CHAPTER 1 INTRODUCTION TO INSURANCE

1.1 Introduction:
In insurance, the insured makes payments called "premiums" to an insurer, and in return is able to claim a payment from the insurer if the insured suffers some kind of loss. This relationship is usually drawn up in a formal legal contract. In one classic example of insurance, a ship-owner insures a ship and receives payment if the ship is damaged or destroyed. This example is one of the earliest uses and developments of concepts like insurance. Interestingly, ships are now more often insured through risk pooling and spreading organizations such as Lloyd's of London because the loss of a large ship going down is too great for one insurer to accept. In the case of annuities, such as a pension, similar concepts apply, but in some sense in the reverse. When applied to annuities, the terms risk and loss are somewhat different from traditional insurance as they concern the chances of living beyond life expectancy and the need for income during the period between annuitization and death. For example, many individual people purchase health insurance policies and they each pay a small monthly or yearly premium to an insurance company. When a policyholder gets ill, the insurance company provides money to cover medical treatment. For some individuals the insurance benefits may total far more money than they have ever paid into the insurance policy. Others may never make a claim. When averaged out over all of the people buying policies, value of the claims even out. Insurance companies set their premiums based on their calculated payouts.

They plan to take in more money than they pay out in the end to cover expenses. For-profit insurance companies set their rates to make a profit rather than to break even. Life is fraught with tensions and apprehensions regarding the future and what it holds for the individual. Despite all the planning and preparation one might make, no one can accurately guarantee or predict how or when death might result and the circumstances that might ensue in its aftermath.

1.2 History of Insurance in India:

Insurance has been an institution of human society for thousands of years, having been practiced by Babylonian traders as long ago as the 2nd millennium BCE. Eventually it was given legal mention in the Code of Hammurabi, and practiced by early Mediterranean sailing merchants. The Greeks and Romans had "benevolent societies" which acted to care for the families and funeral expenses of members upon death. The 19th century saw a rise in the government regulation of insurance, and the 20th century saw further specialization and, in the United States, a bit of deregulation that allowed other financial institutions, such as banks, to offer insurance. The ever-increasing ability of science to predict catastrophes of any measure or variety continues to affect the way insurance is conducted. There are mainly two parties involved in this the insurer and the insured. The insurer is the insurance company who will provide the cover to the insured against any financial losses. The insured may be an individual person or a group of people like an employer, members of a society, etc.

1.3 Functions of Insurance:

It helps capital formation

It provides Certainaty

It shares risk It provides protection

It helps prevention of losses

Classification of insurance:

Types if Insurance

Life Insurance

Non-Life Insurance

General Insrance
1) Marine insurance 2) Fire Insurance 3) Personal Accident Insurance 4) Vechile Insurance

Miscellaneous Insurance
1) Fidelity Guarantee Insurance 2) Crop Insurance 3) Burglary Insurance 4) Flood Insurance etc.

1.4 Principles of Insurance

P R I N C I P L E S Mitigation Loss Risk must attach Causa Proxima Principles of Indemnity Principles of Subrogation Principles of Contribution Principles of Utmost Good Faith Principles of Insurable interest

1.5 Characteristics of Insurance:

It is a cooperative device. It helps risk sharing and risk transfer Calculates risk in advance Payment/claims amount is paid on the occurrence of contingency Number of persons insured is large It is neither charity nor gambling

1.6 Classification of Insurance:

There are mainly two broad classes of Insurance Life and Non Life.

I.

Life Insurance:
Life insurance includes ordinary life, annuities and pensions. The

risks of death due to any reason both natural and unnatural are covered during the policy period. There are two main life insurance productsTerm insurance and Pure insurance. All other policies are variations of these two basic policies. Term insurance is taken for a particular period. If death takes place during the term, the claim is paid. If death does not take place nothing is paid to the insured. In India, most of the products are endowment-type where the savings component is predominant. Under this, every policy will result in a claim either by maturity or by death claims. If death does not occur, the policy expires on a specified date i.e. date of maturity. Premium rates are based on three variables: mortality rate, interest rate and expenses. Interest earned on premiums helps to reduce the periodical premium, which is normally the same during the insurance period and is known as level premium. Since these policies are long-term; for as long as 15, 20, 25 years, the premium amounts are invested by the insurance company in the longterm income yielding securities as per the IRDA regulation. Claims settlement is easy in case of these policies since they are only benefit policies and not indemnity policies. In case of maturity and installment claims, the person insured collects the claim. Otherwise if he/she is no more, the assignees/nominees collect the claims amount.

Several options like different types of accident benefits, coverage for major illness, payment in installments for specific needs like childrens education and last survivor benefits are also available. The major goal of the insurance business is earning the maximum income out of the life fund and matching the assets which liabilities. The surplus as stated above is distributed among the policy holders in the form of bonus or in case, policies may be offered as a reduction to the premium payables.

Definition: Life Insurance contract may be defined whereby the insurer, in consideration of a premium paid either in lump sum or in periodical installments, undertakes to pay an annuity of a certain sum of money either on the death of the expiry of a certain number of years Features of Life Insurance: Instrument of saving Provides social security Risk coverage starts from the date of accepting of proposal Beneficiary nominee/legal heir stands to gain Policy can be assigned or mortgaged Policy holders can seek loans against the policy Certain policies cover up for treatment to serious ailments Ministry of Finance extends income-tax benefits on the amount of premium paid Money can be set aside for childrens marriage and education Provision for old age

Uses of life insurance: Only and best way of family protection Best safeguard against future unpredictable risks Insurance can preserve value of humans and assets Best saving and investment instrument in terms of security, marketability, liquidity and stability of value Enhance standards of living

II.

Non Life insurance:

Non Life insurance products include property or casualty, health insurance or house, fire, marine insurance etc. This insurance class deals with all the non-life aspects of an insured like his/her house, car, health, land, office, cargo, etc which might bring financial loss.

1.7 When Should You Take Insurance?

Your need for life insurance changes with the stages of your life, starting with no need when you're young, progressing to greater and greater levels as you take on more and more responsibility and finally beginning to diminish as you grow older, which is when you should commence planning for your retirement. When you're single: Sad though your death would be, it would create financial hardship for no one. Any honest financial assessment of your situation would have to conclude that you have little or no need for life insurance. But then, as you grow older you will be assuming new roles and taking on larger responsibilities too. Costs of living will rise and you will have to plan for your marriage, your children's future and many other interconnected expenses. So we recommend that you buy a policy now while you're young and rates are low.
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 Double income no kids: Married couples with no children may need little or no life insurance, especially if both spouses contribute equally to the household income. The death of either spouse would not be financially catastrophic; the other could presumably survive on his or her own income. Still, it could be a strain. Perhaps the survivor couldn't afford the rent payments on a single income, or maybe you have to repay debts. Each of you should probably buy a substantial amount of life insurance to protect one other. Married with children: A single-income family with young children is the classic high-need situation. Basically, all of these people are dependent on one breadwinner for their total support, so insurance on that life is vital. And if the non-earning spouse should die, the other would have to pay for foster care - a very expensive proposition that argues for insurance on both lives. This same highneed situation exists for dual-income households with children, for single parents, and for anyone caring for elderly parents who have limited resources of their own. The golden years: The kids have grown and are making it on their own. You have a pension and considerable assets that can generate good income with suitable retirement planning that will provide for the remainder of your life, independently.

