Whole Life and Endowments

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Traditional Life Insurance:Whole Life Insurance and Endowments#Unless Specifically mentioned in the Slide heading, the content of the slide would apply for both Whole Life and Endowment policies.1This deck describes Whole Life & Endowment products along the Insurance Value ChainNew BusinessServicingClaimsPremium receipt

Issuance (Policy Contract)Simple (Address, Bene, etc)

SurrenderClaim forms

InvestigationsLapse / Reinstatement

DividendsApplication (Health Info)

UnderwritingLoans

FA Increase/decreaseRiders

Non ForfeitureAdjustmentsProductsFeaturesRidersChannel ManagementHierarchyLicensingCompensationActuarialInvestments & AccountingSuspenseFund managementReporting & CorrespondenceMISDashboardsAgentCustomerPremium & ClaimsFund AccountingPricingValuationReserving#2This section describes Whole Life & Endowment product detailsNew BusinessServicingClaimsPremium receipt





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Non ForfeitureAdjustmentsProductsFeaturesRidersChannel ManagementHierarchyLicensingCompensationActuarialInvestments & AccountingSuspenseFund managementReporting & CorrespondenceMISDashboardsAgentCustomerPremium & ClaimsFund AccountingPricingValuationReserving#3Product Whole LifeFeaturesWhole Life Coverage(Usually matures at Age 100/120 Years) Covers Risk and also has a Savings element (Cash Value)Premiums are generally higher than Term Insurance.Stringent Underwriting as compared to Term insurance. Level Premiums for entire premium paying period Policy can be participating or non-participating (dividend paying) Maturing of Whole Life Insurance.A Whole Life Insurance policy is usually designed to mature at the age of 100/120 years. That is, the policy owner pays premium only up to the age of 100/120 years. At this point the policy is fully paid up and does not require further premium payments.Below is a sample Whole Life Insurance Policy. Click to Enlarge.

ProductsFeaturesRiders#Product Whole LifeRegular vs Single vs. Limited

Regular Premium In this mode of Premium payment the customer pays premium till death or maturing of policy (usually at the age of 100/120 years)Single Here, the Customer pays a Single one-time payment. The insurer covers a continuing risk for a period of time with the one time payment. Limited Here, the Customer is expected to pay premiums for a limited period and if all premium payments have been made over the period of time, then his/her policy is considered paid in full. In the below diagram, we are assuming that the Customer buys a Policy at the Insured Age of 25. More info in the Notes Section.

ProductsFeaturesRiders#Different modes of Premium Payment Insurer Perspective

Regular A regular payment involves a lot of transaction between the Insured and the Insurer, hence the Expenses involved for the Insurer is high comparatively. And the interest gained is also low as the Principal takes a long time to grow to its maximum(Maturity or death)

Limited Here the number of transactions is greater than single but lesser than Regular. So the expenses are moderate. Similarly the interest gained is also moderate as the Principal takes some time to grow to maximum(end of limited period).

Single In this mode of payment the Interest gained is the greatest since the Lump Sum is handed over to the Insurer in year 1 itself. The expenses is also lowest since there is just 1 transaction involved.

From the above , it is clear that Single Premium is most beneficial to the Insurance company.5Product (Contd...) RidersA rider is an additional coverage that can be added to an existing life insurance policy.Whole Life Insurance offers many riders along with the base coverage. Riders are normally included on a policy at issue but some can be added after issue (client specific).Riders need not run continuously with the base coverage. For e.g. A base coverage may run for 80 years, but a ridertaken on the base coverage may run only for a period of 30 years. 20 years(Insured Age) 60 years 100 years

Please look at the Notes section for explanation of the above.

Base CoverageDisabilityCritical illnessCost of Living AdjustmentProductsFeaturesRiders#The Insured has the Disability rider effective from the Policy Inception at the Insured Age of 20 up to the Insured Age of 60.This should give him coverage during his working years if he were to become disabled. Post retirement, the insured does not expect his income to be affected by disability, thus there is no need for the rider

However, he can see a possibility of being affected by a Critical Illness owing to Old Age. Hence he takes the Critical Illness Cover at the 60, continuing up to the age of 100 years.

