Insurance business is not only commercial but it has become professional now. Knowledge of insurance is as much essential as trading business for the society. Privatization of insurance of insurance business has added more significance of life for the people. The prospects of insurance in the first years of the next millennium decide the direction of insurance management. Safety, Security and Investment have become need of the present society. People, now, demand insurance as compared to the previous attitude of selling insurance to people. They have become selective and practical. Insurance industry has to meet the expectations of people.
Here I prepare a report on life insurance Company that is ‘Jibon Bima Corporation’. Generally, we know life insurance is a contract, whereby the insurer in consideration of a premium undertakes to pay a certain sum of money either on the death of the insured or on the expiry of a fixed period. Jibon Bima Corporation also help people same way. Under this corporation various types of policy exist, that’s shown below.
Various life insurance schemes of the Corporation:
JBC offers various types of life insurance plan to meet people’s needs. Some of the popular insurance schemes of JBC are as follows:
- Whole Life Assurance
- Endowment Assurance
- Progressive Premium Policy
- Anticipated Endowment assurance
- Joint Life Endowment Assurance
- Child Protection Policy
- Double Protection Endowment Policy
- Estate Duty Policy
- Children Education and Marriage Policy
- Guaranteed Bonus Endowment Assurance
- Multiple Payment Policy
- Self Supporting Insurance Policy
- Term Insurance
- Grameen Jibon Bima Policy
- Individual Pension Policy
- Family Income Rider
- Single Premium Assurance
- Family Pension Rider
- Health Insurance
- Group Term Assurance
- Group Endowment Assurance
- Mortgage Protection Policy
- Marriage Endowment Policy
The corporation has also taken steps to introduce some other attractive schemes. Descriptions about this insurance are given below.
Whole Life Assurance
- Whole life insurance is not really whole life insurance for this corporation. Because if insured is not died until 85 years then he get the insurable amount himself.
- In other hand, it is the possibility to decrease the income in old age so; premium is to be limit among 80 years old.
- The amount of premium is lowest. Insured should be getting height security by providing lowest amount of money through this insurance.
- Accident can be including with this insurance. This additional advantage is to be void gradually 60&55 years old of the policy holder.
- The family protection advantage can also be added with this insurance but its highest validity is not more then 20 years.
In this insurance if the amount is less then 5000 then it must be annual payment. But if the amount is more then 5000 and less then 10000 then payment may be semi-annual.
Insurable amount is paid after the termination of a certain time period or person is died before this period. Endowment policy is popular as a reliable source for financial support. Its meets the demand for retirement or for the education helps for children or as a capital it helps the family. Endowment assurance may be 10 to 50 years. But the age of the policy holder is not more then 70 years. The premium for this insurance helps the policy holder to get free from income tax.
Progressive Premium Policy (with profit)
Through this policy comparatively large amount of policy can be get by low rate of premium. The initial stage of the work life a person likes this insurance. Generally: the first five year the rate of premium may low. After this period when the income is increased the rate of income may also be increased.
- Progressive Premium Policy is a special type of policy where the validity if the insurance policy is terminates at the age of 70 years of the policy holder. Normally, the policy holders pay the lower premium through an agreement to pay the higher premium after first five year. When this opportunity is taken at the time of diversification the remaining period of insurance at least 10 years.
- At the time of diversification the medical test is not needed.
Supplementary benefit can not be taken with this insurance.
Anticipated Endowment Assurance
Anticipated endowment assurance is known as three points planning among the policy holder. From this policy the policy holder can get two benefits.
- The insured amount of money is provided through three payments, so it can meet the future need more then one time.
- All insurable amounts are to be paid due to the death of the insurable person although first and second payment is to be made.
This insurable period may be 12, 15, 18, 21, 24 and 30 year.