1.8 Future Planning and Insurance:

Every insurance plan revolves around the financial consequences of a premature death. Obviously, the consequences are too large to ignore and cannot be totally covered by an individual's personal resources. Basically, life insurance is nothing but a contract where the insured party or the purchaser of insurance pays a premium that protects him against specific losses. When planning your life insurance portfolio, you must consider your family's recurring needs like medical expenses, house rent, provision costs for instance as well as long-term needs that involve reinstating your family's set standard of living and their future such as higher education and marriages. Throughout our living existence, we are faced by numerous risks failing health, financial losses, accidents and even fatalities. Insurance addresses all these uncertainties on financial terms. Change is perhaps, the only static constant within the dynamics of life and risks always move in tandem within a changing environment. Life insurance is more of a hedging mechanism rather than a real investment avenue. It is essentially a mechanism that eliminates risks primarily by transferring the risk from the insured to the insurer. The insurance industry in particular has been subjected to numerous changes in the last few decades since the need for insurance is more evident now than earlier. People's spending patterns are changing and more & more resources are needed for immediate consumption. In fact, we recommend that you review your needs and insurance portfolio from time to time, say every 2-3 years.

1.9 Criticisms of the Insurance Industry:

Lack of knowledge of policyholders: Insurance policies can be complex and some policyholders may not understand all the fees included in a policy. As a result, people could buy policies at unfavorable terms. In response to these issues, governments often make detailed regulations that set down minimum standards for policies and govern how they may be advertised and sold. Redlining: Location is one of the variables used to set rates. Insurers are also starting to use credit "scores", occupation, marital status, and education level to set rates. Many consider these practices to be "unfair" and even racist. An interesting refutation to this is that the job of an insurance underwriter is to properly categorize a given risk as to the likelihood that the loss will occur. Health insurance: Health insurance is one of the most controversial forms of insurance because of the conflict between the need for the insurance company to remain solvent versus the need of its customers to remain healthy, which many view as a basic human right. This conflict exists in a liberal healthcare system because of the unpredictability of how patients respond to medical treatment. Suppose a large number of customers of a particular insurance company were to contract a rare disease costing 100 million dollars to fight for each patient.

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CHAPTER NO. 2 CHILDREN'S INSURANCE

2.1 Introduction:
Children's life insurance is the best gift from parents and grandparents, as it secures the future of those who are dear. It lays a strong foundation for the young ones and gives them an opportunity to pursue their dreams.

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Child Insurance policies are a combination of life insurance and investments. In child insurance plans a small portion of the premium is goes toward providing the life insurance of the parent and a large portion of the premium goes towards the investments. In an unfortunate event if the parent dies within the premium paying period the policy continues and the future premiums are waived and the beneficiary gets the Sum Assured and all other benefits, bonus etc. You can decide the risk level of investments for your plan, A 100% Equity or a 100% Debt or a combination of both with different allocation as per your comfort level. The more equity allocation would give you a higher return but is also a bit risky in the short run. If you have a long term horizon say 10 years or so then you should go for a higher Equity allocation. One word of caution " Please make sure that you know the expenses and other deductibles very clearly before hand " because the early years charges are quite high in some plans and in some policies the exit years can be expensive. Most of the insurance companies in India are offering Child Insurance Plans. If you are planning to buy a secure future of your child then at least compare plans of 4 or 5 insurance companies and then decide, because each company will have something different to offer. Life insurance is usually purchased as a financial protection against untimely death and life insurance for kids is no different. While no parent or grandparent wishes to think about this, one has to consider the other family members, including a childs siblings.

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2.2 Child Plan:

Your child might be the bright one in your family. His teacher is calling you at least once every quarter eulogizing about his talents, and is recommending a couple of grade jumps. Or perhaps, your daughter is putting the dudes in her class to shame on the playing field, wielding a mean tennis racket. Chances are that it might take some time before you know what your kid is good at. But you can always provide for his/her future by salting away a children's plan that will give you the funds at the right time to take his/her dreams forward. Children's plans are immensely popular as parents are looking at so many non-traditional avenues for their kids. This means insurers are also in the game, offering a host of children's policies. This list of insurers offering children's plans as well as details of all the plans they offer will help you make that informed decision regarding your ward's future. Child plan is a plan which enables a parent or a legal guardian or a relative of the child to provide a sum for the child by way of a very low premium. The policy is in two stages: Covering the period from the date of commencement of the policy to the deferred date. Covering the period from the deferred date to the date on which the policy emerges as a claim either by death or on maturity. Parents and grandparents want the best for the little loved ones in their lives-from keeping them healthy and happy to providing for their financial future.Childrens life insurance is a tool many families use to give their children a financial foundation that they can draw upon when they are older.

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The lowest cost life insurance you can buy is the one you qualify for right now: Rates rise with age. It comes as no surprise, then, that rates for a childas young as two weeks oldis the least expensive insurance you can buy. The low rates make whole life insurance affordable for almost everyone. Because whole life premiums are locked in at the beginning, they will never increase with the childs ageregardless of whatever health issues may arise. Whole life insurance has the added advantage of accumulating cash value over time. This cash value is a financial asset that the grown child can borrow against or use as collateral. In addition, the money borrowed is not subject to income tax, whether or not the loan amount is repaid. By the time the child turns twenty, the cash value of a whole life policy will likely be equal to or greater than the amount of the premiums paid. If you paid $10 a month for a $15,000 policy, after 20 years the policy would have a cash value of $2,400 or more. A $35,000 policy would have a cash value of about $5,700. Some life insurance programs provide for an automatic doubling of the policys face value when the child turns 21without a change in the premium. In addition, you or the adult child may be able to purchase additional coverage on certain policy anniversary dates, also without increasing the premium. The primary reason for buying any kind of life insurance is to insure against untimely death. This is not something parents or grandparents wish to think about. Nevertheless, consideration must be given to the survivors, including a childs siblings. Funeral and burial expenses and unpaid medical bills can affect the finances of an entire family at a time when grief and stress are already at an extreme level. Life insurance is a way of protecting everyone.
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2.3 The Importance of Life Insurance for Children:

Nothing feels better for parents than to see their kids growing healthy in a good environment and their basic needs are met such as medical care thats why its important to obtain health insurance for children. As much as possible parents want only the best for their kids to be able to function well in the community they live in and to fulfill their educational and employment opportunities in the next years to come. By obtaining health insurance for children, they are very much protected. For kids to grow up healthy, it is important for parents to provide the best health insurance for children whenever required. Getting a health insurance for children is the best way to protect them in the event of an illness or disease. Health for children is the most important and it should not be neglected. The costs of medical expenses have been increasing lately. Children are more at risk to certain diseases and illnesses than adults do. Usually, these kids suffer a lot when their medical condition is neglected or if they are not given the proper medication or healthcare. Health insurance for children ensures the parents that whenever the need arises or whenever their kids need proper medical treatment they can afford the proper medical care for them no matter how expensive the cost will be. There are still a lot of people or parents who do not consider the importance of having a health insurance for children. Mostly, when they spend money, they tend to look for immediate benefits. In the case of health insurance plans, you need to pay the premium monthly but it covers medical expenses in case you need it. Most people may not know it but health insurance plans may be beneficial in the long run. Because kids are very prone to get sick or to get injured, they need to see a physician no matter how minor or how basic the disease or injury is. Health insurance for children gives parents peace of mind knowing that
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all the expenses involved in the treatment of their kids are covered by the health insurance company. And because of this, they are given the proper or best health insurance for children that they deserve. Parents do not have to worry of the very expensive costs. It also removes the anxiety and concern of the parents on where to get or borrow the money in order to pay for the medical expenses acquired during the treatment or hospitalization. 1. According to studies conducted on children, those who have health insurance for children are most likely to become active and perform well in school. 2. Children who have health insurance are also likely to get the best health care or medical treatment that they need whenever required and as toddlers, they are given the proper immunizations. 3. According to the studies conducted by the United States Department of Health and Human Services (HHS) and National Center for Health Services Research (NCHSR), children with asthma and ear infections never consulted a doctor because they do not have health insurance plans. 4. Insured children are also likely to visit the dentist regularly for dental and preventive care. 5. Health insurance for children is very important for kids to grow up healthy and be able to function well in their respective communities.

