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STATELIFE INSURANC E
INTERNSHIP REPORT
CORPORA TION
INTERNSHIPREP ORT
PRESENTED TO:
INTERNSHIP REPORT
ACKNOWLEDGEMENT
All gratitude and thanks to almighty ALLAH the !ra"ious# The $ost mer"i%ul and &ene%i"ent 'ho ga(e me "ourage to undertake and "om)lete this task* I am (ery mu"h o+liged to my e(er "aring and lo(ing )arents 'hose )rayers ha(e ena+led to rea"h this stage* I am grate%ul to almighty ALLAH 'ho made me a+le to "om)lete the 'ork )resented in this re)ort* It is due to HIS unending mer"y that this 'ork mo(ed to'ards su""ess*
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I am highly inde+ted to my Sir Aslam Pathan %or )ro(iding me an o))ortunity to learn a+out the insuran"e system o% Pakistan 'hi"h is (ital ingredient o% &&A )rogram* I am (ery great %ull to o%%i"ers o% STATE LI-E %or )ro(iding me guideline %or the "om)letion o% this re)ort* I %eel great )ride and )leasure on the a""om)lishment o% this re)ort*
EXECUTIVE SUMMARY
I started my internshi) in state li%e insuran"e "or)oration o% Pakistan at Hydera+ad .one 1, /une 2011* I 'orked %or si1 'eeks there and it gi(es me a lot o% )ra"ti"al kno'ledge a+out the o)eration o% an insuran"e "om)any *I haslearned many things in this duration* In the %ollo'ing )ages
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I ha(e summari.ed my e1)erien"e# o+ser(ations and 'orking a"ti(ities 'hi"h I o+ser(ed in my si1 'eek internshi)* This re)ort 'ill dis"uss internshi) 'ith state li%e *It 'ill outline %ollo'ing* History 3e)artments S'ot analysis -inan"ial analysis The sour"e o% in%ormation used during the )re)aration o% this re)ort in"ludes Personal o+ser(ations 3is"ussions 'ith sta%% 4 management Annual re)orts Handouts 3i%%erent 'e+sites Re)ort is +ased on my )ersonal e1)erien"e 4 o+ser(ations a+out insuran"e se"tor 'hi"h I gain during my internshi) in state li%e*
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CONTENTS
Sr. No 1* 2* ,* 2* 5* 6* 7* 9* 8* 10* 11* 12* 1,* 12* 15* 16* 17* 19* 18* 20* 21* 22* 2,* 24. 25. Description INSURANCE 3e%inition History Prin"i)les Ty)es o% insuran"e Li%e Assuran"e INTRODUCTION OF STATE LIFE History -un"tions A"hie(ements :ore ;alues Organi.ational Stru"ture PRODUCTS Indi(idual Li%e Produ"ts !rou) li%e Insuran"e Produ"ts DEPARTMENTS P4!S A<3IT 3EPAT$ENT PH4S NE= &<SINESS A!EN:> -INAN:E4A::O<NTS PERFORMANCE HIGHLIGHTS RECOMMENDATION & CONCLUSION I LIO!RAPHY Page No* 6 7 7 7 8 10 15 16 16 17 18 20 25 26 20 52 5, 57 60 66 72 75 79 88 90
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INSURANC E
INTERNSHIP REPORT
INSURANCE
DEFINTIONS:
Insuran"e "an +e de%ined into a num+er o% 'ays* Some o% them are as %ollo's? A "ontra"t +et'een an insuran"e "om)any and a )erson or grou) 'hi"h )ro(ides %or a money )ayment in "ase o% "o(ered loss# a""ident or death Insuran"e is a "ontra"t +et'een t'o )arties 'here+y one )arty agrees to undertake the risk o% another in e1"hange %or "onsideration kno'n as )remium and )romises to )ay a %i1ed sum o% money to the other )arty on ha))ening o% an un"ertain e(ent @deathA or a%ter the e1)iry o% a "ertain )eriod in "ase o% li%e insuran"e or to indemni%y the other )arty on ha))ening o% an un"ertain e(ent in "ase o% general insuran"e* The )arty +earing the risk is kno'n as the BinsurerB or BassurerB and the )arty 'hose risk is "o(ered is kno'n as the BinsuredB or BassuredB It is a system 'here+y "ontri+utions are re"ei(ed %rom insuring )u+li" and )ool o% money is "reated %rom 'here the "laims are )aid to %e' un%ortunate )ersons 'ho died during the insuran"e )eriod
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o'ners and under'riters met to dis"uss deals at LloydBs :o%%ee House# )rede"essor to the %amous LloydBs o% London* Thus %rom LloydEs o% London insuran"e +egins
PRINCIPLES OF INSURANCE
In e(ery sort o% "ontra"t there are some )rin"i)les 'hi"h must +e %ollo'ed in order to a""om)lish the "ontra"t* -ollo'ing are the )rin"i)les o% e(ery insuran"e "ontra"t*
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For example, where a third party causes damage to the insured's property, after the insurers have settled the claim they can pursue the third party for the cost of the damage.
P!#(*#,-+ %'
3+! /+
<nderinsuran"e "an ha(e serious im)li"ations 'hen insuring a )ro)erty* <nderinsuran"e means that the re)la"ement (alue o% the )ro)erty or the (alue o% the "ontents has +een understated on the )ro)osal# there+y lo'ering the )remiums )aid*
The principle of average means that the amount of the claim payment will be reduced proportionality if the property was not insured to the full amount of its replacement cost.
TYPES OF INSURANCE:
There are t'o ty)es o% insuran"e
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Pro)erty insuran"e Lia+ility insuran"e :redit insuran"e $arine insuran"e A(iation insuran"e
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LIFE ASSURANCE
T&,+$ %' L#'+ I($)! (*+:
Li%e insuran"e may +e di(ided into t'o +asi" "lasses J tem)orary and )ermanent or %ollo'ing su+"lasses G term# uni(ersal# 'hole li%e and endo'ment li%e insuran"e
Term Insuran"e
Term assuran"e )ro(ides li%e insuran"e "o(erage %or a s)e"i%ied term o% years in e1"hange %or a s)e"i%ied )remium* The )oli"y does not a""umulate "ash (alue* Term is generally "onsidered D)ureD insuran"e# 'here the )remium +uys )rote"tion in the e(ent o% death and nothing else* These are main %a"tors to +e "onsidered in term insuran"e* 16 F *+ .%)(" 7,!%"+*"#%( %! 0+ "1 2+(+'#"89 26 P!+.#). "% 2+ , #0 7*%$" "% "1+ #($)!+089 (0 36 L+(/"1 %' *%3+! /+ 7"+!.8 ;arious insuran"e "om)anies sell term insuran"e 'ith many di%%erent "om+inations o% these three )arameters* The %a"e amount "an remain "onstant or de"line* The term "an +e %or
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one or more years* The )remium "an remain le(el or in"rease* :ommon ty)es o% term insuran"e in"lude Le(el# Annual Rene'a+le and $ortgage insuran"e*
!uaranteed Rene'al
!uaranteed Rene'al# the insuran"e "om)any guarantees it 'ill issue a )oli"y o% eFual or lesser amount 'ithout regard to the insura+ility o% the insured and 'ith a )remium set %or the insuredBs age at that time* Some "om)anies ho'e(er do not guarantee rene'al# and reFuire )roo% o% insura+ility to mitigate their risk and de"line rene'ing higher risk "lients @%or instan"e those that may +e terminalA*
$ortgage Insuran"e
Another "ommon ty)e o% term insuran"e is mortgage insuran"e# 'hi"h is usually a le(el )remium# de"lining %a"e (alue )oli"y* The %a"e amount is intended to eFual the amount o% the mortgage on the )oli"y o'nerEs residen"e so the mortgage 'ill +e )aid i% the insured dies* A )oli"y holder insures his li%e %or a s)e"i%ied term* I% he dies +e%ore that s)e"i%ied term is u) @'ith the e1"e)tion o% sui"ide
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see +elo'A# his estate or named +ene%i"iary re"ei(es a )ayout* I% he does not die +e%ore the term is u)# he re"ei(es nothing*
!uaranteed death +ene%itsC !uaranteed "ash (alues# -i1ed and kno'n annual )remiums#
