report state life

8/4/2019 Report State Life

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ACKNOWLEDGEMENT:

With the name of ALLAH the Most Beneficial and Merciful. I completed my internshipin State Life

Insurance Corporation of Pakistan. I am really pleased to have a professionallearning experience in one

of leading insurance organizations of country. In these sixweeks I worked in different departments and I

am truly thankful to all officers and staff who entirely give assistance to me.

I am also grateful to my honorable teachers Sir Fida Hussain Bukhari, Sir Irshad Sb, Sir RiazAhmed Mian

and all other teachers who motivated me to work hard and teach metechnique to learn work.The

account of acknowledgement will remain incomplete if I do not express my sincereappreciation,

indebtedness and gratitude to my parents. They have always been a sourceof encouragement for me.


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EXECUTIVE SUMMARY:

I recently have completed my internship in State Life Insurance Corporation OF Pakistan,Group &

Pension, Lahore Zone in which I got training from its different departments.The structure, the fashion of

working & the dedication of the employees in SLIC is reallycommendable. State Life Insurance

Corporation OF Pakistan (SLIC) has a solidfoundation since 1972 in Pakistan, and main objective is to

provide its customers withsafe, secure and trustworthy service through wide range of products.In this

report I have given a very brief review of Profile of State Life InsuranceCorporation OF Pakistan, all the

products provided by the SLIC and in this regard I havetried to give all the information of SLIC.Then I

have discussed about my learning in entire internship in all departments of StateLife Insurance

Corporation OF Pakistan. During my internship I worked in Underwriting,Claims and Accounts

department and I successfully completed all the task/duties thatwere assigned to me. I have made it

possible to write each and every thing that I have

learnt there. I have all my practical efforts in the form of this manuscript thats the asset

for my prospect career.Then I have done a detailed Financial Analysis as well as SWOT Analysis. Finally I

havegiven some recommendations about State Life Insurance Corporation OF Pakistan.


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Methodology:

Methodology means way of collecting the data of report writing. There are two methodsto conduct

research. First methodology of research is primary data and other is secondarydata base research. In

this report I have methodology of primary data and secondary data.I worked in Group & Pension (State

Life Corporation of Pakistan, Lahore Zone) and aboutthis department so less material was available and I

had to collect most of data bydiscussions with officers.

Primary data:

By meeting/asking questions to different personal of different departments. Mr.Tariq Munir (Deputy

Manager, PHS), Mr. Khawar Majeed (Deputy Manager,(F&A), Mr. Muhammad Yaqoob (Zonal Head,

F&A), MR. Shahid Khokhar(Sector Head, Marketing), MR.Sohail Yaseen (Manager P&GS),and many

personsof staff cooperate with me and guide me about working procedure of theirconcerned

departments.

Practically working, carefully watching the working procedure of the organization.

Visiting different departments of the organization.

Secondary Data:

Study written material available about State Life

Study different books of insurance, booklets, broachers.

Study Annual Report of SLIC.

Visiting website of SLIC

Study previous internship reports available in college library.

Limitations:


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During my internship training I had face to many problems/limitations which weresometimes really

discourage me to collect the basic and important information to make astrong and very good report on

SLIC.Despite of the following limitation I tried my best and honest effort to collect the data

andinterpreted in this report:-

Due to lack of time it is very difficult to get all information of departments of SLIC.

There were no special arrangements for internees. Thanks to all those officers whoguided me and

remained cooperative at all the time.

Officers had not enough time to regularly help us.

Most of staff members who are master of their work but they learnt this by doing inroutine but they

do not know basic concepts of it because they have no professionalknowledge of insurance.

Insurance:

Insurance is defined as


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the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment.

An insurer is a company selling the insurance; an insured, or policyholder, is the person or entity buying

the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a

certain amount of insurance coverage, called the premium.

The transaction involves the insured assuming a guaranteed and known relatively small loss in the form

of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured

in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy,

which details the conditions and circumstances under which the insured will be financially compensated.

Principles Of Insurance :

Following are the three main principles of insurance :


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a-Insurability

b-Legality c-

Indemnification

1-Insurability :

Risk which can be insured by private companies typically share seven common characteristics:

1. Large number of similar exposure units: Since insurance operates through pooling resources, the

majority of insurance policies are provided for individual members of large classes, allowing insurers to

benefit from the law of large numbers in which predicted losses are similar to the actual losses.

Exceptions include Lloyd's of London, which is famous for insuring the life or health of actors, sports

figures and other famous individuals. However, all exposures will have particular differences, which maylead to different premium rates.

2.Definite loss: The loss takes place at a known time, in a known place, and from a known cause. The

classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and

worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory.

Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no

specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear

enough that a reasonable person, with sufficient information, could objectively verify all three elements.

3.Accidental loss: The event that constitutes the trigger of a claim should be fortuitous, or at least

outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it

results from an event for which there is only the opportunity for cost. Events that contain speculative

elements, such as ordinary business risks or even purchasing a lottery ticket, are generally not

considered insurable.

4.Large loss: The size of the loss must be meaningful from the perspective of the insured. Insurance

premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the

policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be

able to pay claims. For small losses these latter costs may be several times the size of the expected cost

of losses. There is hardly any point in paying such costs unless the protection offered has real value to a

buyer.

5.Affordable premium: If the likelihood of an insured event is so high, or the cost of the event so large,

that the resulting premium is large relative to the amount of protection offered, it is not likely that the

insurance will be purchased, even if on offer. Further, as the accounting profession formally recognizes

in financial accounting standards, the premium cannot be so large that there is not a reasonable chance


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of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form

of insurance, but not the substance.

6.Calculable loss: There are two elements that must be at least estimable, if not formally calculable: the

probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while

cost has more to do with the ability of a reasonable person in possession of a copy of the insurancepolicy and a proof of loss associated with a claim presented under that policy to make a reasonably

definite and objective evaluation of the amount of the loss recoverable as a result of the claim.

7.Limited risk of catastrophically large losses: Insurable losses are ideally independent and non-

catastrophic, meaning that the losses do not happen all at once and individual losses are not severe

enough to bankrupt the insurer; insurers may prefer to limit their exposure to a loss from a single event

to some small portion of their capital base.

b-Legality :

When a company insures an individual entity, there are basic legal requirements. Several commonly

cited legal principles of insurance include:


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1-Indemnity: the insurance company indemnifies, or compensates, the insured in the case of certain

losses only up to the insured's interest.

2-Insurable interest: the insured typically must directly suffer from the loss. Insurable interest must

exist whether property insurance or insurance on a person is involved. The concept requires that the

insured have a "stake" in the loss or damage to the life or property insured. What that "stake" is will bedetermined by the kind of insurance involved and the nature of the property ownership or relationship

between the persons.

3-Utmost good faith: the insured and the insurer are bound by a good faith bond of honesty and

fairness. Material facts must be disclosed.

4-Contribution: insurers which have similar obligations to the insured contribute in the indemnification,

according to some method.

5-Subrogation: the insurance company acquires legal rights to pursue recoveries on behalf of the

insured; for example, the insurer may sue those liable for insured's loss

6-Causa proxima, or proximate cause: the cause of loss (the peril) must be covered under the insuring

agreement of the policy, and the dominant cause must not be excluded

7-Principle of loss minimization: In case of any loss or casualty, the asset owner must attempt to keep

the loss to a minimum, as if the asset was not insured.

c-Indemnification:

To "indemnify" means to make whole again, or to be reinstated to the position that

one was in, to the extent possible, prior to the happening of a specified event or peril. Accordingly, life


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insurance is generally not considered to be indemnity insurance, but rather "contingent" insurance (i.e.,

a claim arises on the occurrence of a specified event). There are generally two types of insurance

contracts that seek to indemnify an insured:

an "indemnity" policy, and

a "pay on behalf" or "on behalf of" policy.

