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.

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 that s 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.

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:

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

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 :

a-Insurability b-Legality Indemnification

c-

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 may lead 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

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 insurance policy 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 noncatastrophic, 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:

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 be determined 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

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-

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 shipment be 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.

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 other specialist 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

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

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 Insurance b) 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 pay a 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.

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 the surviving 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:

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Auto Insurance Home Insurance Health Insurance Accident,sickness and unemployment Insurance Casualty Property Insurance Credit Insurance Liability Insurance Other types Insurance Financing Vehicles Closed Community Self Insurance

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:

a)

b)

c) d)

e)

Disability insurance policies provide financial support in the event of the policyholder 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. Long-term disability insurance covers an individual's expenses for the long term, 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. Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work. Total permanent disability insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance. Workers' compensation insurance replaces all or part of a worker's wages lost 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 losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.

b) Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations 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 equipment breakdown 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 to property 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 in the 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 losses incurred 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 in the 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 homeowners insurance (often abbreviated in the real estate industry as HOI), is the type of property insurance that covers private homes, as outlined above.

i) j)

k)

l) m) n) o)

Landlord insurance covers residential and commercial properties which are rented to others. Most homeowners' insurance covers only owner-occupied homes. Marine insurance and marine cargo insurance cover the loss or damage of vessels at 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. Supplemental natural disaster insurance covers specified expenses after a natural disaster 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. Surety bond insurance is a three-party insurance guaranteeing the performance of the principal. Terrorism insurance provides protection against any loss or damage caused by terrorist activities. Volcano insurance is a specialized insurance protecting against damage arising specifically from volcanic eruptions. Windstorm insurance is an insurance covering the damage that can be caused by wind 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 a form 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 business insurance 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:

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 operations injure 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 and cleanup costs as a result of the dispersal, release or escape of pollutants. d) Errors and omissions insurance is business liability insurance for professionals such as insurance agents, 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), protects insured professionals such as architectural corporations and medical practitioners against potential negligence claims made by their patients/clients. Professional liability insurance may take 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, except those 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 common ownership. 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.

d) Collateral protection insurance (CPI) insures property (primarily vehicles) held as collateral for loans made by lending institutions. e) Defense Base Act (DBA) insurance provides coverage for civilian workers hired by the government to perform contracts outside the U.S. and Canada. f) Expatriate insurance provides individuals and organizations operating outside of their home 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 corporations operating 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 action against 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 by governments 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 hobby farms, 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 and television production and print, against risks such as defamation. l) Pet insurance insures pets against accidents and illnesses; some companies cover routine/wellness care and burial, as well. m) Title insurance provides a guarantee that title to real property is vested in the purchaser and/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 covers certain 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 or other social organizations.

b) No-fault insurance is a type of insurance policy (typically automobile insurance) where insureds are indemnified by their own insurer regardless of fault in the incident. c) Protected self-insurance is an alternative risk financing mechanism in which an organization 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 large commercial 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 losses out 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-insured employers 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 a summary 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 Insurance 2- Social safety net

3- Social security 4- Social Security debate 5- Social Security 6- 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 for losses 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.

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.

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 new lands, 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.

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 their employees,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.

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 reinsurance company 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

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 to providegovernment 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 andsemigovernment 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 new regulations. 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.

STATE LIFE INSURANCE

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.

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 Policyholder s 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 to march 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.    

 To widen the area of operation of life insurance and making it available to as large a section 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 activities such 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 step by effecting reduction up to 33% in the premiums on the past and potential Life Policies for the benefit of the Policyholders.

 State Life is profitable organization and it paid Rs.2.657 billion as dividend to the Government of Pakistan since its inception in 1972.  State Life has played very vital role in the economy by providing employment to the people 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 book value 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 against Rs.1.494 billion in 1972.  State Life is smoothly striving towards its objective of making life insurance available to 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 and number 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 government the 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:

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 Policyholder s 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.

Organizational Chart:

Management hierarchy:

Board Of Directors:

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.

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

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

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),

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

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

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 pay high premiums. Individuals who anticipate requirement of a lump sum in far future can also opt this plan.

Endowment Assurance:
It s 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.