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Overview Most parents do not think about purchasing life insurance for children. But unexpected events can occur in your children's lives. This makes it a good idea to invest in life insurance as protective measure for your children. Though it seems unpleasant to think about, there are compelling reasons for why you should consider purchasing life insurance for your children. Significance Buying life insurance for children can be a good investment. Purchasing life insurance at a young age will ensure your children are covered in case they experience serious illness or an accident. For example, if you have a family history of a serious illness that your child develops when older, your child might have a more difficult time obtaining insurance because of the higher costs and more scarce availability of insurance for people with serious medical conditions. Having life insurance can also greatly reduce the financial burden associated with a serious accident or illness. Purchasing life insurance for your children when they are healthy and young will enable them to maintain affordable premiums when adults. Benefits Purchasing life insurance for your children can serve as an investment in your child's future. Buying a "permanent" life insurance policy can enable your child to use the insurance as collateral while securing a loan in the future. This would benefit your child when he applies for student or other types of personal loans. Guaranteed Insurability: Children with insurance are guaranteed insurability later in life with term insurance. This is beneficial, especially if health problems develop later on that would prevent them from getting coverage.
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 Low Premiums: Whole life insurance gives coverage for the entire life of the child with premiums that will stay low no matter what health conditions develop. Safety Net: Policies accrue cash value over time that, if needed, can be used as an emergency fund for a child to withdraw money from or cash in. Tax Free Savings: Money going into a life insurance policy for a child is like tax free savings, and if it ever needs to be borrowed against, a policy loan can be taken out which is also tax free. Financial Protection: If a child were to die, life insurance can assist with the cost of funeral arrangements and any lost wages during this time of grieving. Function Life insurance can serve as a form of earnings protection for children. Though this is not common, there are situations when a child can be the family member earning the majority of the family income, as in the case for child singers and actors. Funeral Expenses Though we never want to even consider the possibility of a child dying, there is a possibility this will happen. Having life insurance for your children will ensure necessary funeral expenses are covered if this worst-case scenario does occur. Considerations When considering purchasing life insurance for your children, you should get several quotes to compare prices and the offerings of each insurance company. Term insurance policy enables parents of insured children to exchange this type of insurance for more permanent insurance
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coverage. Make sure your child can collect accumulated cash value under insurance policies you consider, as well as if your child can borrow money against the insurance policy in the future.

Six Good Reasons Why Children Should Have Health Insurance:

1. Children with insurance are more likely to have a usual source of care. 2. Children with insurance are more likely to have access to preventive care. 3. Children with insurance get health care services they need. 4. Insuring children will help close the racial disparities gap. 5. Health insurance helps improve social and emotional development. 6. Insured children are better equipped to do well in school.

Why Child Insurance?

Planning does not necessarily mean about what you wish your child would grow up to be, or have certain characteristics, but it also essentially means you as a responsible parent having various obligations to fulfill that would help him to grow better in this world. To provide good Education (Graduation as well as Post Graduate) Secures the childs future in case of any unfortunate event. Marriage Seed capital for business

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Child plans come in two broad variants:

Traditional child plans: Traditional plans invest a major portion of their money in debt instruments like corporate bonds and government securities (as specified by the regulator). It carries relatively lower risk since it is invested mainly in corporate bonds and government securities. The bonuses are stable and give the parent considerable comfort knowing roughly how much he can expect. Regular endowment plans are suited for parents with a low risk appetite. Unit Linked insurance plans (ULIPs): ULIPs can invest across equity and debt markets in varying proportions. Parents with some risk appetite can opt for a ULIP child plan that invests across equity and debt markets. The reason why ULIP child plans can prove to be significant is because over the long-term (15-20 years), equities can add considerably to the corpus you plan to build for your child's needs. Equities are best placed to beat inflation over the long term. However, to achieve this, one must invest wisely

2.4 How to select an Insurance Policy for Your Child?

Need returns on regular intervals to fulfill various obligation like Child Education, Tuition, Admission Fees, Coaching Classes (Money back Guaranteed Plans) Need returns for my child's education and marriage (periodic non guaranteed and one time maturity benefit) (Money back Plans with non guaranteed returns). Need one lump-sum money for my child's higher education or marriage (Endowment Guaranteed Plans)

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 Need one lump-sum money for my child's higher education or marriage with lesser rate of growth (Endowment Plans with non guaranteed returns)

Factors to be considered for the Best Plan:

Adequate Sum required for his Higher Education Cost. Rider Benefits like Health Insurance, Accident cover. Competitive Pricing and Returns. Administrative Costs. Assured amount for Children in case of Parents Death. Claim History of the company you are purchasing insurance

2.5 Advantages & Disadvantages of Children Policy:

Advantages of Buying Insurance for Your Children

They can continue their current coverage into adulthood They can lock in a low premium They can convert to another policy when theyre 21 They may become uninsurable later

Disadvantages of Insurance for Children

They probably won't use it Your child may need a medical exam Most young adults can get coverage later Insurance premiums may actually drop as your child ages Kids don't pose a financial loss Your group life insurance may already cover them

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2.6 Children's Insurance Helps Generate Funds When Needed:

Life insurance plays an important role in an individual's financial planning exercise. Insurance can assist individuals in planning for their own life stages as well as provide for their children's future. It also secures a child's future in case of any unfortunate event. Various kinds of child insurance products are available in the market. Parents need to build a sufficient corpus for their children. They should start planning for their children at an early age. One of the biggest financial commitments for parents is to meet the expenses incurred in bringing up and settling their children. Child insurance plans play an important role in securing a child's future. With a number of children's insurance plans available in the market, it becomes difficult for most parents to evaluate them objectively. The factors to be kept in mind include the timeframe for building a corpus, age at which the funds would be required, approximate amount needed to build the corpus, investment avenues to be considered and the amount available to the child in case of death of parents. As inflation rises, the first impact is on the education sector. Planning for a child's future is an important step. It is advisable that parents go for a term policy. That will take care of the child's financial needs in case of untimely death of any of the working parents. For the child's future, one can create a specific financial plan through systematic investment planning (SIP) in mutual funds. Previously, providing for the child was to just set aside some amount of money in a savings bank account or making fixed deposits with the intention of using the maturity amount. Children's insurance plans aim at providing for meeting expenses of children education, marriage etc.
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With the costs going up sharply, it makes sense to plan for insurance well in advance so as to enable provision of adequate funds at the time they are required. It also tends to provide a sense of relief and security for the parents - that they won't be out of funds as an when they are required the most. Parents should always attempt to provide for their children's future by selecting a children's plan that will yield funds at the right time. The most important requirement is providing for education . Children's plans are immensely popular. Almost all insurance companies - public and private - offer children's insurance plans. The things have changed now. Now, parents take a term cover in their name, which would be replaced if there is any loss of income due to the untimely death of any of the earning parents. So, it has the twin benefits of investment and protection. One can either invest in traditional child plans or unit linked insurance plans (ULIPs). Parents can either opt for a regular traditional endowment plan which carries relatively lower risk since it is invested mainly in corporate bonds and government securities . The bonuses are stable and give the parents considerable comfort knowing roughly how much they can expect. Regular endowment plans are suited for parents with a low risk appetite. Parents with some risk appetite can opt for a ULIP child plan that invests across equity and debt markets. Over the long term, equity can add considerably to the corpus you plan to build for your child's needs. Equity is best-placed to beat inflation over the long term. However, to achieve this, you must invest wisely. Debt, on the other hand, brings stability to a portfolio. While the returns from debt at times may seem unattractive as compared to equity, its importance in a portfolio cannot be understated.
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2.7 Childrens Future Solutions:

As parents, we aspire to give the best that life has to offer to our children. While children enrich our lives, it is no secret that they also need funding for their considerable expenses. Since most of us have relatively fixed sources of income, financial planning for a childs benefit becomes an essential part of the entire familys budget. Education is the best provision for old age. Aristotle Aristotles maxim still holds true. Unfortunately the cost of education has risen far beyond the Greek philosophers wildest imagination. Every child deserves the best opportunities and options. So whether it is a foreign degree or a specialized training course, most parents would not like to deny their children any opportunity due to the lack of funds. Marriage is another expense that can just creep up on you and in India marriages are quite expensive. It is therefore prudent that you make carefully plan your finances for your childs benefit. You should ensure that you have the required funds ready, when they are needed but at the same time your plan should also build in risk management so even if you were not around you would have insure your childs happy future. As a careful investor your investment plan for your child should consider the following few pointers: Saving regularly Secure investment Insurance cover Flexibility Guaranteed return

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Above all keep in mind that it is never too early to plan for your child's future. The earlier you begin the more you can gather for your childs needs. Child Plans offer you market linked returns with insurance cover. These are designed in a way that enables you to take care of your childs future financial needs. A carefully planned investment today can ensure that you dont have to worry about funding concerns in case of requirements.

2.8 Different Childrens Insurance Policies:

ICICI Prudential Life Insurance Co. Ltd. SmartKid Regular Premium SmartKid New Unit-linked

HDFC Standard Life Insurance Co. Ltd. Childrens Plan Unit Linked Yound Star II Unit Linked Yound Star Plus II Unit Linked Young Star Suvidha Plus Unit Linked Young Star Suvidha

Birla Sun Life Insurance Co. Ltd Birla Sun Life Insurance Childrens Dream Plan

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Life Insurance Corporation of India Child Career Plan Child Future Plan Jeevan Kishore Jeevan Chhaya Komal Jeevan Jeevan Anurag

SBI Life Insurance Co. Ltd. SBI Life - Scholar II SBI Life - Unit Plus Child Plan

Tata AIG Life Insurance Company Limited Tata AIG Life Assure Career Builder Tata AIG Life Assure Educare at 18 Tata AIG Life Assure Educare at 21 Tata Aig Life Starkid Reliance Life Insurance Company Limited. Reliance Child Plan Reliance Secure Child Plan Bajaj Allianz Life Insurance Company Limited Child Gain

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CHAPTER 3 LICS CHILDREN INSURANCE PLANS

As individuals it is inherent to differ. Each individual?s insurance needs and requirements are different from that of the others. LICs Insurance Plans are policies that talk to you individually and give you the most suitable options that can fit your requirement.

Children Insurance Plans of LIC:

1. Jeevan Anurag 2. Children's Deferred Endowment Assurance Plan 3. Jeevan Kishore 4. Child Career Plan 5. Komal Jeevan 6. Jeevan Chhaya 7. Child Future Plan

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Life Insurance Corporation

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3.1 JEEVAN ANURAG

Benefits:
LICs Jeevan ANURAG is a with profits plan specifically designed to take care of the educational needs of children. The plan can be taken by a parent on his or her own life. Benefits under the plan are payable at prespecified durations irrespective of whether the Life Assured survives to the end of the policy term or dies during the term of the policy. In addition, this plan also provides for an immediate payment of Basic Sum Assured amount on death of the Life Assured during the term of the policy.

Assured Benefit Payment of 20% of the Basic Sum Assured at the start of every year during last 3 policy years before maturity. At maturity, 40% of the Basic Sum Assured along with reversionary bonuses declared from time to time on full Sum Assured for the full term and the Terminal bonus, if any shall be payable. For example, if term of the policy is 20 years, 20% of the Sum assured will be payable at the end of the 17th, 18th, 19th year and 40% of the Sum Assured along with the reversionary bonuses and the terminal bonus, if any, at the end of the 20th year.

Death Benefit Payment of an amount equal to Sum Assured under the basic plan immediately on the death of the life assured.

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Eligibility Conditions and Other Restrictions:

FOR BASIC PLAN Age at entry Age of the Life Age of the Life Assured- 20 to 60 years (age nearest birthday) Maximum 70 years (age nearest birthday) All terms from 10 to 25 years. In case of single premium mode minimum term shall be 5 Years. Sum Rs. 50,000 /-

Assured at maturity Term Minimum Assured Maximum assured

Sum No limit. Sum Assured will be in multiples of Rs.5, 000 /- only. Yearly, Half-yearly, Quarterly, Monthly or

Mode

through salary deductions in case of regular premiums.

Options of Payment of Premium:

Following premium paying terms are offered: (i) (ii) Single Premium- One Year Regular Premium payable during (n-3) Years, where n is the policy term (iii) Regular Premium payable throughout the policy term

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Other Benefits:
The plan offers other benefits as follows: Grace Period: A grace period of one month but not less than 30 days will be allowed for payment of yearly, half-yearly or quarterly premiums and 15 days for monthly premiums. 15 days Cooling-off period: If you are not satisfied with the Terms and Conditions of the policy you may return the policy to us within 15 days.

Paid up Value: If at least three full years' premiums have been paid in respect of this policy, any subsequent premium be not duly paid, this policy shall not be wholly void, but the Sum Assured by it shall be reduced to such a Sum, called the paid-up value, as shall bear the same ratio to the full Sum Assured as the number of premiums actually paid shall bear to the total number of premiums originally stipulated in the policy. The policy so reduced shall thereafter be free from all liability for payment of the within mentioned premium, but shall not be entitled to the future bonuses. The existing vested reversionary bonuses, if any, will remain attached to the reduced paid-up Policy. The Sum Assured so reduced along with existing bonuses, if any, shall be paid in one single installment on maturity or on earlier death. The rider benefits will cease to apply if the policy is in lapsed condition. Once the payment of assured benefit starts, the policy shall be kept in force till maturity and the unpaid premiums, if any, will be deducted with interest at appropriate rate out of the next benefit payment.

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Loan: Policy Loan is permissible under the policy after it acquires a paidup value but before starting of payment of assured benefits. The terms and conditions of loan and the rate of interest applicable will be as fixed by the Corporation from time to time. At present, the rate of interest is 9% p.a. compounding half-yearly.

