A partnership have a business jointly owned by several parties but which is not itself a corporate entity. The partnership is generally run in fairly personal way by the partners. This can create problems if one partner dies as his widow may not wish to take upon his role or may withdraw his share in the business. On the other hand, the co partner may not have sufficient funds to buy out the widows share. This may result in selling her share to an outsider. The value of share might have grown many fold after the partnership came into existence. The remaining partners may not like to have outside interference and instead of selling share to outsider, the remaining partners would like to buy out the share of the deceased widow. On these principle LIC allow partnership insurance on the lives of partners and as for as possible all the partners must be covered under partnership Insurance.
The following requirements are necessary for Partnership /insurance.
1.Proposal Form as per prescribed form.
2. Copy of Deed of partnership duly attested by the partner authorised to sign insurance proposal.
3. Copies of audited /balance sheet and Profit and Loss account for Last 3 years.
4. Copies of Income tax return statement of the firm for preceding 3 years, duly attested by the authorized partner.
5. The copy of audited Balance sheet containing schedule of partners capital accounts.
6.Letter of authority in favour of partner signing the proposal.
Saturday, August 21, 2010
Friday, August 20, 2010
Key Man Insurance
Key man insurance is an insurance taken by a business firm on life of an employee (Keyman) whose services contribute to the success of the business of the firm. The object of keyman insurance is to indemnity a business firm from the loss of earnings resulting from the death of a valuable employee. Loss of earning may occur because immediate replacement of the keyman may not be possible and it may take a longer time to train another person to perform his functions.
The primary objective of the insurance is to protect the company against premature death of valuable employee, the company also secures some tax advantages. It implies that in the period immediately following his death, there will be a vacuum in the company with the result thatthe company incures financial losses or even at times becomes unable to fulfill the commitments made by it.
Keyman Insurance will not be issued on the following cases.
1. Keyman has a share of 51% capital in the firm.
2.His family has a share of more than 70% capital in the firm.
3.the company is incurring losses consistantly
4. The keyman is illitrate.
The following factors would be taken into account while deciding the quantum of keyman insurance.
1.The qualification of the keyman
2.Experience Vis-a-vis exposure in different capacities.
3.His service in the company and previous record.
4.Whether he is the only keyman in the particular area or otherwise, the following method may be used in deciding the sum assured under Keyman Insurance.
For a large quoted Public Limited company, the maximum sum assured will be lower of the following
1)5 Times average net profit (After making provisions for depreciation and income tax.)
2) Two or three times the gross profit (Net profit + Depreciation + Income Tax)
The primary objective of the insurance is to protect the company against premature death of valuable employee, the company also secures some tax advantages. It implies that in the period immediately following his death, there will be a vacuum in the company with the result thatthe company incures financial losses or even at times becomes unable to fulfill the commitments made by it.
Keyman Insurance will not be issued on the following cases.
1. Keyman has a share of 51% capital in the firm.
2.His family has a share of more than 70% capital in the firm.
3.the company is incurring losses consistantly
4. The keyman is illitrate.
The following factors would be taken into account while deciding the quantum of keyman insurance.
1.The qualification of the keyman
2.Experience Vis-a-vis exposure in different capacities.
3.His service in the company and previous record.
4.Whether he is the only keyman in the particular area or otherwise, the following method may be used in deciding the sum assured under Keyman Insurance.
For a large quoted Public Limited company, the maximum sum assured will be lower of the following
1)5 Times average net profit (After making provisions for depreciation and income tax.)
2) Two or three times the gross profit (Net profit + Depreciation + Income Tax)
Sunday, August 8, 2010
Marriage Endowment Policy - LIC
This plan provides for a sum assured to be kept aside to meet the marriage/Educational expenses of children. Under this plan, the sum assured together with vested bonuses shall be payable at the end of selected term either in a lumpsum or in ten half yearly instalments. The first instalment will be payable on the date of maturity. Premiums are payable for the selected term of the policy or till death of the life assured if it occures during the selected term.
The bonus at Endowment assurance rate will be reckoned on the sum assured and will be payable alongwith the sum assured at the end of the term even after cessation of premiums on death of the Life Assured.
Policy Term 5 to 25 Years
Age at Entry 18 to 60 Years
Accident Benefit equivalent to basic sum assured would be available under this plan by payment of appropriate additional premiums.
The bonus at Endowment assurance rate will be reckoned on the sum assured and will be payable alongwith the sum assured at the end of the term even after cessation of premiums on death of the Life Assured.