Joint Life Endowment Assurance (with profit)
Through this insurance policy any two person who has the insurable interest to each other life they jointly take this insurance. Under this insurance the insurable amount is to be paid after the termination of the submission date or occurrence death of any one policy holder. This insurance is specially planed for the people who do the joint business. Under this insurance husband wife can take this policy, but the wife must be educated and have own source of income.
Under this insurance the interested person’s separately fill up the form and both people separately face the necessary physical tests and the report also is high quality. In the list of premium the age of the policy holders are equal.
The amount is not less then 10,000. If any take insurance under this insurance he found the chance of tax rebate at a given time. With this insurance any supplementary insurance can not be taken. The person who is fit by medical test can take this policy up to 50 years and who is not fit can take this policy up to 45 years. The termination age for the policy holder is 70 years and for the non fit person is 65 years.
Children Protection Policy (with profit)
This policy is given jointly premium provider and the life of children. Generally the father of the children is known here as premium provider. When father is died or incapable to provide premium then mother can known as premium provider. In this case mother must be educated and has own source of income. Except father and mother other persons can not regarded as premium provider.
Under this policy the age of the children from 18 to 25. This insurance can be taken at least 6 month old baby and the duration can be 8 to 24 years. The amount of this policy is not less then 6000 Tk.
Without medical test any proposal form can not be taken. Under this policy various types of protection is taken for children. If premium provider is died before the termination date then it is not necessary to provide premium for rest of the period and the children get the following advantage:
- For every thousand annually 100 Tk. Is providing for children after the death of the premium provider.
- After the termination of date principal amount is paid with bonus.
With this insurance any supplementary benefit policy can not be taken.
Dual Protection Endowment (with profit)
A person can not earn much after his work life. As a result large amount of saving can not possible for the protection of the family and adequate life insurance can not be taken. In this time the death of the person who only income for the family, create a bad situation for the family. To over come this life insurance corporation provides the double protection endowment.
- Double protection endowment policy provides the double amount of money in the case of died on premium holder.
- It ensures the dead risk of a person by providing equal amount of money in exchange of lumsum amount of premium.
- Double protection endowment can be taken in 10, 15, 20, or 25 years.
- Bones is providing up to principal amount.
- It not only provides adequate protection for the initial stage of work life but also provide protection in old age.
- With this insurance any supplementary benefit can not be taken.
Estate Duty Policy (with profit)
Description of estate duty:
According to the law of estate duty in 1950, all permanent or temporary assets with the asset which used in agriculture must provide the asset duty. In the case of death of any person if his asset price is more then 200000 Tk. It must provide duty for it.
What is asset?
In this act the term ‘Asset’ is used for many cases and it includes all permanent and temporary assets.
Generally tax is providing for the following assets.
- Personal asset: Personal asset of the dead person like cash, ornaments, furniture’s in house, car, share and security and for land.
- Dual Capital-Investment: Except cash exchange, capital investment in dual name and capital investment where the right of the dead person from the first time.
- Partnership: Any asset which is protected by the partner is included the estate duty policy.
The asset which value at height 50,000 is free from duty. Except this the asset which is insured for providing duty and written in the name of govt. is also free from duty.
If any asset is insured under the ‘Estate Duty Policy’ then it must be then it must be written at the name of president of the country.
For issuing this insurance some special formalities is followed. So, before taking this insurance the collateral formality must be known from regional office.
Children Endowment (without profit)
Through this insurance parents build a prospectus life for their children. It free parents from burden of their children in marriage or high education. Here the insurable amount get only when the date is terminated. But for the uncertain death of the policy holder the rest amount of the premium would not paid. The premium is return at 2% when the insured child is died or it can transfer for other children.
To protect the right of children the insured amount is paid to the insured children when the time is end. To provide all insured amount at a time any loan or surrender price is not paid up to this insurance. Here the policy holder can get tax rebate. With this insurance any supplementary benefits is not acceptable.