And mortality and e1)ense "harges 'ill not redu"e the "ash (alue sho'n in the )oli"y* The ,!#. !& 0#$ 03 (" /+$ o% 'hole li%e are )remium in%le1i+ility# and the internal rate o% return in the )oli"y may not +e "om)etiti(e 'ith other sa(ings alternati(es*Also# the "ash (alues are generally ke)t +y the insuran"e "om)any at the time o% death# the death +ene%it only to the +ene%i"iaries*
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Riders are a(aila+le that "an allo' one to in"rease the death +ene%it +y )aying additional )remium* The death +ene%it "an also +e in"reased through the use o% )oli"y di(idends* 3i(idends "annot +e guaranteed and may +e higher or lo'er than histori"al rates o(er time* Premiums are mu"h higher than term insuran"e in the shortGterm# +ut "umulati(e )remiums are roughly eFual i% )oli"ies are ke)t in %or"e until a(erage li%e e1)e"tan"y* :ash (alue "an +e a""essed at any time through )oli"y DloansD and are re"ei(ed Din"omeGta1 %reeD* Sin"e these loans de"rease the death +ene%it i% not )aid +a"k# )ay+a"k is o)tional* :ash (alues su))ort the death +ene%it so only the death +ene%it is )aid out*
LimitedGPay
Another ty)e o% )ermanent insuran"e is LimitedG)ay li%e insuran"e# in 'hi"h all the )remiums are )aid o(er a s)e"i%ied )eriod a%ter 'hi"h no additional )remiums are due to kee) the )oli"y in %or"e* :ommon limited )ay )eriods in"lude 10Gyear# 20Gyear# and )aidGu) at age 65*
Endo'ments
Endo'ments are )oli"ies in 'hi"h the "ash (alue +uilt u) inside the )oli"y# eFuals the death +ene%it @%a"e amountA at a "ertain age* The age this "ommen"es is kno'n as the endo'ment age* Endo'ments are "onsidera+ly more e1)ensi(e @in terms o% annual )remiumsA than either 'hole li%e or uni(ersal li%e +e"ause the )remium )aying )eriod is shortened and the endo'ment date is earlier*
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Endo'ment Insuran"e is )aid out 'hether the insured li(es or dies# a%ter a s)e"i%i" )eriod @e*g* 15 yearsA or a s)e"i%i" age @e*g* 65A* This is ty)e o% li%e insuran"e 'here+y a s)e"i%i" term is sele"ted and )remiums are )aid throughout that term or earlier death* I% li%e insured sur(i(es that term the sum insured along 'ith a""rued +onuses is )aid as maturity (alue *This "lass o% insuran"e "arries loan and surrender (alue )ro(ided the )oli"y has +een en%or"ed at least t'o "onse"uti(e years* There are di%%erent ty)es o% endo'ment insuran"e* Sim)le endo'ment Anti"i)ated endo'ment /oint li%e endo'ment Progressi(e endo'ment :hildren endo'ment Single )remium endo'ment -amily )ension endo'ment O)tional maturity endo'ment $ortgage )rote"tion endo'ment Personal )ension endo'ment Annuities endo'ment
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!<ARANTE3 INS<RA&ILIT> RI3ERS @!IRA RE-<N3 O- PRE$I<$ RI3ER TER$ INS<RAN:E RI3ER @TIRA =A;IER O- PRE$I<$ RI3ER @=PRA
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BRIEF HISTORY
The Li%e Insuran"e &usiness in Pakistan 'as nationali.ed during M !*1 19;2* Initially Li%e Insuran"e +usiness o% 32 I($)! (*+ C%., (#+$ 'as merged and )la"ed under three &eema <nits named A # & and : &eema <nits* Ho'e(er# later these &eema <nits 'ere merged and e%%e"ti(e N%3+.2+! 19 19;2 the $anagement o% the Li%e Insuran"e &usiness 'as "onsolidated and entrusted to the State Li%e Insuran"e :or)oration o% Pakistan* State Li%e Insuran"e :or)oration o% Pakistan is headed +y a :hairman and assisted +y the E1e"uti(e 3ire"tors a))ointed +y -ederal !o(ernment* <) to /uly 2000 the :or)oration 'as run +y &oard o% 3ire"tors "onstituted under Li%e Insuran"e @Nationali.ationA Order 1872* In /uly 2000# )(0+! I($)! (*+ O!0#( (*+ 2<<<# the -ederal !o(ernment re"onstituted the &oard o% 3ire"tors o% State Li%e 'hi"h runs the a%%air o% this :or)oration* The +asi" stru"ture o% the :or)oration %or Indi(idual Li%e Insuran"e "onsists o% F%)! R+/#%( - O''#*+$ T:+("&=S#4 >%( - O''#*+$ F+: S)2=>%( - O''#*+$ 111 S+*"%! O''#*+$ ?@1 A!+ O''#*+$
-or !rou) 4 Pension there are F%)! >%( - O''#*+$ @ S+*"%! O''#*+$ 2< S+*"%! H+ 0$
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R+/#%( - O''#*+$
Regional O%%i"es# ea"h headed +y a Regional :hie%# su)er(ise +usiness a"ti(ities o% the Kones %un"tioning under them*
P!#(*#, - O''#*+
The )rin"i)al o%%i"e# +ased at Lara"hi# is res)onsi+le %or "or)orate a"ti(ities su"h as in(estment# real estate# a"tuarial# o(erseas o)eration# et"*
MAAOR ACHIEVEMENTS
The maMor %un"tion o% the State Li%e Insuran"e :or)oration o% Pakistan is to "arry out Li%e Insuran"e &usiness B ho'e(er# it is also in(ol(ed in the other related +usiness a"ti(ities su"h as
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INTERNSHIP REPORT
In(estment o% )oli"yholdersE %und in !o(ernment se"urities Sto"k market Real Estate The maMor a"hie(ements o% State Li%e are as under? 16 The :or)oration has redu"ed u) to33C in the )remiums on the )ast and )otential Li%e Poli"ies %or the +ene%it o% the Poli"yholders* 26 It is a )ro%ita+le organi.ation and it )aid R$626@D; 2#--#%( as di(idend to the !o(ernment o% Pakistan sin"e its in"e)tion in 19;26 36 State Li%e has )layed (ery (ital role in the e"onomy +y )ro(iding em)loyment to the )eo)le o% the "ountry As )ermanent em)loyees As )art o% its marketing %or"e In(esting the huge %unds in di%%erent se"tors o% the e"onomy* ?6 * The In(estment Port%olio o% State Li%e as at 3161262<1< stands at R$61916??D 2#--#%($* D6 In(estment )ort%olio also in"ludes in(estment in Real Estate 'hi"h stands at &ook (alue R$626D38 2#--#%( as at 3161262<1< @6 =hereas -air (alue is R$6216@81 2#--#%( as at 3161262<1< ;6 The Paid u) :a)ital in"reased %rom R$61< .#--#%( in 1872 to R$619 1<< .#--#%( in 2010* 86 The Premium in"ome in"reased %rom R$6<631; 2#--#%( in 1872 to 2863@;2#--#%( in 2010* 96 Similarly In(estment in"ome in"luding rental in"ome in"reased '!%. R$6<681 2#--#%( in 1872 to 2;?61D2 2#--#%( in 2010* 1<6 Total statutory %und o% State Li%e stands " R$61996??D 2#--#%( in 2010 as against R$616?9? 2#--#%( in 1872* 116 State Li%e is smoothly stri(ing to'ards its o+Me"ti(e o% making li%e insuran"e a(aila+le to large se"tion o% the so"iety +y e1tending it to "ommon man*
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As at 3e"em+er# 2<1< the total num+er o% )oli"ies in %or"e <nder indi(idual li%e 2689D .#--#%( 36;D? .#--#%(
CHRONOLOGY OF EVENTS
Taking o(er o% management o% li%e insuran"e "om)anies18 $ar"h 1872 Esta+lishment o% state li%e insuran"e "or)oration No(# 1872 Redu"tion o% )remium rates on ne' )oli"ies No(# 1872 Redu"tion o% )remium rates on old )oli"ies /an# 187, Esta+lishment o% <L +ran"h 1872 $erger o% units and %ormation o% .ones 1875 Esta+lishment o% +ran"h o%%i"e in 3u+ai Esta+lishment o% agen"y o%%i"e in Lu'ait Esta+lishment o% $ultan .one 1895 Esta+lishment o% -aisala+ad .one 1896 Esta+lishment o% !uMran'ala .one 1896 Esta+lishment o% Su"ker .one 1880 1st 1st 1st 1st 1st /an# O"t#
/uly 1879 $ay# 189, 1st 1st 1st 1st O"t# mar"h# /uly A)ril#
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$ay#
CORE VALUES
MISSION:
To remain the leading insurer in the "ountry +y e1tending the +ene%its o% insuran"e to all se"tions o% so"iety and meeting our "ommitments to our )oli"y holders and the nation.