Policy Term 5 to 25 Years
Age at Entry 18 to 60 Years
Accident Benefit equivalent to basic sum assured would be available under this plan by payment of appropriate additional premiums.
Saturday, August 7, 2010
LIC - Comparison of Products - Whole Life, Endowment Plans
WHOLE LIFE PLAN
The Premiums are payable throughout the life time of the assured. This is the cheapast form of Policy. If payment of premiums ceases after 3 years premiums are paid, a free paid-up policy for such reduced sum will be secured sum will be secured provided, the reduced sum assured exclusive of any bonus is not less than Rs250/-. Such reduced paid-up Policy will not be entitled to participate in the profits declared thereafter but bonus already declared will remain attached to the policy.
ENDOWMENT ASSURANCE POLICY
This is the most popular form of life assurance, since it is not only makes provision for the family of the life Assured in the event of his early death but provides a lumpsum at any desired age. The amount assured if not paid by reason of his earlier death, becomes payable at the end of the endowment term. The premium paying term is restricted to maximum of 25 years for endowment without project plan, No loan will be granted under this plan on the policies issued on the lives of children, until the policy vests in the life assured.
JEEVAN ANAND
Jeevan Anand Plan is the Combination plan of Whole Life Plan and Endowment .
Benefits
(a) Survival benefits: Sum assured along with vested bonuses payable at the end of the premium paying team.
(b) Death benefit: Sum assured along with vested bonus are payable on death during the premium paying term.
(c) Simple Reversionary Bonus accures during premiumpaying term and is payable at the end of the premium paying term or on earlier death alongwith final dditional bonus.
(d) Accident Benefits : The double Accident Benefit is available during the premium paying term and thereafter upto age 70.
Loan will be granted against the surrender value of the policy after payment of premium for atleast 3 years.
The Premiums are payable throughout the life time of the assured. This is the cheapast form of Policy. If payment of premiums ceases after 3 years premiums are paid, a free paid-up policy for such reduced sum will be secured sum will be secured provided, the reduced sum assured exclusive of any bonus is not less than Rs250/-. Such reduced paid-up Policy will not be entitled to participate in the profits declared thereafter but bonus already declared will remain attached to the policy.
ENDOWMENT ASSURANCE POLICY
This is the most popular form of life assurance, since it is not only makes provision for the family of the life Assured in the event of his early death but provides a lumpsum at any desired age. The amount assured if not paid by reason of his earlier death, becomes payable at the end of the endowment term. The premium paying term is restricted to maximum of 25 years for endowment without project plan, No loan will be granted under this plan on the policies issued on the lives of children, until the policy vests in the life assured.
JEEVAN ANAND
Jeevan Anand Plan is the Combination plan of Whole Life Plan and Endowment .
Benefits
(a) Survival benefits: Sum assured along with vested bonuses payable at the end of the premium paying team.
(b) Death benefit: Sum assured along with vested bonus are payable on death during the premium paying term.
(c) Simple Reversionary Bonus accures during premiumpaying term and is payable at the end of the premium paying term or on earlier death alongwith final dditional bonus.
(d) Accident Benefits : The double Accident Benefit is available during the premium paying term and thereafter upto age 70.
Loan will be granted against the surrender value of the policy after payment of premium for atleast 3 years.
Thursday, September 25, 2008
Unit Linked Insurance Plans of LIC
Market Plus
“Market Plus” is a unit linked pension plan wherein the pension is payable after a specified period. Four types of investment Funds namely Bond, Secured, Balanced and Growth Fund are offered. Though primarily a Pension product, the plan has many attractive features and options which make it an ideal Retirement solution for the future.
On vesting of the policy, the Fund Value will be utilized to provide a pension based on the then prevailing Annuity rates. An option to commute upto one third of the payable benefit in a lump sum is available.
In event of the unfortunate death of the policy holder the Fund Value along with the Riders, if any, will be payable in a lump sum or as a pension.
Profit Plus
Profit Plus is a unit linked Endowment plan where the premium payment term (PPT) is limited to single lump sum, or uniformly over 3, 4 or 5 years. You can choose the level of cover within the limits, which will depend on whether the policy is a Single premium or Limited premium contract, term chosen and on the level of premium you agree to pay.
Four types of investment Funds are offered. Premiums paid after allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV).
We may pay premiums regularly at yearly, half-yearly, quarterly or monthly (ECS) intervals over the premium paying term of 3, 4 or 5 years. The minimum premium will be Rs.10000/-. Alternatively, a Single premium can be paid subject to a minimum of Rs.20,000/-
Fortune Plus
Fortune Plus is a unit linked assurance plan where premium payment term (PPT) is 5 years and the premium payable in the first year will be 50% of total premium payable under the policy. The level of cover will depend on the level of premium you agree to pay.Four types of investment funds are offered. Premiums paid after allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of the units may increase or decrease, depending on the Net Asset Value (NAV). The plan therefore serves the purpose of insurance-cum-investment.
