What is Insurance?
According to Justice Tindall, "Insurance is a contract in which a sum of money is paid to the assured in consideration of insurer's incurring the risk of paying a large sum upon a given contingency."
Life Insurance policy -
Life Insurance guarantees a specific promised sum of money to a designated beneficiary upon the death of the insured, or to the insured if he survives the term of the policy. Life being the most important asset of an individual, life insurance at the maximum scope. If a child, a spouse, a life partner, or a parent depends on you and your income, you need life insurance.
Amount recoverable under Life Insurance policy -
The following amounts are recoverable under a life insurance policy
1. Maturity of policy -
On maturity of the policy, i.e. Completion of the term for which the insurance was taken in case of endowment policies, the processing of claims by maturity is normally undertaken by Divisional office of Life Insurance Corporation (LIC) about 2 months before the 8date of maturity.
2. Happening of certain event -
On the death of the life insured, if it occurs before the maturity of the policy, provided policy is in force on the date of death, the death claims action begins with an intimation being received in the Insurer's office. The intimation may be received by the nominee, assignee, relatives, the employer, agent or Development Officer of the area.
3. Bonus -
Bonus is payable if declared by the insurance company. If a surplus is shown in the valuation of Corporation, The Life Insurance Corporation(LIC) distributes its profit among its policyholders every year in the form of bonus/profit share.
4. Share in profits -
if it is a participation policy, a share in the profits, declared by the board of directors of the insurance company may be recovered in addition to the sum assured. It is noteworthy that share in the profit does not make the policyholder liable for the acts of the company.
5. Surrender value -
Surrendering a life insurance policy means complete cancellation of the policy. One needs not to pay any premium to the insurance company after surrendering the policy. Earlier surrender value is payable by the insurer only after three consecutive years premiums are paid. If the policy is canceled before the lapse of 3 years, no amount is returned to the insured.
6. Paid-up value -
When the policyholder wants to terminate the policy, he may convert the same into paid-up policy. In this case, the amount of paid-up value is payable to the insured only after the full term (maturity) of the policy.
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