EUALITY POLICY:
To ensure satis%a"tion o% our (alued )oli"yholders in )ro"essing ne' +usiness# )ro(iding a%ter sales ser(i"e and o)timi.ing return on Li%e -und through a Fuality "ulture and to maintain oursel(es leading li%e insurer in Pakistan
OBAECTIVES:
To run li%e insuran"e +usiness on sound line* To run li%e insuran"e +usiness on sound line* To )ro(ide more e%%i"ient ser(i"e to the )oli"yholders* To ma1imi.e the return to the )oli"yholders +y e"onomi.ing on e1)enses and in"reasing the yield on in(estment* To make li%e insuran"e a more e%%e"ti(e means o% mo+ili.ing national sa(ings* To 'iden the area o% o)eration o% li%e insuran"e and making it a(aila+le to as large a se"tion o% the )o)ulation as )ossi+le# e1tending it %rom the "om)arati(ely more
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a%%luent se"tions o% so"iety to the "ommon man in to'ns and (illages* To use the )oli"yholders %und in the 'ider interest o% the "ommunity*
ORGANI>ATIONAL STRUCTURE
It is headed +y "hairman M!6 S1 1#0 AF#F S#00#G# 'ho is a :HIE- ENE:<TI;E o% the "or)oration and a))ointed +y the go(ernment the other administrati(e le(el and authorities is gi(en +elo'
MANAGEMENT HIERARCHY:
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ORGANOGRAM:
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B% !0 %' D#!+*"%!$?
It "om)rises o% 7 dire"tors# "hairman and se"retary +oard 'ho are res)onsi+le %or making )lans and )oli"ies to a"hie(e the set goals o% the organi.ation* $r* Shahid A.i. SiddiFi $r* Oamar Kaman :haudhry $rs* S)enta Landa'alla $r* Aslam -aruFue $r* Amin Oasim 3ada $r* Rasheed >*:hinoy Syed A* =aha+ $ehdi Syed Hur Riahi !arde.i $r* Ak+ar Ali Hussain :HAIR$AN 3IRE:TOR 3IRE:TOR 3IRE:TOR 3IRE:TOR 3IRE:TOR 3IRE:TOR 3IRE:TOR SE:RETAR> &OAR3
E4+*)"#3+ D#!+*"%!$?
It "om)rises o% 2 mem+ers res)onsi+le %or im)lementation o% )oli"ies and dire"ti(es o% the +oard o% dire"tors* Syed Arshad Ali $s* Nargis !haloo $r* $ohammad >ahya $r* Allah Rakha Aasi
R+/#%($?
There are ? !+/#%($ in Pakistan headed +y regional "hie%s res)onsi+le %or looking a%ter all the .ones under his administration* These regions areC Southern Region :entral Region $ultan Region
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>%(+$?
North Region
There are 2@ F%(+$ in Pakistan headed +y the .onal head res)onsi+le %or )ro"urement o% +usiness to a"hie(e the set +usiness target o% the organi.ation* The 2 $#* $"!)*")!+ %' "1+ C%!,%! "#%( "onsists o%? -our Regional O%%i"es# T'entyGSi1 Konal O%%i"es# A %e' Su+GKonal O%%i"es# 111 Se"tor O%%i"es# A net'ork o% 261 Area O%%i"es a"ross the "ountry %or Indi(idual Li%e Insuran"eC -our Konal O%%i"es# 6 Se"tor O%%i"es 'ith 20 Se"tor Heads %or !rou) 4 Pension are in(ol(ed in the $arketing o% Li%e Insuran"e Plans )oli"ies and )rodu"ts o%%ered +y State Li%e and a Prin"i)al O%%i"e* The Konal O%%i"es deal e1"lusi(ely 'ith Sales and $arketing* <nder'riting o% Li%e Insuran"e Poli"ies and the Poli"yholderEs Ser(i"es* Regional O%%i"es# ea"h headed +y a Regional :hie%# su)er(ise +usiness a"ti(ities o% the Kones %un"tioning under them* The Prin"i)al O%%i"e# +ased at Lara"hi# is res)onsi+le %or "or)orate a"ti(ities su"h as in(estment# real estate# a"tuarial# o(erseas o)erations# et"* Lara"hi @SouthernA Kone Lara"hi @:entralA Kone Lara"hi @EasternA Kone Hydera+ad Kone Ouetta Kone Sukkur Kone $ir)urkhas Kone Larkana Kone Lahore :entral Kone
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Lahore =estern Kone !uMran'ala Kone -aisala+ad Kone Sargodha Kone Sialkot Kone $ultan Kone Sahi'al Kone Rahim>ar Lhan Kone 3era !ha.i Lhan Kone &aha'al)ur Kone Pesha'ar Kone Ra'al)indi Kone A++otta+ad Kone !uMrat Kone Islama+ad Kone $ir)ur @ALA Kone
G!%),
S'at Kone
(0 P+($#%(:
There are 2 .onal o%%i"es o% !rou) 4Pension and under these .ones there are many se"tor o%%i"esC !rou) and Pension Ra'al)indi Kone !rou) and Pension Pesha'er Kone !rou) and Pension Lara"hi Kone !rou) and Pension Lahore Kone
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PRODUCTS
As 'e kno' that SLI: has dominated li%e insuran"e market and it a"Fuires a+out 80P market share o% li%e insuran"e* So it has introdu"ed a great num+er o% )rodu"ts and it is o%%ering )rodu"ts a))ro)riate %or e(ery inha+itant o% Pakistan SLI: o%%ers di%%erent )rodu"ts %or Indi(idual li%e !rou) li%e insuran"e
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INDIVIDUAL PRODUCTS
LIFE
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%inan"ial e1igen"ies* As the name suggests# the )lan o%%ers three )ayments throughout term o% the )oli"y* The )lan o%%ers sur(i(al +ene%its eFual to 25P o% sum insured on "om)letion o% 1R,rd and 2R,rd term o% the )oli"y* I% the )oli"yholder does not 'ithdra' the sur(i(al +ene%its# a (ery attra"ti(e s)e"ial re(ersionary +onus is a(aila+le* On "om)letion o% term o% the )oli"y# the remaining 50P sum insured )lus a""rued +onuses shall +e )aya+le* I% the li%e insured e1)ires during term o% the )oli"y# sum insured# a""rued +onuses# un"laimed sur(i(al +ene%its and s)e"ial re(ersionary +onuses are )aya+le* The )lan is suita+le %or the indi(iduals 'ho ha(e longGterm %inan"ial needs +ut also anti"i)ate reFuirement o% money relati(ely earlier* Three Payment Plans hel)s %ul%illing these shortGterm %inan"ial needs 'ithout terminating the a"tual "ontra"t*
S 0 2 1 ! P- (:
Sada+ahar is an anti"i)ated endo'ment ty)e 'ithG)ro%it )lan that )ro(ides lum) sum +ene%it at "ertain stages during the )remiumG)aying term or on earlier death* In addition# this )lan has a +uiltGin A""idental 3eath &ene%it @A3&A rider so that the )oli"yholder gets an additional sum assured in "ase o% death due to an a""ident* This )lan is a sa%e instrument %or "ash )ro(ision at the time o% need* =ith this )lan# the )oli"yholder "an se"ure greater )rote"tion and "ontinued )ros)erity %or the %amily at a%%orda+le "ost a%%orda+le "ost*
Admissi+le Ages and Terms this )lan is a(aila+le to all mem+ers o% the general )u+li"# aged %rom 20 to 60 years nearest +irthday* &oth males and %emales may )ur"hase this
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)lan* Terms o%%ered under this )lan are 12# 15# 19# 21# 22# 27 and ,0 years.