Since Cost of Living fluctuates always and can affect ones purchasing power at any time, the Insured feels the need to have a Cost of Living Adjustment Rider through out the Life of the Policy.

From the illustration it is clear that the Riders can be added and terminated anytime as per the need of the Insured.6Product (Contd...)Some Common Riders Cost of Living Adjustment Disability Critical Illness Accelerated Death Benefit Accidental Death Benefit Cost of Living Adjustment - This rider enables the Face Value to be adjusted(increase/decrease) to reflect Cost of Living measured by the Consumer Price Index(CPI). Below is an example, that explains the benefits of having a COLA rider.

Illustration\

In the above example, the Policy with COLA rider has the face value increasing along with the the increase in inflation(CPI).

ProductsFeaturesRidersFace Amount at Age 35Years40Years45Years 50Years With COLA rider $5,000.00 $5,342.00 $5,723.34 $5,902.32With COLA rider $5,000.00 $5,000.00 $5,000.00 $5,000.00 #7Accidental Death Benefit - This rider pays out a sum assured as per the Accidental Death Benefit rider in addition to the Base Face Amount in case of death resulting due to an accident. Death due to an accident Is unexpected and sudden and hence a bigger set back to the affected parties compared to a normal death.Disability - This rider waives the Payer from Premium Payment in the event of Disability, owing to which the Payer cannot engage in the Activity that he/she was involved in at the time of disability. During the time the Premium is waived, the Policy remains active. It is the responsibility of the Payer to produce documents establishing his/her disability at the event of disability and periodically if the disability continues, else the waiver can be terminated by the insurance company.Critical Illness - This rider pays money equal to or less than the sum assured as per the Critical Illness rider, in the event of the Insured being Diagnosed with a Critical illness. The disease has to be listed in the Critical Illness Rider. Accidental Death Benefit - This rider pays out a sum assured as per the Accidental Death Benefit rider in addition to the Base Face Amount in case of death resulting due to an accident. Death resulting due to an accident is unexpected and sudden and hence a bigger set back to the affected parties compared to a normal death.

Product (Contd...)ProductsFeaturesRiders# Product - Endowments FeaturesCovers the risk for a specific period of time, either for a number of years or to a specified age, and also has a savings element (cash value).In the event of death during the specific period of time, the sum insured is paid to the beneficiary.Money Back - At the end of the period (Policy Maturity) if the Policy Holder (insured) survives, the sum assured is paid.Endowment product is good for those averse to taking risks.

ProductsFeaturesRiders#9Policy Life CycleNew BusinessServicingClaimsPremium receipt





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Non ForfeitureAdjustmentsProductsFeaturesRidersChannel ManagementHierarchyLicensingCompensationActuarialInvestments & AccountingSuspenseFund managementReporting & CorrespondenceMISDashboardsAgentCustomerPremium & ClaimsFund AccountingPricingValuationReserving#10New Business The New Business Application captures personal information (Age, Sex, Location, Occupation) as well as detailed information on the Applicants personal habits (health, hobbies, drinking and smoking habits).Below is a sample New Business Application. Click on it to enlarge.

The key sections of a New Business Application are : Personal Information Health Information Coverage InformationRefer to the Notes section for the explanation of the above sections.

New BusinessApplicationPremium ReceiptUnderwritingIssuance#Personal Information This section captures information like the Name, Age, Address, Beneficary, Owner, Payor..etc. This information is largely used for administration purpose. Only some information can be critical to underwriting.Health Information This section captures the Health history of the insured and is very critical to Underwriting. This section is generally in the form of a Questionnaire.Coverage Information Here the applicant chooses the Coverage (both base and riders) and the face amount value. The information provided in this section has a huge bearing on Premium calculation.11New Business(Contd...)New Business Process Flow (an example for an application entered via a Web Service)