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 by the policyholder. Another 20% of the sum assured can be taken on completion of two-third of 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 due date 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 in addition to:

(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 of the 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 unclaimed installment 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 the basic 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 Life s 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 Life s surplus. Rates of bonus applicable will be 25% higher than those on anticipated endowment plan.

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.

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.

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.

Child Education & Marriage Assurance:

Child Education & Marriage Assurance is a plan for the protection of child s 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 Life s 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 of another child.  Get a refund of all the previous premiums paid till the death of the child or the cash value of the policy, whichever is higher and terminate the contract.  Continue the policy without naming another child in which case the benefit of Refund of Premium [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 and without 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.

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 feature of 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.

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.

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 children s 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 called the enhanced cash value and participates in State Life s 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.

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 to mature 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 her needs, can mature the policy in parts.  Let the policy mature at originally selected term. In this case the policyholder gets an additional bonus. 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.

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.

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.

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)

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 age should 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

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

Family Income Benefit (FIB):

This supplementary cover provides that incase of death of the life insured during term of this cover, an annuity of 10% to 50% per annum of the basic sum insured will be payable till the completion of term of this cover. For instance, if a life insured has taken 25% FIB supplementary cover for 20 years on his policy having sum insured of Rs 1,000,000. If the life insured expires during term of FIB, say at the end of fourth year, an annual sum of Rs 250,000 will be payable for rest of 16 years. While the basic plan provides a lump sum, FIB provides a regular stream of income to the dependents and helps in meeting the day to day expenses. This supplementary cover is available to lives between 18 and 55 years of ages. It 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 Optional Maturity Plan

Waiver of Premium (WP):

This supplementary cover provides for waiver of due premiums in the event of the life insured s Total and Permanent Disability caused by accident as defined in the contract. With the help of WP, the life insured gets relieved of vagaries of paying premiums incase of his or her being incapacitated as a result of accident. The rate of premium for standard risk will be Rs 0.50 to 1.00 per thousand of sum insured depending upon the age of life insured. WP is available to lives between 18 and 55 years of ages. It can be attached with following plans:         Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Jeevan Sathi Assurance Child Education & Marriage Assurance Child Protection Assurance (For adult life only) Muhafiz Plus Assurance Optional Maturity Plan

Special Waiver of Premium (SWP):

This supplementary cover will provide for waiver of premiums under the policy incase of the life insured s Total and Permanent Disability due to accident or disease which renders him unable to engage in any occupation. With the help of SWP, the life insured gets relieved of vagaries of paying premiums incase of his or her being incapacitated as a result of accident or disease. SWP is available to lives between 20 and 55 years of ages. SWP can be attached with following plans:        Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Jeevan Sathi Assurance Child Education & Marriage Assurance Child Protection Assurance (For adult life only) Optional Maturity Plan

Term Insurance (TI):

In the event of death of the life insured during term of TI supplementary cover, the sum insured will be payable in addition to the benefits payable under the basic policy. Suppose, Mr A, covered under a policy of Rs 1,000,000, also attaches TI supplementary cover with his policy. Incase of his death during term of TI, a sum equal to Rs 1,000,000 will be payable under this supplementary cover. This will be in addition to the benefits payable under main policy. This supplementary cover is an excellent opportunity for individuals who want to enhance coverage of their policy substantially on payment of a meager amount of premium. TI is available to lives between 18 and 55 years of age. TIR 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 Optional Maturity Plan Guaranteed Insurability (GI) Under this supplementary cover, State Life gives the policyholder a right to purchase additional life insurance upto specified maximum amounts on specified further dates at standard rates, without evidence of insurability being required at such later dates.

