INSURANCE

MANAGEMENT
TYPES OF LIFE INSURANCE POLICIES – TERM LIFE
INSURANCE – WHOLE LIFE INSURANCE – ENDOWMENT
LIFE INSURANCE – UNIT LINKED POLICIES
Unit-1 Life Insurance
Types of Life Insurance Policies – Term Life Insurance – Whole Life insurance – Endowment Life
Insurance – Unit Linked Policies
With or without Profit Policies
Customer Evaluation – Policy Evaluation – Cost and Benefit –
Group and Pension Insurance Policies – Special features of Group Insurance / Superannuation
Schemes – Group Gratuity Schemes – Superannuation schemes.
Computation of Premiums and Settlement of claims: Premium defined – Premium Calculation
Including Rebates – Mode of Rebates – Large sum assured Rebates – Premium Loading – Rider
Premiums – Computation of Benefits – Surrender value – Paid up value – Settlement of claims:
Intimation procedure, Documents and Settlement procedures.
Types of Life Insurance
Plans
Different Types of Life Insurance Policies in India

Term Plan – pure risk cover

Unit linked insurance plan (ULIP) – Insurance + Investment opportunity
Endowment Plan – Insurance + Savings
Money Back – Periodic returns with insurance cover
Whole Life Insurance – Life coverage to the life assured for whole life/ Different Types of Life
Insurance Policies in India
Child’s Plan – For fulfilling your child’s life goals like education, marriage, etc.
Retirement Plan - Plan your retirement and retire gracefully/Different Types of Life Insurance
Policies in India
Term Life Insurance 
Term life insurance is a type of life insurance that provides a death benefit to the beneficiary
only if the insured dies during a specified period. If the insured survives until the end of the
period, or term, the coverage ceases without value and a payout or death claim cannot be
made. Term life insurance is income replacement that remains active for a specified number of
years. Term life insurance is the most affordable type of life insurance. It can further be classified
into:
Level Term Life Insurance: where the death benefit remains the same throughout the policy
term and the renewal premium is constant.
Decreasing Term Life Insurance: where the death benefit under the plan decreases with time
and the renewal premium is constant. For example: Mortgage redemption policies, credit life
insurance.
Increasing Term Life Insurance: where the coverage and premium increase.
Term Life Insurance - Continued
Term plans are the most basic form of life insurance. They provide life cover with no savings /
profits component. They are the most affordable form of life insurance as premiums are cheaper
compared to other life insurance plans.
Online term insurance plans provide pure risk cover, which explains the lower premiums. A fixed
sum of money - the sum assured – is paid to the beneficiaries if the policyholder expires over
the policy term. If the policyholder survives, there is no pay out.
Whole Life Insurance 
Whole life insurance is a type of life insurance that provides you coverage throughout your
lifetime provided the policy is in force. Whole life insurance policies also contain a cash value
component that increases over time. You can withdraw your cash value or take out a loan
against it as per your convenience. In addition, in case of your unfortunate demise before you
pay back the loan, the death benefit paid to your beneficiaries will be reduced.

A whole life insurance policy covers a policyholder over his life. The main feature of a whole life
policy is that the validity of the policy is not defined so the individual enjoys the life cover
throughout his life. The policyholder pays regular premiums until his death, upon which the
corpus is paid out to the family. The policy expires only in case of an eventuality as there is no
pre-defined policy tenure.
Endowment Policy 
An endowment policy is defined as a type of life insurance that is payable to the insured if he/she
is still living on the policy's maturity date, or to a beneficiary otherwise. An endowment policy
provides you with a dual combination of protection and savings. In an endowment policy, if the
insured dies during the term of the policy, the nominee receives the sum assured plus the bonus
or participating profit or guaranteed additions, if any. The bonus or profit is paid for the number
of years that the insured survives in the policy term.

