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Arun Patil

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Some fundamentalsy Toughest industry

y Hardest sale

y Negative perceptions

y Unpleasant experiences

y Noblest profession

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Why Life Insurance ?y The triangle of insurance

y Protecting economic value ofassets

y Time-value & loss-possibilityofasset

y Earning man is an asset that needs protection

y Unparalleled financial instrument

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Genesis & history of insurancey Rooted in Mahabharata

y Dichotomyofknowing & feeling

y Chinese, Babylonian, Greeks, English practicesy Beginning in Londons Lloyd Coffee House

y First English Company (Oriental) in 1818

y First Indian Company (Bbay Mutual) in 1870

y Birth ofLIC in 1956 (170 + 75)

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Purpose & need of insurancey Perils & Risks (events & loss)

y Possibility implies uncertainty

y Not protection ofasset, but compensating lossy Only economic consequences insured

y Typesofrisks Critical, important, unimp., Dynamic& static, Fundamental & particular, Pure & speculative

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How insurance works?y Sharing & spreading ofsimilar risks & costs

y Occurence tobe accidental and random

y Sharing proportional to exposure ofrisk

y Collection in advance & paymenton contingency

y Premiums & claims

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The human assety Human being an income-generating asset

y Income dependent on skills & knowledge

y Earning till retirementor early deathy Insurance of intangibles (practice/voice)

y Human Life Value (HLV) concept discounted valueofan individuals future earnings net ofhis personalexpenses

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Principles of insurancey Insurers promiseofpaymenton happening of

contingency

yA legallybinding contracty Essentials ofcontract

y Utmost good faith (health, habits, personal & familyhistory, nature of job)

y Duty to disclose till risk-commencementon bothparties to contract

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Principle of Insurable Interest Insurance is not a contract ofwagering or betting

(speculative risk)

Proposermust have stake in continuance ofsubjectmatter & could suffer loss

I.I. in ones own life, spouse, children, Employer,Creditor, Partner, Company

Principle of indemnity only loss-compensation, notprofit-making

Risks are related to needs

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Types ofPremiums Prem. - a consideration paid for securing benefits

Depends upon Mortality, Interest & Expenses

R

isk prem

ium

& Mo

rtalityT

ab

les (MMIB) Net premium considers interest tobe earned

Loadings for expenses, bonuses & contingencies

Level premium- uniform spread ofrisk prem.

Office/Tabular prem.= net prem. + loading

Rebates for modes & Sum Assured

Extra prem. for extra benefits or risks

Prem. depends on age (3 types ofcalculations)

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Growth & dev. of L.I. in Indiay StoryofLIC till 2000

y 8 years ofPrivatization

y Innovations & specialities ofprivate players

y Development in products & services

y Present issues & problems

y A peep into the future

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If (atall)you wish to contact me

y

y Mobile : 9820551566

y Email : omarunpatil@gmail.com