Enter New Business AppsValidate AppsUnderwritingApproved?ErrorsSub-Standard ?ResolveApp RejectedPolicy Issued Communication sent to Applicant for confirmationUser ConfirmsYesRejected YesUser DeclinesApprovedNoNew BusinessApplicationPremium ReceiptUnderwriting Issuance# Enter New Business Apps At this stage the Applicants Personal Info, Health Info and Coverage Info is captured. Validate Apps Here the Applications are validated for correctness and completeness. Underwriting - At this stage, the risk of Insurance is assessed and a Decision is taken on whether to Insure or Not. Sub-Standard Applications found to be Sub Standard are risky proposition for the Insurer and hence Premiums are higher Communication sent to Application for Confirmation In case applications are found to be Sub-standard, then a communication needs to be sent to the Applicant for confirmation before issuing the policy . This is done because Premium charged for Sub Standard customers is higher than normal.12 New Business (Contd...) Underwriting Underwriting is a process of determining the risk of providing insurance to an individual based on the following factors:Health Factors - An applicant who smokes or suffers from obesity or has a chronic disease would be charged a higher premium based on the higher risk.Life Habits - Applicants who drink heavily, participate in risky sports or hobbies would also pay a higher premium than those who have a safer lifestyle. Gender and Age Statistically, women live longer than men and hence would pay lower premium. Age is an important factor, as the younger one is, the longer he/she is expected to live and pay premiums. New BusinessApplicationPremium ReceiptUnderwriting Issuance# New Business (Contd...) Based on the Risk factors, underwriters may classify applicants in different risk rating categories. Some examples are (carrier specific, not limited to these):Preferred - Applicant with lower chances of incurring a loss than a Standard customer would fit in this Risk rating. The premiums are lowest for this kind of customer.Standard - Applicant with normal risk and who will be charged under standard rates. Sub-Standard - Applicants who are found to be uninsurable at standard rates. These customers are charged under Sub-Standard rates and pay higher premiums. This would be a table rating, and the premium paid would be some multiple of the standard premium. Another way of rating a policy would be to charge a temporary or permanent flat extra amount.

Premium Receipt The initial premium can either be submitted with the application or upon acceptance of the policy by the applicant. The money is kept in a suspense account until applied to the policy. If the initial premium is found to be excess, then it is either refunded or deducted from future payments, depending on the carriers policy.

New BusinessApplicationPremium ReceiptUnderwriting Issuance# New Business (Contd...) Factors that determine Premiums: Age & Sex - Men pay slightly more premium as their life expectancy is lower. Also, premiums are higher if the policy is issued at an older age. Health & Medical History Factors like hypertension, high cholesterol, obesity, diabetes and smoking all affect ones premium as all these reduce life expectancy. Occupation and Hobbies The price of Insurance coverage would be high if the occupation (mining, fighter pilot, motor racing, etc) is considered risky or if the Applicant/Insured is involved in high risk hobbies (Sky Diving, Skiing. etc). Product Features The features of the chosen product would also have a bearing on the Premium. A Product offering a higher rate of dividend would result in a larger premium than a product offering no/less dividend. Coverage The coverage sought by the applicant would also affect the premium. The more coverage requested, the higher the premium.) Issuance (Policy Contract)The policy is issued once the Premium has been collected and the underwriter has given a go-ahead. If the Applicant is rated as a Sub-standard risk, then a communication is sent to the applicant and his/her consent is awaited before issuing a policy.

New BusinessApplicationPremium ReceiptUnderwriting Issuance#Policy Life CycleNew BusinessServicingClaimsPremium receipt





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Non ForfeitureAdjustmentsProductsFeaturesRidersChannel ManagementHierarchyLicensingCompensationActuarialInvestments & AccountingSuspenseFund managementReporting & CorrespondenceMISDashboardsAgentCustomerPremium & ClaimsFund AccountingPricingValuationReserving#16SERVICINGDividends Dividends are the means by which policyholders participate in the profits of the insurance company that may arise from actual mortality, investment, and expense experience being more favorable that what was anticipated when the premium rates were set. In the case of a mutual insurance company, there are no stockholders, and so the profits are for the benefit of the policyholders. Several types of dividends may be paid including annual dividends, extra dividends (one time payments or at stated intervals), and termination dividends (at maturity, death, or surrender). Dividends are based on tabular rates that are expressed as per $1,000 of face amount. Dividend rates may be set well in advance or they may be declared annually. These tabular rates would be provided by the client every time the rates are set or declared.