Endowment plans differ from term plans in one critical aspect i.e. maturity benefit. Unlike term
plans which pay out the sum assured, along with profits, only in case of an eventuality over the
policy term, endowment plans pay out the sum assured under both scenarios – death and
survival. However, endowment plans charge higher fees / expenses – reflected in premiums – for
paying out sum assured, along with profits, in either scenario – death or maturity. The profits are
an outcome of premiums being invested in asset markets – equities and debt.
 Money Back Policy 
Money back policy gives you money during the policy tenure. A money back policy gives you a
percentage of the sum assured at regular intervals during your policy term. If you live beyond the term
of the policy then you will receive the remaining portion of the corpus and the accrued bonus also at
the end of the policy term.
But in case of an unfortunate event before the full term of the policy is over; the beneficiaries are
entitled to receive the entire sum assured regardless of the number of instalments paid out. Money
back policies are the most expensive insurance options offered by insurance companies as they offer
returns to the insured during the policy tenure.
Money Back policy gives way for a person to plan the course of his life with a sum that is expected in
regular intervals. Plans such as children’s education, children’s marriage can be executed in a better way
with the help of this policy.
A money back policy is a variant of the endowment plan. It gives periodic payments over the policy
term. To that end, a portion of the sum assured is paid out at regular intervals. If the policy holder
survives the term, he gets the balance sum assured. In case of death over the policy term, the
beneficiary gets the full sum assured.
Retirement Plans 
A savings and investment plan that provides you with income during retirement is called
Retirement Plan. Retirement plans are offered by life insurance companies in India and help you
to build a retirement corpus. On maturity, this corpus is invested for generating a regular income
stream which is referred to as pension or annuity. Retirement plans are further classified into.
'With cover' and 'without cover' plans: 'With cover' pension plans offer an assured life cover in
case of an eventuality and in 'Without cover' pension plan, the corpus built till is given out to the
nominees in case of an eventuality. There is no life cover in without cover plans.
Immediate Annuity Plans: In case of immediate annuity plans, the pension commences within
one year of having paid the premium.
Deferred Annuity Plans: In case of deferred annuity, the pension does not commence
immediately; it is ‘deferred‘up to a time, which is decided upon by the policyholder.
 Unit Linked Insurance Plans – ULIPS
Unit linked insurance plans are a type of life insurance plan that provide you with a dual advantage of
protection and flexibility in investment. A unit-linked insurance plan (ULIP) is a type of life insurance where
the cash value of a policy varies according to the current net asset value of the underlying investment
assets. The premium paid is used to purchase units in investment assets chosen by the policyholder.
Types of Unit Linked Insurance Plans (according to investment):
Aggressive ULIP‘s which invest 80-100% in equity.
Balanced ULIP‘s which invest 40-60% in equity.
Conservative ULIP‘s which invest up to 20% in equity.
Types of Unit Linked Insurance Plans (according to death benefit) 
Type I ULIP: It gives the higher of the sum assured or fund value as death benefit
Type II ULIP: This plan pays the policy holder both benefits i.e. sum assured plus fund value as death benefit.
ULIPS - Continued
ULIPs are a variant of the traditional endowment plan.They pay out the sum assured (or the
investment portfolio if its higher) on death/maturity.
ULIPs differ from traditional endowment plans in certain areas. As the name suggests,
performance of ULIP is linked to markets. Individuals can choose the allocation for investments
in stock/debt markets. The value of the investment portfolio is captured by the NAV (net asset
value). To that end, there are many similarities between ULIPs and mutual funds. ULIPs differ in
one area, they are a combination of investment and insurance, while mutual funds are a pure
investment avenue
Child Insurance Policy 
A child insurance policy is a saving cum investment plan that is designed to meet your child‘s
future financial needs. A child insurance policy allows your kids to live their dreams. Child
insurance policy gives you the advantage to start investing in the children‘s plan right from the
time the child is born and provisions to withdraw the savings once the child reaches adulthood.
Some child insurance policies do allow intermediate withdrawals at certain intervals.
Life insurance is not just to fulfil the daily expenses of the family in the absence of breadwinner.
It should be capable enough to bail out the family during large financial exigencies. So, one
should always choose one or two best types of life insurance which can support his/her family in
different stages of life.
 Types of Life Insurance - Snapshot
There are certain basic forms of life insurance. The different types of life insurance policies
include:
SL No
Type of Insurance Features
Policy

1
Term Life Insurance Term insurance is a life insurance product offered by an insurance
company which offers financial coverage to the policy holder for a
specific time period.

2
Whole Life Policy The policyholder pays regular premiums until his death, upon which
the corpus is paid out to the family.
Types of Life Insurance – Snapshot - Continued
SL No
Type of Insurance Features
Policy
3
Endowment Plans Endowment plans pay out the sum assured under both scenarios - death and
survival
4
Unit Linked ULIP is a life insurance product, which provides risk cover for the policy holder
Insurance Plans along with investment options to invest in any number of qualified
investments.