History of insurance:

In some sense we can say that insurance appears simultaneously with the

appearance of human society. We know of two types of economies in human societies: natural or non-


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monetary economies (using barter and trade with no centralized nor standardized set of financial

instruments) and more modern monetary economies (with markets, currency, financial instruments and

so on). The former is more primitive and the insurance in such economies entails agreements of mutual

aid. If one family's house is destroyed the neighbours are committed to help rebuild. Granaries housed

another primitive form of insurance to indemnify against famines. Often informal or formally intrinsic to

local religious customs, this type of insurance has survived to the present day in some countries where

modern money economy with its financial instruments is not widespread.

Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which

insurance is part of the financial sphere), early methods of transferring or distributing risk were

practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC,

respectively.Chinese merchants travelling treacherous river rapids would redistribute their wares across

many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system

which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early

Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the

lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipmentbe stolen or lost at sea.

Achaemenian monarchs of Ancient Persia were the first to insure their people and made it official by

registering the insuring process in governmental notary offices. The insurance tradition was performed

each year in Norouz (beginning of the Iranian New Year); the heads of different ethnic groups as well as

others willing to take part, presented gifts to the monarch. The most important gift was presented

during a special ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold coin) the

issue was registered in a special office. This was advantageous to those who presented such special gifts.

For others, the presents were fairly assessed by the confidants of the court. Then the assessment was

registered in special offices.

The purpose of registering was that whenever the person who presented the gift registered by the court

was in trouble, the monarch and the court would help him. Jahez, a historian and writer, writes in one of

his books on ancient Iran: "Whenever the owner of the present is in trouble or wants to construct a

building, set up a feast, have his children married, etc. the one in charge of this in the court would check

the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of

twice as much."

A thousand years later, the inhabitants of Rhodes invented the concept of the general average.Merchants whose goods were being shipped together would pay a proportionally divided premium

which would be used to reimburse any merchant whose goods were deliberately jettisoned in order to

lighten the ship and save it from total loss.


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The Talmud deals with several aspects of insuring goods. Before insurance was established in the late

17th century, "friendly societies" existed in England, in which people donated amounts of money to a

general sum that could be used for emergencies.

Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts)

were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed

estates. These new insurance contracts allowed insurance to be separated from investment, a

separation of roles that first proved useful in marine insurance. Insurance became far more

sophisticated in post-Renaissance Europe, and specialized varieties developed.

Lloyd's of London, pictured in 1991, is one of the world's leading and most famous insurance markets

Some forms of insurance had developed in London by the early decades of the 17th century. For

example, the will of the English colonist Robert Hayman mentions two "policies of insurance" taken out

with the diocesan Chancellor of London, Arthur Duck. Of the value of 100 each, one relates to the safe

arrival of Hayman's ship in Guyana and the other is in regard to "one hundred pounds assured by the

said Doctor Arthur Ducke on my life". Hayman's will was signed and sealed on 17 November 1628 but

not proved until 1633. Toward the end of the seventeenth century, London's growing importance as a

centre for trade increased demand for marine insurance. In the late 1680s, Edward Lloyd opened a

coffee house that became a popular haunt of ship owners, merchants, and ships' captains, and thereby a

reliable source of the latest shipping news. It became the meeting place for parties wishing to insure

cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of London remains the

leading market (note that it is an insurance market rather than a company) for marine and otherspecialist types of insurance, but it operates rather differently than the more familiar kinds of insurance.

Insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured more

than 13,000 houses. The devastating effects of the fire converted the development of insurance "from a

matter of convenience into one of urgency, a change of opinion reflected in Sir Christopher Wren's

inclusion of a site for 'the Insurance Office' in his new plan for London in 1667." A number of attempted

fire insurance schemes came to nothing, but in 1681 Nicholas Barbon, and eleven associates, established

England's first fire insurance company, the 'Insurance Office for Houses', at the back of the Royal

Exchange. Initially, 5,000 homes were insured by Barbon's Insurance Office.

A number of attempted fire insurance schemes came to nothing, but in 1681 Nicholas Barbon, and

eleven associates, established England's first fire insurance company, the 'Insurance Office for Houses',

at the back of the Royal Exchange. Initially, 5,000 homes were insured by Barbon's Insurance Office.The

first insurance company in the United States underwrote fire insurance and was formed in Charles Town

(modern-day Charleston), South Carolina, in 1732. Benjamin Franklin helped to popularize and make

standard the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752,

he founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Franklin's

company was the first to make contributions toward fire prevention. Not only did his company warn


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against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great,

such as all wooden houses. In the United States, regulation of the insurance industry is highly

Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas

insurance markets have become centralized nationally and internationally, state insurance

commissioners operate individually, though at times in concert through a national insurance

commissioners' organization. In recent years, some have called for a dual state and federal regulatory

system (commonly referred to as the Optional federal charter (OFC)) for insurance similar to that which

oversees state banks and national banks.

Types of insurance:

Any risk that can be quantified can potentially be insured. Specific kinds of risk that may

give rise to claims are known as perils. An insurance policy will set out in detail which perils are covered


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by the policy and which are not. Below are non-exhaustive lists of the many different types of insurance

that exist. A single policy may cover risks in one or more of the categories set out below. For example,

vehicle insurance would typically cover both the property risk (theft or damage to the vehicle) and the

liability risk (legal claims arising from an accident). A home insurance policy in the U.S. typically includes

coverage for damage to the home and the owner's belongings, certain legal claims against the owner,

and even a small amount of coverage for medical expenses of guests who are injured on the owner's

property.

Business insurance can take a number of different forms, such as the various kinds of professional

liability insurance, also called professional indemnity (PI), which are discussed below under that name;

and the business owner's policy (BOP), which packages into one policy many of the kinds of coverage

that a business owner needs, in a way analogous to how homeowners' insurance packages the

coverages that a homeowner needs.

Following are the two main types of insurances:

a) Life Insuranceb) General Insurance

a)

Life Insurance:

Life insurance provides a monetary benefit to a descendant's family or other designated beneficiary,

and may specifically provide for income to an insured person's family, burial, funeral and other final

expenses. Life insurance policies often allow the option of having the proceeds paid to the

beneficiary either in a lump sum cash payment or an annuity.

Annuities provide a stream of payments and are generally classified as insurance because they are

issued by insurance companies, are regulated as insurance, and require the same kinds of actuarial

and investment management expertise that life insurance requires. Annuities and pensions that paya benefit for life are sometimes regarded as insurance against the possibility that a retiree will

outlive his or her financial resources. In that sense, they are the complement of life insurance and,

from an underwriting perspective, are the mirror image of life insurance.


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Certain life insurance contracts accumulate cash values, which may be taken by the insured if the

policy is surrendered or which may be borrowed against. Some policies, such as annuities and

endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed.

In many countries, such as the U.S. and the UK, the tax law provides that the interest on this cash

value is not taxable under certain circumstances. This leads to widespread use of life insurance as a

tax-efficient method of saving as well as protection in the event of early death.

Burial Insurance:Burial insurance is a very old type of life insurance which is paid out upon death to cover final

expenses, such as the cost of a funeral. The Greeks and Romans introduced burial insurance

circa 600 AD when they organized guilds called "benevolent societies" which cared for thesurviving families and paid funeral expenses of members upon death. Guilds in the Middle Ages

served a similar purpose, as did friendly societies during Victorian times.

b) General Insurance:Following are the main types of general Insurance:

1- Auto Insurance2- Home Insurance3- Health Insurance4- Accident,sickness and unemployment Insurance5- Casualty6-

Property Insurance

7- Credit Insurance8- Liability Insurance9- Other types10-Insurance Financing Vehicles11-Closed Community Self Insurance


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1- Auto Insurance:Auto insurance protects the policyholder against financial loss in the event of an

incident involving a vehicle they own, such as in a traffic collision.

