are certain insurance polices and annuities which are useful for education of the children irrespective of the death or survival of the father or guardian. The insurance can provide funds for the marriage if policy is taken for this purpose.

(4)PROVISION FOR ESTATE DUTY:Estate duty is imposed on the movable and immovable property of the decease. This is a tax recovered by the Government before transfer of property to the legal hair of the decease. Life insurance therefore affords very satisfactory means of making provision for payment of estate duty.

BUSINESS PROTECTION:

The insurance has been useful to business community also. Some of the users are discussed as under:

(a) A creditor secured his loan by taking the insurance policy in the name of debtor.

(b) The partnership business may discontinue at the death of any partner although the surviving partner can restart the business but in both the cases the business and the partners will suffer Economically. The insurance policy provide adequate funds at the time of death. Each partner may be insured for the amount of his interest in the partnership.

(c) The business can obtain loan by pledging the policy as collateral for the loan. The insured persons are getting more loan due to certainty of payment at their death.

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IMPORTANCE OR ADVANTAGES OF LIFE INSURANCE

Life is full or Risks, Insurance reduces these risks and provides certainty and thereby security. Importance of life insurance is discussed from various point of views as under:

ADVANTAGE OF LIFE INSURANCE TO AN INDIVIDUAL:-

(i)FAMILY PROTECTION: Life insurance contract protect the family interest. There are certain special requirement of the family which is fulfilled by the earning member of the family. If the member become disable to earn the income due to old age or death, those needs may remain unfulfilled and the family will suffer. The life insurance provides safety and security against the loss of earning at death or in old age.

(ii)SURRENDER VALUE AND FACILITIES FOR LOAN:when the insured is unable to pay the premium on his policy. He can surrender his policy and can get surrender value. With this the contract comes to an end and the insured will get the cash without any liability to pay any further premiums. The insurance company may grant loan to the policy holder on the security of life insurance policy.

(iii)REGULAR SOURCE OF INCOME FOR OLD AGE: The provision for old age is required where the person is surviving more than his earning period. In old age income come down while expenditure increases (i.e. medical Expenditure). The life insurance provides old age funds along with the protection of the family by issuing various policies.

(iv)PROVISION FOR CHILDREN:There are many families need say education for children daughter's marriage and needs for settlement of children. Insurance comes to help for meeting these requirements. Multipurpose policy education and marriage policies are the better policies for these needs.

(v) EXEMPTION FROM INCOME TAX :Under the income tax Act 20% Rebate is given in income tax on the amount which ever the insured paid as premium on the life insurance policy taken by him.

(vi) LIFE INSURANCE ENCOURAGE SAVING : In most of the life policies element of saving predominate. These policies combine the program of insurance and saving. The saving with insurance has certain Extra advance which are as under:

(a) In insurance saving is possible because regular premiums are required to be compulsorily paid.

(b) In insurance the deposited premium cannot be withdrawn easily before the expiry of the term of the policy.

(c) The compulsion to premium is insurance is so high that if the policyholder fail to pay premium within the days of grace, he subject his policy to lapsation. Therefore he has to try his level best to pay the premium.

In the absence of such forceful compulsion elsewhere life insurance in the best media of saving

(vii)SAFETY AS WELL AS INVESTMENT:The elements of safety and investment are present only in case of life insurance. In case of life insurance payment is made when death occurs of the term of insurance is expired. The loss to the family at a early death and payment in old age are provided by life insurance. The elements of investment say regular saving capital formation and return of the capital alongwith certain additional return are observed in life insurance.

(viii)FREE FROM COURT DEGREE:Life insurance policy taken in the interest of family cannot be acquired by the court for payment of any debt. According to Agent Manual Book of L.I.C a policy taken under the married women's property Act for the benefit of one's wife and children is fully protected from creditor expect to the extent of any interest in policy by the assured.

ADVANTAGES OF INSURANCE TO BUSINESS:-

(i)ENHANCEMENT OF TRADE CREDIT: On the security of life insurance policy loan can be taken for business purpose. Life Insurance Corporation provides credit facilities to big industrial houses. The insured persons are getting more loans due to certainty of payment at their death. The insurance policies are the best collateral and adequate loans are granted by the lenders.

(ii)BUSINESS FIRMNESS:Partnership business may discontinue at the death of any partner because the firms have to pay to the legal hair of the decease, his share in the firm. But the insurance policies provide adequate funds at time of death. With this economic position of the firm become strong.

(iii)WELFARE OF EMPLOYEES:The welfare of employees is the responsibility of the employer. Therefore the employer has to look after the welfare of the employees. These requirement are easily met by the life insurance, accident and sickness benefit and pensions which are generally provided by group insurance. The premium for group insurance is generally paid by the employer with this employees will work their maximum capacities to complete their jobs when they are assured of the above benefits.

(iv)SAFETY FROM EMBEZZLEMENT OF FUNDS:Insurance company issue a policy that indemnify the employer against direct economic loss that he may suffer through acts of fraud or dishonesty by an employee in the course of his employment. This type of insurance policy provides safety to the businessman from embezzlement of funds form the business.

(v)SAFETY OF PAID LOAN:A creditor cans safe his debt by taking a policy on the life of his debtor. The insurance company will pay the debt in case the debtor dies without paying his debt.