5
Money Back Policy Money back plan is a life insurance product as well as an investment plan
which provides life insurance cover against death of the policy holder along
with periodic returns as a percentage of sum assured.
Life Insurance Plans & Policies Easy Chart.pdf
LINKED INSUIRANCE PLANS/POLICIES
(UNIT LINKED INSURANCE POLICIES)
 UNIT LINKED INSURANCE
PLANS
• A Unit Linked Insurance Plan (ULIP) is a product offered by
insurance companies that, unlike a pure insurance policy, gives
investors both insurance and investment under a single integrated
plan.
• ULIPS were regulated by IRDAI and not by SEBI
• The Insurance companies offer the following types of funds in In
ULIP Schemes
Conservative Fund : Invested in Debt Securities like Government
Securities (G-Secs), Corporate Bonds, Fixed Deposits etc.,
Balance Fund : Invested in mix of Debt and Equity
Aggressive Fund : Invested in Equities and equity related instruments
i.e., Stock Market
Following 7 benefits of ULIPs make them fall under investment
options:
• Transparent structure, features, and charges

• Flexibility to switch between funds

• In cover option

• Different premium paying frequencies

• Various fund options to suit both risk takers and averters

• Rider options for additional coverage

• Tax benefit u/s 80C, 80D and 10 (10D)

• Lock-in Period for 5 Years (Including Top-Up Premium)
• Investment Risk is borne by the Policyholder
• All limited premium unit linked insurance other than single
premium products , shall have premium paying term of at least
5 Years.
• A linked product must have a guaranteed sum assured payable on
death and may have a guaranteed maturity value.
• A top-up premium is an amount of premium that is paid by the
policyholders at irregular intervals besides basic regular premium
payments specified in the contract and is treated as single
premium
• Cap on Charges were fixed on United linked contracts with a tenor of
10 Years or less and for those with tenor above 10 Years
• Insurers must provide Benefit Illustrations giving two scenarios of
interest – at 6% and at 10%
• The prospect is required to sign on the illustration also while signing
the proposal
Article IRDAI New Rules on ULIP

IRDAI new rules on ULIP, Non-Linked insurance products_ Check what has changed - The Financial Express.pdf
The minimum mortality cover should be as follows:
Minimum Sum assured for age at entry of below 45 years
Single Premium (SP) contracts: 125 percent of single premium.
Regular Premium (RP) including limited premium paying (LPP)
contracts: 10 times the annualized premiums or (0.5 X T X
annualized premium) whichever is higher. At no time the death
benefit shall be less than 105 percent of the total premiums
(including top-ups) paid.
(In case of whole life contracts, term (T) shall be taken as 70 minus age at
Minimum Sum assured for age at entry of 45
years and above
Single Premium (SP) contracts: 110 percent of
single premium
Regular Premium (RP) including limited
premium paying (LPP) contracts: 7 times the
annualized premiums or (0.25 X T X annualized
premium) whichever is higher. At no time the
death benefit shall be less than 105 percent of
the total premiums (including top-ups) paid.
The minimum health cover per annum should be as follows:

Minimum annual health cover for age Minimum annual health cover for age at entry of 45
at entry of below 45 years years and above

Regular Premium (RP) contracts: 5 times the Regular Premium (RP) contracts: 5times the
annualized premiums or Rs. 100,000 per annualized premiums or Rs. 75,000 per annum
annum whichever is higher, whichever is higher.

At no time the annual health cover shall be At no time the annual health cover shall be less than
less than 105 percent of the total premiums 105 percent of the total premiums paid
paid.
Cap on Discontinuance Charge: IRDA has introduced a cap on surrender charge, termed as policy
discontinuance charge, basis the year of discontinuance and annual premium. This allows life insurers to
charge only a small penalty on early surrender of policy. The cap on discontinuance charge illustrated below:

Annualized Premiums Paid Discontinuance/Lapsation/ Surrender charge (in %)

5 4
6 3.75
7 3.50
8 3.30

9 3.15
10 3.00

11 and 12 2.75
13 and 14 2.50
15 and thereafter 2.25
• Life insurance companies has to inform their ULIP (unit linked insurance
plan) holders of the reduction in yield every month.

• The reduction in yield means the difference between gross and net yields and
is expressed in percentage. The net yield is determined after deducting all
prescribed charges from the gross yield. Reduction in yield implies lowering of
growth within fund due to various charges.

• Insurers must also issue annual certificates detailing the contributions, charges
and taxes deducted from the fund value, and the final payments made,
according to IRDAI’s (Insurance Regulatory and Development Authority of India)
new guidelines on ULIPs.

