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OUR TOPIC
Life Insurance Business in Bangladesh A Case Study on Meghna Life Insurance Company Ltd

Definition of Life Insurance

Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money (the "benefits") upon the death of the insured person.

Origin of Life Insurance

The earliest life insurance contract on record was written in 1583 for a period of 12 months, on the life of a William Gybbons, for a premium of 75 pounds, with a face amount of over 383 pounds. Since 1947 to 1971, life insurance business was developed in Bangladesh. In 1973 by Presidential Order, two insurance was established where one company named Jiban Bima Corporation solely established for life insurance.

About the Company

Meghna Life Insurance Company Ltd. was established in 1996. Authorized Capital for company is Tk. 60 Crore the

Issued, Subscribed and paid up Capital for the company is Tk. 20.0343 Crore

Product & Services

Company Offers six different life insurance policies to insured.
Products

Ordinary Life (Ekok Bima)

Group Insurance

Loko Bima

Islami Bima (Takaful)

Islami Khudra Bima

Swanirvar Bima

Financial Performance
Total assets of the company at 2011 was Tk. 1005.41 crore. Total claims of the company at 2011 was Tk. 103.2 crore Total life fund for 2011 was Tk. 900.2 crore Total premium for 2011 was Tk. 392.8 crore

Business Performance
Ordinary Life Insurance: Number of Policies 60,372 Sum Assured (In Crore Taka) 633.14 1st Year Premium (In Crore Taka) 51.68 Loko Bima: Number of Policies 1,21,891 Sum Assured (In Crore Taka) 455.26 1st Year Premium (In Crore Taka) 35.63 Islami Bima: Number of Policies 26,049 Sum Assured (In Crore Taka) 222.89 1st Year Premium (In Crore Taka) 18.67

Business Performance (contd..)

Islami Khudra Bima: Number of Policies 34,044 Sum Assured (In Crore Taka) 134.71 1st Year Premium (In Crore Taka) 9.22 Group Insurance: Number of Policies 26 Sum Assured (In Crore Taka 75.55 Annual Premium (In Crore Taka) 1.34 Swanivar Bima: Number of Policies 12,294 Sum Assured (In Crore Taka) 127.09 1st Year Premium (In Crore Taka) 10.73

Premium
Below is the amount of premium for each 1000 Tk. Insurance policy.
Length of Policy ( Years) Age 25 26 10 116.0 116.0 11 105.9 105.9 12 97.50 97.60 13 90.50 90.60 14 84.50 84.60 15 79.40 79.40

27
28 29 30

116.1
116.1 116.2 116.2

106.0
106.0 106.1 106.2

97.60
97.70 97.80 98.00

90.60
90.70 90.80 90.80

84.60
84.70 84.80 84.90

79.50
79.60 79.70 79.80

Bonus
Meghna Life Insurance Co. Ltd. has been tremendously working to render better services to its valued clients at their utmost satisfaction. Due to their sincere services the rate of conservation of policies through earning of renewal premium has reached to a prestigious level. In conformity with this continuous success, the company declares bonus in a higher more rate every after two years. The bonus is paid with the maturity, death, paid up and surrender amount.

Settlement of Claims
Particulars
By Death By Survival

Ordinary Life

Loko Bima

Islami Bima
6,704,370

Islami Khudra
2,551,140

Swanirvor Bima
689,000

Group

Total

19,808,540 111,466,7 35 368,465,600 36,893.10 0

2,074,141 43,293,92 6 - 563,061,8 00

157,128,700

574,400

By Surrender
Bonus in Cash Claim by Maturity Total 2011

5,650,853

18,431

1,065,248

- 6,734,532

78,526,328 61,646,26 0 85,151,631 193,100,8 43 557,602,952 303,125,3 69

756,207

81,001

1,672

- 141,011,4 68 - 278,272,4 74 2,074,141 1,032,374, 200

165,674,525

3,206,541

690,672

Total 2010

473,286,418 201,607,9 75

128,309,446

2,162,037

277,465

2,319,049 807,962,3 90

Findings
Life insurance is a contract between two parties where insurer pays a sum of money to the insured for the death of him. Life insurance was first introduced in 1583. In Bangladesh, life insurance was developed from 1973 through Nationalization order. Meghna life insurance company was established in 1996 and the current authorized capital is 60 crore. The company offers six different products Ordinary Life, Group Insurance, Loko Bima, Islami Bima, Islami Khudra Bima and Swanirvar Bima. Companys total assets, total claims, premium and life fund are greater than the previous years which indicates the growth of the company. Meghna life offers attractive premium plans, bonus policies and their settlement of claim management is very efficient.

Recommendation
Meghna life insurance companys total claims is not much satisfactory compared to previous years. Company must try to improve their services so that more people can open policy under them which will lead greater claims. Companys bonus and premium plan is suitable for middle aged people but not for young or old aged people. They must try to improve it. Company can offer more diversified products so that every classes of people can be benefited from them. Last of all, to improve the popularity of life insurance and efficiency of life insurance companies, we must have to train well both the policy holders and the insurer. Government can play a vital role in this sector.