ServicingDividends LoansSurrenderLapseNon ForfeitureFA Increase/Decrease#SERVICING(Contd...)Factors considered during computation of Dividends.ProductDurationAge Gender Rate Class Smoke Class Base Coverage or Rider Product Insurance companies announce the amount of Dividends it would be paying out for each of its products. This is projected when they sell a policy under a certain product/plan. The insurance company would want to incentivize a certain kind of customer more than the other.ServicingDividendsLoansSurrenderLapseNon ForfeitureFA Increase/Decrease# SERVICING(Contd...) Duration This is the age of the policy. This is a way to incentivize people for keeping the policy for long time. A policy which has been in effect for a longer time is generally given a higher dividend as compared to a policy which is relatively new. For E.g.: Policy A(Effective Date 01/01/1994) Policy Age as on 01/01/2009 would be 14. Policy B(Effective Date 01/01/2004) Policy Age as on 01/01/2009 would be 5. Lets assume, the Insurance company follows the below table to pay out dividends.

Policy Age Dividend rate 0 - 5 years 5$ per Face value of 1000$ 5-10 years 10$ per Face value of 1000$ 10-15 years 20$ per Face value of 1000$ As per the table above Policy A would receive dividend at the rate of 20$ per Face value of 1000$ and Policy B would receive dividend at the rate of 20$ per Face value of 1000$. This way Customers see value for holding a policy for a long time. DividendsLoansSurrenderLapseNon ForfeitureFA Increase/DecreaseServicing#SERVICING(Contd...) Common Dividend Options (can be a combination of options):CashPremium ReductionOne year TermDividend on DepositPaid Up AdditionsCash Dividends are paid in cash.Premium Reduction The dividend is deducted from the premium due in the billing process and reduces the premium that must be paid. When dividends are applied to reduce premiums and the dividend exceeds the premium, the excess is usually paid in cash. If premiums are paid modally, depending on the carrier there may be a means to spread the annual dividend pro-rata over the modal premiums to make the policy owners net premium outlay level over the modal premiums. Otherwise the excess is paid in cash and full modal premiums are paid for the rest of the policy year.One Year Term The dividend is used as a single premium to purchase the applicable amount of Term coverage for one year. DividendsLoansSurrenderLapseNon ForfeitureFA Increase/DecreaseServicing# SERVICING(Contd...)Dividend on Deposit Dividends are deposited in an interest bearing account for as long as the owner wishes. Any amounts remaining on deposit at death are paid along with the death benefit.

Illustration:For E.g. : Prosenjit has a policy under a participating plan with a face amount of 100,000$. Taking into consideration Prosenjit Product, Policy Age, Age and Gender, the Insurance Carrier Netlife offers him dividends at the rate of 10 Dollars per Thousand Dollars of Face value, which makes him eligible for a total Dividend of 1000$. Prosenjit chooses to avail his dividend by the Dividend on Deposit mode. So he creates a Deposit of 1000$. Subsequent Dividends can also be added to the deposit.This deposit continues to grow with interest being applied on it. He can continue to have the deposit as long as he wishes. If retained until death, the deposit would be paid along with the Death benefits of the policy.

DividendsLoansSurrenderLapseNon ForfeitureFA Increase/DecreaseServicing#SERVICING(Contd...) Paid up Additions Dividends are used to purchase additional layers of paid-up insurance for the same duration as the policy duration. No further premium is required to keep the paid-up additions in force. The paid up additions may also earn dividends but a different scale may be used. The dividends on the paid-up additions can also be applied under any of the available dividend options. The paid-up addition option is usually offered and is very popular. Example: Srikanth holds a policy with Face Amount of 100,000 $.Srikanth, receives a dividend of 10,000 $ as dividend on year 1. He chooses to avail the dividend in the Paid Up Additions mode. With the 10,000 $ of dividends, Srikanth buys additional insurance worth 1000$ face amount. For this additional insurance, he need not pay any more premiums as it is paid up. In year 2, Srikanths Insurer announces dividends at the rate of 5$ per face value of 1000$. So, in the year 2 Srikanth would be eligible for Dividends from 2 layers. Original Face Amount - 5/1000 * 100,000 500$Paid Up Addition - 5/1000 * 1000 5$ Total - 505$. With the dividends earned in year 2, he can buy another paid up addition and create another layer. Paid up Addition is offered very rarely, but is very popular