The specific further dates on which additional insurance can be taken are the policy anniversaries of the basic policy nearest the 25th, 28th, 31st, 34th, 37th and 40th birthdays of the life insured. Thus the option dates for various issue ages Issue Ages 10 24 25 27 28-30 31-33 34-36 37 No of Option Dates 6 5 4 3 2 1 Option Date Ages 25, 28, 31, 34, 37, 40 28, 31, 34, 37, 40 31, 34, 37, 40 34, 37, 40 37, 40 40

This supplementary cover is available only to standard lives between 10 and 37 years of ages and who are not engaged in hazardous occupations. Only one GI will be issued on the life of any one person. GI is available only at the time of issue of the basic policy and can not be attached to the policy after its issuance. Individuals who foresee increase in their insurance needs in the near future can get benefit from this supplementary cover. It saves them from providing any further evidence of insurability incase they desire to enhance coverage under the policy. GI can be attached with following plans:      Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Child Education & Marriage Assurance Optional Maturity Plan

Refund of Premium Rider (RPR):

RPR provides for refund of premiums paid under the policy in the event of death of the life insured during term of the policy. It is an ideal form of enhancing the life cover under the policy with a modest increase in premium. This supplementary cover is available to lives between 20 and 60 years of ages. The available term ranges from 10 to 25 years. RPR can be attached with following plans:      Endowment Assurance Anticipated Endowment Assurance Shad Abad Assurance Child Protection Assurance (For adult life only) Optional Maturity Plan

Hospital and Surgical Benefits (H&S):

This supplementary cover provides benefits in case of hospitalization of the life insured, in State Life s approved hospitals, as a result of sickness or accident. On payment of double amount of premium specified for H&S, the benefits and their limits will also be doubled. H&S is available to lives between 18 and 50 years of ages. The available term ranges from 10 to 25 years. RPR can be attached with following plans:

      

Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Jeevan Sathi Assurance Shad Abad Assurance Child Protection Assurance (For adult life only) Optional Maturity Plan

Group Life &Pension Plans:

Following are the main group life and pension plans which are issued by the State Life Corporation:        Term Insurance Scheme Provident Fund Insurance Scheme House Building & Perquisites Insurance Scheme Pay Continuation Scheme Group Endowment Insurance Scheme Group Pension Scheme Private Education

Term Insurance Scheme:

Product subscription / features:
Group Term Insurance Plan provides life insurance coverage to the member of a group, such as the employees of an employer. The amount of coverage of each member is determined with reference to either his designation or salary or employment category or some other similar variable.

What need does it fulfill?

This plan provides insurance protection to the members of a group at a very affordable minimum possible cost, 24 hours coverage around the world. By promoting a sense of financial security amongst the employees it contributes to improving the working environment for the employer resulting in higher productivity. In most cases the employer is legally obliged to provide insurance cover to his employees. This plan helps the employer to fulfill this requirement. Premiums are tax-deductible for the employer. Total premium under group term insurance is lower as compared to sum of premium of all policies if issued individually to each life, due to savings in expenses.

The Benefits Of Plan:

On death of any insured member the sum assured on his life is paid for the benefit of his surviving family. This benefit is payable regardless of the total number of the deaths even if the total amount paid out exceeds the total premiums received under the policy. However, if in any three-year period State Life earns a net profit on any policy, then some share in the profit is passed on to the policyholder, depending upon the total number of members in the scheme. This share can go up to 90% in case of large sized schemes.

What riders can be added? PTD (Accident) Rider:

Under this rider the insured member is entitled to payment of the sum assured in case of any accident causing permanent and total disability, which includes loss of two limbs or two eyes or loss of hearing in both ears or severe facial disfigurement. If the disability is permanent but not total then some percentage of the sum assured is payable depending upon the severity of the disability. In this regards the same schedule of disabilities is applicable as is prescribed under the labor laws. In case of a temporary accidental disability causing absence from work a fortnightly benefit calculated at the rate of Rs. 3,000 per month or the monthly salary whichever is less is payable.

A.D.B. Rider:
Under this rider the death benefit of an insured member is doubled if the death was caused by an accident.

Natural Disability Rider:

Under this Rider if an, insured member is rendered incapable of pursuing any occupation or vocation for gainful employment due to permanent disability caused by disease or sickness then he is entitled to the sum assured as benefit.

Critical Illness Rider:

If an employee contracts any of the following critical illnesses while insured under this rider then he is entitled to the rider sum assured as benefit. Covered critical illnesses include.

     

Heart attack Coronary Artery by-pass surgery Stroke Cancer Kidney Failure Major organ transplant such as heart, kidney or liver

The insured member must survive for at least 31 days after contracting the illness to become eligible for he benefit. Some restrictions apply during the first two years of coverage.