ADVANTAGE OF INSURANCE TO SOCIETY:-

(i)HELPS IN CAPITAL FORMATION:The elements of investment, regular saving, capital formation and return of the capital are observed in life insurance.

(ii)HELPS IN PROVIDING EMPLOYMENT:The Expansion in the field of insurance provide employment to many. Thus to some extent the insurance companies can solve the problem of unemployment.

(iii)REDUCTION IN INFLATION:The insurance helps in reduces the inflation of pressure in two ways:

(a)By extracting money in supply to the amount of Premium collected.

(b) By Providing sufficient funds for production narrow down the inflationary gap.

ADVANTAGE OF LIFE INSURANCE TO THE INDUSTRIAL SECTION:-

Life insurance promotes economic welfare of a community by providing capital for the development of its commerce and industry. Adequate capital from insurers accelerate the production cycle. Life insurance Corporation provides capital to the big industrial houses.

ADVANTAGE OF LIFE INSURANCE TO THE GOVERNMENT:-

The Life Insurance Corporation invests its reserve in Government security. Life Insurance Corporation help in industrial development by providing financial help time to time Government collect large amount in the form of tax through life insurance.

This is clear from the above discussion that the life insurance is helpful to all classes of society. Famous author Huebner said about life insurance life this "life insurance is a husband's privilege, a wife's right and a child's claim."

LIMITATIONS OF THE SCOPE OF INSURANCE

We have discussed the various advantages of insurance. But insurance has its

Own limitation. The important limitation of insurance are as under:

(1)INSURANCE IS LIMITED TO MONETARY VALUE ONLY:-Under insurance only monetary loss is compensated. Loss which cannot measure in monetery term not cover under insurance. Therefore the insurance cannot be done for those goods which are not measure in money value say love enjoyment feeling and mental suffering.

(2)NO INSURANCE WITHOUT INSURABLE INTEREST:-For insurance this necessary that the assured must have insurable interest in the subject matter. For insurance contract to be alid: the insured must posses an insurable interest in the subject matter of insurance. Without insurable interest the contract of insurance become void. The insurable interest is the financial interest where by insured is benefited by the existence of the subject matter and is prejudicial by the damage of the subject matter.

(3)HIGH PREMIUM RATE:-Today the premium rate is very high. Therefore insurance facilities is not available to many person say low income group and people belonging to village area.

(4)NON INSURABLE RISKS:-Non insurable risks are those which cannot be insured. Such risks cannot be anticipated. Speculative risks are non insurable risks. These risks take birth by the changes in market condition such as price fluctuations, they cannot be insured.

(5)MORAL LIMITATION :-Moral risk stand in two way of insurance, specially in general insurance. Some people misuse the facilities of insurance. They take undue advantages through insurance. For example, person can insure his property for higher value and destroy the subject matter intentionally for claiming the full insured value. In this way moral limitation limits the scope of insurance.

(6)INSURANCE IS NOT A PROFITABLE INVESTMENT:-Insurance is not a profitable investment if comparison is made with other source of investment.

(7)NO INSURANCE FOR INDIVIDUAL RISKS:- To spread the loss immediately smoothly and cheeply large number of person should be insured. If smaller number of persons is insured, the cost of insurance to each member may be higher. Therefore, to make the insurance cheeper, it is essential to insure large number of persons or property because the lesser would be cost of insurance and so, the lower would be premium.

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TYPES OF LIFE INSURANCE POLICYAll insurance contract carry with them right and liabilities of various types and it is for the insured to select any out of them. The rights are in the form of receiving the assured sum and the liability are in the form of payment of the premium. The Life Insurance Corporation offers types of policies which will suit the varying requirement of the people. From the view point of the insurer all polices are alike but for an insured, that policy will be best which meets his requirement and suit his pocket. Having different elements in different policies, the policy holders are free to choose the best policies according to their requirements. No one policy is the best policy for all the policy holders due to variance in cost, elements of investment, protection, requirement of the policy holders and availability of the policy.

The life insurance policies can be divided as under:

(1) On the basis of duration or time.

(2) On the basis of method of premium payment.

(3) On the basis of participation in profit.

(4) On the basis of number of lives covered.

(5) On the basis of payment of claim

(6) Annuity

(7) Non-conventional policies.

(1)POLICIES ON THE BASIS OF DURATION: The life insurance policies on the basis of duration are as under:

(A) Whole Life Policy

(B) Endowment Policy

(C) Term Policy.

(A)WHOLE LIFE POLICIES:Whole life policies are issued for whole life. It means that the policy amount will be paid at the death of the life assured. Under this policy the assured cannot get the policy amount during his life time, only his dependent will get the advantages of this policy. Corporation issues the following type of whole life policy:

(i)ORDINARY WHOLE LIFE POLICY:Under this policy premium is payable throughout the lifetime of the assured and the policy money shall be payable after the death of the assured. This policy provides full protection in the sense that the family received a lumpsum amount after the death of the assured. The premium payable under this policy is lower as compared with other type of policies.

Only disadvantages of this policy is that the assured to pay premium throughout life and he never enjoy the benefit under the policy. This policy suits middle-aged person who may desire full protection of the family at the lowest cost.

(ii)SINGLE PREMIUM WHOLE LIFE POLICY:Under this policy the total amount of premium is paid at one time by the assured. The policy is not so popular but is purchased for investment purposes.

It generally suits those persons who get windfall income from lotteries or gambling.

