Most of the population of our country lives in towns and villages. The economic problems of the rural population are different from those of the urban population. State Life has developed a plan to provide life insurance benefits to the majority of the country’s population, which is living in rural areas.
The plan is crafted as per the needs, lifestyle and conditions of the rural population. Under this plan, the insured gets the insurance coverage during the fixed term of the policy, and at the end of the term, he is paid the sum assured along with the bonus amount. If the insured person dies before the expiry of the term of the policy, the sum assured and the accumulated bonus amount are paid to heirs of the insured. Financial security is to be provided in case of hospitalization for treatment. This policy aims to provide financial coverage in case of hospitalization for treatment of any ailment or, God forbid, an accident.
The Haari Plan policy has the following special coverage:
When the policy money becomes due for payment on the death of the policyholder, it can be paid only to that person who is legally entilled to give a valid and effective discharge to the Corporation. lf the policy bears nomination, the claim is settled in favour of lhe nominee. Similarly, if the policy is assigned, the assignee receives the claim amounl. lt should be noted that an assignment of a policy automatically cancels the existing nomination. Hence, when such a policy is reassigned in favour of the policyholder, it is necessary to make fresh nomination.
When a policyholder wants to change his address in State Lifeia%s records, notice of such charrge should be given lo the zonal office servicing his policy. Policy records can be transferred from the zonal office thal services the policy to any other zonal office nearest to the policyholde/s place of residence. The correct address facilitates better services and quicker settlemenl of claims.
When the premium is not paid within the days of grace provided after the due date, the policy lapses. The grace period in case of yearly, half-yearly and quarterly modes of paymenl is one month and in case of the monthly mode of payment, it is 15 days.
A lapsed policy may be revived during the lifetime of the life insured, bui within a period of 5 years from the due date of the first unpaid premium and b€fore the date of maturity. Pevival of a lapsed policy is considered either on nonmedical or medical basis depending upon the age ofthe life insured at the time of revival and the ium to be revived.
No alteration is permissible in the policy document - the evidence of contract, unless both the parties to the contracl agree. After the policy is issued, a policyholder in a number of cases finds the terms not suitable to him or her and desires to change them to suit his or her convenience. State Life also realizes thal insurance being a long-term contract, certain changes under given circumslances might necessitate an alteration of the contract. Keeping in view the basic principles of insurance and administrative convenience, State Life permits some allerations. As a rule, State Life will not permit alterations wilhin the 1st year from the commencement of the policy.
The loss or destruction of a policy document does noi in any way absolve the Corporation of the liability of payment of policy monies when the claim arises. lf the policy is lost or destroyed, claim or sum insured will be paid to the claimant or policyholder after he or she furnishes an indemnity bond jointly with two sureties. Similarly, a policy can be surendered even if the original policy documenl is lost. However, for the purpose of loan or survival benefil one has to obtain a duplicate policy. The policy being a legal document, the issue of duplicate policy involves the normal procedures like issuing a newspaper advertisement.
A lapsed Life Insurance policy can be revived lvithin 5 years ftom the date of the llrst unpaid prem.um.
It is not possible to raise money against your life insurance policy. However, there is a provision available by way of assignment or mortgaging the policy provided lhe policy has been in force for a minimum stipulated period.
ln case the policy is lost, policyholder should get a duplicate policy issued. State Life issues it after completion of certain formalilies and a nominal fee.
A lapsed policy can be rcvived within five years from lhe dale of the first unpaid premium.
The calculation of life insurance premiums is primarily based on four laclots iLy. age of the person to be insured insured, type of policy, sum insured and term of the policy.
Life insurance is mainly considered as a saving instrument rather than an inveslment avenue as it promotes compulsory savings besides protecting the family of the policyholder in the event of unforeseen happening. lt is the only saving inslrument, which covers the life risk. A loan can also be availed against the State Life insurance policies.