Suitable For:
The plan is suitable for employers who desire to provide financial security to their employees by means of insurance coverage or for members of a professional body or association or some welfare association or a social club who desire to avail insurance protection on a collective basis.

Group Provident Fund Insurance Scheme:

Group Provident Fund Insurance Scheme provides life insurance coverage to the members of the provident fund scheme of an employer. The amount of coverage of each member depends upon his age and the amount of his provident fund balance at any time.

What Need Does It Fulfull?

Young employees normally have short service to their credit and consequently their Provident Fund balance is also quite meager. In case of unfortunate death of such a person the provident fund amount is not adequate for meeting the financial needs of the family such as schooling of the children, their marriage expenses and housing accommodation. Group Provident Fund Insurance Scheme is specially designed to meet such an eventually since the benefits under the scheme are on a sliding scale.

The benefits under a typical scheme are as follows:Age 18 31 41 51 56 Bracket 30 40 50 55 59 Benefit 4 times the fund balance. 3 times the fund balance. 2 times the fund balance. 1 time the fund balance. 1/2 time the fund balance.

The younger employees enjoy a higher multiple of the fund balance since the average amount of their fund balance is smaller but their requirement for insurance is greater.

Benefits of Group Provident Fund Insurance Scheme:

On the death of any member of the provident fund scheme his family is paid a lump sum amount equal to the amount of his fund balance on the date of his death multiplied by a factor depending upon the age of the employee at death. The factors applicable for a typical scheme are already given above however the employer in a particular case may adjust these factors to suit his own special requirements. If the scheme has 200 or more members then at the end of three years the fund is also entitled to some share in the profits depending upon the size of the scheme.

What riders can be added?

Any rider which can be added with group term insurance plan can also be added with this plan such ADB, PTD (Accident), NDB or Critical Illness Cover.

Suitable for..
The plan is suitable for any employer who maintains a provident fund scheme for his employees and who appreciates the benefits of providing the maximum possible insurance coverage to his employees. Some employers may appreciate the benefits of group insurance but they may avoid higher coverage under their group term insurance policy since the cost of this coverage would either have to be borne by them or if they recover the cost from the salaries of their employees then some of the employees might object to it.

For such employers this scheme is very suitable since it does not require any explicit premium contribution from the employer or the employees, instead the cost of the scheme is recovered from the annual investment return earned by the provident fund. In a typical case, if a fund is earning a return of around 12% per annum, then with the introduction of this scheme, this return may reduce to about 11 or 11 % per annum. This decrease is so small that most of the employees do not even feel it but by virtue of it their families could enjoy a handsome insurance protection against any misfortune striking the breadwinner of the family.

House Building & perquisites Insurance Scheme:

Under this plan each member of the group is insured for the total amount of loan outstanding against him inclusive of accumulated interest. The amount of Insurance is the actual amount of loan outstanding on the date of death whereas the premium is charged on the average loan outstanding over the whole policy year.

What need does it fulfill?

It provides financial security to employers and financial institutions against the risk of untimely death of any of their indebted employee or client. Very often the family of the deceased person is not is a position to repay the loans taken out by him, especially if the deceased person was the sole breadwinning member of the family. In such a case the insurance coverage provides an assurance to the creditor that he would be able to recover his capital without causing hardship to the distressed family. The creditor is also protected from the headache of constantly monitoring cases of delayed repayments of loan in hardship cases caused by unforeseen death of a bread winning family member. The premium due under this policy may be recovered by the creditor from the borrowers along with the loan repayment installments.

Benefits Of Group House Building & perquisites Insurance:

In case of death of an insured member of the scheme the total amount of the loan outstanding against him including accumulated interest is payable to the policyholder. In case State Life earns a profit on any policy during a 3-year period, the policyholder is also entitled to some share in the profits depending upon the size of the group.

What riders can be addes?

PTD (Accident) and NDB rider may be attached with this plan. These riders provide insurance cover against permanent disability due to accidental and natural causes rendering the insured member unable to earn a livelihood for himself and his family. In such a case the attaching riders can facilitate the creditor in recovering the outstanding amount of loan.