(iii)LIMITED PREMIUM PAYMENT WHOLE LIFE POLICY:In this type of policy the insured is required to pay premium for a fixed period from 5 to 60 years or up to the retirement. Here the insured is required to pay premium for a selected period of years or up to his death. But the assured sum will payable only after his death. This is a better type of life insurance policy for family provision since it enables the assured to pay all the premiums during the productive years of life. With profits limited premium payment policies do not cease to participate in profits after completion of the premium paying period but continue to share in the periodical bonus distribution. This type of policy is suitable for that person whose need for money would arise only after the insured death.

(iv)CONVERTIBLE WHOLE LIFE POLICY:

This is a whole life policy which gives its holder an option to get it converted at the end of five years, into an endowment policy. If this option is exercised the policy no longer remains a whole life policy. The object of the policy is to provide maximum insurance protection at a minimum cost and at the same time the policy can be convertd into endowment policy, at the end of five year. The difference in premiums for the previous five years and interest thereon, will be charged. The insured is not required to go under fresh medical examination. The minimum sum assured for which a policy will be issued under this scheme is Rs. 5000 and the maximum age at entry shall be 45 years. This plan is introduced by the Corporation to meet the needs of the young man whose income is lower in the beginning and has prospects of increase in income after a short period.

(B)ENDOWMENT POLICIES:Under the endowment policy money shall be payable to the assured if he alive upto the term of insurance or to his nominee in the event of his early death. The endowment policies are many of which important endowment policies are as under:

(i)ORDINARY ENDOWMENT POLICY:

Under this policy the amount becomes payable, on the expiry of the term of insurance contract or in case of death of the assured before maturity. The assured is required to pay premium throughout the term of insurance or upto death. This policy is the combination of term insurance and of pure endowment. This policy provides and ideal combination of both the family protection and the investment. The old age provision and the family protection is possible by purchasing only this singly policy. Besides this compulsory saving is possible under this policy which is not present in other types of policies. This policy is more popular as compared with others.

(ii)PURE ENDOWMENT POLICIES:

Under this policy the sum assured is payable to the life assured if he survive till the term of policy nothing being payable if death occurs before the term expire. It is suitable those person who do not feel any need of family provision after their death. This type of policy has the element of investment only. Pure endowment grants protection against 'Living too Long'. The rate of premium in such policy is lower than that in ordinary endowment policy. Sometime pure endowment are issued on the lives of children to provide funds for college education.

(iii)DOUBLE ENDOWMENT POLICY:Under this policy amount payable to the insured is double the amount of sum assured; if the assured survives upto the term of policy. In case the assured dies during the term of policy. Only the sum assured is payable to his nominee or his family. The payment of premium is continued upto the term of insurance or death whichever is earlier. This policy is beneficial to those who are confident of living long but would like to have some cover in the event of his early death. The investment element is higher than the protection element in this policy.

(iv)ANTICIPATED ENDOWMENT POLICY:

Under this policy sum assured are payable to the insured in installment during the term of the policy at certain interval and the balance at maturity. In the event of death of the insured before maturity, full sum assured shall be payable without any deduction of payment made earlier. This policy is beneficial to those who want to provide for their old age and family, also need lumpsum benefits at a periodical internals. No loan will be granted under this policy and the minimum amount for which a policy will be issued is Rs. 5000.

(v)JOINT LIFE ENDOWMENT POLICY: This policy covers two lives in a single policy say husband and wife. The assured sum is payable on the expiry of the insurance terms or the death of one of the two assured lives during the endowment terms. The main advantages of such a joint life policy is that the premium is low as compared to the sum total of the premium separated payable by two persons.

(vi) CHILDRENS DEFERRED ENDOWMENT POLICY:Sometimes a parent or guardian of a child wants to take and insurance policy on the life of the child under which premium is paid by the parent or guardian during the first few years and by the child thereafter. This can be done by taking the children's deferred endowment policy. The policy is taken on the life of child and not on the life of parent.

Under this policy the risk does not commence immediately at the issue of policy but only on the policy anniversary, following completion of 18 or 21 years. The policy contain two stage, one converting the period from the date of commencement of policy to the deferred date i.e the date of commencement of risk on the child's called deferment period, and the other convering the period from the deferrd date to the date on which the policy emerges as a claim by the death of the child or its survival to a stipulated date. A combined policy is issued to cover both the period. Polices under this scheme are issued on the lives of children. Both male and female, who have completed one year of age but have not completed 18 years. No medical examination is required where the deferment period is 10 years or more. The provision of this policy make it obligatory on the life of assured to adopt the policy in writing at any time after attaining majority but before the deferred date.

The person entitled to the policy money will have the option of taking cash payment in entire cancellation of the policy contract before the deferred date. In the event of the life assured death (child's death) before the deferred date i.e. the date of commencement of risks, the policy shall stand cancelled.

The law premium rate under this policy is a great attraction. The second advantage of this policy is that the habit of saving is developed among the children, if the policy is discontinued before or at majority cash is available for meeting specific expenses of education and marriage.

FIXED TERM (MARRIAGE) ENDOWMENT POLICY:-Under this policy the sum assured is payable only at the end of a agreed period, but the premium ceases if death of the policy holder occurs earlier. The beneficiary may discount the policy before maturity. This policy is meant to meet the needs of a family man who wants to make available a sum for marriage of a female dependents.

