Unauthorized reproduction or distribution of this material or part of it is not permitted with out prior consent
Copyright© 2002
Planning Life Insurance ?
learn about the
basics of life insurance.
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Take control of your life.
Learn the basics.
Then
seek the advice of your
RESOURCES Representative.
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The general assumption is that life insurance is
available for purchase when desired.
But this is not the case.
Waiting could be a significant mistake.
Many prospects were surprised when advised that they
would not be able to qualify for coverage or would be
rated and forced to pay higher premium.
Remember
your money pays for the insurance
but
your health buys it.
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Once you have thought about your
financial needs and familiarized yourself
with the basic of life insurance, you may
decide to purchase a life insurance
policy.
Take control of your life.
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Should be one of international standing, sound
financials, highest credit rating and with a
history of customer friendly track record.
Should be one of high maturity and sound
experience of finance and investment. He
should be cooperative and willing to apply
himself to the requirements of clients.
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Copyright© 2002
Selecting an Insurer
Major consideration
Financial stability
Cost
Service
Rating
Attitude toward
claims
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Ratings
A+++
A++, A+
A, AB++, B+
B, BC++, C+
C, CD
E
F
Highest
Superior
Excellent
Very Good
Good
Fair
Marginal
Below minimum standards
Under state supervision
In Liquidation
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Copyright© 2002
Choosing
an Insurance Advisor
Check whether the agent is experienced agent.
Look for an agent with specialized training in life
insurance
Determine if your agent has any professional designations
Agents who also are financial planners are better equipped
Talk with the agent yourself to determine compatibility
[email protected]
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Choosing
an Insurance Advisor
The agent should be willing and able to explain
various policies and other insurance-related
matters.
You should feel satisfied that the agent is
listening to you and looking for ways to find you
the right type and amount of insurance.
If you are not comfortable with the agent, or you
aren’t convinced he or she is providing the service
you want, find another agent.
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What do I expect from the Advisor
apprise you of insurance products and
advise you one suitable to you
provide you with all details
give a point-by-point explanation
seek the advice of your RESOURCES Representative.
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Seek clarifications
ask
How long can I keep this policy? If I want the option
to renew the policy for a specific number of years or
until a certain age, what are the terms of renewal?
Will my premiums increase? If yes, when?
Can I convert to a permanent policy? Will I need a
medical exam when I convert?
Are the premiums within my budget?
Can I commit to these premiums over the long term?
[email protected]
Copyright© 2002
Seek clarifications
ask
How much will I receive if I surrender the policy?
Keep in mind that permanent insurance provides protection for your entire
life.If you don’t plan to keep the policy for many years, consider another type.
Cashing in a permanent policy after only a few years can be a costly way to get
short-term insurance protection.
 How much life insurance do I need?
What's the difference between term, convertible term,
and whole life insurance?
What are the types of permanent insurance?
By using medical tests are insurers trying to eliminate
any applicant likely to develop a serious health
condition
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Seek clarifications
ask
What should I consider in naming life
insurance beneficiaries?
Does it make sense to replace a policy?
As a single person, do I need
insurance?
I have the option of retiring early. How
can I make sure to make the right
decision?
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Seek clarifications
ask
What happens if I fail to make the
required premium payments?
What if I become disabled and can't
pay the premiums
Are other riders available?
When will the policy be in effect?
Is a buyer's guide available?
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Copyright© 2002
We generally wonder if the life insurance we now have
would be enough or too much to cover our needs.
There is no standard formula yet there are
generally accepted calculation guidelines:
How Much Life Insurance
Do I Need?

• [email protected]
.
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Estimating the Amount of
Life Insurance to Own
It requires you to do an inventory of all of your finances,
and to think long and hard about how your beneficiaries
would maintain their lifestyles. You also must consider
inflation and, if you have children, future college
education costs
Short-term needs + long-term needs - resources
= how much life insurance you need.
do an analysis at least once every three years,
or
whenever you have had a major life change.
"Some of your needs may decrease,
some of your needs may never go away,"
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Estimating the Amount of
Life Insurance to Own
Human Life Value Approach:
net present value of families share of
future income (NPVIF n,i) (avg. annual
earnings - (taxes and self-maintenance
costs))
Needs Approach:
Capital Retention Approach
Capital Needs Analysis): determine the
amount of capital needed to provide
income to dependents (income = interest
earned on principle; remainder is
distributed at a later date)
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Estimating the Amount of
Life Insurance to Own
Five Steps to a needs analysis
Step 1
Add up all of your short-term needs
Step 2
Add up your long-term debts
Step 3
Calculate family maintenance expenses
Step 4
Figure out what resources you have
Step 5
Subtract your resources from your total expenses.
The figure you get should represent the amount of life
insurance coverage you should buy
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few tips to keep in mind about your life insurance purchase
Take your time. On the other hand, don’t put off an important decision that
would provide protection for your family. Make sure you fully understand any
policy you are considering and that you are comfortable with the company,
agent, and product.
When you purchase a policy, make your check payable to the
insurance company, not to the agent. Be sure to get a receipt.
Review the copy of your application contained in your policy. Promptly
notify your agent or company of any errors or missing information.
If an agent or company contacts you and wants you to cancel your current
policy to buy a new one, contact your original agent or company before making
a decision. Surrendering your policy to buy another could be very
costly.
If you have a complaint about your insurance agent or company, contact the
customer service division of your insurance company. If you are still dissatisfied,
contact IRDA.
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Copyright© 2002
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Ask Resources
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(India)
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