Suitable For.
This plan is suitable for employers who have a scheme for providing loans to their employees for house building, purchases of conveyance or any other goods of household use. It is also suitable for banks who are in the business of granting loans to their clients for purchase of house or conveyance or for some business venture. Similarly leasing companies and other financial institutions with similar facility may find this plan quite attractive.

Pay Continuation Scheme:

Manpower is still considered as one of the most important elements of productions inspite of the dramatic growth of microchip based automation in all walks of life, especially in commerce and industry. The overall efficiency of an organization therefore depends upon the quality of the manpower of its employees. The more devoted, hardworking and loyal the employees the higher the reward to the employer in the form of greater efficiency and profitability. Quality manpower can be attracted by offering a good employee benefits package based on ensuring security and peace of mind of the workforce so that a greater commitment is obtained from them. This is why the enlightened employer pays particular attention to the welfare and well being of their workforce through various employee benefits scheme. One of the functions of such schemes is to provide protection to the employee s dependants in the event of his death. Progressive employers do provide group insurance which pays a lump sum to the dependants. This however does not last long. What is required in addition is a regular monthly income for a period of time. To meet this Requirement State Life proudly presents a plan, which offers invaluable protection to the employee s family during his working life. The family s regular monthly income is protected for 15 years or until age 60 witchever is earlier. In this way coverage is provided for pay upon the death of the employee. This is illustrated by the following example:  Supposing the pay of an employee is Rs 2000/- per month. If death takes place at age 47 then the benefits payable will be Rs 2000/- per month up to age 60, i-e., for a period of 13 years. Total amount payable Rs.3,12,000/ If death takes place at age 35 then the benefit payable will be 2,000/- per month for a period of 15 years. Total amount payable Rs. 3,60,000/-

Annual premiums will be calculated on the basis of the employee s pay and his age and will be payable at the beginning of each scheme year. If this policy qualify for profit commission it will be payable in accordance with the rules at the end of 3 years. Cover without medical evidence is allowed on the same basis as group term with the monthly benefits being converted into a lump sum equivalent. The total of the benefits so arrived at should, however not exceed the maximum allowable under the policy.

Group Endowment Insurance Scheme:

Group Endowment Scheme is a unique saving and protection scheme through which the employees of an employer can enjoy insurance protection throughout their service and also get a lump sum cash amount upon their retirement if they survive upto retirement.

What Need Does It Fulfill?

In Pakistan most employers do not operate any pension scheme for their employees although some employers may have a provident fund scheme or a gratuity scheme. The expected benefits at retirement under a typical provident fund scheme and gratuity scheme combined are woefully inadequate for a retiring employee for maintaining his standard of living after retirement unless he supplements these benefits with his own personal savings. Keeping this in view some employers may wish to encourage a habit of saving amongst their employees for their own welfare. Group Endowment Insurance Scheme can be a means of introducing a compulsory saving scheme for the employees under the sponsorship of the employer. Participation in the scheme is usually compulsory. However, if participation in the scheme is voluntary, at least 75% of eligible employees must participate.

Benefits Of Group Endowment Insurance Scheme:

Under this scheme each employee is provided insurance protection for an amount which may be flat or depends upon the designation or salary of the employee. The amount of insurance is payable on maturity or death if it occurs earlier. In most cases the term of the endowment insurance for each employee is determined in such a way that the policy matures at or near his retirement date. This enables the maturity proceeds to coincide with retirement and supplement the retirement benefits.

 Profit Participation:

The endowment insurance is issued on a with profits basis. The same bonus rate are applicable as for the corresponding individual endowment insurance policies.

 Premium Rates:
The same premium rates are applicable as for individual endowment policy but with the added attraction that in group form some volume discounts are also applicable depending upon the size of the annual premium.

 Surrender Value:
The policy acquires Surrender Value in respect of a member after insurance cover has been inforce for at least two years on that member and no premiums are in default.  Loan Facility: Under this scheme if the member needs immediate liquidity and a policy has acquired Surrender Value in respect of member, he/she can avail a maximum loan of 80% of the net surrender value of the policy.  Continuation Priviliges: If an employee leaves the service of the employer, he can surrender his policy against the Net Surrender Value. He is also provided with the option of continuing his endowment insurance coverage in an individual capacity without any evidence of good health, for the same sum assured and term as he was enjoying during his service. The premium rates applicable to the policy are the same as are generally applicable to the same class of business in and individual capacity.