We may pay premiums regularly at yearly, half-yearly, quarterly or monthly (ECS) intervals for 5 years. The minimum First year premium will be Rs.20,000/- and you may pay any amount exceeding it. From second year onwards each year’s premium will be 25% of the first year premium.
Money Plus-I
"Money Plus I" is a unit linked Endowment plan with regular premium paying term which offers investment cum insurance during the term of the policy. You can choose the level of cover within the limits, which will depend on the level of premium you agree to pay.
Four types of investment Funds are offered. Premiums paid after allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV).
1. Payment of Premiums: You may pay premiums regularly at yearly, half-yearly, quarterly or monthly (ECS) intervals over the term of the policy. The minimum annual premium will be Rs.5,000/- increasing thereafter in multiples of Rs.1,000/-. The minimum monthly (ECS) premium will be Rs. 1000/- increasing thereafter in multiples of Rs. 250/-.
“Market Plus” is a unit linked pension plan wherein the pension is payable after a specified period. Four types of investment Funds namely Bond, Secured, Balanced and Growth Fund are offered. Though primarily a Pension product, the plan has many attractive features and options which make it an ideal Retirement solution for the future.
On vesting of the policy, the Fund Value will be utilized to provide a pension based on the then prevailing Annuity rates. An option to commute upto one third of the payable benefit in a lump sum is available.
In event of the unfortunate death of the policy holder the Fund Value along with the Riders, if any, will be payable in a lump sum or as a pension.
Profit Plus
Profit Plus is a unit linked Endowment plan where the premium payment term (PPT) is limited to single lump sum, or uniformly over 3, 4 or 5 years. You can choose the level of cover within the limits, which will depend on whether the policy is a Single premium or Limited premium contract, term chosen and on the level of premium you agree to pay.
Four types of investment Funds are offered. Premiums paid after allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV).
We may pay premiums regularly at yearly, half-yearly, quarterly or monthly (ECS) intervals over the premium paying term of 3, 4 or 5 years. The minimum premium will be Rs.10000/-. Alternatively, a Single premium can be paid subject to a minimum of Rs.20,000/-
Fortune Plus
Fortune Plus is a unit linked assurance plan where premium payment term (PPT) is 5 years and the premium payable in the first year will be 50% of total premium payable under the policy. The level of cover will depend on the level of premium you agree to pay.Four types of investment funds are offered. Premiums paid after allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of the units may increase or decrease, depending on the Net Asset Value (NAV). The plan therefore serves the purpose of insurance-cum-investment.
We may pay premiums regularly at yearly, half-yearly, quarterly or monthly (ECS) intervals for 5 years. The minimum First year premium will be Rs.20,000/- and you may pay any amount exceeding it. From second year onwards each year’s premium will be 25% of the first year premium.
Money Plus-I
"Money Plus I" is a unit linked Endowment plan with regular premium paying term which offers investment cum insurance during the term of the policy. You can choose the level of cover within the limits, which will depend on the level of premium you agree to pay.
Four types of investment Funds are offered. Premiums paid after allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV).
1. Payment of Premiums: You may pay premiums regularly at yearly, half-yearly, quarterly or monthly (ECS) intervals over the term of the policy. The minimum annual premium will be Rs.5,000/- increasing thereafter in multiples of Rs.1,000/-. The minimum monthly (ECS) premium will be Rs. 1000/- increasing thereafter in multiples of Rs. 250/-.
Thursday, April 3, 2008
Life Insurance and welfare of the nation
Life Insurance and welfare of the nation always go together
Awareness about Life Insurance
The first life policy was a temporary life insurance cover way back in 1583AD. In this policy, the sum assured is payable only on the death of the person insured during the policy period. The purpose behind this is if any untoward incident occurred for the person insured, his family should not be economically affected.
Later, Amicable society came into being in the 18th century. Mortality tables were prepared to calculate premiums for different plans and different age groups. Life insurance started acquiring a scientific character. Equitable society dawned in 1762
Life Insurance in India
The first Life insurance company was started in 1870 by Bombay mutual assurance society. Then Oriental, Bharat and Empire of India were started. During this period, (ie. Later part of 19th century) swedhishi movement got intensified. It gave impetus to the formation of more companies. Then Hindustan co-operative, United India, Bombay Life, National Etc. came into being. Freedom movement was in full swing. New India, Jupitar, Lakshmi followed.