S)!3#3 - B+(+'#"$:
On "om)letion o% oneGthird o% the )oli"y term# 20P o% +asi" sum assured "an +e taken +y the )oli"yholder* Another 20P o% the sum assured "an +e taken on "om)letion o% t'oGthird o% the )oli"y term and the remaining 60P o% +asi" sum assured )lus a""rued +onuses @i% anyA shall +e )aya+le at the end o% the )oli"y term in the e(ent o% sur(i(al o% the assured* 1A I% the o)tion to 'ithdra' an installment o% 20P sum assured is not e1er"ised on the due date or 'ithin 6 months a%ter the due date# a s)e"ial +onus 'ill automati"ally +e added to the )oli"y at the end o% 6 months* In this e(ent? 2A On death o% the assured 'hile the )oli"y is in %or"e# the s)e"ial +onus 'ill +e )aya+le in addition to @1A &asi" Sum Assured @2A Other Re(ersionary &onuses a""rued on the )oli"y and @,A the amount o% any installment le%t 'ith State Li%e* ,A On the maturity date# the s)e"ial +onus 'ill +e )aya+le together 'ith all the installments o% the sum assured remaining 'ith State Li%e# in addition to regular re(ersionary +onuses a""rued on the )oli"y* 2A So long as the )oli"y remains in %or"e# the )oli"yholder may surrender the un"laimed installment o% sum assured together 'ith the related s)e"ial +onus* The aggregate "ash surrender (alue o% the t'o shall not +e less than the amount o% the said un"laimed installment* 5A The re(ersionary +onuses as )er usual )ra"ti"e 'ill "ontinue to +e allotted ea"h year on the +asi" sum assured @i% in %or"eA as and 'hen A"tuarial Sur)lus is de"lared* Ho'e(er the un"laimed installments o% the sum assured and related s)e"ial +onus 'ill not )arti"i)ate in State Li%eEs A"tuarial Sur)lus*
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INTERNSHIP REPORT
D+ "1 B+(+'#"$:
The %ull +asi" sum insured )lus a""rued +onuses are )aya+le on death o% insured any time 'hile the )oli"y is in %or"e* In addition# i% death o""urs as a result o% an a""ident# additional amount eFual to one +asi" sum assured# su+Me"t to ma1imum limit# 'ill +e )aid* The usual ma1imum on the A3& o% Rs* 2 million 'ill a))ly and )remium 'ill +e "al"ulated a""ordingly
B%()$+$:
This )oli"y 'ill )arti"i)ate in State Li%eEs sur)lus* Rates o% +onus a))li"a+le 'ill +e 25P higher than those on anti"i)ated endo'ment )lan* <nder endo'ment insuran"e these )lans are a(aila+le*
S1 0 A2 0 A$$)! (*+:
Shad A+ad Plan is an e1tended %orm o% endo'ment assuran"e* The +ene%its under the )oli"y in"rease mani%old in the e(ent o% death o% the li%e insured* On "om)letion o% term o% )oli"y# sum insured )lus +onuses atta"hed to the )oli"y are )aya+le* Ho'e(er# on death during the )oli"y term# the death +ene%it "onsists o% dou+le o% sum insured 'ith a""rued +onuses* In "ase o% death due to a""ident# the death +ene%it "onsists o% %our times the sum insured )lus +onuses* The "o(erage "an +e %urther 'idened +y atta"hing su))lementary "o(ers 'ith the )oli"y* This )lan meets the reFuirements o% those 'ho a))re"iate the +asi" sa(ings )ur)ose o% endo'ment assuran"e +ut also like some additional "o(er to )rote"t lo(ed ones in "ase they die# Allah %or+id# +e%ore maturity*
INTERNSHIP REPORT
the "hild at the "om)letion o% the )oli"y term* On "om)letion o% term o% the )oli"y# %ull sum insured together 'ith the a""rued +onuses +e"ome )aya+le to the )oli"yholder* I% the )oli"yholder dies @Allah %or+idA +e%ore "om)letion o% the term# a %amily in"ome +ene%it o% Rs 220 )er 1000 sum insured )er annum is )aid to the "hild until the "om)letion o% )oli"y term* -urther# %uture )remiums under the )oli"y are 'ai(ed and )oli"y remains in %or"e 'ith %ull sum insured and "ontinues to )arti"i)ate in State Li%eEs sur)lus and re"ei(e +onuses* <)on the "om)letion o% )oli"y term# the "hild gets t'o o)tions o% either getting the )ro"eeds in a lum) sum or in %i(e eFual installments*
i* ii* iii*
:ontinue the )oli"y in the same manner as earlier +y s'it"hing the )lan %or the +ene%it o% another "hild* !et a re%und o% all the )re(ious )remiums )aid till the death o% the "hild or the "ash (alue o% the )oli"y# 'hi"he(er is higher and terminate the "ontra"t* :ontinue the )oli"y 'ithout naming another "hild in 'hi"h "ase the +ene%it o% Re%und o% Premium Sas )ro(ided a+o(e under "ondition @+AT 'ill not +e a(aila+le* :hild Edu"ation 4 $arriage Plan is suited %or the )arents 'ho are "ons"ious a+out the %uture o% their "hildren* The term o% the )lan is su"h that the lum) sum +ene%it +e"omes )aya+le 'hen the "hild attains a )redetermined age o% 19# 21 or 25 years* These ages may +e sele"ted "onsidering the o""asion at 'hi"h "hildren generally need %inan"ial assistan"e %or higher edu"ation# marriage# or setting u) +usiness* 3e)ending u)on your indi(idual needs# the )lan is a(aila+le in t'o se)arate (ersions o% 'ith and 'ithout +uiltGin %amily in"ome +ene%it* In addition to )arent# this )lan "an also +e a%%e"ted +y grand)arents# un"les# aunts or any other )erson 'ho is )aying %or the maintenan"e o% the "hild
,2
INTERNSHIP REPORT
INTERNSHIP REPORT
"om)letion o% term o% the )oli"y the )ayment o% )remiums "eases and the "hild is )aid an in"ome o% Rs 100RG )er thousand sum insured )er annum till the "om)letion o% the )oli"y term* On "om)letion o% )oli"y term# sum insured in"lusi(e o% +onuses a""rued till the death o% the )oli"yholder is )aid to the "hild* I% the "hild dies @Allah %or+idA +e%ore maturity o% the )oli"y and during li%etime o% the )oli"yholder# the death "laim )aya+le to the )oli"yholder de)ends on the age at death o% the "hild* As the name suggests# the )lan is suita+le %or )arents 'ho 'ant to "ater %uture %inan"ial needs o% their "hildren in "ase o% death o% the +read'inner o% the %amily* The )lan has a uniFue %eature o% )ro(iding "o(erage on the li%e o% "hild* The "o(erage o% the )oli"y "an %urther +e 'idened +y atta"hing su))lementary "o(ers*
S)(+1!# P%-#*&:
Sunehri Poli"y is an inno(ati(e li%e insuran"e )rodu"t* It is %le1i+le# se"ure and meets the "hallenges o% in%lation Fuite e"onomi"ally* <nder a s)e"ial %eature o% this )lan# %rom third )oli"y year on'ards# sum insured under the )oli"y and )remium 'ill in"rease +y 6P )er annum 'ithout )ro(iding any e(iden"e o% insura+ility* -rom the third )oli"y year on'ard# the )oli"yholder is )ro(ided 'ith a statement sho'ing the +uildu) o% "ash (alue o% the )oli"y and sum insured %or the year* The )oli"y also )arti"i)ates in the sur)lus o% State Li%e and