What riders can be added?

The ADB, PTD (Accident) and NDB can be added to this policy if desired.

Suitable For..
This plan is suitable for employers who desire to inculcate a habit of saving amongst their employees in addition to providing them insurance against premature death.

Group Pension Scheme:

 Introduction:
Once the working life of an individual is over, or he has retired, what will he live on? This is a question which every individual faces during his working life and is of equal importance to a concerned employer. Personal savings, Provident Fund and Gratuity are the normal assets he acquires. If not spent prudently, these aasets can fritter away in a short time. State life s Pension Scheme is the only source which provides a steady monthly income, when other sources of income stop.  What is Pension Scheme: Basically it is a saving, or call it a contribution, which is collected during the working life of an individual and invested profitably. After retirement the individual is entitled to a steady monthly income from a fund built up from the earlier savings. In a sense, it is a reward to the employee, granted today, while money is to be received on retirement.

Why a Pension Scheme:

We advise a pension scheme due to following benefits to the Employees:  After retirement when the monthly pay-cheque stops, the individual starts receiving a regular monthly income in the form of a pension.  While contribution to the scheme, the individual gets a tax concession.  The individual, after retirement, need not fear of a drastic reduction in his standard of living.  All pensions are completely tax-free.  Retirement comes as planned and not abruptly as a shock.

Benefits to the Employer:

 Contributions to the Pension Scheme by the employer are treated as business expenses and deductible in full.

 The knowledge that at the end of the career, the employee will get a regular pension, helps to build up his job loyalty and the adherence to the job, to the employer s satisfaction.  Employer does not have to find money to compensate an employee when he ceases to work.  Shows that the Management cares for their staff and is concerned about their welfare.  Attracts new employees.  Retirement of personnel is planned in advance, removing uncertainty both for the employer and the employee.  Promotion channels in the management hierarchy are unclogged.

Comparison with Provident Fund and Gratuity:

 Provident Fund:
This is like a savings bank. The contribution of the employer as well as the employee along with interest accumulated over the years, is handed over to the employee on his retirement. However, in case an employee wishes to leave before retirement is due, employer s contribution may not have to be paid; or only part payment may be made.

 Gratuity:
Gratuity is exclusively the employer s contribution for the benefit of the employee. From half to a full month s salary is credited for every year of service. Reserves are set aside in the balance sheet but they do not attract tax concession, unless it is a funded scheme. The security of the employee to receive the gratuity is dependent on the continued existence of the employer and his profits, except in case of a funded scheme.

 Pension Scheme:
In comparison with the aforementioned two retirement benefits the Pension Scheme has distinct advantages:  Payments through Pension Scheme are guaranteed for life.  A pensioner can look forward to his retirement with confidence and security.  Pension Scheme is the only method through which regular income accrues to an employee after retirement.  The payment of the pension is not dependent upon the fortune of the employer.  Lump sum comparable to those received from Gratuity or Provident Fund, can still be drawn by commutation or the pension while maintaining a steady monthly income.

How State Life can help you with the Pension Scheme?
State Life maintains a full-fledged pension Department capable of handling each and every scheme in the most competent and professional manner. It has actuaries, lawyers and other experts, besides offering a unified administrative, technical and investment service. An employer can relieve himself of the tedious and cumbersome work by using the professional service offered by State Life, the major ones being:  Designing a Pension Scheme according to am employer s exact requirements, in addition to determining the rate of contribution etc.  Preparation of explanatory documents, if required, for consideration by employees.  Assisting the employer s legal advisers with the preparation of Trust deed and Rules.  Providing reasonable assistance in negotiations with the Central Board of revenue for approval of the scheme.  Maintenance of Individual records of members of the scheme, their contributions, the employer s contribution, pension accrued etc.  Facilities for payment of pensions, when due

Security: All policies issued by State Life are guaranteed and enjoy full financial security, backed by
the Government under Article 35 of Life Insurance Nationalisation Order 1972.