Coverage typically includes:

a) Property coverage, for damage to or theft of the car;

b) Liability coverage, for the legal responsibility to others for bodily injury or

property damage;

c) Medical coverage, for the cost of treating injuries, rehabilitation and sometimes lost

wages and funeral expenses.

Most countries, such as the United Kingdom, require drivers to buy some, but not all, of these

coverages. When a car is used as collateral for a loan the lender usually requires specific

coverage.

2- Home Insurance:Home insurance provides coverage for damage or destruction of the policyholder's

home. In some geographical areas, the policy may exclude certain types of risks, such as flood or

earthquake, that require additional coverage. Maintenance-related issues are typically the

homeowner's responsibility. The policy may include inventory, or this can be bought as a

separate policy, especially for people who rent housing. In some countries, insurers offer a

package which may include liability and legal responsibility for injuries and property damage

caused by members of the household, including pets.

3- Health Insurance:Health insurance policies cover the cost of medical treatments. Dental insurance, like medical

insurance, protects policyholders for dental costs. In the U.S. and Canada, dental insurance is

often part of an employer's benefits package, along with health insurance.

4- Accident,sickness and unemployment Insurance:Following are the main types of policies which are provided under this head:


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a) Disability insurance policies provide financial support in the event of thepolicyholder becoming unable to work because of disabling illness or injury.

It provides monthly support to help pay such obligations as mortgage loans

and credit cards. Short-term and long-term disability policies are available

to individuals, but considering the expense, long-term policies are generally

obtained only by those with at least six-figure incomes, such as doctors,

lawyers, etc. Short-term disability insurance covers a person for a period

typically up to six months, paying a stipend each month to cover medical

bills and other necessities.

b) Long-term disability insurance covers an individual's expenses for the longterm, up until such time as they are considered permanently disabled and

thereafter. Insurance companies will often try to encourage the person

back into employment in preference to and before declaring them unable

to work at all and therefore totally disabled.

c) Disability overhead insurance allows business owners to cover theoverhead expenses of their business while they are unable to work.

d) Total permanent disability insurance provides benefits when a person ispermanently disabled and can no longer work in their profession, often

taken as an adjunct to life insurance.

e) Workers' compensation insurance replaces all or part of a worker's wageslost and accompanying medical expenses incurred because of a job-related

injury.

5- Casualty:

Casualty insurance insures against accidents, not necessarily tied to any specific property. It is a broad

spectrum of insurance that a number of other types of insurance could be classified, such as auto,

workers compensation, and some liability insurances.

a) Crime insurance is a form of casualty insurance that covers the policyholder against lossesarising from the criminal acts of third parties. For example, a company can obtain crime

insurance to cover losses arising from theft or embezzlement.


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b) Political risk insurance is a form of casualty insurance that can be taken out by businesses withoperations in countries in which there is a risk that revolution or other political conditions could

result in a loss.

6-Property Insurance:

Property insurance provides protection against risks to property, such as fire, theft

or weather damage. This may include specialized forms of insurance such as fire insurance, flood

insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.

The term property insurance may, like casualty insurance, be used as a broad category of

various subtypes of insurance, some of which are listed below:

a) Aviation insurance protects aircraft hulls and spares, and associated liability risks,such as passenger and third-party liability. Airports may also appear under this

subcategory, including air traffic control and refuelling operations for international

airports through to smaller domestic exposures.

b) Boiler insurance (also known as boiler and machinery insurance, or equipmentbreakdown insurance) insures against accidental physical damage to boilers,

equipment or machinery.

c) Builder's risk insurance insures against the risk of physical loss or damage toproperty during construction. Builder's risk insurance is typically written on an "all

risk" basis covering damage arising from any cause (including the negligence of the

insured) not otherwise expressly excluded. Builder's risk insurance is coverage that

protects a person's or organization's insurable interest in materials, fixtures and/or

equipment being used in the construction or renovation of a building or structure

should those items sustain physical loss or damage from an insured peril.d) Crop insurance may be purchased by farmers to reduce or manage various risks

associated with growing crops. Such risks include crop loss or damage caused by

weather, hail, drought, frost damage, insects, or disease.

e) Earthquake insurance is a form of property insurance that pays the policyholder inthe event of an earthquake that causes damage to the property. Most ordinary

home insurance policies do not cover earthquake damage. Earthquake insurance

policies generally feature a high deductible. Rates depend on location and hence

the likelihood of an earthquake, as well as the construction of the home.

f) Fidelity bond is a form of casualty insurance that covers policyholders for lossesincurred as a result of fraudulent acts by specified individuals. It usually insures a

business for losses caused by the dishonest acts of its employees.g) Flood insurance protects against property loss due to flooding. Many insurers inthe U.S. do not provide flood insurance in some parts of the country. In response to

this, the federal government created the National Flood Insurance Program which

serves as the insurer of last resort.

h) Home insurance, also commonly called hazard insurance, or homeownersinsurance (often abbreviated in the real estate industry as HOI), is the type of

property insurance that covers private homes, as outlined above.


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i) Landlord insurance covers residential and commercial properties which are rentedto others. Most homeowners' insurance covers only owner-occupied homes.

j) Marine insurance and marine cargo insurance cover the loss or damage of vesselsat sea or on inland waterways, and of cargo in transit, regardless of the method of

transit. When the owner of the cargo and the carrier are separate corporations,

marine cargo insurance typically compensates the owner of cargo for losses

sustained from fire, shipwreck, etc., but excludes losses that can be recovered from

the carrier or the carrier's insurance. Many marine insurance underwriters will

include "time element" coverage in such policies, which extends the indemnity to

cover loss of profit and other business expenses attributable to the delay caused by

a covered loss.

k) Supplemental natural disaster insurance covers specified expenses after a naturaldisaster renders the policyholder's home uninhabitable. Periodic payments are

made directly to the insured until the home is rebuilt or a specified time period has

elapsed.

l) Surety bond insurance is a three-party insurance guaranteeing the performance ofthe principal.

m) Terrorism insurance provides protection against any loss or damage caused byterrorist activities.

n) Volcano insurance is a specialized insurance protecting against damage arisingspecifically from volcanic eruptions.

o) Windstorm insurance is an insurance covering the damage that can be caused bywind events such as hurricanes.

7- Credit Insurance:

Credit insurance repays some or all of a loan when certain circumstances arise to the

borrower such as unemployment, disability, or death.

a) Mortgage insurance insures the lender against default by the borrower. Mortgage insurance is aform of credit insurance, although the name "credit insurance" more often is used to refer to

policies that cover other kinds of debt.

b) Many credit cards offer payment protection plans which are a form of credit insurance.c) Accounts Receivable insurance also know as Credit or Trade Credit insurance is businessinsurance over the accounts receivables of the insured. The policy pays the policy holder for

covered accounts receivable if the debtor defaults on payment.

8-Liability Insurance:


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Liability insurance is a very broad superset that covers legal claims against the insured. Many

types of insurance include an aspect of liability coverage. For example, a homeowner's insurance policy

will normally include liability coverage which protects the insured in the event of a claim brought by

someone who slips and falls on the property; automobile insurance also includes an aspect of liability

insurance that indemnifies against the harm that a crashing car can cause to others' lives, health, or

property. The protection offered by a liability insurance policy is twofold: a legal defense in the event of

a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured)

with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the

insured, and will not apply to results of wilful or intentional acts by the insured.

a) Public liability insurance covers a business or organization against claims should its operationsinjure a member of the public or damage their property in some way.

b) Directors and officers liability insurance (D&O) protects an organization (usually a corporation)from costs associated with litigation resulting from errors made by directors and officers for

which they are liable.

c) Environmental liability insurance protects the insured from bodily injury, property damage andcleanup costs as a result of the dispersal, release or escape of pollutants.

d) Errors and omissions insurance is business l iability insurance for professionals such as insuranceagents, real estate agents and brokers, architects, third-party administrators (TPAs) and other

business professionals.

e) Prize indemnity insurance protects the insured from giving away a large prize at a specific event.Examples would include offering prizes to contestants who can make a half-court shot at a

basketball game, or a hole-in-one at a golf tournament.

f) Professional liability insurance, also called professional indemnity insurance (PI), protectsinsured professionals such as architectural corporations and medical practitioners against

potential negligence claims made by their patients/clients. Professional liability insurance maytake on different names depending on the profession. For example, professional liability

insurance in reference to the medical profession may be called medical malpractice insurance.