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INTERNSHIP REPORT
"urrently the rate o% +onus is Rs 105 )er thousand )er annum o% the adMusted o)ening "ash (alue*
N#/+12 ( P- (:
This )lan )ro(ides term insuran"e "o(er %or a )eriod ranging %rom 5 to 10 years* As the name suggests# this )lan is meant to )ro(ide )rote"tion during the term o% the )oli"y only i*e* sum insured is )aya+le on death i% it o""urs during the term o% insuran"e 'hile the )oli"y is in %or"e* The )lan does not "arry any sur(i(al +ene%its# maturity +ene%its# surrender (alues# loan (alues et"* The )oli"ies 'ill +e 'ithout )ro%its* The )lan is a(aila+le in t'o (ersions namely# 'ith single )remium and 'ith annual )remiums* Atta"hing "ertain su))lementary "o(ers "an 'iden the "o(erage under the )lan*
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INTERNSHIP REPORT
the )oli"yholder 'ill re"ei(e sum insured )lus +onuses atta"hed 'ith the )oli"y* Ho'e(er i% the li%e insured dies +e%ore "om)letion o% term o% the )oli"y# +asi" sum insured )lus atta"hed +onuses 'ill +e )aid to the de)endants immediately* In "ase o% death due to a""ident# the dou+le o% the sum insured is )aid* In addition# the de)endents 'ill also +e )aid an in"ome o% Rs 220 )er thousand sum insured )er annum %or a %i1ed )eriod o% 15 years* The %irst )ayment 'ill %all due on the )oli"y anni(ersary immediately a%ter the death o% the li%e insured*
SHEHNAI POLICY:
F+ ")!+$:
Shehnai Poli"y is an inno(ati(e li%e insuran"e )rodu"t* It )ro(ides a solution to the )ro+lems o% many "on"erned )arents 'ho 'ant to sa(e no' in order to )ro(ide %or their "hildrenEs higher edu"ation# marriage and other e1)enses 'hen the need arises* The term o% the )lan is su"h that the lum) sum +ene%it +e"omes )aya+le as the "hild attains the age o% 25 years* Shehnai Poli"y also "aters %rom the ra(ages o% in%lation* This is done +y the o)tion o% automati" in"rease o% 6P )er annum in sum insured and )remium %rom third )oli"y year on'ard* -rom the %ourth )oli"y year on'ard# the )oli"yholder is )ro(ided 'ith a statement sho'ing the +uildu) o% "ash (alue o% the )oli"y and sum insured %or the year* The )oli"y also )arti"i)ates in the sur)lus o% State Li%e and "urrently the rate o% +onus is Rs 105 )er thousand )er annum o% the adMusted o)ening "ash (alue
M ")!#"& B+(+'#":
The )oli"y matures 'hen the "hild attains age 25 years* At maturity the "ash (alue o% the )oli"y is )aid to the "hild* The "ash (alue in"ludes all the +onuses atta"hed 'ith the )oli"y .
D+ "1 B+(+'#":
I% the li%e insured dies during term o% the )oli"y# )remium )ayments sto) and the sum insured a))li"a+le to the )oli"y year o% death is de%erred to +e )aya+le 'hen the "hild attains
,9
INTERNSHIP REPORT
age o% 25* At the time o% death o% the li%e insured# the said sum insured is added to the UadMusted o)ening "ash (alueV to +e "alled the Uenhan"ed "ash (alueV and )arti"i)ates in State Li%eEs sur)lus until it is )aid out to the "hild 'hen he or she attains the age o% 25 >ears* The "hild 'ill ha(e an o)tion o% either "olle"ting the +ene%it in a lum) Sum or in %i(e eFual annual installments*
SUPPLEMENTARY CONTRACTS
SLI: o%%ers a num+er o% su))lementary "o(ers to enhan"e "o(erage under di%%erent )lans* These su))lementary "o(ers "an +e atta"hed 'ith the main )oli"y and are not a(aila+le e1"lusi(ely* A""idental 3eath 4 Indemnity &ene%it @AI&A A""idental 3eath &ene%it @A3&A -amily In"ome &ene%it @-I&A =ai(er o% Premium @=PA S)e"ial =ai(er o% Premium @S=PA Term Insuran"e @TIA !uaranteed Insura+ility @!IA Re%und o% Premium Rider @RPRA Hos)ital 4 Surgi"al &ene%it @H4SA
INTERNSHIP REPORT
the li%e insured +e"omes )ermanent and total disa+le# an annuity o% 10P o% sum insured 'ill +e )aya+le %or a ma1imum )eriod o% ten years* AI& is suita+le %or o%%i"e "ommuters and indi(iduals 'ho tra(el and use di%%erent modes o% trans)ort* The rates o% )remium %or this su))lementary +ene%it range %rom Rs 2 to Rs10 )er thousand sum insured de)ending u)on the o""u)ational rating o% )ro)oser %or standard li(es 'hose age should +e +et'een 19 to 55 years* AI& "an +e atta"hed 'ith %ollo'ing )lans?
=hole Li%e Assuran"e Endo'ment Assuran"e Anti"i)ated Endo'ment Assuran"e /ee(an Sathi Assuran"e :hild Edu"ation 4 $arriage Assuran"e Shad A+ad Assuran"e Shehnai Poli"y :hild Prote"tion Assuran"e @-or adult li%e onlyA $uha%i. Plus Assuran"e Nigeh+an Plan O)tional $aturity Plan
INTERNSHIP REPORT
Endo'ment Assuran"e Anti"i)ated Endo'ment Assuran"e /ee(an Sathi Assuran"e :hild Edu"ation 4 $arriage Assuran"e Shehnai Poli"y :hild Prote"tion Assuran"e $uha%i. Plus Assuran"e Nigeh+an Plan O)tional $aturity Plan
This su))lementary "o(er )ro(ides %or 'ai(er o% due )remiums in the e(ent o% the li%e insuredEs Total and Permanent 3isa+ility "aused +y a""ident as de%ined in the "ontra"t* =ith the hel) o%
21
INTERNSHIP REPORT
=P# the li%e insured gets relie(ed o% (agaries o% )aying )remiums in "ase o% his or her +eing in"a)a"itated as a result o% a""ident* The rate o% )remium %or standard risk 'ill +e Rs 0*50 to 1*00 )er thousand o% sum insured de)ending u)on the age o% li%e insured* =P is a(aila+le to li(es +et'een 19 and 55 years o% ages* It "an +e atta"hed 'ith %ollo'ing )lans?
=hole Li%e Assuran"e Endo'ment Assuran"e Anti"i)ated Endo'ment Assuran"e /ee(an Sathi Assuran"e :hild Edu"ation 4 $arriage Assuran"e :hild Prote"tion Assuran"e @-or adult li%e onlyA $uha%i. Plus Assuran"e O)tional $aturity Plan
=hole Li%e Assuran"e Endo'ment Assuran"e Anti"i)ated Endo'ment Assuran"e /ee(an Sathi Assuran"e :hild Edu"ation 4 $arriage Assuran"e :hild Prote"tion Assuran"e @-or adult li%e onlyA O)tional $aturity Plan
INTERNSHIP REPORT
In the e(ent o% death o% the li%e insured during term o% TI su))lementary "o(er# the sum insured 'ill +e )aya+le in addition to the +ene%its )aya+le under the +asi" )oli"y* Su))ose# $r* A# "o(ered under a )oli"y o% Rs 1#000#000# and also atta"hes TI su))lementary "o(er 'ith his )oli"y* In "ase o% his death during term o% TI# a sum eFual to Rs 1#000#000 'ill +e )aya+le under this su))lementary "o(er* This 'ill +e in addition to the +ene%its )aya+le under main )oli"y* This su))lementary "o(er is an e1"ellent o))ortunity %or indi(iduals 'ho 'ant to enhan"e "o(erage o% their )oli"y su+stantially on )ayment o% a meager amount o% )remium* TI is a(aila+le to li(es +et'een 19 and 55 years o% age* TIR "an +e atta"hed 'ith %ollo'ing )lans?