DividendsLoansSurrenderLapseNon ForfeitureFA Increase/DecreaseServicing#22SERVICING(Contd...) CASH VALUEWhole life insurance also builds cash value, which represents an overpayment of premium in early years where the risk of death is low. It gradually builds with interest to equal the face amount at maturity. In some cases the cash value at maturity may be higher than the face amount.LOAN Loans are allowed on Whole Life Insurance. The Max Loan Amount is usually a percentage of the Policy value. If a death occurs before the loan is repaid, then the loan and the accrued interest on the loan are deducted from the Death Benefit.

SURRENDERThe policy can be surrendered for its cash value at any time. Any outstanding loan plus accrued loan interest is deducted from the cash value. Typically the surrender value is low (in relation to the premiums paid) in early years but builds with time. Partial Surrenders are usually not allowed.DividendsLoansSurrenderLapseNon ForfeitureFA Increase/DecreaseServicing#SERVICING (Contd...) LAPSE

A Policy may lapse if the premium is not paid on time and there is insufficient net cash value to make use of one of the non-forfeiture options described below. In such a case, it the premium is not paid by the due date, a grace period of 30-31 days is provided to give more time to pay the premium. During that time period the policy is in pending lapse status and the payor is advised of his options. If the payer does not pay the premium by the end of the grace period, the policy lapses.A policy that has lapsed is eligible for reinstatement subject to carrier requirements and conditions. Some type of underwriting is usually required and all past due premiums plus interest must be paid.

DividendsLoansSurrenderLapseNon ForfeitureFA Increase/DecreaseServicing#SERVICING (Contd...) Non-Forfeiture OptionsMost Whole Life Insurance Plans offer non-Forfeiture Options that can protect your policy from lapsing if you are unable or unwilling to continue to pay the premiums. Other than surrendering the policy for the net cash value, two common non-forfeiture options are:1) Extended Term Insurance2) Reduced Paid-Up Insurance

Extended Term Insurance:This option uses the cash value of the Whole Life policy as a single premium to buy term life insurance for a coverage amount equal to the original policys face amount. The length of the term policy is adjusted based on two factors: (1) the size of the cash value and (2) the attained age of the insured.

DividendsLoansSurrenderLapseNon ForfeitureFA Increase/DecreaseServicing#SERVICING (Contd...) Characteristics of ETI :

Non Participating If the original policy was participating, the policy is not entitled to any dividends once the Policy owner opts for ETI.

Paid-Up No further premiums are due.

DividendsLoansSurrenderLapseNon ForfeitureFA Increase/DecreaseServicing#SERVICING (Contd...) Reduced Paid UpThis option uses the cash value of the Whole Life policy to purchase coverage for the original term of the policy. The face amount depends on what the cash value can purchase for that time period and can be a greatly reduced amount. No further premium payments are required and policy will still continue to earn dividends and accrue interest.

A policy that is being maintained under a Non-Forfeiture option can be reinstated to a regular policy.

Face Amount Increase these are not usually allowed on Whole Life or Endowment policies. If allowed they are subject to underwriting.

DividendsLoansSurrenderLapseNon ForfeitureFA Increase/DecreaseServicing#SERVICING Endowments Endowment policies mature after a specified period. An endowment policy provides coverage only for a specified period. A lump sum is payable after the specified period or on earlier death.Typically the maturity age is 65 or after a specified period of 10, 15 or 20 years.Upon maturity, the money is distributed to the Policy owner.Policy MaturingServicing#Policy Life CycleNew BusinessServicingClaimsPremium receipt





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Non ForfeitureAdjustmentsProductsFeaturesRidersChannel ManagementHierarchyLicensingCompensationActuarialInvestments & AccountingSuspenseFund managementReporting & CorrespondenceMISDashboardsAgentCustomerPremium & ClaimsFund AccountingPricingValuationReserving#29ClaimsInsurance companies settle claims for a net amount after taking into consideration any loans, accrued loan interest, Paid Up additions, dividends on deposit, unpaid premiums, etc. Unlike property or casualty insurance, claims are rarely negotiated on a life insurance policy. They are either paid or can be denied within the contestability period (in which case the policy is rescinded and net premiums paid are refunded). Insurance companies are required to pay death claims within a specified period of time (typically 60 days) after receiving proper notification. For explanation, please refer the Notes section.