Guaranteed Surrender Value: This policy can be surrendered for cash after the policy is kept in force by payment of premiums for at least three years. The guaranteed surrender value allowable under this plan for all modes, except the single premium mode will be equal to 30 per cent of the premiums paid excluding the premiums paid for the first year and all extra premiums and the premiums paid for optional / rider benefits. In case of single premium mode, the guaranteed surrender value will be 90 per cent of the premiums paid excluding all extra premiums and the premiums paid for optional / rider benefits. The cash value of any existing vested bonus additions will also be payable on surrender.

Revival: Subject to production of satisfactory evidence of continued insurability, a lapsed policy can be revived by paying arrears of premium together with interest within a period of five years from the due date of first unpaid premium. The rate of interest applicable will be as fixed by the Corporation from time to time. At present the rate of interest is 8% p.a. compounding half-yearly.

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Accidental Death and Disability Benefit:

On death arising as a result of accident an additional amount equal to the Accident Benefit Sum Assured is payable. On total and permanent disability arising due to accident (within 180 days from the date of accident) an amount equal to the Accident Benefit Sum Assured will be paid over a period of 10 years in monthly instalments. The disability due to accident should be total and such that the Life Assured is unable to carry out any work to earn the living. Following disabilities due to accidents are covered : Irrevocable loss of the entire sight of both eyes, or amputation of both hands at or above the wrists, or amputation of both feet at or above ankles, or amputation of one hand at or above the wrist and one foot at or above the ankle

Term Assurance Rider Benefit:

An amount equal to Term Assurance Rider Sum Assured will be payable on death of the life assured during the policy term. If Premium Waiver Benefit has been opted for , then in case of diagnosis by any of the critical illness conditions covered under the policy, the total future premiums payable (total instalment premium) will be waived.

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3.2 Children's Deferred Endowment Assurance Plan

Features:
Product Summary: This is an Endowment Assurance plan designed to enable a parent or a legal guardian or any near relative of the child to provide insurance cover on the life of the child. The plan has two stages, one covering the period from the date of commencement of policy to the Deferred Date and the other covering the period from the Deferred Date to the date of maturity. The insurance cover on the childs life starts from the Deferred Date and is available during the latter period. The Deferred Date in case of Plan No 41 is the policy anniversary date coinciding with or next following the date on which the child completes 21 years of age. In case of Plan No 50 it is the policy anniversary date coinciding with or next following the 18th birthday of the child. Premiums: Premiums are payable yearly, half-yearly, quarterly or monthly and this shall cease on the death of the life assure. Premiums are waived on death of Proposer provided this benefit is availed.

Bonuses: This is a with-profits plan and participates in the profits of the Corporations life insurance business after the deferred date. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan.

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Benefits:
Death Benefit: The Sum Assured along with vested bonuses is payable in a lump sum upon the death of the life assured after the deferrement period. If death occurs before the deferrement period all premiums paid is refunded.

Maturity Benefit: Sum assured along with all bonuses declared up to maturity date is payable in lump sum.

Supplementary/Extra Benefits: These are the optional benefits that can be added to your basic plan for extra protection/option. An additional premium is required to be paid for these benefits.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender values are available on the plan on earlier termination of the contract.

Guaranteed Surrender Value: The policy may be surrendered after it has been in force for 3 years or more. The minimum surrender value allowable under this policy is as under: (a) Before the Deferred date: 90% of the premiums paid excluding the premium for the first year.

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(b) After the Deferred date: If deferment period is less than 10 years: 90% of the premiums paid before the deferment date excluding the premiums for the first year plus 30% of premiums paid after the deferred date. If deferment period is 10 years or more: 90% of a cash option plus 30% of premiums paid after the deferred date.

Corporations Policy on Surrenders:

In practice, the Corporation will pay a Special Surrender Value which is either equal to or more than the Guaranteed Surrender Value. The benefit payable on surrender is the discounted value of the reduced claim amount that would be payable at death or maturity. This value will depend on the duration for which premiums have been paid and the policy duration at the date of surrender.

The Corporation reviews the surrender value payable under its plans from time to time depending on the economic environment, experience and other factors.

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3.3 JEEVAN KISHORE

Features:
Product summary: This is an Endowment Assurance Plan available for children of less than 12 years of age. The policy may be purchased by any of the parent/grand parent.

Commencement of risk cover: The risk commences either after 2 years from the date of commencement of policy or from the policy anniversary immediately following the completion of 7 years of age of child, whichever is later.

Premiums: Premiums are payable yearly, half-yearly, quarterly or monthly throughout the term of the policy or till earlier death of child.

Bonuses: This is a with-profits plan and participates in the profits of the Corporations life insurance business. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. A Final (Additional) Bonus may also be payable provided policy has run for certain minimum period.

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Benefits:
Death Benefit: The Sum Assured along with vested bonuses, if any, is payable in a lump sum upon the death of the life assured after the commencement of the risk. If death occurs before the commencement of the risk, the premiums paid excluding the premiums for the Premium Waiver Benefit, if any, will be refunded.

Maturity Benefit: Sum assured along with all bonuses declared during the policy term is payable in a lump sum on survival to the end of the policy term.

Premium Waiver Benefit: This is an optional benefit that can be added to your basic plan. An additional premium is required to be paid for this benefit. By payment of this additional premium, the proposer can secure the benefit of cessation of premiums from his/her death to the end of the deferment period. The deferment period for this purpose is to be taken as 18 minus age at entry of child.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender values are available on the policy on earlier termination of the contract.

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Guaranteed Surrender Value: The policy may be surrendered after it has been in force for 3 years or more. The guaranteed surrender value, if policy is surrendered before the date of commencement of risk is 90 % of premiums paid excluding premium for the first year. If policy is surrendered after the date of commencement of risk, the guaranteed surrender value is 30 % of premiums paid after commencement of risk together with 90 % of premiums paid before the commencement of risk. Premiums for the first year and the premiums for Premium Waiver Benefit, if any, will be excluded. Corporations policy on surrenders: In practice, the Corporation will pay a Special Surrender Value which is either equal to or more than the Guaranteed Surrender Value. The benefit payable on surrender is the discounted value of the reduced claim amount that would be payable on death or at maturity. This value will depend on the number of premiums paid and the duration at which surrender value is calculated. In some circumstances, in case of early termination of the policy, the surrender value payable may be less than the total premium paid. The Corporation reviews the surrender value payable under its plans from time to time depending on the economic environment, experience and other fact

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3.4 CHILD CAREER PLAN

Features:
Introduction: This plan is specially designed to meet the increasing educational and other needs of growing children. It provides the risk cover on the life of child not only during the policy term but also during the extended term (i.e. 7 years after the expiry of policy term). A number of Survival benefits are payable on surviving by the life assured to the end of the specified durations.

Options: You may choose Sum Assured (S.A.), Maturity Age, Policy Term, Mode of Premium payment and Premium Waiver Benefit.

Payment of Premiums: You may pay the premiums regularly at yearly, half-yearly, quarterly or through Salary deductions over the term of policy. Premiums may be paid either for 6 years or up to 5 years before the policy term.

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Sample Premium Rates: Following are some of the sample premium rates per Rs. 1000/- S.A.: Mode and High S.A. Rebates: Mode Rebate: Yearly mode Half-yearly mode Quarterly & Salary deduction 2% of Tabular Premium 1% of the tabular premium NIL

Sum Assured Rebate: Sum Assured 1,00,000 to 2,99,999 3,00,000 to 4,99,999 5,00,000 and above Rebate (Rs.) Nil 1.5 %o S.A. 2 %o S.A.