EDUCATION ENDOWMENT POLICY: Like marriage endowment policy this policy is also taken out on the life of the father or guardian. The child for whose benefit policy is taken s called beneficiary. But under this policy sum assured is not payable in lumpsum but is payable in equal installment over a period of five years. It is payable in half yearly installment for five years.

(C)TERM INSURANCE POLICY: The terms insurance is for a short period. This policy provides life insurance protection for a limited period of time from three months to seven years. The sum assured is payable only in the event of death of the life assured during the insured period and nothing is payable is case of assured survival. Here the premium charged is comparatively low. The main purpose of the policy is to provide temporary protection as that of a property insurance policies do. The terms policies are for the benefit of the nominee or the dependents. This policy is not very popular now a days. Various types of term policies are as under:-

(1) CONVERTIBLE TERM POLICY: Under this policy facility is given to insured to convert it into whole life or endowment policy. If the option of conversion is exercised A new policy under the limited payment life policy endowment will be issued as the case may be subject to the rates of premium, term and conditions prevailing on the date of conversion.

This policy issued only to first class lives. Proposals for polices under this scheme will be entertained only from persons in Government and Semi-Government services or in the service of reputed commercial firms. The cost of the medical examination will have to be borne by the proposer. The minimum sum assured is Rs. 5000 and the time is 5, 6 or 7 years.

The policy is very much useful of those who are initially unable to pay the larger premium required for a whole life or endowment policy.

(2)DIMINISHING TERM POLICY: This is a insurance policy mainly taken for loan transaction. An important characteristics of this policy is that policy money goes on diminshing years after as the payment of premium is continued. The terms of the policy are such that the insurance company is required to pay a certain sum of money to the third party (creditor) in case of the assured's earlier death. For example, a creditor can take a policy on the life of his debtor as a safety against the loan. In case of the debtors death the insurance company is liable to pay the difference to the creditor.

(3)RENEWABLE TERM POLICY:The policy is renewable at the expiry of terms for an additional period without medical examination, the premium rate will increase according to the advancement of age. This policy is suitable for those whose health are deteriorating and will not enjoy the benefits of insurance at an advanced age. The insured can renew it many times till he has not crossed 55 years age.

(2)POLICIES ON THE BASIS OF METHOD OR PREMIUM PAYMENT:The policies according to premium payment are discuss as under:

(i)SINGLE PREMIUM POLICY:Under this policy premium is paid at the beginning of the policy. The premium under this policy is the highest. The protection element is totally absent in this policy where as investment clement is very high.

This type of policy suits those person who get a windfall income like lotteries or gambling. The single premium policy is not useful to other persons because of chances of death, whereafter the subsequent premium are not required to be paid.

(ii)LEVEL PREMIUM POLICY:Under this policy regular and equal premium are paid at a definite gap of time. The equal installments may be paid monthly quarterly half yearly and yearly. For monthly installment and additional charges of 5 percent on the annual premium is made to cover loss of interest and additional cost of collection.

Level premium policy suits the requirement of different types of the policy holders. Because the originally the premium is calculated and charged on annual basis, the unpaid premium for the years are required to be paid at the time of payment of clamis due to death.

(3)POLICIES ON THE BASIS OF PARTICIPATION IN PROFIT: Policies on the basis of participation in profit are as under:-

(i)WITHOUT PROFIT POLLICIES OR NON PARICIPATING POLICIES:

Under this policy the holders are not entitled to share the profit of the company. These policy holders get only the assured. The rates of premium paid on this policy are lower.

(ii)WITH PROFIT POLICIES OR PARTICIPATING POLICES: Under these polices the holder are entitled to share the profit of the company. The policy holders can share only the profit and not the loss. Therefore they connot be treated as co-owner of the company. They are entitled to get the share of profit it means the bonus only when there is profit. In this policy there is no gurantee that the insured will get something by way of profit every year. According to insurance Act Company has to distribute 95 percent of its profit among the policy holders. Thus if there is no profit in a year no amount can be distributed to the participating policy holders. The premium rate is higher in this type of policy.

(4)ON THE BASIS OF NUMBER OF LIVES COVERED.

The policy may be as under:(i)SINGLE LIFE POLICES :Under these polices only, single (one) individual is insured. This policy insures only one life. The policy may be issued in one's own life as well as in other life also. The policy amount is payable only when the assured event occurs.

(ii)MULTIPLE LIFE POLICES :In these polices more than one life is insured it may be:

(a)JOINT LIFE POLICY:

These polices covers two or more lives and the policy amount is payable on the first death. These policies are suitable to the partners of a firms and to a couple.

(b)LAST SURVIVORSHIP POLICY:Under these policies amount is payable at the last date so long as any one of the insured is alive, no payment is made.

(5) ON THE BASIS OF PAYMENT OF CLAMIS

The policy amount may be paid as under:

(i)LUMPSUM PAYMENT POLICES:Under these policies, policy amount is paid in lumpsum according to the terms and condition of the policy.

(ii)INSTALLMENT PAYMENT POLICIES:Under these pollicies, the policy amount payable in installment. It is suitable to those whose earning capacities are reduced to minimum in old age. Under these polices he may continue to get up to a fixed period or up to death or both.

