PARTNERSHIP INSURANCE

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.

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)

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.

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.