ClaimsOriginal Face AmountPaid Up AdditionOutstanding LoanUnpaid InterestPremiumDueDeath Benefit100,00020,00010,0002,0001,000107,00050,0005,0003,0001,00051,000200,0004,0001,0002,000193,000ClaimsAdjustment.#Life Insurance is generally paid at Full Face value. However there are a few exceptions. And these exceptions have been addressed in the table above.Paid Up AdditionIf the earned dividends has been used to buy additional face value(paid up addition), then the Actual Face Value would be Original Face Amount + Paid Up Addition.LoansIf there is any outstanding loan against the cash value of the policy, the amount of Loan along with any unpaid interest is deducted from the policys face value before payment is made.

Premium DueLife Insurance generally extend a Grace period of 1 or 2 months past the premium due date. If the Insured dies during the grace period then the Premium Due is deducted from Policys face amount before payment is made to the beneficiary. Face Amount CorrectionAnother exceptional scenario which has not been discussed in the table above is, when the Insurance company discovers after death that the Insured Age or Gender provided during Policy issue was incorrect.In such a scenario, the Face value is revised. The Insurance company computes the Face amount that the premium would have purchased if the Actual information was provided. Such situations are not uncommon. Some are intentional but most of them are mistakes. Hence Insurance companies generally give the benefit of doubt to the customer and do not void the policy.30This section describes the Agent Compensation in Whole Life & EndowmentNew BusinessServicingClaimsPremium receipt





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Non ForfeitureAdjustmentsProductsFeaturesRidersChannel ManagementHierarchyLicensingCompensationActuarialInvestments & AccountingSuspenseFund managementReporting & CorrespondenceMISDashboardsAgentCustomerPremium & ClaimsFund AccountingPricingValuationReserving#31 Channel ManagementCommissionCommissions on Whole Life Base coverage is good, but the same cannot be said about commissions on Riders, they tend to be low. Commission is calculated for each coverage and it is generally paid for 10 years. Commission is highest in the first year and reduces in the subsequent years.Commissions are paid either as per the High Low Schedule or the Flat Schedule. The following slide has an Example of Schedule. Refer to the Notes section of the following slide for explanation.

Channel ManagementCompensation#Channel ManagementHigh low scheduleLevel ScheduleAnnual Premium1st year2nd to 10th yearAll 10 yearsFirst $1,00020.0%5.0%6.5%Next $4,00020.0%3.0%4.7%Next $5,00015.0%1.5%2.85%Next $10,00012.5%1.5%2.6%Next $10,00010.0%1.5%2.35%Next $20,0005.0%1.5%1.85%Next $200,0002.5%1.0%1.15%Next $250,0001.0%0.5%0.55%Channel ManagementCompensation#High Low Schedule As per the High low Schedule, an agent who has sold Insurance worth 12,000$ would be paid commission based on the below calculation for year 1:First $1,000 - 1000 * 20/100 = 200$Next $4,000- 4000 * 20/100 = 800$Next $5,000- 5000 * 15/100 = 750$Next $2,000- 2000 * 12.5/100 = 250$So in Year 1, the Agent would receive a Commission of = 200$ + 800$ + 750$ + 250$ = 2000$

From year 2 up to year 10, the Agents commission would be First $1,000 - 1000 * 5/100 = 50$Next $4,000- 4000 * 3/100 = 120$Next $5,000- 5000 * 1.5/100 =75$Next $2,000- 2000 * 1.5/100 = 30$So the Commission paid to the Agent from year 2 up to year 10 would be = 275$.