=hole Li%e Assuran"e Endo'ment Assuran"e Anti"i)ated Endo'ment Assuran"e /ee(an Sathi Assuran"e :hild Edu"ation 4 $arriage Assuran"e Shad A+ad Assuran"e Shehnai Poli"y :hild Prote"tion Assuran"e @-or adult li%e onlyA $uha%i. Plus Assuran"e O)tional $aturity Plan
INTERNSHIP REPORT 25 27 28-30 31-33 34-36 37 5 4 3 2 1 28, 31, 34, 37, 40 31, 34, 37, 40 34, 37, 40 37, 40 40
This su))lementary "o(er is a(aila+le only to standard li(es +et'een 10 and ,7 years o% ages and 'ho are not engaged in ha.ardous o""u)ations* Only one !I 'ill +e issued on the li%e o% any one )erson* !I is a(aila+le only at the time o% issue o% the +asi" )oli"y and "annot +e atta"hed to the )oli"y a%ter its issuan"e* Indi(iduals 'ho %oresee in"rease in their insuran"e needs in the near %uture "an get +ene%it %rom this su))lementary "o(er* It sa(es them %rom )ro(iding any %urther e(iden"e o% insura+ility in "ase they desire to enhan"e "o(erage under the )oli"y* !I "an +e atta"hed 'ith %ollo'ing )lans? =hole Li%e Assuran"e Endo'ment Assuran"e Anti"i)ated Endo'ment Assuran"e :hild Edu"ation 4 $arriage Assuran"e O)tional $aturity Plan
22
INTERNSHIP REPORT
H%$,#" 7HHS8:
(0 S)!/#* - B+(+'#"$
This su))lementary "o(er )ro(ides +ene%its in "ase o% hos)itali.ation o% the li%e insured# in State Li%eEs a))ro(ed hos)itals# as a result o% si"kness or a""ident* On )ayment o% dou+le amount o% )remium s)e"i%ied %or H4S# the +ene%its and their limits 'ill also +e dou+led* H4S is a(aila+le to li(es +et'een 19 and 50 years o% ages* The a(aila+le term ranges %rom 10 to 25 years* RPR "an +e atta"hed 'ith %ollo'ing )lans?
=hole Li%e Assuran"e Endo'ment Assuran"e Anti"i)ated Endo'ment Assuran"e /ee(an Sathi Assuran"e Shad A+ad Assuran"e :hild Prote"tion Assuran"e @-or adult li%e onlyA O)tional $aturity Plan
INTERNSHIP REPORT
<nder this rider the insured mem+er is entitled to )ayment o% the sum assured in "ase o% any a""ident "ausing )ermanent and total disa+ility# 'hi"h in"ludes loss o% t'o lim+s or t'o eyes or loss o% hearing in +oth ears or se(ere %a"ial dis%igurement* I% the disa+ility is )ermanent +ut not total then
26
INTERNSHIP REPORT
some )er"entage o% the sum assured is )aya+le de)ending u)on the se(erity o% the disa+ility* In this regards the same s"hedule o% disa+ilities is a))li"a+le as is )res"ri+ed under the la+or la's* In "ase o% a tem)orary a""idental disa+ility "ausing a+sen"e %rom 'ork a %ortnightly +ene%it "al"ulated at the rate o% Rs* ,#000 )er month or the monthly salary 'hi"he(er is less is )aya+le*
A6D6B6 R#0+!?
<nder this rider the death +ene%it o% an insured mem+er is dou+led i% the death 'as "aused +y an a""ident*
<nder this Rider i% an# insured mem+er is rendered in"a)a+le o% )ursuing any o""u)ation or (o"ation %or gain%ul em)loyment due to )ermanent disa+ility "aused +y disease or si"kness then he is entitled to the sum assured as +ene%it .
S)#" 2-+ F%!: The )lan is suita+le %or em)loyers 'ho desire to )ro(ide %inan"ial se"urity to their em)loyees +y means o% insuran"e "o(erage or %or mem+ers o% a )ro%essional +ody or asso"iation
27
INTERNSHIP REPORT
or some 'el%are asso"iation or a so"ial "lu+ 'ho desire to a(ail insuran"e )rote"tion on their li%e*
B+(+'#"$:
&ene%its o% this )lan are In "ase o% death o% an insured mem+er o% the s"heme the total amount o% the loan outstanding against him in"luding a""umulated interest is )aya+le to the )oli"yholder* In "ase State Li%e earns a )ro%it on any )oli"y during a ,Gyear )eriod# the )oli"yholder is also entitled to some share in the )ro%its de)ending u)on the si.e o% the grou)* Riders or su))lementary "ontra"t that "an +e atta"h 'ith this )lan is
29
INTERNSHIP REPORT
PT3 @A""identA and N3& rider may +e atta"hed 'ith this )lan* These riders )ro(ide insuran"e "o(er against )ermanent disa+ility due to a""idental and natural "auses rendering the insured mem+er una+le to earn a li(elihood %or himsel% and his %amily* In su"h a "ase the atta"hing riders "an %a"ilitate the "reditor in re"o(ering the outstanding amount o% loan* This )lan is suita+le %or em)loyers 'ho ha(e a s"heme %or )ro(iding loans to their em)loyees %or house +uilding# )ur"hases o% "on(eyan"e or any other goods o% household use* It is also suita+le %or +anks that are in the +usiness o% granting loans to their "lients %or )ur"hase o% house or "on(eyan"e or %or some +usiness (enture* Similarly leasing "om)anies and other %inan"ial institutions 'ith similar %a"ility may %ind this )lan Fuite attra"ti(e*
1* $an)o'er is still "onsidered as one o% the most im)ortant elements o% )rodu"tions in s)ite o% the dramati" gro'th o% mi"ro"hi) +ased automation in all 'alks o% li%e# es)e"ially in "ommer"e and industry* The o(erall e%%i"ien"y o% an organi.ation there%ore de)ends u)on the Fuality o% the man)o'er o% its em)loyees* The more de(oted# hard'orking and loyal the em)loyees the higher the re'ard to the em)loyer in the %orm o% greater e%%i"ien"y and )ro%ita+ility* Ouality man)o'er "an +e attra"ted +y o%%ering a good em)loyee +ene%its )a"kage +ased on ensuring se"urity and )ea"e o% mind o% the 'ork%or"e so that a greater "ommitment is o+tained %rom them* This is 'hy the enlightened em)loyer )ays )arti"ular attention to the 'el%are and 'ell +eing o% their 'ork%or"e through (arious em)loyee +ene%its s"heme* 2* One o% the %un"tions o% su"h s"hemes is to )ro(ide )rote"tion to the em)loyeeEs de)endants in the e(ent o% his death* Progressi(e em)loyers do )ro(ide grou) insuran"e 'hi"h )ays a lum) sum to the de)endants* This ho'e(er does not last long* =hat is reFuired in addition is a regular monthly in"ome %or a )eriod o% time* To meet this ReFuirement State Li%e )roudly )resents a )lan# 'hi"h o%%ers in(alua+le )rote"tion to the em)loyeeEs
28
INTERNSHIP REPORT
%amily during his 'orking li%e* The %amilyEs regular monthly in"ome is )rote"ted %or 15 years or until age 60 'hi"he(er is earlier* In this 'ay "o(erage is )ro(ided %or )ay u)on the death o% the em)loyee* This is illustrated +y the %ollo'ing e1am)le? G a* Su))osing the )ay o% an em)loyee is Rs 2000RG )er month* I% death takes )la"e at age 27 then the +ene%its )aya+le 'ill +e Rs2000RG )er month u) to age 60# IGe*# %or a )eriod o% 1, years* Total amount )aya+le Rs*,#12#000RG +* I% death takes )la"e at age ,5 then the +ene%it )aya+le 'ill +e 2#000RG )er month %or a )eriod o% 15 years* Total amount )aya+le Rs* ,#60#000RG ,* Annual )remiums 'ill +e "al"ulated on the +asis o% the em)loyeeEs )ay and his age and 'ill +e )aya+le at the +eginning o% ea"h s"heme year* I% this )oli"y Fuali%y %or )ro%it "ommission it 'ill +e )aya+le in a""ordan"e 'ith the rules at the end o% , years* 2* :o(er 'ithout medi"al e(iden"e is allo'ed on the same +asis as grou) term 'ith the monthly +ene%its +eing "on(erted into a lum) sum eFui(alent* The total o% the +ene%its so arri(ed at should# ho'e(er not the ma1imum allo'a+le under the )oli"y e1"eed*
INTERNSHIP REPORT
inadeFuate %or a retiring em)loyee %or maintaining his standard o% li(ing a%ter retirement unless he su))lements these +ene%its 'ith his o'n )ersonal sa(ings* Lee)ing this in (ie' some em)loyers may 'ish to en"ourage a ha+it o% sa(ing amongst their em)loyees %or their o'n 'el%are* !rou) Endo'ment Insuran"e S"heme "an +e a means o% introdu"ing a "om)ulsory sa(ing s"heme %or the em)loyees under the s)onsorshi) o% the em)loyer* Parti"i)ation in the s"heme is usually "om)ulsory* Ho'e(er# i% )arti"i)ation in the s"heme is (oluntary# at least 75P o% eligi+le em)loyees must )arti"i)ate .