Guaranteed Bonus Endowment Assurance:
Annually 20 Tk. Bonus is paid for every thousand Taka under this insurance. This guaranteed bonus is providing with the principal insured amount after the termination of date or before this date if the person is died.
The policy can be 15, 20, and 25 and 30 years and like Endowment assurance principal amount with bonus and surrender amount is to be paid. This policy can be taken at highest 55 year the person who is fit in medical test and the person who is not fit for him the highest period is 50 year. The termination age of the policy holder is at highest 70 years but for the unfit person this age is 65 years.
In the case of uncertain death of the policy holder to protect the mortgaged property and to free from burden to the relatives this term insurance is so much helpful. Get loan from bank as collateral the fixed asset and submit this paper to get loan one can take this policy for one year. But continue this policy for more then one year, one can provide the medical report 15 days before the termination date and by providing adequate amount of premium one can renewed this policy. After the termination of policy date if any one wants to continue it then he must submit the medical report from his own cost and by providing adequate premium. To renew the policy premium is fit according to the age of the person.
Under this insurance if the policy holder is died within one year or before one year then the insured amount is paid. If the insured person is not dead then the premium is not get back.
The rate of premium is very low. Surrender amount, policy loan can not get in this insurance. For the first year with premium 2 taka stamp duty is provide for every thousand premium is provide annually. Tax rebate is not get here. With this insurance any supplementary benefit is not allowed.
Family Income Rider
- ‘Family Income Rider’ is not any separate insurance. It is incorporated with Endowment insurance and supplementary insurance.
- The duration of family income rider is less then basic insurance, but not more then it. But any case it is not more then 20 years.
- In the case of death of the policy holder:
A. 10% up to prime insured amount is providing the person who had the insurable interest to the policy holder.
B. At the time of the death of the policy holder monthly 12% is provide up to insured amount.
C. After the termination of the family income rider rest 90% of principal amount.
- Family income rider is protected by adding extra premium with endowment policy.
- After the termination of the date if the policy holder is not died then the extra benefit is void and the policy is terminated to general endowment policy.
The age of the policy holder is an important factor for taking any proposal for the policy. The rate of the premium is increase with the increase of the age. Again problem can be associated if the age is not known. So, the insured person must be providing the age provident paper with the proposal form. But later if the difference of age of policy holders actual age and the submitted age is more then the policy paper must be void.
Age provident certificate can be following kinds.
- ‘Birth Certificate’ which is issued at the time of birth
- S.S.C or the same level certificates.
- Papers from service sectors.
- Voter List.
PAYMENT OF PREMIUM:
In the case of life insurance premium is paid always annually. But for the help of the policy holder it can be semiannually, quarterly or monthly. If the payment is monthly then policy holder must pay extra 5% from the amount of list. Payment of premium is annually so for the semiannually, quarterly or monthly basis premium is cut from accrued premium in the case of dead of premium holder.
DAYS OF GRACE:
If premium is paid 30 days from normal date then any extra charge can not be paid and this extra 30 days is said Days of Grace. If the last day of Days of Grace is Friday or any holiday then the next open day policy holder can pay the premium without any extra charge.
If the policy holder is died within the days of grace then the insured amount is paid by cutting the premium amount.
REVIVAL OF LAPSED POLICIES:
Generally the policy which is continued two years then it achieved its minimum amount. The policy which is not achieved the minimum amount then without first policy the others payment of premium is not paid within Days of Grace then it is considered as Revival of Lapsed Policies.
This revival of lapsed policies next any time (not more then 5 years) can be start again by providing premium with interest selected by corporation and the physical document.
SPECIAL REVIVAL SCHEME:
The policy holder who is unable to pay all accrued premium with interest, their policy can be active with the following conditions.
- Duration for the special revival scheme is more then 6 month but less then 5 year.
- The advantage can be taken one time in its life time. Te date of policy is readjusted in the equal time period when the premium is not paid.
