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Life Assurance

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					Life Assurance



 Grade 12 Commerce by Mr. G. Mumba
 Munali Boys High School, August 2008
Life Assurance
          This provides cover against
           death, which will certainly
           occur.
          The principle of indemnity
           does not apply to life
           assurance, as it is not possible
           for the Insurance company to
           bring back the dead to life
           when the risk of death strikes.
          Life Assurance therefore
           deals with certainties as
           opposed to Insurance which
           deals with probabilities.
             Life Assurance Types
   The main policies under Life Assurance are:
       Whole Life Policy
       Terms Policy
       Life Endowment Policy
       Annuity Policy
       Funeral Policy (Group Life Policy)
       etc.
          Life Assurance Premiums
   The amount of premium to
    be paid for Life Assurance
    is determined by the
    following factors:
       The age of the proposer
       The current and historical
        health status
       The occupation of the
        proposer
       The gender
       The lifestyle of the proposer
                Whole Life Policy
   Under this policy, the person assures his/her life for a
    certain sum which is paid to his/her dependants only
    when death occurs.
   The assured continues to pay the premium for the rest
    his/her life time, that is, until he or she dies or retires
   No compensation until when one dies
   And when death occurs, the sum assured is paid to
    the dependants or official beneficiaries.
                    Terms Policy
   This policy covers a person for a specific period of
    time and specified sum, e.g. 10 years.
   If the assured does not die within the covered period,
    no compensation is granted
   But if the assured dies within the specified period, the
    compensation goes to the dependants.
   It therefore means that Terms Policy has no value at
    the end of its full period as the assured gets nothing if
    he/she lives up to the end of the policy.
          Life Endowment Policy
   Just like in Terms Policy, the assured is also
    covered for specific period of time under
    endowment policy, e.g. 10 years.
   If the assured dies before the maturity of the
    policy, the compensation goes to the
    dependants
     Life Endowment Policy Cont.
   But if he/she lives up to the end of the policy,
    the sum assured is personally paid to him/her.
   It is therefore means that compensation is
    guaranteed with or without death.
   Life Endowment Policy enables the assured to
    save as well as have life cover.
   An Endowment Policy can be with profit or
    without profit.
Annuity Policy
          This policy provides regular
           payments to the assured
           from a fixed future date
           until the person dies,
           arranging such payments to
           begin from the time one
           retires.
          It is suitable for self-
           employment people who
           have no pension plan or
           scheme.

				
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posted:8/15/2012
language:English
pages:9