GROUP INSURANCE

Under the group insurance scheme the life insurance of a particular group or all the person of same group is accepted on the collective basis. Under this scheme the insurance of all the person of that group is under a contract. The insurance organization establishes contract with the employee of a particular group under this scheme and after setting the terms of insurance the group insurance is given the final shape for the whole group. Such policy is also called "Mater Policy". The premium is determined under this scheme by studying the characteristics and risk of the insured group.

The important characteristics of group insurance is that a big group of people is insured for the under one policy and thus many a people do get benefits of group insurance simultaneously.

Insurance is specially suitable for those ogaisation who are willing to provide to their members the benefits of group insurance taking into onsideration their welfare aspect. The employer of organised sector provide generally to their employees many beefits such as P.F. Supperannuation fund and gratuity. The scheme of group insurnace are considered best to make arrangement for these benefits and extra facilities provide by the employer.

The benefits of group insurance are available to other person also aparts from general employee of organised sector which are as under:

(1)GROUP CREDITOR INSURANCE.Under this scheme a creditor under takes a master policy for all his debtors so that the amount of debt due toward evry debtor is insured. The insured amount goes on diminishing as payment of debt proceed gradually.

THE INSURANCE OF PERSON EMPLOYED IN SMALL BUSINESSES:The scheme of group insuance are very useful for those person who are earning their livelihood from small businesses like milk vendor. Taxi driver and Rickshaw puller, barber, washerman, bidi worker and small farmers.

Group insurance schemes are of three types:

(1)GROUP TERM INSURANCE SCHEME :Under this scheme the economic arrangement is being done for the member of a group like employees professionl group or labourer after their death. The family of the insured person gets the payment of insured amount as per the terms and conditions if that perosn dies during the scheme. The insurance remain valid for the whole duration of the service of the employees. The insurance benefits ceases the movement the employees retire or resigns from the service. Under this scheme, all those employees can get themselves insrued who are on regular service. This is an essential condition of group term insurance scheme that employer is also expected to bear the burden of premium. If employer undertakes the responsibility of bearing the whole premium than this sheme is called non contributory scheme. But it is necessary that the whole burden may fall on employer. Employer is to bear premium to the extent of 1\4 of the total premium. The shceme is called contributory scheme. If employees are also required to pay premium. Under non contributory scheme it is necessary that all present employees are insured under group insurance and when new employees becomes eligible under the scheme they are also to be taken under this scheme. However under contributory scheme it is no necessary that all the employees should join the scheme

(2)SUPERANNUATION SCHEME:The objective of this scheme is to make arrangement for a certain pension on the retirement of the insured employees. Thus the retire person get a certain income in future.

The insured employees are given the assurance that they will be paid the amount of pension regularly upto a certain period after their retirement. If an employer die before that time period that the balance amount of that pension will be given to his legal heirs. If the insured employee remain alive even after that certain period even then he will continue getting pension regularly.

(3)GROUP GRATUITY LIFE ASSURANCE SCHEME :This scheme is to provide gratuity facility to the employees. Under this scheme death gratuity is given to the heirs of employees after his death. However if and employee dies prematuring then the amount of gratuity become less. The amount of gratuity is determine according to the acutal service period of the emplyee. This scheme provide facilities to the dependent of the employee by giving them a lumpsum as gratuity.

(4)SOCIAL SECURITY GROUP SCHEME :A social security Group Fund (SSF) administered by the LIC was set up in 1989-90 to meet the insurance requirement of the weaker and vulnerable sections of the society. As on 31 march 1999 about 49 lakh people belonging to 24 occupational group/areas have been covered under various social security group schemes financed from the SSF. Under these schemes people in the age group of 18-60 years are covered for a sum of Rs. 5,000 on death due to natural causes, and Rs. 25,000 on death caused by accident. While the SSF subsideises 50 per cent of the premium. The beneficiary has pay the remaining 50 percent.

Under landless Agricultural Labouures Group Insurance Scheme (LALGI) in operation since 1987, the heads of the families in the age group of 18 to 60 years and not apperaing as a land holder in the revenue recourd and not having inheritable right in agricultural land are elegible to be covered for and insurance cover of Rs. 2,000 payable only on death before 60 Years. Upto 1 April 1990, it was operated by LIC on hebalf of the central government which used to reimburse to LIC the premium payable by the beneficiaries. However, with effect from 1st April 1990 the entire premium payable by the beneficiaries is being met out of the SSF. At present, about 1.2 core landless agriculture labourers are covered under the scheme. During 1998-1991, 47, 122 claims were settled.

All over the country the Integrated Rural Development programe (IRDP) beneficiaries between the age group of 18 to 60 years are conered under a group Life Insurance Scheme being operated by the LIC for which the entire premium is paid by the Central government. An amount of Rs. 5,000 is payable to the beneficiary in case of normal death and Rs. 10,000 in case of accidental death. During 1998-99, 5,896 claims were settled.