9- Other types:

a) All-risk insurance is an insurance that covers a wide-range of incidents and perils, exceptthose noted in the policy. All-risk insurance is different from peril-specific insurance that

cover losses from only those perils listed in the policy. In car insurance, all-risk policy

includes also the damages caused by the own driver.

b) Bloodstock insurance covers individual horses or a number of horses under commonownership. Coverage is typically for mortality as a result of accident, illness or disease

but may extend to include infertility, in-transit loss, veterinary fees, and prospective

foal.

c) Business interruption insurance covers the loss of income, and the expenses incurred,after a covered peril interrupts normal business operations.


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d) Collateral protection insurance (CPI) insures property (primarily vehicles) held ascollateral for loans made by lending institutions.

e) Defense Base Act (DBA) insurance provides coverage for civilian workers hired by thegovernment to perform contracts outside the U.S. and Canada.

f) Expatriate insurance provides individuals and organizations operating outside of theirhome country with protection for automobiles, property, health, liability and business

pursuits.aExpatriate insurance provides individuals and organizations operating outside

of their home country with protection for automobiles, property, health, liability and

business pursuits.

g) Kidnap and ransom insurance is designed to protect individuals and corporationsoperating in high-risk areas around the world against the perils of kidnap, extortion,

wrongful detention and hijacking.

h) Legal expenses insurance covers policyholders for the potential costs of legal actionagainst an institution or an individual. When something happens which triggers the

need for legal action, it is known as "the event". There are two main types of legal

expenses insurance: before the event insurance and after the event insurance.

i) Locked funds insurance is a little-known hybrid insurance policy jointly issued bygovernments and banks. It is used to protect public funds from tamper by unauthorized

parties. In special cases, a government may authorize its use in protecting semi-private

funds which are liable to tamper. The terms of this type of insurance are usually very

strict. Therefore it is used only in extreme cases where maximum security of funds is

required.

j) Livestock insurance is a specialist policy provided to, for example, commercial or hobbyfarms, aquariums, fish farms or any other animal holding. Cover is available for mortality

or economic slaughter as a result of accident, illness or disease but can extend to

include destruction by government order.

k) Media liability insurance is designed to cover professionals that engage in film andtelevision production and print, against risks such as defamation.

l) Pet insurance insures pets against accidents and illnesses; some companies coverroutine/wellness care and burial, as well.

m) Title insurance provides a guarantee that title to real property is vested in the purchaserand/or mortgagee, free and clear of liens or encumbrances. It is usually issued in

conjunction with a search of the public records performed at the time of a real estate

transaction.

n) Travel insurance is an insurance cover taken by those who travel abroad, which coverscertain losses such as medical expenses, loss of personal belongings, travel delay, and

personal liabilities.

10- Insurance Financing Vehicles:

a) Fraternal insurance is provided on a cooperative basis by fraternal benefit societies orother social organizations.


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b) No-fault insurance is a type of insurance policy (typically automobile insurance) whereinsureds are indemnified by their own insurer regardless of fault in the incident.

c) Protected self-insurance is an alternative risk financing mechanism in which anorganization retains the mathematically calculated cost of risk within the organization

and transfers the catastrophic risk with specific and aggregate limits to an insurer so

the maximum total cost of the program is known. A properly designed and

underwritten Protected Self-Insurance Program reduces and stabilizes the cost of

insurance and provides valuable risk management information.

d) Retrospectively rated insurance is a method of establishing a premium on largecommercial accounts. The final premium is based on the insured's actual loss

experience during the policy term, sometimes subject to a minimum and maximum

premium, with the final premium determined by a formula. Under this plan, the

current year's premium is based partially (or wholly) on the current year's losses,

although the premium adjustments may take months or years beyond the current

year's expiration date. The rating formula is guaranteed in the insurance contract.

Formula: retrospective premium = converted loss + basic premium tax multiplier.

Numerous variations of this formula have been developed and are in use.

e) Formal self insurance is the deliberate decision to pay for otherwise insurable lossesout of one's own money. This can be done on a formal basis by establishing a separate

fund into which funds are deposited on a periodic basis, or by simply forgoing the

purchase of available insurance and paying out-of-pocket. Self insurance is usually

used to pay for high-frequency, low-severity losses. Such losses, if covered by

conventional insurance, mean having to pay a premium that includes loadings for the

company's general expenses, cost of putting the policy on the books, acquisition

expenses, premium taxes, and contingencies. While this is true for all insurance, for

small, frequent losses the transaction costs may exceed the benefit of volatility

reduction that insurance otherwise affords.

f) Reinsurance is a type of insurance purchased by insurance companies or self-insuredemployers to protect against unexpected losses. Financial reinsurance is a form of

reinsurance that is primarily used for capital management rather than to transfer

insurance risk.

g) Social insurance can be many things to many people in many countries. But asummary of its essence is that it is a collection of insurance coverages (including

components of life insurance, disability income insurance, unemployment insurance,

health insurance, and others), plus retirement savings, that requires participation by

all citizens. By forcing everyone in society to be a policyholder and pay premiums, it

ensures that everyone can become a claimant when or if he/she needs to. Along the

way this inevitably becomes related to other concepts such as the justice system and

the welfare state. This is a large, complicated topic that engenders tremendous

debate, which can be further studied in the following articles (and others):

1- National Insurance2- Social safety net


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3- Social security4- Social Security debate5- Social Security6- Social welfare provision

h) Stop-loss insurance provides protection against catastrophic or unpredictable losses.It is purchased by organizations who do not want to assume 100% of the liability forlosses arising from the plans. Under a stop-loss policy, the insurance company

becomes liable for losses that exceed certain limits called deductibles.

11-Closed Community Self Insurance:

Some communities prefer to create virtual insurance amongst themselves by other means

than contractual risk transfer, which assigns explicit numerical values to risk. A number of religious

groups, including the Amish and some Muslim groups, depend on support provided by their

communities when disasters strike. The risk presented by any given person is assumed collectively by

the community who all bear the cost of rebuilding lost property and supporting people whose needs are

suddenly greater after a loss of some kind. In supportive communities where others can be trusted to

follow community leaders, this tacit form of insurance can work. In this manner the community can

even out the extreme differences in insurability that exist among its members. Some further justification

is also provided by invoking the moral hazard of explicit insurance contracts.

BASIC INSURANCE TERMINOLOGIES:

Insured:

The person known as the policyholder, a person with insurance coverage.

Insurer:

A company licensed to transact the business of insurance and issue insurance policies.

Policy:

It's the written contract between an insurance company and its insured. It defines what

thecompany agrees to cover for what period of time and describes the obligations

andresponsibilities of the insured.

Premium:

It's the amount of money a policyholder pays for insurance protection.

Claim:

It's the notice to the insurance company that under the terms of a policy, a loss maybecovered.


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Indemnity:

Legal principle that specifies an insured should not collect more than the actual cash valueof a

loss but should be restored to approximately the same financial position as existedbefore the

loss.

Agent:

A licensed person or organization that sells insurance and represents the insurancecompany to

the policyholder.

Broker:

An organization or person paid by the policyholder to look for insurance on their behalf.

Deductible:

It's the amount of the loss, which the insured is responsible to pay before the

insurancecompany pays the benefits.

Expiration Date:

This is the date on which the policy ends.

