Meaning of life insurance explained along with its benefits and types. http://www.koffeefinancial.com/Static/Learn.aspx

2. What is Life Insurance?
• It is a contract between the insured person
and the company or "carrier" that is providing
the insurance.
• It offers a way to replace the loss of income
that occurs when the insured person dies,
usually the person who is the majority income
provider of the family.

3. What is Life Insurance?(Contd.)
• If the death of the insured occurs while the
contract is in force, the insurance company
pays a specified sum of money free of income
tax to the person named as beneficiary.
• It can also be a form of savings in the long run
where there is the option of contributing
regularly.

4. Benefits of Life Insurance
• Provides
– Continuity of income
– Mortgage protection
– Protection against disabilities
– Children’s education
– Marriage expenditure
– Retirement fund
– Tax relief
– “Peace Of Mind”

5. Types of Life Insurance
• Temporary (Term)
• Traditional
• Unit Linked Insurance Plan

6. Temporary (Term) Life Insurance
• Is a type of life insurance which provides
coverage for a limited period of time For a
specified premium. After that period the
insured can either drop the policy or pay
annually increasing premiums to continue the
coverage.
• If the insured dies during the term, the death
benefit will be paid to the beneficiary.

7. Temporary (Term) Life Insurance (Contd.)
• It has the lowest possible premium among all
insurance plans.
• Defining characteristics of this type of life
insurance plan are
– Complete absence of survival benefit
– On maturity no death benefit money is provided
• The death benefit would be paid by the insurance
company if the insured died during the term of
the policy, while no benefit is paid if the insured
dies one day after the last day of the term of the
policy.

8. Term Life Insurance Factors
• This type of insurance often makes sense
when the need for coverage is till a specific
point in time (e.g. coverage required until
children graduate from college or a home loan
is paid off).
• 3 key factors to be considered in term
insurance are –
– Face amount (protection or death benefit)
– Premium to be paid (cost to the insured)
– Length of coverage (term)

9. Types Of Term Life Insurance
• Annual Renewable Term
• Mortgage Protection Life Insurance

10. Annual Renewable Term
• It is the simplest form of term life insurance
for a term of one year.
• The death benefit would be paid by the
insurance company if the insured died during
the one year term, while no benefit is paid if
the insured dies.
• The premium paid is based on the expected
probability of the insured dying in that one
year.

11. Mortgage Protection Life Insurance
• It can be a lifesaver—not for the policyholder but for
the mortgage protection life insurance policyholder’s
family.
• Ensures to your family that they will not lose their
home in the event of the death of the policy holder
before the home mortgage is paid off.
• This insurance can also protect your home in the event
that the policy holder is diagnosed with a terminal
illness (Cancer, brain tumor etc.).
• Insurance company will pay off the mortgage even if
the mortgage protection life insurance policyholder is
still alive.

12. Traditional Life Insurance
• Life insurance that remains in force until the
policy matures, or unless the policy lapses.
• Such policy is for the life of the insured the
payout is assured at the end of the policy.

13. Types of Traditional Life Insurance
• Whole life coverage
• Universal life coverage
• Endowments

14. Whole Life Coverage
• Life insurance which provides coverage for an
individual's whole life. The person starts to save
over time & can use it later.
• This insurance is for the whole life and not for a
specified period.
• As there is no fixed end date for the policy, only
the death benefit exists and is paid to the named
beneficiary.
• The policyholder is not entitled to any money
during his or her own lifetime. There is no
survival benefit wherein the benefit ends.

15. Universal Life Coverage
• Permanent insurance coverage with flexibility
in premium payment and the potential for a
higher internal rate of return.
• It allows the policyholder to break the death
benefit and cash value accumulation into
separate components.

16. Endowments
• Is a life insurance contract designed to pay a
lump sum after a specified term on its
maturity or on earlier death.
• Endowments can be cashed in early or
surrendered and the holder then receives the
surrender value which is determined by the
insurance company depending on how long
the policy has been running and how much
has been paid in to it.

17. Endowments (Contd.)
• Endowment policies cover the risk for a specified
period at the end of which the sum assured is
paid back to the policyholder along with all the
bonus accumulated during the term of the policy.
• Endowments are more expensive than whole life
or universal life because the premium paying
period is shorter and the maturity date is earlier
• These plans provide the option of paying
premiums throughout the policy term, a limited
term, or single premium thus it is a good fit for
people having short career spans.

18. Unit Linked Insurance Plans
• Risk cover and investment (endowment) where
the policyholder bears the investment risk.
• The portion of the premiums after deduction of
all expenses and the premium for the risk cover is
allocated to unit funds.
• Your premiums provide not only a life insurance
cover, but a part of the premium will also be
invested in specific investment funds of your
choice.

19. Tax Rebates in Life Insurance
• 80(C) upto Rs. 1 lac in respect of premium
paid on life insurance policy.
• 10(10D) on the money received from
insurance company with accumulated bonus
which is tax free.

20. Thanks!
• For more information, explore
– http://www.koffeefinancial.com/Static/Learn.aspx
• Or email us at learn@koffeefinancial.com