Benefits:
A. Survival Benefit: On life assured surviving to the end of the specified durations an amount specified below is payable: 5 years before the date of expiry of policy term 4 years before the date of expiry of policy term 3 years before the date of expiry of policy term 2 years before the date of expiry of policy term 1 years before the date of expiry of policy term 25% of the Sum Assured

10% of the Sum Assured

10% of the Sum Assured

10% of the Sum Assured

10% of the Sum Assured

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Death Benefit: On death (after the Date of Commencement of Risk) -

(i) If death occurs within the period from date of commencement of risk to 5 years before the date of expiry of policy term: Sum Assured along with Vested Simple Reversionary Bonuses and Final (Additional) bonus (if any) is payable.

(ii) If death occurs within 5 years before the date of expiry of policy term: Sum Assured along with Final (Additional) bonus (if any) is payable. On death during the Extended Term - Sum Assured is payable.

On death (before the Date of Commencement of Risk) - All the premiums paid (excluding extra premium and premium for premium waiver benefit, if any,) along with interest of 3% p.a compounding yearly shall be payable.

Premium Waiver Benefit: The proposer can opt for this benefit if aged between 18 and 55 and is medically fit. It provides waiver of premiums on death of proposer. Further the benefit shall remain in force during the Auto cover period. Any premiums that have fallen due and not paid during the Auto Cover period shall also be waived. This benefit shall not be available in case of suicide by the proposer within one year of policy. Further, revival of the policy shall be subject to medical fitness of the proposer.

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Eligibility Conditions and Other Restrictions: (a) (b) (c) (d) (e) (f) (g) (h) Minimum Entry Age Maximum Entry Age Minimum Maturity Age Maximum Maturity Age Minimum Sum Assured Maximum Sum Assured Policy term Premium Paying term 0 years (last birthday) 12 years (last birthday) 23 years (last birthday) 27 years (last birthday) Rs. 1,00,000 Rs. 100,00,000 11 to 27 years 6 years and Policy term less 5 years

Participation in Profits of the Corporation: Simple Reversionary Bonuses shall be declared per thousand Sum Assured annually at the end of each financial year depending upon the Corporations experience, provided the policy is in full force. In case of a paid up policy, bonuses shall be payable only if, at least, 3 full years premiums have been paid. On surrender, the discounted value of vested bonuses, if any, (if not paid earlier) will be payable. Final (Additional) Bonus may also be declared in addition.

Paid-up Value: Notwithstanding the death benefit provided under the Auto Cover period, if at least three full years premiums have been paid and any subsequent premium be not duly paid, this policy shall not be wholly void but shall become paid-up.

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Surrender Value: You may surrender the policy for cash after at least three full years premiums have been paid. The Guaranteed Surrender Value will be as under: i. Before commencement of risk: 90% of the total amount of premiums (excluding premiums for the first year ) paid. ii. After commencement of risk: 90% of the total amount of premiums (excluding premium for the first year) paid before commencement of risk and 30% of premiums paid on and after the commencement of risk.

Grace Period: A grace period of one calendar month but not less than 30 days will be allowed for payment of premiums.

Revival: If the policy is lapsed it can be revived by paying arrears of premium together with interest within a period of five years, subject to production of satisfactory evidence of continued insurability. The rate of interest applicable will be as fixed by the Corporation from time to time.

Cooling-off period: If you are not satisfied with the Terms and Conditions of the policy you may return the policy to us within 15 days.

Exclusions: Suicide is excluded for Premium Waiver Benefit for first year. No other exclusions.

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Miscellaneous Provisions:

Date of commencement of risk: If age of Life Assured is upto 10 years, risk shall commence either after 2 years from the date commencement of policy or from the policy anniversary coinciding with or immediately following the completion of 5 years of age of Life assured, whichever is later. In other cases, risk shall commence from the policy anniversary coinciding with or next following 12th birthday of the Life Assured.

Date of Vesting: The policy shall automatically vest in the Life Assured on the policy anniversary coinciding with or immediately following the completion of 18 years of age and shall on such vesting be deemed to be a contract between the Corporation and the Life Assured.

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3.5 KOMAL JEEVAN

Features:
Product summary: This is a Children's Money Back Plan that provides financial protection against death during the term of plan with periodic payments on survival at specified durations. This plan can be purchased by any of the parent or grandparent for a child aged 0 to 10 years.

Commencement of risk cover: The risk commences either after 2 years from the date of commencement of policy or from the policy anniversary immediately following the completion of 7 years of age of child, whichever is later.

Premiums: Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary deductions, as opted by you, up to the policy anniversary immediately after the life assured (child) attains 18 years of age or till the earlier death of the life assured. Alternatively, the premium may be paid in one lump sum (Single premium).

Guaranteed Additions: The policy provides for the Guaranteed Additions at the rate of Rs.75 per thousand Sum Assured for each completed year. The Guaranteed Additions are payable at the end of the term of the policy or earlier death of the Life Assured.

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Loyalty Additions: This is a with-profit plan and participates in the profits of the Corporations life insurance business. It gets a share of the profits in the form of loyalty additions which are terminal bonuses payable along with death or maturity benefit. Loyalty addition may be payable depending on the experience of the Corporation.

Benefits:
Survival Benefit: The percentage of sum assured as mentioned below will be paid on survival to the end of specified durations: On the policy anniversary % of Sum Assured

immediately following the Life assured attains the age of 18 years 20 years 22 years 24 years 20% 20% 30% 30%

Death Benefit: In case of death of the life assured before the commencement of risk, the policy shall stand cancelled and premiums paid (excluding the Premium for Premium waiver Benefit) under the policy will be refunded. However, if death occurs after the commencement of risk but before the policy matures, the full Sum Assured plus Guaranteed Additions together with Loyalty Additions, if any, is payable.

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Maturity Benefit: The Guaranteed Additions together with Loyalty Additions, if any, is payable in a lump sum on survival to the end of the policy term.

Premium Waiver Benefit: This is an optional benefit that can be added to your basic plan. An additional premium is required to be paid for this benefit. By payment of this additional premium, the proposer can secure the benefit of cessation of premiums from his/her death to the end of the deferment period. The deferment period for this purpose is to be taken as 18 minus age at entry of child.

Surrender Value: Buying a life insurance contract is a long-term commitment. However, surrender value is available on the plan on earlier termination of the contract.

Guaranteed Surrender Value: The policy may be surrendered after it has been in force for 3 years or more. The Guaranteed Surrender Value before the date of commencement of risk is 90% of the premiums paid excluding the premiums paid during the first year and any extra premium paid. After the date of commencement of risk, the Guaranteed Surrender Value is 90% of the premiums paid before the date of commencement of risk excluding the premiums paid during the first year and any extra premium paid plus 30% of the premiums paid after the date of commencement of risk.

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3.6 JEEVAN CHHAYA

Features:
Product summary: This is an Endowment Assurance plan that provides financial protection against death throughout the term of the plan. Besides payment of Sum Assured immediately on death, one-fourth of Sum Assured is payable at the end of each of last four years of policy term whether the life assured dies or survives the term of the policy.

Premiums: Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions as opted by you throughout the term of the policy or till the earlier death.

Bonuses: This is a with-profits plan and participates in the profits of the Corporations life insurance business. It gets a share of profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. Bonuses for full term on the full Sum assured are paid at the end of the term even if death occurs during policy term. Final (Additional) Bonus may also be payable provided policy has run for certain minimum period.