Planning for the financial consequences of a premature death is an essential part of every financial plan. Generally, the consequences are simply too large to ignore and cannot be totally covered with your own resources. Life insurance is nothing but a contracl with an insurance company under which the insured (purchaser) pays a premium in exchange for coverage of specitied losses. Life ;nsurance protects your family against the risk of the premalure death of you (or your spouse). Life insurance planning should consider your family's s.lrort-term needs (for example, medical expenses) and long-term needs (for example, replacing your income). ln the course of our life we are accosted by risk-that of failing health, financial losses, accidents and so on. lnsurance is a means by which life's uncedainties are addressed in financial terms. lt offers a monetary comp€nsation against those losses. lnsurance is considered more as a hedging mechanism rather than a true investmanl avenue. Life insurance, in particular is essentially acknowledged as a mechanism which eliminates risk substituting certainty for uncertainty primarily by lransferring risk from the insured to the insurer.
At present loans are granted up to 80% of the Surrender Value for policies, where the premium due is fully paid-up.
The rate of profit or return charged is '10% per annum compounded semiannually.
Policyholders are eligible to take loan on their policies subject to certain rules and regulations.
The policyholder has to apply for loan in a prescribed form and submit the policy document with the form duly
completed.
Cunently State Life is charging 10% interest on policy loans. lnterest is payable half-yeady.
A policyholder can repay the loan amount eilher in part or in full anytime during the term of the policy
lf loan is not repaid during the term of the policy or eariy claim, the amount of loan plus profit or relurn, if any, will be deducted from the claim money and the balance amount will be paid to the person making the claim.
The very fundamental principle of spreading of the risk is aclually practiced by the insurance companies by reinsuflng the risks that they have insured.
Underwriting of a risk involves consideration of material facts on the basis of which a decision will oe taken whether to accepl the risk and if so at what rate of premium
lf the policy has acquired a surrender value and a premium has remained unpaid beyond the grace period, the policyholder will entitled to benefits under one of the following two options given hereinafrer, depending on the option exercised (if any) in his Proposal for this policy: Option A Option B : Automatic Premium Loan Automatic Paid-up Provided the surrender value of the policy exceeds the total of due premiums(s) remaining unpaid and any other amount owed to State Life. The option can be exercised at the time of taking the policy or at any ime thereafrer while the policy is in force. The option can be changed subsequently by written intimation to and endo;sement in the policy by Stale Life, so long as no premiums remain unpaid beyond the grace period. lf no option has b€en exercised by the policyholder, b€nefits under ie%automatic paid-upie% option will apply.
A Automatic paid-up Option
This policy will be converted into a paid-up policy. The paid-up Sum lnsured will be specially calculaled to allow for the clearance of all outstanding dues of Slate Life againsl the policy. No further premium(s) will be payable but the sum insured will be reduced. Any bonuses attached to the policy will be taken into consideration while determining the paid-up sum insured. A policy once paid-up will not be entitled to any further bonuses. lf the specially calculated paid-up sum insured works out to be less than Rs.100/ the policy will not be converted into paid-up but will be treated as having been forfeited losing all its benefits. A policy thus made paid-up may be revived for full sum insured as per provision of condition No-4 above
B Automatic Premium Loan Option
So long as the nel surrender value of the policy equals or exceeds any due premium remaininJ unpaid beyond its grace period, State Life will continue to keep this policy in full force, and treat the said premium as paid by creating an automatic premium loan against the nel surrender value of the policy. When the net surrender value of the policy becomes less than a due premium remaining unpaid beyond its grace period, the policy will be kept in full force for a i I further broken period. This broken period will bear the same proportion to the full period of the unpaid premium as the net surrender value bears to the unpaid premium. The policy, will automaticaliy be forfeited and loie all beneflts at the expiry of the said broken period. Protil or retum (however called or described) will be charged on automatic premium loan at rates determined by State Life from time to time, so long as any automatic premium loan along with profit or relum (However called or described) is outstanding against this policy, any: payment received by State Life will first be applied to reduce this debt.
Death claim is usually payable to the nominee/ assignee or the legal successor, as lhe case may be. However, if the deceased policyholder has not nominated/ assigned the policy or not made a will, the claim is payable lo the holder of a succession certificate or such evidence of title from a Court of Law.
