Page 73 - IC23 life insurance application
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system and therefore regular payment of premium is not seriously taken. The policy


               is therefore likely to lapse leaving no cover.



               TERM ASSURANCE:



               We have already discussed this concept through out.  It is the cheapest insurance

               and nothing is payable on the expiry of the term.



               There is a variation of this plan, called convertible term insurance. This plan can be

               taken initially for a short period say 5 to 7 years and pay premium at a very low rate.


               Just before the expiry of the term, this policy can be converted into an endowment

               plan of any duration, by payment of an increased premium.  No fresh proposal or


               medical examination is required.



               ENDOWMENT PLANS:



               Endowment  plans  are  those  where  the  sum  assured  is  paid  either  on  maturity  or

               death if earlier.  There can be a large varieties of endowment plans to suit different


               needs. It takes care of both the risks of dying too early and living too long.



               Moneyback plan is one such, which we have discussed.Premium paying period can

               be different than the duration of the policy.  This is called limited endowment plan.



               The  amount  payable  on  death  can  be  two  or  three  times  more  than  the  amount

               payable on survival or vice versa.



















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