(5)THE RURAL GROUP LIFE INSURANCE SCHEME (RGLIS), announced on 15 august 1995, is a group insurance scheme which provides a life cover of Rs. 5,000 for persons in rural areas. The premium payable is Rs. 60 per year for those who enroll up to the age of 40 years and Rs. 70 per year for those who enroll 40 years and up to 50 years. The entry age is resricted to 20 years (minimum) and 50 years (maximum). Deaths occurring after 60 years are not covered. Nor is their any saving element in the scheme. There are two types of scheme: (i)General Scheme- for persons between the age 20 and 50 years where premiums are to be paid by the members in full and (ii)Subsidised Scheme for person between the age of 20 and 50 years who belong to a household below-powerty line. Only one member of such a household is eligible under the scheme where 50 percent of the premium is shared by the Central government and state government in equal proportions. Intermediate level Panchayats are designated as the nodal agencies for its implementation. LIC provides incentives to village level workers of Rs. six for enrolment of a new member and Rs. three on renewal of insurance cover for an existing member in the subsequent year, from 15 August 1997 to 14 August 1998, 3, 09, 252 persons were enrolled and 73,925 persons renewed their membership. Among them 2,98,917 and 70,183 persons were under subsideised category respectively 5,047 claims were settled up to 31 March 1999.

ANNUITY

A life annuity may be defined as a contract under which the insurance company agrees. In consideration of a certain payment, to pay, to the person who make the payment (ammuitant), a fixed regular income. The person during whose life the annuity is paid is called the annuitant. The price of the annuity paid by the annuitant at the beginning of the contract is called the premium or consideration. The regular payment to be made by the insurance company is called the annuity. The annuity is usually paid annually but can also be paid half yearly quarterly or monthly. Annuity contract is just opposite of insurance contract. Different definitions of annuity are given as under:

W.A Dinsdale, "Annuity may be defined as the payment of amount periodically during the life time of the annuitant in consideration of the payment of an agreed sum to insurance company. "

D.S. Hansell, "Annuity is a form of pension whereby in return for a certain sum of money the assurer agree to pay the annuitant, an annual amount for a specified period."

Mayerson, "The life annuity is a device that Liquidate the annuitants's capital over the life time, paying him and income comparing both interest on his money and protion of principal."

Bhir and Limaya, "Annuity is contract where the annuitant agree to pay to insurer a certain amount either in a lumpsum or spread over a period of few years and the insurer in return agrees to pay to the annuitant a certain sum every year, either so long as the annuitant is live or for such period as may be determined by the contract of annuity."

The annuity is suitable to those who do not want to leave amount of others but want to use their money during their lifetime. Therefore, to enjoy the maximum advantage of his capital, one can safely rely on an insurance company by purchasing an annuity which will be paid to him till his death. The payment of annuity generally continues upto the life. The premium rate is determined according to longevity. The amount of premium is higher at younger age lower at higher age. No medical examination is necessary in case of annuity because at the early death the insurance company does not suffer less.

ADVANTAGES OF PURCHASING ANNUITIES:

Advantages of purchasing annotates are as under:

(1)SELF USE OF MONEY:The annuity is beneficial to those who do not want to leave amount for other but want to use their money during their life time. During the lifetime they may make maximum use of the money by purchasing annuity which is to possible otherwise.

(2)REGULAR SOURCE OF INCOME IN OLD AGE:under annuity payment is being made till the annuitant survive. In other word one can say in annuity money is paid till death. It appears like pension. It seemed to be a regular source of income in old days.

(3)CONSTANT STANDARD OF LIVING:Some persons wants to maintain a particulars standard of living till their death without seeking any financial help from others. Annuities help those person by providing regular source of income till death.

(4)EQUITABLE PRICE FOR ANNUITY:The payment made by the annuitant at the beginning of the contract is called price of the annuity. The payment of annuity generally continues upto the life. So the premium rate is determined according to longvity. The amount of premium is higher at younger age and lower at old age.

(5)CHECK ON EXPENDITURE:Man with excess money may expand lavishly. If money is used for taking annuity check may put on excess expenditure.

(6)NO MEDICAL EXAMINATION:In annuity contract the insurance company under to pay certain amount periodically up to death. Because at the early death, the company does not suffer loss. Therefore, no medical examination is necessary at the time of purchasing annuity.

SIMILARITY BETWEEN ANNUITY AND LIFE INSURANCE:

Following are the point of similarity between annuity and life insurance:

(1) In both the contracts premiums are computed on the basis of probabilities of death and survival as reflected by mortality table.

(2) Both the contract are performed by Life Insurance Corporation of India.

(3) Life insurance and annuity both relates to life of a person.

(4) In both the contract money is keep safe

KINDS OF ANNUITIES

(A) ANNUITIES ACCORDING TO COMMENCEMENT OF INCOME:

(1) IMMEDIATE ANNUITY. Under this annuity payment commence immediately after the end of the first income period. For example if the annuity is to be paid annually then the first installment will be paid at the expiry of one year. Similarly in half yearly annuity, the payment will begin at the end of six months. The annuity can be paid either yearly, half-yearly, quarterly or monthly. The purchase money is in single amount.

(2) ANNUITY DUE. Under this annuity, the payment commences from the time of contract. The first payment is made as soon as the contract is finalised. The premium is generally paid in single amount, but can be paid in installment also.

(3) DEFERRED ANNUITY.Under this annuity contract. The payment of annuity commence after a fixed period or at the attainment by the annuitant of specified age. The premium may be paid as a single premium or in instalment. At the death, the premium may be returned without interest. The deferred annuity can be surrendered for a cash amount at the end of or before the deferment period. The surrender value is normally 95 percent of the premium paid excluding first premium before deferment period. No surrender value is payable after the deferment period.

The deferred annuity is useful to those who desire to provide a regular income for themselves and their family after the expiry of a specified period. The deferred annuity can be issued to male or female lives. It is found from experience that female have a greater vitality than the males and therefore, the annuity rates are quoted at higher rates of premium for female than for males.