Grace Period:

A period (usually 30 or 31 days) following each insurance premium due date, other thanthe first

due date, during which an overdue premium may be paid. All provisions of thepolicy remain in

force throughout this period.

Limit:It's the maximum amount paid by the insurance company under the terms of a policy.

Underwriting:

The process of classifying applicants for insurance by identifying characteristics such asage,

gender, health, occupation and hobbies. People with similar characteristics aregrouped together

and are charged a premium based on the group's level of risk.


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EVOLUTION OF INSURANCE:

Insurance has its roots in so ancient times and it get ahead in different periods in

differentshapes and at last come into existence in modern form of this time and it is now

popular inall over the world and it is a separate industry with billions Rs. of capital and all over

theworld millions of people are getting benefit and earning livelihood from this industry.Almost

4,500 years ago, in the ancient land of Babylonia, traders used to tolerate risk of the caravan

trade by giving loans that had to be afterward repaid with interest when thegoods arrived

safely. In 2100 BC, the Code of Hammurabi granted legal status to thepractice. I think perhaps it

was time when insurance made its beginning.As European civilization stepped forward, its social

institutions and welfare practices alsogot more and more polished. With the discovery of newlands, sea routes and thesubsequent growth in trade, medieval unions took it upon themselves

to protect theirmember traders from loss on account of fire, shipwrecks and the like.Since most

of the trade took place by sea, there was also the fear of pirates. So theseguilds even offered

ransom for members held imprisoned by pirates. Burial expenses andsupport in times of

sickness and poverty were other services obtainable. Basically, allthese revolved around the

concept of insurance or risk coverage.In 1347, in Genoa, European maritime nations entered

into the earliest known insurance contract and decided to accept marine insurance practice.


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Insurance as we know it today owes its existence to 17th century England. Infect, it begantaking

shape in 1688 at a rather interesting place called Lloyd's Coffee House in London, where

merchants, ship-owners and underwriters met to discuss and transact business. By the end of

the 18th century, Lloyd's had prepared enough business to become one of the first modern

insurance companies.

In 1693, astronomer Edmond Halley constructed the first mortality table to provide a link

between the life insurance premium and the average life spans based on statistical laws of

mortality and compound interest. In 1756, Joseph Dodson reworked the table, linkingpremium

rate to age.The first stock companies to get into the business of insurance were chartered in

England in 1720. The year 1735 was the birth of the first insurance company in the

Americancolonies in Charleston, SC. In 1759, the Presbyterian Synod of Philadelphia sponsored

thefirst life insurance corporation in America for the benefit of ministers and theirdependents.

However, it was after 1840 that life insurance really took off in a big way.The 19th century saw

huge developments in the field of insurance, with newer productsbeing devised to meet the

growing needs of urbanization and industrialization.In 1835, the well-known New York fire drew

people's attention to the need to provide forsudden and large losses. Two years later,

Massachusetts became the first state to requirecompanies by law to maintain such reserves.The great Chicago fire of 1871 furtherstressed how fires can cause huge losses in densely

populated modern cities. The practiceof reinsurance, wherein the risks are spread among

several companies, was devisedspecifically for such situations.There were more branches of the

process of industrialization. In 1897, the Britishgovernment passed the Workmen's

Compensation Act, which made it mandatory for acompany to insure its employees against

industrial accidents. With the advent of theautomobile, public liability insurance, which first

made its appearance in the 1880s,gained importance and acceptance?In the 19th century, many

societies were founded to insure the life and health of theirmembers, while fraternal orders

provided low-cost, members-only insurance. Even today,such fraternal orders continue to

provide insurance coverage to members as do most labs.

our organizations. Many employers sponsor group insurance policies for theiremployees,providing not just life insurance, but sickness and accident benefits and old-age

pensions.Employees contribute a certain percentage of the premium for these policies.


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HISTORY OF INSURANCE INDUSTRY IN PAKISTAN:

At the time of independence, the country had 5 domestic and 77 foreign insurance companies.

These companies were regulated under the Insurance Act of 1938. The government in 1948

established the Department of Insurance within the domain of Ministry of Commerce to

supervise the affairs of insurance industry and to safeguard the interests of the insured. The Act

was amended in 1958 for the first time keeping in view the requirements of domestic market

and to have effective control over the insurance premium rates. Since then, various

amendments have been made in the Act. The Department of Insurance further created the

Controller of Insurance for the same purpose that was abolished in 2000 when SECP was made

responsible for supervising insurance business in the country. Since the business of insurance

companies is to spread the risk, therefore, the need for establishment of a domestic reinsurancecompany was felt that would eventually boost the profitability of national insurance companies

and to allow companies to handle growing insurance demand. It was also aimed to reduce the

outflow of foreign exchange that was earlier used as reinsurance premiums made to reinsurance

companies mainly in the U.K. The Pakistan Reinsurance Corporation (presently called as Pakistan

Reinsurance Company Limited) was established in 1953. In 1955, National Coinsurance

Scheme(NCS) was initiated to promote insurance culture in Pakistan and to assist small

insurance companies in meeting financial requirements. Moreover, it aimed to have checks and


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balances on government expenditure on insurance and to assist in settlement of claims in which

the government was the beneficiary. The formation of NCS yielded favorable results, Moreover,

economic growth in 1960s further promoted the insurance business in the country and the

number of Pakistani insurance companies increased to 26 and reached to 47 by 1971. However,

the number of foreign companies decreased from 77 in 1947 to25 in 1972 due to political

uncertainty and separation of East Pakistan.

The life insurance business (that grew very rapidly from a total sum assured of only Rs.130

million in 1949 to Rs. 51.7 billion in 1972) was nationalized in 1972.Life InsuranceManagement

Board managed the affairs of these newly nationalized life insurancecompanies. By

consolidating the business of 41 nationalized insurance companies in 1973,the government

created State Life Insurance Corporation with a purpose of encouraginglife insurance business

and to safeguard the interests of policyholders. The initial benefitswere the reduction in

premium rates by 33 percent and resolution of various outstandingdisputes between the

policyholders and the insurers.Moreover in 1973, the government replaced NCS with National

Insurance Fund (NIF) forthe purpose to manage insurance of government and semi government

property. The NIFreduced the premium rates for insuring government property; in addition it

shifted all theprofits of insurance companies to the government exchequer. As well toprovidegovernment a more conducive environment for undertaking insurance and to reduce

itscost, National Insurance Corporation (presently National Insurance Company Limited)was

established in 1976. Since then, it has been the sole insurer to the government andsemi-

government bodies.In 1980s no significant development took place in the insurance industry

until thefinancial sector reforms were initiated by the government in early 1990s that

alsoencouraged investments in insurance business. The number of domestic

insurancecompanies increased to 62 in 1995 while foreign participation was reduced to 9

insurancecompanies. One of the significant changes in insurance regulation was the abolition of

theoffice of controller of insurance and after the conversion of corporate law Authority in

toSECP, a new department was formed in SECP to look after the affairs of the insuranceindustry.

Since the Insurance Act 1938 had become outdated, it was prudent to replace itwith some newregulations. The new Insurance ordinance was promulgated in August 19,2000 by the SECP that

increased the minimum paid-up capital of non-life insurancecompanies to Rs. 80 million and for

life insurance companies to Rs. 150 million.


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STATE LIFE

INSURANCE


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CORPORATION

OF PAKISTAN

Brief History:

The Life Insurance Business in Pakistan was nationalized during March 1972. Initially Life

Insurance business of 32 Insurance Companies was merged and placed under three Beema Units

named A, B and C Beema Units. However, later these Beema Units were merged and

effective November 1, 1972 the Management of the Life Insurance Business was consolidated

and entrusted to the State Life Insurance Corporation of Pakistan.