B+(+'#"$:
<nder this s"heme ea"h em)loyee is )ro(ided insuran"e )rote"tion %or an amount 'hi"h may +e %lat or de)ends u)on the designation or salary o% the em)loyee* The amount o% insuran"e is )aya+le on maturity or death i% it o""urs earlier* In most "ases the term o% the endo'ment insuran"e %or ea"h em)loyee is determined in su"h a 'ay that the )oli"y matures at or near his retirement date* This ena+les the maturity )ro"eeds to "oin"ide 'ith retirement and su))lement the retirement +ene%its*
P!+.#). R "+$
The same )remium rates are a))li"a+le as %or indi(idual endo'ment )oli"y +ut 'ith the added attra"tion that in grou) %orm some (olume dis"ounts are also a))li"a+le de)ending u)on the si.e o% the annual )remium*
S)!!+(0+! V -)+
The )oli"y a"Fuires Surrender ;alue in res)e"t o% a mem+er a%ter insuran"e "o(er has +een in %or"e %or at least t'o years on that mem+er and no )remiums are in de%ault*
L% ( F *#-#"&
51
INTERNSHIP REPORT
<nder this s"heme i% the mem+er needs immediate liFuidity and a )oli"y has a"Fuired Surrender ;alue in res)e"t o% mem+er# heRshe "an a(ail a ma1imum loan o% 90P o% the net surrender (alue o% the )oli"y*
I("!%0)*"#%(:
52
INTERNSHIP REPORT
On"e the 'orking li%e o% an indi(idual is o(er# or he has retired# 'hat 'ill he li(e onW This is a Fuestion 'hi"h e(ery indi(idual %a"es during his 'orking li%e and is o% eFual im)ortan"e to a "on"erned em)loyer* Personal sa(ings# Pro(ident -und and !ratuity are the normal assets he a"Fuires* I% not s)ent )rudently# these assets "an %ritter a'ay in a short time* State li%eEs Pension S"heme is the only sour"e 'hi"h )ro(ides a steady monthly in"ome# 'hen other sour"es o% in"ome sto)* This +ooklet e1)lains ste)G+yGste) the nature o% the Pension S"heme# ho' it o)erates and 'hat are its +ene%its to the em)loyer as 'ell as to the em)loyees* W1 " #$ P+($#%( S*1+.+W &asi"ally it is a sa(ing# or "alls it a "ontri+ution# 'hi"h is "olle"ted during the 'orking li%e o% an indi(idual and in(ested )ro%ita+ly* A%ter retirement the indi(idual is entitled to a steady monthly in"ome %rom a %und +uilt u) %rom the earlier sa(ings* In a sense# it is a re'ard to the em)loyee# granted today# 'hile money is to +e re"ei(ed on retirement*
B+(+'#"$/W1&
P+($#%( S*1+.+W
=e ad(ise a )ension s"heme due to %ollo'ing +ene%its to the Em)loyees? o A%ter retirement 'hen the monthly )ayG"heru+ sto)s# the indi(idual starts re"ei(ing a regular monthly in"ome in the %orm o% a )ension* o =hile "ontri+ution to the s"heme# the indi(idual gets a ta1 "on"ession* o The indi(idual# a%ter retirement# need not %ear o% a drasti" redu"tion in his standard o% li(ing* o All )ensions are "om)letely ta1G%ree* o Retirement "omes as )lanned and not a+ru)tly as a sho"k*
:ontri+utions to the Pension S"heme +y the em)loyer are treated as +usiness e1)enses and dedu"ti+le in %ull* The kno'ledge that at the end o% the "areer# the em)loyee 'ill get a regular )ension hel)s to +uild u)
5,
INTERNSHIP REPORT
his Mo+ loyalty and the adheren"e to the Mo+# to the em)loyerEs satis%a"tion* Em)loyer does not ha(e to %ind money to "om)ensate an em)loyee 'hen he "eases to 'ork* Sho's that the $anagement "ares %or their sta%% and is "on"erned a+out their 'el%are* Attra"ts ne' em)loyees* Retirement o% )ersonnel is )lanned in ad(an"e# remo(ing un"ertainty +oth %or the em)loyer and the em)loyee* Promotion "hannels in the management hierar"hy are un"logged.
(0
P!%3#0+(" F)(0? This is like a sa(ings +ank* The "ontri+ution o% the em)loyer as 'ell as the em)loyee along 'ith interest a""umulated o(er the years is handed o(er to the em)loyee on his retirement* Ho'e(er# in "ase an em)loyee 'ishes to lea(e +e%ore retirement is due# em)loyerEs "ontri+ution may not ha(e to +e )aidC or only )art )ayment may +e made*
aa
G! ")#"&?
!ratuity is e1"lusi(ely the em)loyerEs "ontri+ution %or the +ene%it o% the em)loyee* -rom hal% to a %ull monthEs salary is "redited %or e(ery year o% ser(i"e* Reser(es are set aside in the +alan"e sheet +ut they do not attra"t ta1 "on"ession# unless it is a %unded s"heme* The se"urity o% the em)loyee to re"ei(e the gratuity is de)endent on the "ontinued e1isten"e o% the em)loyer and his )ro%its# e1"e)t in "ase o% a %unded s"heme*
aa
P+($#%( S*1+.+?