• IRDA I has capped the reduction in yield at 3% for less than or equal
10-year tenure and 2.25% for more than 10 years.

• In case the limit is not adhered to, insurers will have to add more units to
the policyholder’s account and maintain the fund value at the prescribed
limit.
 Comparison between ULIPs, Insurance plan(Non Term) and Mutual Funds
ULIPs
A ULIP is an insurance cum investment plan
and returns solely depends on the market
performance.
The money is invested in debt, equity and
hybrid funds which can be chosen as per risk
capacity.
One can switch between funds
You can withdraw the money but only after
the lock in period (currently 5 years).
ULIps offer tax benefits under section 80C
Unit Linked Plans (ULIP) allows you to switch
your
investment between the funds linked to the plan.
Charges in ULIP include mortality charges,
premium allocation charge, fund
management charge and administration
charges
Traditional Insurance Plans(Non term plans) Mutual Funds
Traditional plan(ex Endowment, Moneyback) is an A mutual fund is a pure investment product that
insurance cum investment plan that promises
gives market linked returns. There’s no risk
cover. both risk cover and returns to the investor.
The money is invested in equities, debts and
The money is invested only in debt instruments. other money market instruments depending on
the fund.
Traditional Plan locks in your funds. You
No lock-in period. Exiting from the funds is easy.
can’t withdraw the money before maturity.
Insurance plan offer tax benefits under Only investments in ELSS funds are eligible
section 80C for section 80C benefits
No switching option is available. If you are not
No switching option satisfied with the performance of the fund you
can exit completely from the same by paying exit
charges, if applicable
Charges include commission paid to the insurance Mutual fund charges include an entry load, the
agent, administration charges towards your policy, annual fund management charge and an exit
load, mortality charges, etc. if applicable.
What is (Net Asset Value) NAV?

To understand NAV first you need to understand how a Unit Fund is created. The money from all the
investors is pooled together to form one large corpus. This money is later invested in the markets. To
help divide the returns on investment, the fund manager divides the corpus amount into units with a
certain face value. Each investor then has a share of units in the fund depending on how much
money he pooled. Hence to start with, the value of each unit is considered the NAV i.e. Net Asset
Value. Once investments are made in the market, the total value of the fund can increase or decrease
on a daily basis and hence accordingly the NAV also increases or decreases. The formula used to
calculate is NAV* = "(Market Value of Investments held by the fund + Value of Any Current Assets) -
(Value of Current Liabilities & Provisions) / Number of units existing at valuation date (before creation
/ redemption of any units)“

*NAV Calculation Formula as per IRDAi

NAV = Total Value of Fund
Total Number of Outstanding Units
 Example of NAV calculation
In reality there will be thousands of investors for a particular fund.
For better understanding let's take a simple example with Two investors Mr X and Mr Y.

Mr X contributes Rs 40,000 and Mr Y contributes Rs 30,000.

Now there will be deductions for various costs like fund management fee, mortality charges, etc. Let's
assume that after the charges are deducted Mr X has Rs 30,000 left and Mr Y has 20,000 left.
Hence the net amount available to invest is Rs 30,000 + Rs 20, 000 = Rs 50,000. The fund manager
wants to
create units with a face value of Rs. 10 each.
Hence Mr X has 30000/10 = 3000 units and Mr Y has 20000/10 = 2000 units.
Total number of units in the fund is 5000. NAV = Net Value/Number of units => Rs 50000/5000 = Rs 10 Let's
consider that after investing there is a profit and net value of the fund increases to Rs 58,000.
Now there is a new NAV for the fund. NAV = Rs 58000/5000= Rs 11.60 Hence the investors have a profit of Rs
1.60 per unit invested.
If after a few years, the value of the net value of the fund increases to Rs 1, 00,000 then NAV would change to
Rs 20.

Conclusion The value of NAV is dependent on the value of the fund. As the value of fund changes according to
market conditions, the NAV value changes. Hence at the end of every working day, the fund managers re- calculate
the NAV and post the updated value on their website. Hence you can conveniently track the Net Asset Value of your
fund.
Loan on ULIPS
• LIC currently provides loans against its traditional policies at
9%, to be paid on a half-yearly basis. In its circular issued in June
this year, where sweeping changes were introduced in the ULIP
charge structure, the insurance regulator had specified the norms
under which such loans could be disbursed.
The maximum loan amount was capped at 40% of the net asset
value in ULIPs where equity accounted for over 60% of the
total portfolio
While in case of policies where debt instruments made up
more than 60%, the ceiling stood at 50%.
Settlement Option

Definition: Under a settlement option, the maturity amount entitled to a life insurance
policyholder is paid in structured periodic installments (up to a certain stipulated period
of time post maturity) instead of a 'lump-sum' payout. Such a payout needs to be
intimated to the insurer in advance by the insured. The primary objective of settlement
option is to generate regular streams of income for the insured.