Payment of Pension:
The pension will be payable by monthly instalments; commencing from the retirement of member and ceases upon his death.

Guaranteed Payments:
By incorporating a Guaranteed Pension period, payment can be ensured for a defined period say 5 to 10 years, whether or not a pensioner is alive after retirement, if, however, a pensioner survives the guaranteed period, pension will continue throughout his lifetime.

Supplementary Benefits:
They may be termed as supplementary, but are indeed those invaluable finishing touches that make the picture complete. Employees would not feel secure unless their families were provided for in the event of their untimely demise. At a little extra cost employees may be given peace of mind by providing these benefits, some of which are listed below:-

 Widow's Pension (upon death in service):

The pension will be payable to the wife of a member if he dies while in service. Normally, a widow s pension is one half of the member s pension entitlement.

 WIDOW S PENSION (upon death after retirement):

The pension is payable to the wife if the member dies after retirement. In this case also a widow s pension is one half of the pension the member was receiving. The widow s pension, in either case would be payable for life but would cease in the event of remarriage.

 Orphan's Benefits:
The inclusion of orphan s benefits in Pension Scheme along with the widow s pension, gives the scheme a level of completeness. A normal scale of orphan s benefit is 33% of the widow s pension per child, payable upon the child s attainment of age 18 or earlier marriage. Limit is imposed on the number of children who can claim such benefits.

Retirement Aspects:
Pension will be payable to a member according to a predetermined scale on the normal retirement date fixed by the employer.

EarlyRetirement:
A member who retires before his normal retirement date on account of becoming incapacitated, or for any other reason, may be granted a reduced immediate pension to commence on the day following the actual date of retirement.

Late Retirement:
A member who remains in employer s service after the normal retirement date will receive an appropriately increased pension on retirement.

Withdrawl Benefits:
If a member withdraws from the service of the employer before the normal retirement date due to any reason and without any entitlement to early retirement pension, his future contribution, or contribution made on his behalf, will cease.

Benefits to be paid on withdrawal will depend upon the withdrawal from service rules of the scheme. In such a case one of the following procedures may be adopted:

 Refund of contribution:
If a member withdraws from the contributory scheme a refund is made of all the contributions made by the employee.

 Defrred Paid-Up Pension:

A withdrawing member may be allowed a deferred paid-up pension of the amount accrued to his account on the date of withdrawal. The reduced pension will commence on his normal retirement date.

Private Education:

EDUCATION PLAN:
Moving towards more educated Pakistan

Introduction:
It is the dream of every father and mother to educate their children. They sacrifice their needs and work hard to turn their dreams into reality. However, the human life is uncertain. A sudden death of the breadwinner could end all the hopes. State Life has designed an innovative plan to address this area. You know that State Life is the largest Life Insurance Organization in Pakistan with offices throughout the country including remote areas. There are around 6 million people insured with State Life. We have the experience of more than 30 years in Life Insurance Business. Besides the immense financial strength, all the policies of State Life are guaranteed by Government of Pakistan. Being the leading Insurer in the country, State Life aims to play its role in development of education. State Life would run this plan on non-profit basis. If the plan generates any profit to State Life, whole profit would be returned to the school which may be utilized for the welfare of students such as scholarship. Having such plan would also give competitive advantage to the school. This plan intends to ensure continuation of education of school children in case their fathers or guardians die. The plan would cover the annual fee of the schools and cost of books and uniforms.

Schools to be Covered:
Registered Private Schools with at least 300 students would be eligible to be covered under this scheme. The G&P Division should approach the schools with good standing based on their general reputation, location, fee structure etc. This point should be taken as general advice and not as a matter of strict condition.

Eligible Persons:
The fathers (with age below 60) of the students studying in class level Nursery to 10 would be covered under the scheme on compulsory basis. In case the father is not alive, guardian may be covered provided his age is not more than 60 years.

Benefit:
In case the father or guardian dies while the student is studying in school, State Life would pay the fee of the student to the school. An additional annual grant equal to school annual fee would also be paid to cover the cost of books and uniforms. This payment would be made by State Life each year till the student completes education in class 10. In case the annual fee of the school increases by more than 5% in any year, the benefit payment by State Life would take it as 5%.