Corporation provides loan to policy holder as collateral of policy. The highest amount of this loan is 90%. The interest for this loan is annually 11.50 Tk. But this amount can be modified by the corporation any time. But loan does not provide through Children Protection Policy and Children Endowment Policy.
INDISPUTABILITY OF POLICIES:
Any policy which continued at least two years can not face the question of legality, if not policy holder hidden any information under the insurance act in 1938.
From the time of taken policy if the policy holder suicide then the premium may be void able and the amount of premium can be disclosed by the corporation.
To pay the insurable amount in a shorten time policy holder may select the nominated person when he take the insurance. But it can do after issuing policy by endorsement.
In 2oo3 corporation sold 53,198 new individual policies with a sum assured of Tk. 602.63 core against 70,513 policies sold with a total sum assured of TK. 844.66 core during the previous year. On the other hand, during the year under review the corporation earned first year premium income to the tune of Tk. 43.82 core against Tk. 58.26 core in the previous year, representing diminution of 24.78%. The result of life insurance business during the last three years is given below in Table-1
Table-1: Individual new life insurance business during the last three years:
In 203 the number of personal assurance policies issued in rural areas of Bangladesh was 31,054 with a sum assured of Tk. 305.22 core compared to 42,302 policies issued with sum assured amounting to Tk. 448.08 core in the preceding year showing a decrease of sum assured of Tk. 142.86 core as rural business.
In 2003, 37,459 policies were issued under non-medical scheme with a sum assured of Tk. 412.57 core compared to 52,093 policies issued with a sum assured of Tk. 626.23 core in the preceding year. This shows a decrease of 14,634 of new policies and a decrease of Tk. 213.66 core as the sum assured over the time.
FEMALE LIFE INSURANCE POLICIES:
During 2003 the number of policies issued on life of female was 9,778 with a sum assured of Tk. 77.67 core. In the previous year the number of policies was 10,683 and the sum assured of Tk. 83.37 core. This show a decrease of 905 policies and a decrease of Tk. 5.70 core with a sum assured over the previous year.
CLASSIFICATION OF NEW BUSINESS ACCORDING TO SUM ASSURED:
In 2003 the average sum assured per individual new life policy stood at Tk. 1, 16,664 as against Tk. 1, 19,788 in the previous year. The classification of new individual policies issued according to number of policies and the sum assured in shown in Table-2 below:-
In 2003, the corporation signed 11 new Group Insurance contracts covering 2,931 officers and staff and earned new premium income of Tk. 0.33 core. The total Group Insurance Premium income during the year was Tk. 9.82 core as against Tk. 9.10 core in the preceding year showing a growth of 7.91%.
INDIVIDUAL INSURANCE BUSINESS IN FORCE:
At the end of 2003, the Corporation had 342,275 policies in force with a sum assured of Tk. 3,115.78 core. Out of these 339,414 policies with a sum assured of Tk. 3,115.27 core were under written by the erstwhile old Unit Companies has been declining every year due to maturity claim. At the end of the year the number of policies in force has decreased by 3.18% over the previous year.
Net renewal premium earned premium earned from in-force policies during the year 2003 was Tk. 140.22 core as compared to Tk. 112.45 core in 2002 showing a growth of 24.70%.
At the end of 2003, the total number of in-force individual policies of erstwhile Unit companies constituted 0.83% of the total number of policies in force whereas it was only 0.01% in regard to the total sum assured.
Table-4 shows the number and sum assured of individual in-force policies as on 31.12.2002 with corresponding figures of last year.
During 2003, a total number of 56,547 individual policies with a sum assured of Tk. 686.44 core lapsed. During last year 65,471 policies lapsed with sum assured of Tk. 745.17 core. On the other hand 7,780 lapsed policies with a sum assured of Tk. 73.40 core were revived during the same period. As a result, at the end of the year, the percentage of lapsed policies stood at 19.66% in terms of net average sum assured.