State Life Insurance Corporation of Pakistan is headed by a Chairman and assisted by the

Executive Directors appointed by Federal Government. Up to July 2000 the Corporation was run

by Board of Directors constituted under Life Insurance (Nationalization) Order 1972. In July

2000, under Insurance Ordinance 2000, the Federal Government reconstituted the Board of

Directors of State Life which runs the affair of this Corporation.


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The basic structure of the Corporation consists of Four Regional Offices, Twenty-Six Zonal

Offices, a few Sub-Zonal Offices, 111 Sector Offices, and a network of 461 Area Offices across

the country for Individual Life Insurance; Four Zonal Offices and 6 Sector Offices with 20 Sector

Heads for Group & Pension are involved in the Marketing of Life Insurance Plans policies and

products offered by State Life and a Principal Office. The Zonal Offices deal exclusively with Sales

and Marketing. Underwriting of Life Insurance Policies and the Policyholders Services. Regional

Offices, each headed by a Regional Chief, supervise business activities of the Zones functioning

under them. The Principal Office, based at Karachi, is responsible for corporate activities such as

investment, real estate, actuarial, overseas operations, etc.

Total income of the Corporation was 390.50 million rupees in 1973 which has gone up

to41,829.9 million rupees in 2008 (annual compound growth rate 13.30%). The corporationhas

shown a tremendous growth rate in all the sectors during the period from 1973 to2010. Total

number of policies in force (individual life) was 357,413 in 1973 and2,568,698 in 2009, as shown

in the annual report for the year ending 2009. First yearpremium has gone up from 48.2 (Year

1973) million rupees to 5,158.6 million rupees(Year 2009). Total death claims paid by the

corporation are 41092, amounting to 5071million rupees between the period from 2002 tomarch 2009.

Core Values:

Objectives:

To run life insurance business on sound line. To run life insurance business on sound line. To provide more efficient service to the policyholders. To maximize the return to the policyholders by economizing on expenses and increasing

the yield on investment.

To make life insurance a more effective means of mobilizing national savings.


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To widen the area of operation of life insurance and making it available to as large asection of the population as possible, extending it from the comparatively more affluent

sections of society to the common man in towns and villages.

To use the policyholders fund in the wider interest of the community.

Mission:

To remain the leading insurer in the country by extending the benefits of insurance to all

sections of society and meeting our commitments to our policy holders and the nation.

Quality Policy:

To ensure satisfaction of our valued policyholders in processing new business, providing after

sales service and optimizing return on Life Fund through a quality culture and to maintain

ourselves leading life insurer in Pakistan.

Major Achievements:

The major function of the State Life Insurance Corporation of Pakistan is to carry

out Life Insurance Business; however, it is also involved in the other related business activitiessuch as investment of policyholders fund in Government securities, Stock market, Real Estate

etc. The major achievements of State Life are as under:

On the commencement of the operations, the Corporation took a very important stepby effecting reduction up to 33% in the premiums on the past and potential Life

Policies for the benefit of the Policyholders.


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State Life is profitable organization and it paid Rs.2.657 billion as dividend to theGovernment of Pakistan since its inception in 1972.

State Life has played very vital role in the economy by providing employment to thepeople of the country as permanent employees and as part of its marketing force and

by investing the huge funds in different sectors of the economy. The Investment

Portfolio of State Life as at 31.12.2009 stands at Rs.191.445 billions.

Investment portfolio also includes investment in Real Estate which stands at a bookvalue of Rs.2.538 billion as at 31.12.2009 whereas it fair value is around Rs.21.681

billion in the same period.

The Paid up Capital increased from Rs.10 million in 1972 to Rs.1,100 million in 2009. The Premium income increased from Rs.0.317 billion in 1972 to 28.367 billion in 2009.

Similarly Investment income including rental income increased from Rs.0.81 billion in

1972 to 274.152 billion in 2009.

Total statutory fund of State Life stands at Rs.199.445 billion in 2009 as againstRs.1.494 billion in 1972.

State Life is smoothly striving towards its objective of making life insurance availableto large section of the society by extending it to common man. As at December, 2009

the total number of policies inforce under individual life were 2.895 million andnumber of lives covered under group life insurance were 3.754 million.

Organizational Structure:

It is headed by chairman who is a CHIEF EXECUTIVE of the corporation and appointedby the governmentthe other administrative level and authorities is given below

Board of directors:

It comprises of 7 members who are responsible for making plans and policies to achievethe set goals of

the organization.

Executive Directors:


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It comprises of 4 members responsible for implementation of policies and directivesof the board of

directors.

Regions:

There are 4 regions in Pakistan headed by regional chiefs responsible for looking afterall the zones

under his administration.

Zones:

There are 26 zones in Pakistan headed by the zonal head responsible for procurementof business to

achieve the set business target of the organization.The basic structure of the Corporation consists of

Four Regional Offices, Twenty-SixZonal Offices, a few Sub-Zonal Offices, 111 Sector Offices, and a

network of 461 AreaOffices across the country for Individual Life Insurance; Four Zonal Offices and 6

SectorOffices with 20 Sector Heads for Group & Pension are involved in the Marketing of LifeInsurance.

Plans policies and products offered by State Life and a Principal Office. The Zonal Offices

deal exclusively with Sales and Marketing. Underwriting of Life Insurance Policies and the

Policyholders Services. Regional Offices, each headed by a Regional Chief, supervise business activitiesof the Zones functioning under them. The Principal Office, based at Karachi, is responsible for corporate

activities such as investment, real estate, actuarial, overseas operations, etc.

Organizational Chart:


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Management hierarchy:


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Board Of Directors:


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PLACES

HEAD OFFICE:

State Life Insurance Corporation Of PakistanPrincipal Office State Life Building No. 9,Dr. Ziauddin Ahmed

Road, Karachi-75530PO BOX No 021-99202800-9 Lines

REGIONAL OFFICES:

There are 4 regions in Pakistan headed by regional chiefs responsible for looking afterall the zones under

his administration.


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Southern Region

Central Region

Multan Region

North Region

ZONAL OFFICES:

There are 26 zones in Pakistan headed by the zonal head responsible for procurementof business to

achieve the set business target of the organization.

Karachi (Southern) Zone

Karachi (Central) Zone

Karachi (Eastern) Zone

Hyderabad Zone

Quetta Zone

Sukkur Zone

Mirpurkhas Zone

Larkana Zone

Lahore Central Zone

Lahore Western Zone

Gujranwala Zone

Faisalabad Zone

Sargodha Zone

Sialkot Zone

Multan Zone

Sahiwal Zone

RahimYar Khan Zone

Dera Ghazi Khan Zone

Bahawalpur Zone

Peshawar Zone


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Rawalpindi Zone

Abbottabad Zone

Gujrat Zone

Islamabad Zone

Mirpur (AK) Zone

Swat Zone

GROUP AND PENSION:

There are 4 zonal offices of Group &Pension and under these zones there are many sectoroffices.

Group and Pension Rawalpindi Zone

Group and Pension Peshawer Zone

Group and Pension Karachi Zone

Group and Pension Lahore Zone


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PROMOTION:

Advertising plays a significant role in the promotion of life insurance business. Product campaigns on

Shadabad Plan & Child Education & Marriage Plan were launched in National and Regional dailies.

Advertisements to give recognition to the Area Managers on their business performance were also

released in the print media.

A multi media advertising campaign on bonus announcement of policyholders in print &electronic media

was also launched at the end of the year.

Specially produced radio programs in Urdu & Regional languages were broadcasted from Radio Pakistan

and FM Channels.

State Life outdoor advertising made its presence on LCD screens placed at Karachi and Lahore

international Airports besides screening of TV commercials on CCTV .