(B) ANNUITY ACCORDING TO NUMBER OF LIVES COVERED

(1)SINGLE LIFE ANNUITY:

Under single life annuity one single person is contracted. This annuity is most suitable to those who have no dependent and want to use all saving during his life time.

(2)MULTIPLE LIFE ANNUITY: Under this annuity more than one life is contracted. Again multiple life annuity is of two types:

(a)Joint life annuity.Under this annuity payment of annuity stops at the first death.

(b)Last Survivor annuity. Under this annuity payment continues. Up to the death of the last person of the group.

(C) ANNUITY ACCORDING TO MODE OF PAYMENT. The annuities according to mode of premium payment can be of two types:-

(1)LEVEL PREMIUM ANNUITIES:Under this annuity, the annuitant can deposit some amounts periodically so that at the end the can get sufficient amount in equal installment. Before commencement of the payment of annuity, annuitant is given option to get the surrender value in cash or to get the paid up values reduced in proportion to the premium paid to the premium payable. At the death of the depositor the family member can get the surrender values or premium paid whichever is higher.

(2)SINGLE PREMIUM ANNUITIES:Under this annuity single premium is paid by the purchaser of the annuity.

(D)ANNUITIES ACCORDING TO THE DISPOSITION OF SUM

(1)LIFE ANNUITY:Under this annuity regular income will be made to the annuitant througout his life time. No payment is made after his death. When the depositor dies before receiving all the amounts of the purchase prices, he is at loss. But if he survives for a longer period than expected, he is benefited by this annuity.

(2)GUARANTEED MINIMUM ANNUITY:Under this life of annuity payment upto a period is guaranteed by the company. If the annuitant (depositor) dies before the specified period annuity will continue upto the unexplored period. Guaranteed minimum annuity is of two types:

(a)immediate annuity with guaranteed payment.Under this annuity payment for a fixed number of years will continue, irrespective of death. Sometimes instead of continuing the annuity payment after the death of the annuitant, the difference of the purchase money and annuity installment already paid is returned as a lumpsum to the nominee.

(b)Deferred Annuity with Guaranteed Payment. Under this annuity, the payment will continue for a fixed period say 5, 10, 15, 20 years and upto life thereafter. But payments commence after deferment period. The annuity also guarantees refund of cash value of the balance of annuity where the company promise to pay a lumsum to the nominee or to the annuitant's estate, the difference, if any, between the total of annuities received before the annuitant's death the purchase price.

RETIREMENT ANNUITY POLICY:This annuity is useful to employees at the time of retirement. The main object of the annuity contract is to make provision to the individual in old age. This type of annuity commences between the age of 58 and 68.

NON CONVENTIONAL POLICES

The Life Insurance Corporation of India has introduced sevral non conventional policies to meet the requirement of the public. The conventional policies have the main characteristics of protection at early death or living too long. But now a days majority of the people is interested mainly in investment. The LIC has introduced several new polices from time to time to these requirement. Some of the important new policies are disused as under:

Jeevan Surabhi Policy.This is an excellent money back policy. It increases life insurance cover with lumpsum payment at short intervals. The policy issues for there different terms say for 15, 20 and 25 years. The corresponding premium paying time is 12, 15 and 18 years respectively.

Under this policy additional risk can be covered on the basis of per thousand sum assured as under:

(a) After 6 to 10 years more risk covered.

(b) After 11 to 5 years 100% additional risk covered.

(c) After 16 to 20 years 150 % additional risk covered.

(d) After 21 to 25 years 200% additional risk covered.

JEEVAN MITRA POLICY:This is an endowment insurance policy with additional insurance cover day double of the sum assured and in case of death by accident triple the sum assured. If the policyholder services till maturity, he will get only the sum assured bonus. The policy can be taken at the age of 18 to 50 years. Maximum maturity age is 70years. The term policy is 15 to 30 years. For taking the policy only standard age proof, acceptable.

JEEVAN SAATHI POLICY :This is a joint life policy meets for couples only. Under this policy the sum assured is payable at the death of the survivor or maturity amount is paid of the other partner survives till maturity.

Term of the policy is 15 to 30 years. Maximum age of maturity is 70 years. Only standard age proof is accepted. This policy protects both the lives against accident risk.

JEEVEN KISHOR POLICY:This is an exclusive policy for children with profit. Risk cover commences from the age of 7 years 2 years after date of the policy. Under this policy the accident benefit is available to the insured on attaining majority for Rs. one laks without charging extra premium.

Minimum term is 15 years and maximum terms are 35 years for this policy. Minimum sum assured as Rs. 10,000 and maximum sum assured is Rs. 5,00,000

JEEVEN CHHAYA POLICY:This is and ideal plan to make provision for a child's higher education. Jeevan Chhaya introduced in March 1991 can be considered to be a combination of Jeevan Mitra and money Back Policy. Couples having a child (not a adopted one), of age less than one year of this policy. This policy an be taken in order to ensure that an adequate financial provision is made for the higher education of the child. Either fathers or mothers each one of them individually and take policies under this plan.

The premium under this scheme payable during the lifetime of the life assured and shall cease on the death of the life assured or on the expiry of the term of the policy, which ever is earlier.