Description: Under settlement option, the insured receives a regular flow of income
from the insurer post the maturity of the policy. An annuity or a pension is type of
settlement option where the insured gets regular stream of income after the
completion of the maturity period when the insured reaches the vesting age.
Under ULIPs, final settlement of the maturity claims exactly on the date of maturity,
at times, may be against the interests of the policyholders, especially when the
capital markets are under a bearish grip.
Enabling the policyholders to participate in the market recovery will be a boon to
the policyholders, who have accumulated their savings over a period of years.
The guidelines prescribe a period of 5 years from the date of maturity. The
Policyholders need to take a prudent and informed decision.
Settlement option is not available for pension and annuity plans.
• Unit-Linked Insurance plan (ULIP) offers dual benefits of insurance and
investment. Unlike traditional insurance products, ULIPs are subject to
various risk factors, where the return is directly proportionate to
market conditions. ULIP offered by various insurance companies have
varying charge structures. Before investing, understanding the
intricacies of charges that you will have to pay over the entire tenure
will help you buy the most suitable ULIP.
• Insurance companies have often found themselves at the receiving end
for imposing stiff fees or costs since these charges shrink the investible
portion of the premium paid. This battle raged prominently in the case
of unit linked insurance plans, or ULIPs, for years. More importantly,
these charges are often not plainly communicated to the policy buyers.
We help you understand the key charges that tag along with ULIPs.
 The Major ULIP charges:-
• Premium Allocation Charges in ULIP:- It is a percentage of the first year premium charged by the insurer
before allocating the policy. These are the initial expenses incurred by the insurance company at the
time of policy issuance. It includes fees such as cost of underwriting, medical expenses, agent’s
commission, etc. After deducting these charges, the remaining amount is invested in the chosen fund.
Say, your premium allocation charge is 10 per cent and your total premium is Rs 50,000. Then Rs 5,000 will
be deducted by the insurer as premium allocation charge and Rs 45,000 will be invested.
• Policy Administration Charges in ULIP:- Every month, a fee is charged by the insurer for administration
of Insurance policy. These charges are deducted by cancelling the units proportionately from each
of the funds selected. This will be either same throughout the tenure or varies at a predefined
rate.
• Fund Management Charges in ULIP:- These charges are levied for managing your funds. This is charged
by the insurer as a percentage of the fund’s value and is reduced before computing the net asset
value of the fund. According to IRDAI regulations, it should not be more than 1.35%.
• Surrender or Discontinuance Charges in ULIP:- These are levied when the insurer surrenders ULIPs
prematurely. As per IRDAI’s regulations, an insurer shall recover only the incurred acquisition cost in the
event of discontinuance of the policy. They are charged as a percentage of the fund value and premium.
The surrender charges in ULIP for the first four years will range from Rs 1000- Rs 3,000, depending upon
the premium paid by the insured. After fifth year, no surrender charges are levied.
• Partial Withdrawal Charges in ULIP:- From third year onwards, investors are allowed to partially
withdraw from ULIP, subject to pre-specified conditions. However, such withdrawals attract penalty
charges.
• Mortality Charges in ULIP:- These are imposed by the insurer for providing death cover to the insured.
It is calculated by the insurer after factoring in age, health risk and mortality table used by the insurer.

• Switching Charges in ULIP:- An investor is allowed a fixed number of free switches between different fund
options every year. Subsequently to this, each switching would attract charges, which could go up to Rs 100-500
per switch, subject to the insurer’s charge structure.

• Premium Redirection Charges in ULIP:- Insurers levy premium redirection charges if you redirect your
future premiums to another less risky fund options, without changing the existing funds structure.

• Guarantee Charges in ULIP:- Insurer levies guarantee charges on ULIPs of the high-NAV guarantee variety. These
are paid by the insured for getting a guaranteed return. For example, if a ULIP promises 120% after 10 years,
you need to pay guarantee charges for the same.

• Rider Charges in ULIP:- These are levied on additional benefits bought over the base plan. For example, you need
to
pay extra charges if you opt for a critical illness rider.