Well known media advertisement started with the prayer of a daughter

A Khuda mara Abbu salamat Raheen

Traveled to wipe off the tears of a widow (Salma Waheed),


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Insurance Plans Issued By State Life:

Following are the main plans which are Issued by State Life Insurance

Corporation:

Individual Life Plan Group Life and Pension Plans Insurance Plans for Gulf Bancassurance


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Individual Life Plans:

Following are the main Individual Life Plans which are issued by the State Life

Corporation:

Whole Life Assurance Endowment Assurance Sadabahar Plan Anticipated Endowment Assurance Shad Abad Assurance

Jeevan Sathi Assurance Child Education & Marriage Assurance Child Protection Assurance Sunehri Policy Shehnai Policy Optional Maturity Endowment Nigehban Plan Muhafaz Plus Assurance Supplementary Covers


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Whole Life Assurance :

It is a unique combination of protection and savings at a very economical premium. Death at any time

before age 85 years terminates payment of premiums and the sum insured and attached bonuses

become payable. In the event the insured survives to the policy anniversary at age 85 years, the policy

matures and the sum insured plus bonuses become payable. Under this plan the rates of bonuses are

usually much higher than the other plans and they help in increasing not only protection but also the

investment element of the policy substantially. Click here for supplementary covers which can be

attached with this plan.

This plan is best suited for youngsters who have at initial stages of their careers and cannot afford to payhigh premiums. Individuals who anticipate requirement of a lump sum in far future can also opt this

plan.


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Endowment Assurance:

Its a safest and surest method of guaranteed cash provision either at a

specified time or at death (Allah forbid). Under these policies, the sum insured plus bonuses are payable

at the end of the specified number of years or at death of the life insured if earlier. Premiums are

payable for the specified number of years or till death, if earlier. The benefits under the plan can be

further increased by attaching supplementary covers. For details of supplementary covers, please click

here.

The plan serves the requirements of a family in various shapes by way of financial

help at retirement, education of children or provision of capital for business.


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Sadabahar Plan :

Sadabahar is an anticipated endowment type with-profit plan that provides lump sum

benefit at certain stages during the premium-paying term or on earlier death. In addition, this plan has a

built-in Accidental Death Benefit (ADB) rider so that the policyholder gets an additional sum assured in

case of death due to an accident.

This plan is a safe instrument for cash provision at the time of need. With this plan, the

policyholder can secure greater protection and continued prosperity for the family at an affordable cost.

Admissible Ages and Terms This plan is available to all members of the general public,

aged from 20 to 60 years nearest birthday. Both males and females may purchase this plan. Terms

offered under this plan are 12,15,18, 21, 24, 27 and 30 years.

Survival Benefits:

The policyholder can get the following survival benefits under this plan:

On completion of one-third of the policy term, 20% of basic sum assured can be taken bythe policyholder. Another 20% of the sum assured can be taken on completion of two-thirdof the policy term and the remaining 60% of basic sum assured plus accrued bonuses (if

any) shall be payable at the end of the policy term in the event of survival of the assured.

If the option to withdraw an installment of 20% sum assured is not exercised on the duedate or within 6 months after the due date, a special bonus will automatically be added to

the policy at the end of 6 months. In this event:

On death of the assured while the policy is in force, the special bonus will be payable inaddition to:


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(1) Basic Sum Assured

(2) Other Reversionary Bonuses accrued on the policy and (3) the amount of any

installment left with State Life.

On the maturity date, the special bonus will be payable together with all the installments ofthe sum assured remaining with State Life, in addition to regular reversionary bonuses

accrued on the policy.

So long as the policy remains in force, the policyholder may surrender the unclaimedinstallment of sum assured together with the related special bonus. The aggregate cash

surrender value of the two shall not be less than the amount of the said unclaimed

installment.

The reversionary bonuses as per usual practice will continue to be allotted each year on thebasic sum assured (if in force) as and when Actuarial Surplus is declared. However, the

unclaimed installments of the sum assured and related special bonus will not participate in

State Lifes Actuarial Surplus.

Death Benefits:

The full basic sum insured plus accrued bonuses are payable on death of insured any time while the

policy is in force. In addition, if death occurs as a result of an accident, additional amount equal to one

basic sum assured, subject to maximum limit, will be paid. The usual maximum on the ADB of Rs. 4

million will apply and premium will be calculated accordingly

Bonuses:

This policy will participate in State Lifes surplus. Rates of bonus applicable will be 25% higher than thoseon anticipated endowment plan.


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Anticipated Endowment Assurance:

This is a modified form of endowment assurance and is also called Three Payment Plan.

Besides fulfilling the long-term financial needs, it also helps in meeting the short-term financial

exigencies. As the name suggests, the plan offers three payments throughout term of the policy.

The plan offers survival benefits equal to 25% of sum insured on completion of 1/3rd and 2/3rd term of

the policy. If the policyholder does not withdraw the survival benefits, a very attractive special

reversionary bonus is available. Click here for special reversionary bonus currently available. On

completion of term of the policy, the remaining 50% sum insured plus accrued bonuses shall be payable.

If the life insured expires during term of the policy, sum insured, accrued bonuses, unclaimed survival

benefits and special reversionary bonuses are payable. Click here for supplementary covers available

with this plan.

The plan is suitable for the individuals who have long-term financial needs but also anticipate

requirement of money relatively earlier. Three Payment Plan helps fulfilling these short-term financial

needs without terminating the actual contract.


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Shad Abad Assurance:

Shad Abad Plan is an extended form of endowment assurance. The benefits under the

policy increase manifold in the event of death of the life insured.

On completion of term of policy, sum insured plus bonuses attached to the policy are payable. However,

on death during the policy term, the death benefit consists of double of sum insured with accrued

bonuses. Incase of death due to accident, the death benefit consists of four times the sum insured plus

bonuses. The coverage can be further widened by attaching supplementary covers with the policy. Click

here for details of the supplementary covers.

This plan meets the requirements of those who appreciate the basic savings purpose of endowment

assurance but also like some additional cover to protect loved ones in case they die, Allah forbid, before

maturity.


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Jeevan Sathi Assurance:

This is a joint life plan and covers lives of two partners say husband and wife

simultaneously. Premiums are payable till the end of the specified term or till death of either of the

insured persons, if earlier. The plan contains extensive benefits; an overview of which appears as under:

On the death of the first life, the sum insured will be paid to the survivor. Further

premiums under the policy will be waived, but the insurance protection of the second life will continue.

Also, the policy will continue to participate in profits of the Corporation. On death of the second life,

again the sum insured will be paid together with the attaching bonuses. In this event the policy will

terminate.

If the second life survives the term of the policy, he or she will be paid sum insured

together with the attached bonuses, even though the sum insured has been paid once, on the death of

the first life. If both the lives survive the term of the policy, the sum insured will be paid to them jointly,

only once, together with the attached bonuses. Different supplementary covers are also available for

increasing coverage under the policy.

Jeevan Sathi Plan is best suited for those married couples who want to enjoy insurance coverage for a

comparatively lesser premium. Moreover, housewives who are otherwise not insurable can also enjoy

the benefits of insurance policy through this plan.


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Child Education & Marriage Assurance:

Child Education & Marriage Assurance is a plan for the protection of childs future. It

provides a lump sum benefit for the child at the completion of the policy term. On completion of term of

the policy, full sum insured together with the accrued bonuses become payable to the policyholder.

If the policyholder dies (Allah forbid) before completion of the term, a family income benefit of Rs 240

per 1000 sum insured per annum is paid to the child until the completion of policy term. Further, future

premiums under the policy are waived and policy remains in force with full sum insured and continues

to participate in State Lifes surplus and receive bonuses. Upon the completion of policy term, the child

gets two options of either getting the proceeds in a lump sum or in five equal installments.

Continue the policy in the same manner as earlier by switching the plan for the benefit ofanother child.

Get a refund of all the previous premiums paid till the death of the child or the cash value ofthe policy, whichever is higher and terminate the contract.

Continue the policy without naming another child in which case the benefit of Refund ofPremium [as provided above under condition (b)] will not be available.