For the purpose of revival of lapsed policies there is a revival cell in each regional office. These cells are functioning effectively with an end in view to reviving more and more policies.
Percentages of lapsed policies in terms of net average sum assured in force for the last three years are given table
There is a reinsurance treaty between Jiban Bima Corporation and Swiss re-Life and Health Limited of Switzerland and Munich Reinsurance Company of Germany. The present retention limit in respect of under written risk of the Corporation is Tk. 15 Lakh. Moreover, Jiban Bima Corporation is also working as a re-insurer of 9 Private Life Insurance Companies of the country:
NAMES OF THE COMPANIES:
- Sandhani Life Insurance Company Limited.
- Homeland Life Insurance Company Limited.
- Rupali Life Insurance Company Limited.
- Padma Life Insurance Company Limited.
- Fareast Islami Life Insurance Company Limited.
- Baira Life Insurance Company Limited.
- Sunflower Life Insurance Company Limited.
- Popular Life Insurance Company Limited.
- Prime Islami Life Insurance Company Limited.
In accordance with provision under section 20 Insurance Corporation Act, VI of 1973 the Bi-annual Valuation of asset and liabilities of the Corporation for the year 1999 and 2000 has been completed. As a result, policyholder were given bonus at a higher rate for the above year and 5% Bi-annual Valuation surplus i.e. equivalent to Tk. 1,85,00,000/- has been deposited to the Government Exchequer. Moreover, the Bi-annual Valuation works for the year 2001 and 2002 in under process.
The accumulated life fund is respect of both individual life and group insurance business of the Corporation amounted to Tk. 641.83 core on 31-12-2003. During the year under report there was an accretion of fund to the tune of Tk. 64.48 core in this fund.
Life fund position as on 31-12-2003.
Assets representing Life Fund as on 31-12-2003
The book value of Investment and Loans of the Corporation including Term Deposit with Banks as on 31-12-2003 stood at Tk. 553.47 core against which provision of Tk. 1.06 core has been made as bed and doubtful Investment of unit companies. Accumulated depreciation on the building account of the corporation stands Tk. 18.33 core. During the year under reference there was a net increase of Tk. 52.06 core in different classes of investment.
LOANS ON MORTGAGE OF PROPERTY:
The balance of loan on mortgage of property account stood at Tk. 6.14 core as on 31-12-2003. In the previous year the balance of loan on mortgage of property was Tk. 7.05 core. During the year under review house building loan amounting to Tk. 29.84 was sanctioned to 9 officers and staff. Besides a sum of Tk. 1.19 core was recovered from them during the year as repayment of installment with interest. Up to 31-12-2003, the balance of house building loan Tk. 6.14 core is recoverable from 429 officers and staff of the Corporation.
There has some limitation to prepare this report. The major limitation of the report is that it is mostly based on secondary studies and partially on primary analysis. Time for preparing report is not enough. If the time will be more report it is easy for me to prepare the report more correctly. So, time limitation also a major problem here. Report can be preparing more moderately, lack of the adequate information it can’t prepare properly.
The prospects of insurance in the first years of the next millennium decide the direction of insurance management. Safety, Security and Investment have become need of the present society. People, now, demand insurance as compared to the previous attitude of selling insurance to people. Jibon Bima Corporation has been making relentless endeavors to make rural people life insurance-minded and to create awareness about life insurance. Regular contacts are being made with insurable people. For this purpose annual development conference and seminars both on regional and national basis are being organized. All these efforts have widened the horizon of life insurance business and helped its acceptability in the rural areas of the country.
New and attractive insurance product design and its marketing is not possible due to lack of adequate number of insurance expert. A good number of talented officers from within the corporation can be provided with higher education and training in actuarial discipline to overcome the problem. At present, the corporation is carrying on its insurance business with manpower than the approved strength.
* Annual report of Jibon Bima Corporation in 2003.
* Prospectus of Jibon Bima Corporation.