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Benefits:
Benefits on death/survival: One fourth of the sum assured is payable at the end of each of last four years of the policy term. On death/survival all bonuses declared during the term of policy will also be paid along with the last instalment. These benefits are payable whether the life assured survives the policy term or dies during the term of policy. Further, on death during the policy term, an amount equal to Sum Assured is also payable immediately.

Supplementary/Extra Benefits: These are the optional benefits that can be added to your basic plan for extra protection/option. An additional premium is required to be paid for these benefits.

Surrender Value: Buying a life insurance contract is a long-term commitment. However, surrender values are available on the plan on earlier termination of the contract. Guaranteed Surrender Value: The policy may be surrendered after it has been in force for 3 years or more. The guaranteed surrender value is 30% of the basic premiums paid excluding the first years premium and the fixed benefit already paid. The Corporation reviews the surrender value under its plans from time to time depending on the economic environment, experience and other factors.

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3.7 CHILD FUTURE PLAN

Features:
Introduction: This plan is specially designed to meet the increasing educational, marriage and other needs of growing children. It provides the risk cover on the life of child not only during the policy term but also during the extended term (i.e. 7 years after the expiry of policy term). A number of Survival benefits are payable on surviving by the life assured to the end of the specified durations.

Options: You may choose Sum Assured (S.A.), Maturity Age, Policy Term, Mode of Premium payment and Premium Waiver Benefit.

Payment of Premiums: You may pay the premiums regularly at yearly, half-yearly, quarterly or through Salary deductions over the term of policy. Premiums may be paid either for 6 years or upto 5 years before the policy term.

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Benefits:
A. Survival Benefit: On life assured surviving to the end of the specified durations an amount specified below is payable: 5 years before the date of expiry of policy term 4 years before the date of expiry of policy term 3 years before the date of expiry of policy term 2 years before the date of expiry of policy term 1 years before the date of expiry of policy term 25% of the Sum Assured

10% of the Sum Assured

10% of the Sum Assured

10% of the Sum Assured

10% of the Sum Assured 50% of the Sum Assured along with

On the date of expiry of policy term

vested Simple Reversionary Bonuses and Final (Additional) Bonus, if any.

B. Death Benefit: On death (after the Date of Commencement of Risk) - Sum Assured along with vested Simple Reversionary Bonuses and Final (Additional) Bonus, if any shall be payable. On death during the Extended Term - Sum Assured is payable. On death (before the Date of Commencement of Risk) - All the premiums paid (excluding extra premium and premium for premium waiver benefit, if any,) along with interest of 3% p.a compounding yearly shall be payable.

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Premium Waiver Benefit: The proposer can opt for this benefit if aged between 18 and 55 and is medically fit. It provides waiver of premiums on death of proposer. Further the benefit shall remain in force during the Auto cover period. Any premiums that have fallen due and not paid during the Auto Cover period shall also be waived. This benefit shall not be available in case of suicide by the proposer within one year of policy. Further, revival of the policy shall be subject to medical fitness of the proposer. Eligibility Conditions and Other Restrictions: (a) (b) (c) (d) (e) (f) (g) (h) Minimum Entry Age Maximum Entry Age Minimum Maturity Age Maximum Maturity Age Minimum Sum Assured Maximum Sum Assured Policy term Premium Paying term 0 years (last birthday) 12 years (last birthday) 23 years (last birthday) 27 years (last birthday) Rs. 1,00,000 Rs. 100,00,000 11 to 27 years 6 years and Policy term less 5 years

Surrender Value: You may surrender the policy for cash after at least three full years premiums have been paid. The Guaranteed Surrender Value will be as under: i. Before commencement of risk: 90% of the total amount of premiums (excluding premiums for the first year ) paid. ii. After commencement of risk: 90% of the total amount of premiums (excluding premium for the first year) paid before commencement of risk and 30% of premiums paid on and after the commencement of risk.
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Grace Period: A grace period of one calendar month but not less than 30 days will be allowed for payment of premiums.

Revival: If the policy is lapsed, it can be revived by paying arrears of premium together with interest within a period of five years, subject to production of satisfactory evidence of continued insurability. The rate of interest applicable will be as fixed by the Corporation from time to time.

Cooling-off period: If you are not satisfied with the Terms and Conditions of the policy you may return the policy to us within 15 days.

Exclusions: Suicide is excluded for Premium Waiver Benefit for first year. No other exclusions.

Miscellaneous Provisions: Date of commencement of risk: If age of Life Assured is upto 10 years, risk shall commence either after 2 years from the date commencement of policy or from the policy anniversary coinciding with or immediately following the completion of 5 years of age of Life assured, whichever is later. In other cases, risk shall commence from the policy anniversary coinciding with or next following 12th birthday of the Life Assured.

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CHAPTER 4 INFORMATION COLLECTED FROM AGENTS AND CHILDREN POLICY HOLDERS OF LIC
4.1 Information collected from LIC Agents:
Children Policies out of each 100 policies- After conducting agents survey it was found that only 10-20 children policies were taken by customers. Event of taking Children Policies- Most of the Children Policies were issued at the time of Birthday, at the time of Birth as well as any special occasion, Premium Rang- Rs. 4000/- to Rs. 15000/- yearly. Time taken for settlement of claims- They said that, it was all depends upon different insurance plans, but they try to give compensation to the policy holder as early as possible. More popular Children Policies of LIC

Jeevan Chaya Jeevan Kishor Komal Jeevan

Most common communities who take policies- Most of the agents said that, al communities are equally interested for taking child plan. Response from Rural & Slum areas- agents said that there is no any specific response from those areas. Special schemes for Physically/Mentally retired child-No Male childrens are insured more than female childrens. There is no commission difference between adults & child policies.
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4.2 Information collected from Children Policy Holders:

After conducting policy holders survey, it was found that most of the customers demanded for Jeevan Chaya, Jeevan Kishor, Komal Jeevan, and Child Career Plan. Average age of the child when policy was taken 0 to 5 years. Average term period of policy was Rs. 2500/- to Rs. 7500/-. Most of the customer preferred to pay premium on the yearly basis, but half yearly as well as quarterly was also preferable choices of customers to pay premium. Single working parent was preferred to purchase children policy as compare to both working. Where yearly average income were between Rs. 1-2 lakhs/-, they preferred to purchase Children Policy. Parents were not making difference amount between male & female child. Very really policies are taken for physically handicap, mentally retired or any special disease. There are no any special policies for protect School Bus Accident or Terrorist Attack.

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FINDINGS
Children Insurance: Parents should always attempt to provide for their children's future by selecting a children's plan that will yield funds at the right time. The most important requirement is providing for education . Children's plans are immensely popular. Almost all insurance companies - public and private - offer children's insurance plans. Earlier, only simple moneyback plans were taken in the name of the child. The policy used to provide fixed cash inflows at fixed time intervals. Childrens life insurance plays numerous roles, depending on the type of policy a person opts for. The basic role of child life insurance is to provide financial security to the family in case of the childs untimely death. Untimely death can result in funeral and burial expenses and high medical bills. Apart from this, a childs death could lead to emotional trauma due to which it may not be possible for the earning members of the family to resume work for months. The ability to resume work may also be affected by the requirement of special attention and counseling for other kids in the family. All this can impact your familys finances and childrens life insurance is protection for the family at such times.