Child Education & Marriage Plan is suited for the parents who are conscious about the future of their

children. The term of the plan is such that the lump sum benefit becomes payable when the child attains

a predetermined age of 18, 21 or 25 years. These ages may be selected considering the occasion at

which children generally need financial assistance for higher education, marriage, or setting up business.

Depending upon your individual needs, the plan is available in two separate versions of with andwithout built-in family income benefit. In addition to parent, this plan can also be affected by

grandparents, uncles, aunts or any other person who is paying for the maintenance of the child.


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Child Protection Assurance:

This is a joint life assurance and covers the lives of child and either of the parents. If the

policyholder and the child both survive full term of the policy, sum insured and accrued bonuses

become payable. If the policyholder dies before completion of term of the policy the payment of

premiums ceases and the child is paid an income of Rs 100/- per thousand sum insured per annum till

the completion of the policy term. On completion of policy term, sum insured inclusive of bonuses

accrued till the death of the policyholder is paid to the child.

If the child dies (Allah forbid) before maturity of the policy and during lifetime of the

policyholder, the death claim payable to the policyholder depends on the age at death of the child.

As the name suggests, the plan is suitable for parents who want to cater future financial

needs of their children incase of death of the breadwinner of the family. The plan has a unique featureof providing coverage on the life of child. The coverage of the policy can further be widened by attaching

supplementary covers. Please click here for the details of supplementary covers.


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Sunehri Policy:

Sunehri Policy is an innovative life insurance product. It is flexible, secure and meets the

challenges of inflation quite economically. Under a special feature of this plan, from third policy year

onwards, sum insured under the policy and premium will increase by 6% per annum without providing

any evidence of insurability. From the third policy year onward, the policyholder is provided with a

statement showing the build up of cash value of the policy and sum insured for the year. The policy also

participates in the surplus of State Life and currently the rate of bonus is Rs 105 per thousand per

annum of the adjusted opening cash value.

Death Benefit:

If the life insured dies during first two years of policy issue, then the initial basic sum

insured will be payable. If the life insured expires in third or later policy years, the death benefit payable

will be equal to sum insured applicable to the policy year of death plus adjusted opening cash value.

Maturity Benefit:

Policy matures on policy anniversary nearest to age 70 years of the life insured. The maturity

benefit equals to cash value of the policy at age 70.

This plan is suitable for individuals who have started their career and expect increase in their income

over a certain period of time say a year or two. The increase in premium and sum insured helps them to

meet their increased insurance requirement with increase in incomes.


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Shehnai Policy:

Shehnai Policy is an innovative life insurance product. It provides a solution to the

problems of many concerned parents who want to save now in order to provide for their childrens

higher education, marriage and other expenses when the need arises. The term of the plan is such that

the lump sum benefit becomes payable as the child attains the age of 25 years.

Shehnai Policy also caters from the ravages of inflation. This is done by the option of

automatic increase of 6% per annum in sum insured and premium from third policy year onward. From

the fourth policy year onward, the policyholder is provided with a statement showing the build up of

cash value of the policy and sum insured for the year. The policy also participates in the surplus of State

Life and currently the rate of bonus is Rs 105 per thousand per annum of the adjusted opening cash

value.

Maturity Benefit:

The policy matures when the child attains age 25 years. At maturity the cash value of the policy is paid

to the child. The cash value includes all the bonuses attached with the policy.

Death Benefit:

If the life insured dies during term of the policy, premium payments stop and the sum insured applicable

to the policy year of death is deferred to be payable when the child attains age of 25. At the time of

death of the life insured, the said sum insured is added to the adjusted opening cash value to be calledthe enhanced cash value and participates in State Lifes surplus until it is paid out to the child when he

or she attains the age of 25 years. The child will have an option of either collecting the benefit in a lump

sum or in five equal annual installments.


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Optional Maturity Endowment:

It is an endowment assurance with a built in option to mature early. The plan is

available for individuals aged 20 to 45 years. The policyholder has following options regarding maturity

of this plan.

After the policy has been in force for 20 years or more, the policyholder gets an option tomature the policy for a proportionately reduced sum insured.

After the policy has been in force for 20 years or more, the policyholder, depending on his or herneeds, can mature the policy in parts.

Let the policy mature at originally selected term. In this case the policyholder gets an additionalbonus.

The policy participates in bonuses declared by State Life from time to time. Please click

here for details of bonuses currently available for this plan. Coverage under the policy can also be

enhanced by attaching supplementary covers.


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Nigehban Plan:

This plan provides term insurance cover for a period ranging from 5 to 10 years.As the

name suggests, this plan is meant to provide protection during the term of the policy only i.e. sum

insured is payable on death if it occurs during the term of insurance while the policy is in force. The plan

does not carry any survival benefits, maturity benefits, surrender values, loan values etc. The policies

will be without profits.

The plan is available in two versions namely, with single premium and with annual premiums. Attaching

certain supplementary covers can widen the coverage under the plan.


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Muhafaz Plus Assurance:

Muhafiz Plus provides a substantial sum of money on maturity or earlier death (Allah

forbid) of the life insured. On maturity, the policyholder will receive sum insured plus bonuses attached

with the policy.

However if the life insured dies before completion of term of the policy, basic sum

insured plus attached bonuses will be paid to the dependants immediately. In case of death due to

accident, the double of the sum insured is paid. In addition, the dependents will also be paid an income

of Rs 240 per thousand sum insured per annum for a fixed period of 15 years. The first payment will fall

due on the policy anniversary immediately after the death of the life insured.


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Supplementary Covers:

State Life offers a number of supplementary covers to enhance coverage under

different plans. These supplementary covers can be attached with the main policy and are not available

exclusively. Please click below for the details of these supplementary covers:

Accidental Death & Indemnity Benefit (AIB) Accidental Death Benefit (ADB) Family Income Benefit (FIB) Waiver of Premium (WP) Special Waiver of Premium (SWP) Term Insurance (TI) Guaranteed Insurability (GI) Refund of Premium Rider (RPR) Hospital & Surgical Benefit (H&S)


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Accident Death & Indemnity Benefit (AIB):

This supplementary cover provides for payment of additional amount equal to the sum insured under

the policy in the event of death by accidental means, or in the event of loss of two or more limbs or loss

of sight in both eyes. One-half of the sum insured will be paid for loss of one limb; one-third of sum

insured in the event of loss of one eye and one-fourth of sum insured will be paid for loss of thumb and

index finger. Moreover, weekly indemnities are also available for total and partial disability of the life

insured as a result of the accident. If the life insured becomes permanent and total disable, an annuity

of 10% of sum insured will be payable for a maximum period of ten years.

AIB is suitable for office commuters and individuals who travel and use different

modes of transport. The rates of premium for this supplementary benefit range from Rs 4 to Rs10 per

thousand sum insured depending upon the occupational rating of proposer for standard lives whose ageshould be between 18 to 55 years.

AIB can be attached with following plans:

Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Jeevan Sathi Assurance Child Education & Marriage Assurance Shad Abad Assurance Shehnai Policy Child Protection Assurance (For adult life only) Muhafiz Plus Assurance Nigehban Plan Optional Maturity Plan


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Accidental Death Benefit (ADB):

This supplementary cover will provide for payment of an additional amount equal to sum insured in the

event of death by an accident as defined in the contract. On payment of a modest premium, a

handsome accidental coverage is obtained through this supplementary cover. ADB is highly

recommended for individuals who travel daily through road transport.

The cover is available to lives between 5 and 55 years of ages. Maximum term of this supplementary

benefit is not allowed to exceed the premium paying term of the basic policy, or 60 years of age of the

life proposed whichever is earlier.

ADB can be attached with following plans:

Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Jeevan Sathi Assurance Child Education & Marriage Assurance Shehnai Policy Child Protection Assurance Muhafiz Plus Assurance Nigehban Plan Optional Maturity Plan


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