• Miscellaneous Charges in ULIP:- It is relatively a smaller element in the charge structure. You need to shell out
miscellaneous charges, for example, if you decide to change the premium payment mode from yearly to
quarterly.
Illustrations – Product
Understanding (ULIP/SPECIAL
ENDOWMENT/MONEYBACK
)
 Illustration : Unit Linked Insurance
Plans
7)Mr J has taken a ULIP policy of an SA 5 Lakhs. Initial Premium allocation rate is 8%. Term of the policy 25 Years. Premium
amount Rs 100000
(i) Calculate Premium Allocation Charges (PAC)
o 100000* 8% = 8000 ( Premium * Allocation Rate )
(ii) Calculate Premium Allocated
100000 -8000 = 92000 Premium – Allocation Charges (derived from PAC given)
Additional Info
This 92000 is invested in fund opted by the policyholder after that
Policy Admin Charges (absorbed every month)
Mortality Charges (absorbed every month on sum at risk)
Fund Management Charge (Based on the choice of Fund, absorbed at the end of the year)
Switching Charge/ Redirection Charge ( In case done/ opted by the customer in the policy year)
Illustration : Special Plans (Double
Endowment)
8) Mr R Buys a double endowment assurance (@ Maturity) policy for a sum assured of Rs 10
Lakhs with a single premium 1 Lakh for 15 Years. Mr R Dies at any time during the period of
contract only the sum assured is payable ?
(i) What would be payable to nominee ?
o Rs 10 Lakhs Plus Vested Bonus if Any
(ii) if Mr R survives during the period of contract . Calculate the Maturity amount Mr R
entitled to receive ?
oRs 20 Lakhs (Because it says double the sum assured at the time of maturity) Plus Vested
Bonus if Any
Illustration : Money Back Plans
10) Mr T takes a money back policy for 20 years for SA of 1 Lakh. Survival benefit being paid every 5 years
as 15% of SA for 5th, 10th and 15th Year and Balance amount of survival payable on maturity with an
bonus of Rs 55 Per Thousand. Calculate the Survival amount and maturity amount
Survival Amount
o5th Year Survival Benefit @ 15% = 15000
o10th Year Survival Benefit @ 15% = 15000
o15th Year Survival Benefit @ 15% = 15000
Maturity Amount
o20th Year Maturity Benefit @ 55% (Being the balance percentage of SA) = 55000 Plus Vested Bonus
o58*100000/1000 *20 = 116000 Bonus* Sum Assured/1000 * n (n being the term of the Policy)
oTherefore 55000+116000 = 171000 payable at maturity
Illustration : Unit Linked Insurance
Plans
16) Mr Rathod has taken a ULIP policy of an Sum Assured of 5 Lakhs. Term of the policy 25
Years. Premium amount Rs 1,50,000. Initial Premium allocation rate is 10%, 5% for 2nd & 3rd
Year each, 2% for 4th and 5th Year each and NIL from subsequent years
(i) Calculate Premium Allocation Charges for first 6 years
(ii) Calculate Premium Allocated for first 6 years
 
oFirst Year 15,000, 2nd and 3rd Year 7,500 Each , 4th and 5th Year 3,000 Each , 6th Year zero
oFirst Year 1,35,000, 2nd and 3rd Year 1,42,500 Each , 4th and 5th Year 1,47,000 Each , 6th Year
1,50,000
Illustration : Unit Linked Insurance
Plans
19.Mr Jayant has taken a ULIP policy of a Sum Assured 5 Lakhs. Term of the policy 25 Years.
Premium amount Rs 2,00,000 . Initial Premium allocation rate is 10%, 5% for 2nd and 3 rd year
each, 2% for 4th and 5th Year each and NIL subsequent years
(i) Calculate Premium Allocation Charges for first 6 years
(ii) Calculate Premium Allocated for first 6 years
oFirst Year 20,000, 2nd and 3rd Year 10,000 Each , 4th and 5th Year 4,000 Each , 6th Year zero
oFirst Year 1,80,000, 2nd and 3rd Year 1,90,000 Each , 4th and 5th Year 1,96,000 Each , 6th Year
2,00,000
Thank You
Jaswanth Singh G
Insurance (InsureTech) and Pensions Domain Consultant
Faculty
Resident Editor The Insurance Times
+91 8310765785 +91 9449049107 
jaswanth@indiaassurance.in
jasshu7@gmail.com