As per the Level Schedule The commission earned for all 10 years would be:

First $1,000 - 1000 * 6.5/100 = 65$Next $4,000- 4000 * 4.7/100 = 188$Next $5,000- 5000 * 2.85/100 =142.5$Next $2,000- 2000 * 2.6/100 = 52$So the Commission earned by the agent for all 10 years as per the level schedule would be = 65$ + 188$ + 142.5$ + 52$ = 447.5$33This section discusses the Investment and Accounting in Whole Life & EndowmentNew BusinessServicingClaimsPremium receipt





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Non ForfeitureAdjustmentsProductsFeaturesRidersChannel ManagementHierarchyLicensingCompensationActuarialInvestments & AccountingSuspenseFund managementReporting & CorrespondenceMISDashboardsAgentCustomerPremium & ClaimsFund AccountingPricingValuationReserving#34 Investment and AccountingInvestmentPremiums are used to fund the investments ??

AccountingAccounting in Whole Life Insurance is complex as every financial event can result in multiple accounting entries.Investments & AccountingFund Accounting#Not sure what the information under "Investments" is trying to say - either expand or leave outThis section explains the Actuarial Process in Whole Life & EndowmentNew BusinessServicingClaimsPremium receipt





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Non ForfeitureAdjustmentsProductsFeaturesRidersChannel ManagementHierarchyLicensingCompensationActuarialInvestments & AccountingSuspenseFund managementReporting & CorrespondenceMISDashboardsAgentCustomerPremium & ClaimsFund AccountingPricingValuationReserving#36 In traditional life insurance, the Actuary focuses on the analysis of mortality and producing accurate Mortality table. The mortality table forms the basis on which products are built.

Three major areas addressed by an Actuary include Pricing, Reserving and Valuation.Pricing - The actuary calculates probable life span and comes up with the Insurance premium to be charged for covering various risks.

Reserving Reserves are funds established to pay for claims that the insurance company is liable for but has not settled. Insurance regulatory bodies world over mandate Insurance companies to establish reserve funds by type of insurance products to protect the Insured.

Valuation Valuation is assessing the ability of an Insurance scheme to meet its benefit promise. This is generally done annually or on need. Valuation ensures the health of the scheme and promised benefits could be provided at the maturity of the scheme. Based on the results, the contribution(premium) could be adjusted.ActuarialReservingValuationPricing#Mortality Table - An actuary builds a chart indicating probability of death and life expectancy in relation to certain variables such as age,sex,occupation or socio-economic class. This table is called Actuarial Table or Mortality table37This section covers the Reporting and Correspondence process in Whole Life and Endowments.New BusinessServicingClaimsPremium receipt





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Non ForfeitureAdjustmentsProductsFeaturesRidersChannel ManagementHierarchyLicensingCompensationActuarialInvestments & AccountingSuspenseFund managementReporting & CorrespondenceMISDashboardsAgentCustomerPremium & ClaimsFund AccountingPricingValuationReserving#38ReportingIn Whole Life Insurance Reporting is done differently for Base Coverage and Riders. The reporting is based on the Elapsed period.

CorrespondenceMost service and financial events in Whole Life insurance require correspondence with the customer to confirm that the request has been properly recorded. Service Events E.g.: Election of Non-Forfeiture option, Change of Address, Beneficiary, and Payer...etc. Financial Events E.g.: Face Amount Increase, Service Commission, Inclusion of Riders, Premium Payment, Grace/Lapse notification etc.Reporting & CorrespondenceCustomer#Thank YouThe contents of this document are proprietary and confidential to Infosys Technologies Ltd. and may not be disclosed in whole or in part at any time, to any third party without the prior written consent of Infosys Technologies Ltd.

2009 Infosys Technologies Ltd. All rights reserved. Copyright in the whole and any part of this document belongs to Infosys Technologies Ltd. This work may not be used, sold, transferred, adapted, abridged, copied or reproduced in whole or in part, in any manner or form, or in any media, without the prior written consent of Infosys Technologies Ltd. #Chart12650100

Paid Up YearModes of Premium PaymentInsured Age

Sheet1Paid Up YearSeries 2Series 3Single262.42Limited504.42Regular1001.83To resize chart data range, drag lower right corner of range.

Whole Life and Endowments

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