At the time of death life assured gets immediate payment of sum assured. If he survives 25% of the sum assured is paid every year in last 4 year. The bonus on full sum assured for the full term of the policy along with final additional bonus, if any will be payable at the end of the policy term. Maturity benefits are fixed, whether policyholder survives or not. The policy term can be 20, 21, 22, 23, 24 or 25 years.

Under this policy minimum sum assured is Rs. 10,000 and maximum sum assured is 1,00,000 minimum and maximum age at entry is 20 years and 45 years receptively. Maximum maturity age in this plan is 65 years.

Proposal under this plan can be entertained under non-medical (general) scheme, both in respect of male and female lives upto rupees one lakh sum assured. However, if anything medial then the regular procedure life calling for full medical report specula report are to be followed. The father and mother should jointly sign a deletion regarding the date of birth of the child.

BIMA KIRAN POLICY:Bima Kiran is a unique low cost insurance plan. Therefore it suits the young ones. In built accident benefit and a free insurance cover after maturity for 10 years is provided under this plan. Minimum and maximum entry age is 18 years and 60 are respectively. The policy term is minimum 15 year and maximum 30 years. Minimum and maximum sum assured under this policy is Rs. 50,000 and Rs. 3 lakh respectively. Major draw back of this policy is taking loan facilities.

ASHADEEP II POLICY :As has deep II policy is suitable when one need costly treatment. This policy covers risk of cancer (maliganant) paralytic stroke reneal failure coronary artery diseases.

Under this policy a lumpsum Rs. 25000 to Rs. 1,50,000 depending on the sum assured is payable. In other word 50% of the sum assured is payable and all the future premiums are waived. At the time of maturity 50% of sum assured plus bonus will be paid. Minimum age at entry is 18 years and maturity age is 65 years. The minimum sum assured is Rs. 50,000 while the maximum sum assured is Rs. 3,00,000.

JEEVAN SHREE POLICY:This policy is exclusive meant for professionals. NRI's and filmstrips. This policy enjoys greater commercial liquidity, viability and higher yield on maturity. Minimum sum assured is Rs. 5,00,000. This policy guaranteed addition Rs. 75% per thousand with loyalty addition, which can go upto 75 % of sum, assured depending upon the Corporation experience.

CHILDREN'S MONEY BACK POLICY:

Now a day the children need financial support to enter business/career. This policy fulfills this type of need of the child. Under this policy 20% sum assured is payable after 18 and 20 years age of the child and 30% sum assured is payable after 22 and 24 years of age. At age 26 guaranteed addition of Rs. 80 per thousand is payable. Loyalty addition can go up to Rs. 90 pr thousand depending upon Corporation's experience. Entry age is 0 to 10 years.

NEW JANA RAKSHA POLICY:

This type of policy is only meant for farmers and industrial workers. Under this policy a 3 years grace period is provided in case of non-payment of premium after payment of fist 2 years premium. The policy term is 12 to 30 years and minimum sum assured is Rs. 10000. From 50000 maximum sum assured has been raised Rs. 5 lakh.

JEEVAN GRIHA POICY:This is an ideal plan for covering your housing loan need. This is a low premium and high-risk coverage plan. Plan is granted on the face value of sum assured.

Minimum age and maximum age at entry is 18 and 50 years receptively. The minimum term is 5 years and maximum term is 30 years. The maturity age is 65 years. This policy can be collateral security for housing loan.

JEEEVAN SANCHAY POLICY.Jeevan sanchay policy is suitable to fulfil the dreams of your moved ones. This is a new money back policy for 12, 15, 20, and 25 years minimum and maximum sum assured is Rs. 25,000. Under this policy in addition to sum assured guaranteed addition Rs. 70 per thousand-loyalty addition is also payable if at least first 5 years premium are paid.

JEEVAN SNEHA POLICY:This is an exclusive 20 years money back policy for today's women. This plan provides money in regular intervals. Mode of payment is yearly.

Minimum age maximum age at entry is 18 years and 50 years receptively. Minimum and maximum sum assured is Rs. 25000 and 5,00,000 receptively. Under this plan risk is covered for three years after fist two years premium is paid.

WHICH IS THE IDEAL POLICY?

There are different types of policies carrying with them various right and liabilities one has to select a policy best suited to one's particular circumstances. In planning the selection of a particular policy, one has to consider the following points:

(1)Need For Insured :the need for the insured is the important factor in selecting the insurance policy. This can be determined by the size of this family his age, the age and health of his wife, children, his other dependents and the standard of living of his family.

(2)CAPACITY TO PLAY PREMIUM:How much amount one should insure will depend upon this capacity to pay premiums at present as well as in future also. For this he shall have to take into account his income at present and also to make a fair estimate of the likely change in it in future. There should be no overestimate of the future income.

(3)NATURE OF HIS FINANCIAL OBLIGATION AND THE FINANCIAL CAPACITY OF HIS DEPENDENTS :

This financial obligation and financial capacity of his dependent will determine the amount of assured sum and the manner in which it should be paid. One may need provision for the education of his child after ten years in his case he would do better by taking a ten year endowment policy where the assured sum may be payable in installment. But if one wants to make provision for the marriage of his daughter, the payment of policy money in form of a lumpsum will be more proper.

(4)TEMPERAMENT:if one by virtue of his habits cannot save anything. It would be better for him to go for a policy of maximum amount as it will means a compulsory saving for him. But if one can save regularly, can take a policy of moderate amount and invest the rest of his savings to earn a higher interest.