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Apart from this basic role, childrens life insurance has the following benefits: A child may be inflicted by some illness that proves to be an obstacle for purchasing a policy later. This situation can be avoided by purchasing life insurance for kids at a very early age. Life insurance rates increase with age. Thus, buying a child life insurance policy helps one get the most affordable rates. Once settled, the premium does not rise with the childs age or with health issues that s/he may develop at a later stage. Child life insurance could prove to be a good investment, in case you opt for one that matures after a specific term. The money from this could help in financing higher education or strengthening the financial base when your child is trying to find his/her place in the world. Childrens life insurance can be purchased when your child is as young as two weeks old. This will ensure the best rates. Overview Most parents do not think about purchasing life insurance for children. But unexpected events can occur in your children's lives. This makes it a good idea to invest in life insurance as protective measure for your children. Though it seems unpleasant to think about, there are compelling reasons for why you should consider purchasing life insurance for your children.

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Significance Buying life insurance for children can be a good investment. Purchasing life insurance at a young age will ensure your children are covered in case they experience serious illness or an accident. For example, if you have a family history of a serious illness that your child develops when older, your child might have a more difficult time obtaining insurance because of the higher costs and more scarce availability of insurance for people with serious medical conditions. Having life insurance can also greatly reduce the financial burden associated with a serious accident or illness. Benefits Purchasing life insurance for your children can serve as an investment in your child's future. Buying a "permanent" life insurance policy can enable your child to use the insurance as collateral while securing a loan in the future. This would benefit your child when he applies for student or other types of personal loans. Function Life insurance can serve as a form of earnings protection for children. Though this is not common, there are situations when a child can be the family member earning the majority of the family income, as in the case for child singers and actors.

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SUGGESTIONS
There are still a lot of people or parents who do not consider the importance of having a health insurance for children. Mostly, when they spend money, they tend to look for immediate benefits. In the case of health insurance plans, you need to pay the premium monthly but it covers medical expenses in case you need it. Most people may not know it but health insurance plans may be beneficial in the long run. Parents need to build a sufficient corpus for their children. They should start planning for their children at an early age. One of the biggest financial commitments for parents is to meet the expenses incurred in bringing up and settling their children. Child insurance plans play an important role in securing a child's future. With a number of children's insurance plans available in the market, it becomes difficult for most parents to evaluate them objectively. The factors to be kept in mind include the timeframe for building a corpus, age at which the funds would be required, approximate amount needed to build the corpus, investment avenues to be considered and the amount available to the child in case of death of parents. For kids to grow up healthy, it is important for parents to provide the best health insurance for children whenever required. Getting a health insurance for children is the best way to protect them in the event of an illness or disease. Health for children is the most important and it should not be neglected.

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CONCLUSION
Insurance is a cover used for protecting oneself from the risk of a financial loss. It is important to understand that risk is a part of any persons life and that it increases as a person increases in age, responsibility and wealth. Insurance is risk coverage against financial losses and should not be taken as an investment instrument. There are mainly two parties involved in this the insurer and the insured. The insurer is the insurance company who will provide the cover to the insured against any financial losses. The insured may be an individual person or a group of people like an employer, members of a society, etc. A policy is the contract between the insurer and the insured, which states the risks covered, the exclusions, if any, and the benefits reimbursed on the happening of an event like death, illness etc. The policy is paid through what is called a premium, which is a set amount that must be paid by the insured on a monthly, semi-annual or annual basis. On the happening of an event like death, disability, fire, etc, for which the insured is covered, the benefit amount stated in the policy contract can be claimed by the insured. Life insurance plays an important role in an individual's financial planning exercise. Insurance can assist individuals in planning for their own life stages as well as provide for their children's future. It also secures a child's future in case of any unfortunate event. Various kinds of child insurance products are available in the market.

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The factors to be kept in mind include the timeframe for building a corpus, age at which the funds would be required, approximate amount needed to build the corpus, investment avenues to be considered and the amount available to the child in case of death of parents. Every insurance plan revolves around the financial consequences of a premature death. Obviously, the consequences are too large to ignore and cannot be totally covered by an individual's personal resources. Basically, life insurance is nothing but a contract where the insured party or the purchaser of insurance pays a premium that protects him against specific losses. When planning your life insurance portfolio, you must consider your family's recurring needs like medical expenses, house rent, provision costs for instance as well as long-term needs that involve reinstating your family's set standard of living and their future such as higher education and marriages. Throughout our living existence, we are faced by numerous risks failing health, financial losses, accidents and even fatalities. Insurance addresses all these uncertainties on financial terms. Change is perhaps, the only static constant within the dynamics of life and risks always move in tandem within a changing environment. Life insurance is more of a hedging mechanism rather than a real investment avenue. It is essentially a mechanism that eliminates risks primarily by transferring the risk from the insured to the insurer. The insurance industry in particular has been subjected to numerous changes in the last few decades since the need for insurance is more evident now than earlier. People's spending patterns are changing and more & more resources are needed for immediate consumption. In

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fact, we recommend that you review your needs and insurance portfolio from time to time, say every 2-3 years. The India insurance companies offer a comprehensive range of insurance plans. The most common types include: term life policies, endowment policies, joint life policies, whole life policies, loan cover term assurance policies, unit-linked insurance plans, group insurance policies, pension plans, and annuities. General insurance plans are also available to cover motor insurance, home insurance, travel insurance and health insurance. Due to the growing demand for insurance, more and more insurance companies are now emerging in the Indian insurance sector. With the opening up of the economy, several international leaders in the insurance sector are trying to venture into the India insurance industry.

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ANNEXURE
Parents Questions
1. Have you taken Children Insurance Policy? 2. Which policy is taken under which Insurance Company? (specify the scheme) 3. What was the age of the child at the time of taking a policy & now what is the age of the child? 4. What is the term (period) of the policy? 5. Whether equal amount are taken for male or female children? 6. Does child has any health problem? a) Any Specific Daises b) Physically Handicap c) Mentally Retired d) Any Other 7. Any policy fora) School Bus Accident b) Terrorist Attack 8. What is the Premium Rate? 9. What type of mode is adopted for paying the premium? 10.Whether both parents are working or single parent? 11.What is the average income of the family?

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Agents Questions
1. Out of each 100 policies how many Children Policies are taken? 2. At which occasions more Children Policies are taken? a) Birthday b) Childrens Day c) At the time of Birth d) Accident e) Terrorist Attack f) Bomb Blast g) Any Other 3. Are there any special schemes for Physically/Mentally Retired childrens? If yes, then what are the discounts provided to them? 4. Are male children insured more than female children? 5. What is the premium range? 6. What is the time required for Settlement of Claim? 7. Is there commission difference in adults & children policy? How Many? 8. Which policies are more popular? 9. Which religion or community is taken Children policies? 10.Are there any responses from rural & slum areas? If yes which special schemes are offered?

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BIBILIOGRAPHY
By Insurance [Principles, Practices, Management & Salesmanship], M. Motihar By Recent Trends in Insurance Sector in India, K. Ravichandran. By Principles of Insurance Management, Neelam C. Gulati. By New deal in Insurance, Prof. M Gangadhara Rao, Prof. K Sivaramakrishna, Dr. (Ms) P Sheela.

WIBLIOGRAPHY
www.whatinsurance.com www.insuremagic.com www.irda.gov.in www.licindia.com www.insurance.com

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