Life Insurance companies act 1912 was the first legislation for regulating insurance in India and to exercise control over the functioning of life insurance companies. The insurance act 1938 was the first comprehensive legislation governing not only life, but non life insurance business also. The post of controller of insurance was created to govern the life and non life insurance business.
Life insurance companies and PF societies numbering about 20 were in existence in 1950. All these companies were owned by private parties. There was no guarantee. Trusteeship was lacking. They were not bothered about the customer’s interest. There emerged many malpractices. The promoters of the company is diverted the funds for their personal and family interest with least concern for customers. Hence, such of these companies could not survive for long. The result was some companies, went into liquidation.
The Life insurance business was popular only in urban centers. It was felt that life insurance, the business of long term security deserved to be organized in a better manner. The then prim minister pundit Jawaharlal Nehru Decided to Nationalize Life Insurance. The business of nearly 250 private and foreign insurance companies was taken over by LIC of India, through enactment of Life Insurance Act 1956. On this memorable occasion the then Finance Minister Shri.C.D.Deshmuck spoke thus “The misuse of Power, Position, Privilege that we have reason to believe occurs under existing conditions, is one of the most compelling reason, that have influence us in deciding to Nationalize Life Insurance” . In his memorable words and assertion “The nationalization of Life Insurance will be another mile ston on the road the country has chosen in order to reach the goal of socialist pattern of society. In the implementation of the five year plan, It is bound to give material assistance into the lives of millions in rural areas, It will introduce a new sense of awareness of building for the future, of calm confidence, which insurance alone cane give. It is a measure conceived in a genuine spirit of service to the people. It will be for the people to respond, confound the doubters and make it a resounding success.
The persons who have insured their lives with LIC (the only insurer ) are not only providing economic securities for their families, but also contributing immensely to the growth and development of country in all spears of activity.
Awareness about Life Insurance
The first life policy was a temporary life insurance cover way back in 1583AD. In this policy, the sum assured is payable only on the death of the person insured during the policy period. The purpose behind this is if any untoward incident occurred for the person insured, his family should not be economically affected.
Later, Amicable society came into being in the 18th century. Mortality tables were prepared to calculate premiums for different plans and different age groups. Life insurance started acquiring a scientific character. Equitable society dawned in 1762
Life Insurance in India
The first Life insurance company was started in 1870 by Bombay mutual assurance society. Then Oriental, Bharat and Empire of India were started. During this period, (ie. Later part of 19th century) swedhishi movement got intensified. It gave impetus to the formation of more companies. Then Hindustan co-operative, United India, Bombay Life, National Etc. came into being. Freedom movement was in full swing. New India, Jupitar, Lakshmi followed.
Life Insurance companies act 1912 was the first legislation for regulating insurance in India and to exercise control over the functioning of life insurance companies. The insurance act 1938 was the first comprehensive legislation governing not only life, but non life insurance business also. The post of controller of insurance was created to govern the life and non life insurance business.
Life insurance companies and PF societies numbering about 20 were in existence in 1950. All these companies were owned by private parties. There was no guarantee. Trusteeship was lacking. They were not bothered about the customer’s interest. There emerged many malpractices. The promoters of the company is diverted the funds for their personal and family interest with least concern for customers. Hence, such of these companies could not survive for long. The result was some companies, went into liquidation.
The Life insurance business was popular only in urban centers. It was felt that life insurance, the business of long term security deserved to be organized in a better manner. The then prim minister pundit Jawaharlal Nehru Decided to Nationalize Life Insurance. The business of nearly 250 private and foreign insurance companies was taken over by LIC of India, through enactment of Life Insurance Act 1956. On this memorable occasion the then Finance Minister Shri.C.D.Deshmuck spoke thus “The misuse of Power, Position, Privilege that we have reason to believe occurs under existing conditions, is one of the most compelling reason, that have influence us in deciding to Nationalize Life Insurance” . In his memorable words and assertion “The nationalization of Life Insurance will be another mile ston on the road the country has chosen in order to reach the goal of socialist pattern of society. In the implementation of the five year plan, It is bound to give material assistance into the lives of millions in rural areas, It will introduce a new sense of awareness of building for the future, of calm confidence, which insurance alone cane give. It is a measure conceived in a genuine spirit of service to the people. It will be for the people to respond, confound the doubters and make it a resounding success.
The persons who have insured their lives with LIC (the only insurer ) are not only providing economic securities for their families, but also contributing immensely to the growth and development of country in all spears of activity.
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