Cost:
The cost of the scheme for first year would be 6.00% of total annual fee of the school. The cost would be paid by the school annually in advance. State Life would review the cost each year.

Medical Requirements:
There would be no medical requirements if the annual fee is equal to or less than the Class Level Wise Limits given below

Class Level

Maximum Annual Fee upto which No Medical would be Required (Rs.) 50,000

Nursery, KG 1 & KG Class 1-5 Class 6-10 75,000

100,000

In case the annual fee is higher than the above limits, State Life would determine if any medical is required.

Data Requirement:
Once the policy is issued to the school, the data of fathers/guardians such as name, date of birth, occupation, NIC # would be provided by the school to State Life within a period of 3 months.

Claim Settlement:
The school would lodge the claim as soon as possible on a prescribed form along with necessary supporting documents such as death certificate, copy of NIC. State Life would start paying the fee within the shortest possible time, after necessary verification.

Termination of the Coverage:

The insurance coverage would terminate on the earliest of following events:

y y y y

Termination of the Contract between the School and State Life, Father/Guardian attains the age of 60, Student leaves the school, Wind up of the School,

Profit Sharing:
State Life would evaluate the scheme after every three years and if the scheme has generated any profit to State Life, 100% of the profit would be returned to the School. The profit of the Scheme would be worked out as follows:

Total Cost Paid or Payable Less: Less: Less: Less: State Life s Management Expenses & Contingency Margin Claims Paid, Claims in-process, Present Value of future payments on claims incurred & reported

Less:

Provision for claims incurred but not reported.

State Life s Management Expenses & Contingency Margin as percentage of cost would depend on average number of students remained covered during the profit commission period, as follows:

Average Number of Student per year of Cost) 300-600 601-1,000 1,001-3,000 More than 3,000

State Life s Management Expenses & Contingency Margin (as % 25% 20% 15% 10%

Closing Remarks:
This is a brief of the Scheme which is sufficient at proposal stage. If a proposal is accepted, a detailed contract would be executed between the School and State Life, containing all the details of the scheme.

Insurance Plans for Gulf:

Insurance plans issued by tha State Life Corporation are the same as issued in the local market. Following are the main palns:          Whole Life Assurance Endowment Assurance Anticipated Endowment Assurance Shad Abad Assurance Jeevan Sathi Assurance Child Education & Marriage Assurance Child Protection Assurance Wealth Builder Plan Supplementary Covers

Features of aal these plans are same for the gulf except for the wealth builder plan.

Wealth Builder Plan:

This plan is specially designed for Pakistani expatriates working in Middle East for earning better income for their loved ones. Since the earning level of overseas Pakistanis is higher in Middle East, they are in a better position to save higher amounts. It is observed that due to a disciplined method of saving, these expatriates do not find much money back home after putting their precious decades in hard work away from homes. To cater this need, State Life offers Wealth Builder Plan where insurance protection and saving term is 20 years but premium payment term is only 7 years. This plan is available in UAE, in US Dollars and UAE Dirhams and in Kuwait and Saudi Arabia, in US Dollars only. If the policyholder has paid all the 7 premiums, the plan will continue to participate in State Life s surplus and earn bonuses. Whether the policyholder stays in Middle East or returns back to home in Pakistan, the benefits at maturity or earlier death will be payable in US Dollars or UAE Dirhams in which the policy was originally issued. Attaching following supplementary covers can further increase coverage under the policy:

y y

Accident Death Benefit (ADB) Term Insurance (TI)

Following maturity and death benefits available under this plan:

Maturity Benefit:
Full sum insured plus bonuses are payable to the policyholder on completion of the 20 years term of the policy.

Death Benefit:
Full sum insured plus attached bonuses is payable to the dependents on death of the life insured.

Bancassurance:

Financial Products:
Following are the financial products which are provided by State Life to its customer through banks:

 Endowment Plan  Three Payment Plan  Sadabahar Plan

Endowment Plan:
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.

Three Payment Plan.

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 1/3 and 2/3 term of the policy. If the policyholder does not withdraw the survival benefits, a very attractive special reversionary bonus is 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. 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.

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 and 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 member 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.