In "om)arison 'ith the a%orementioned t'o retirement +ene%its the Pension S"heme has distin"t ad(antages? Payments through Pension S"heme are guaranteed %or li%e*
52
INTERNSHIP REPORT
A )ensioner "an look %or'ard to his retirement 'ith "on%iden"e and se"urity* Pension S"heme is the only method through 'hi"h regular in"ome a""rues to an em)loyee a%ter retirement* The )ayment o% the )ension is not de)endent u)on the %ortune o% the em)loyer* Lum) sum "om)ara+le to those re"ei(ed %rom !ratuity or Pro(ident -und# "an still is dra'n +y "ommutation or the )ension 'hile maintaining a steady monthly in"ome* State Li%e maintains a %ullG%ledged )ension 3e)artment "a)a+le o% handling ea"h and e(ery s"heme in the most "om)etent and )ro%essional manner* It has a"tuaries# la'yers and other e1)erts# +esides o%%ering a uni%ied administrati(e# te"hni"al and in(estment ser(i"e* An em)loyer "an relie(e himsel% o% the tedious and "um+ersome 'ork +y using the )ro%essional ser(i"e o%%ered +y State Li%e# the maMor ones +eing? 3esigning a Pension S"heme a""ording to an em)loyerEs e1a"t reFuirements# in addition to determining the rate o% "ontri+ution et"* Pre)aration o% e1)lanatory do"uments# i% reFuired# %or "onsideration +y em)loyees* Assisting the em)loyerEs legal ad(isers 'ith the )re)aration o% Trust deed and Rules* Pro(iding reasona+le assistan"e in negotiations 'ith the :entral &oard o% re(enue %or a))ro(al o% the s"heme* $aintenan"e o% Indi(idual re"ords o% mem+ers o% the s"heme# their "ontri+utions# the em)loyerEs "ontri+ution# and )ension a""rued et"* -a"ilities %or )ayment o% )ensions# 'hen due
S+*)!#"&:
All )oli"ies issued +y State Li%e are guaranteed and enMoy %ull %inan"ial se"urity# +a"ked +y the !o(ernment under Arti"le ,5 o% Li%e Insuran"e Nationali.ation Order 1872*
55
INTERNSHIP REPORT
G) ! ("++0 P &.+("$
&y in"or)orating a !uaranteed Pension )eriod# )ayment "an +e ensured %or a de%ined )eriod say 5 to 10 years# 'hether or not a )ensioner is ali(e a%ter retirement# i%# ho'e(er# a )ensioner sur(i(es the guaranteed )eriod# )ension 'ill "ontinue throughout his li%etime*
The )ension 'ill +e )aya+le to the 'i%e o% a mem+er i% he dies 'hile in ser(i"e* Normally# a 'ido'Es )ension is one hal% o% the mem+erEs )ension entitlement*
'"+!
The )ension is )aya+le to the 'i%e i% the mem+er dies a%ter retirement* In this "ase also a 'ido'Es )ension is one hal% o% the )ension the mem+er 'as re"ei(ing* The 'ido'Es )ension# in either "ase 'ould +e )aya+le %or li%e +ut 'ould "ease in the e(ent o% remarriage*
08
R+"#!+.+(" A$,+*"$
56
INTERNSHIP REPORT
Pension 'ill +e )aya+le to a mem+er a""ording to a )redetermined s"ale on the normal retirement date %i1ed +y the em)loyer*
+8
E !-& R+"#!+.+("
A mem+er 'ho retires +e%ore his normal retirement date on a""ount o% +e"oming in"a)a"itated# or %or any other reason# may +e granted a redu"ed immediate )ension to "ommen"e on the day %ollo'ing the a"tual date o% retirement*
gA W#"10! : - B+(+'#"$ ?
I% a mem+er 'ithdra's %rom the ser(i"e o% the em)loyer +e%ore the normal retirement date due to any reason and 'ithout any entitlement to early retirement )ension# his %uture "ontri+ution# or "ontri+ution made on his +ehal%# 'ill "ease* &ene%its to +e )aid on 'ithdra'al 'ill de)end u)on the 'ithdra'al %rom ser(i"e rules o% the s"heme* In su"h a "ase one o% the %ollo'ing )ro"edures may +e ado)ted? R+')(0 %' *%("!#2)"#%(: I% a mem+er 'ithdra's %rom the "ontri+utory s"heme a re%und is made o% all the "ontri+utions made +y the em)loyee* D+'+!!+0 P #0=U, P+($#%(: A 'ithdra'ing mem+er may +e allo'ed a de%erred )aidGu) )ension o% the amount a""rued to his a""ount on the date o% 'ithdra'al* The redu"ed )ension 'ill "ommen"e on his normal retirement date*
INTERNSHIP REPORT
B+(+'#"$:
On the death o% any mem+er o% the )ro(ident %und s"heme his %amily is )aid a lum) sum amount eFual to the amount o% his %und +alan"e on the date o% his death multi)lied +y a %a"tor de)ending u)on the age o% the em)loyee at death* The %a"tors a))li"a+le %or a ty)i"al s"heme are already gi(en a+o(e ho'e(er the em)loyer in a )arti"ular "ase may adMust these %a"tors to suit his o'n s)e"ial reFuirements* I% the s"heme has 200 or more mem+ers then at the end o% three years the %und is also entitled to some share in the )ro%its de)ending u)on the si.e o% the s"heme.
R#0+!$:
Any rider 'hi"h "an +e added 'ith grou) term insuran"e )lan "an also +e added 'ith this )lan su"h A3&# PT3 @A""identA# N3& or :riti"al Illness :o(er
AIM:
59
INTERNSHIP REPORT
The )ur)ose o% this )lan is to )ro(ide smooth "ontinuation o% edu"ation o% "hild until heRshe "om)letes edu"ation*
BENEFITS:
In e(ent o% @!od %or+idA insured %ather or guardian death SLI: 'ill )ro(ide %ollo'ing +ene%its? S"hool %ee 'ill +e )aid %or remaining )eriod o% "hildren edu"ation In addition# an amount eFui(alent to 12 months %ee +e )aya+le %or uni%orm# +ooks# stationery# and other e1)enses* An in"rease o% 5P )er annum in )ayment 'ill +e gi(en in order to "ater in%lation* All )ayments 'ill +e made to s"hool %or +ene%its o% "hildren*
P !": ?
58
INTERNSHIP REPORT
SLI: has %ollo'ing de)artments 'hi"h )er%orms the di%%erent %un"tions o% SLI:* These de)artments areC Personnel 4 !eneral Ser(i"e 3e)artment Audit 3e)artment -inan"e 4A""ounting 3e)artment Poli"yholder Ser(i"e 3e)artment Ne' &usiness 3e)artment Agen"y 3e)artment
60
INTERNSHIP REPORT
G+(+! - S+!3#*+$
Proc"re#ent Pur"hase o% goods and ser(i"es <ni%orms :ommuni"ation Other ser(i"es M$inten$nce O%%i"e ma"hines 4 eFui)ment -urniture 4 %i1ture Trans)ort 4 "on(eyan"e Tele)hone and tele1
61
INTERNSHIP REPORT
R+- "#%( %' ,+!$%((+- H /+(+! $+!3#*+ 0+, !".+(" :#"1 %"1+! 0+, !".+("$:
Re"ei)t and dis)at"h Assets register Ser(i"e like "anteen se"urity and "leanliness
62
INTERNSHIP REPORT
SE:TIONS?
P+!$%((+- S+*"#%(:
All the em)loyee matters su"h as a))ointment# )romotion# demotion# trans%er and allo'an"es are dealt +y )ersonnel se"tion* Annual "on%idential re)ortsG A:R the em)loyees are )re)are# under the su)er(ision o% this se"tion# +y the de)artmental heads* -or the a))ointment o% the sta%%# an ad(ertisement is initiated in the ne's)a)er* Konal head is "om)etent authority %or this a))ointment* This a))ointment also de)ends on the +usiness o% .onal o%%i"e *the a))ointment o% o%%i"ers is done +y )rin"i)al o%%i"e Lara"hi or regional o%%i"e* Sele"tion "ommittee "onstituted +y .onal head "ondu"ts test and inter(ie'* -or )romotion o% the em)loyees# there are A:RES are ne"essary and minimum three years are reFuired to remain in one "adre* Ea"h em)loyee is )romoted +y the "riteria and instru"tions set +y )rin"i)al o%%i"e* PO or Regional o%%i"e does )romotion o% o%%i"ers* In Lahore there are ,62 o%%i"e em)loyees# 8 se"tor head and 2, area managers @A$A*
S)2 S+*"#%($:
There are no o% su+se"tions in this de)artment ;
16 M+0#* - S+*"#%(:
6,
INTERNSHIP REPORT
All the medi"al e1)enses are +eard +y SLI: )ro(ided that these are in"urred in a))ro(ed hos)ital the e1)enses o% medi"ine are reim+ursed* The reim+ursement o% medi"ine is not allo'ed to sta%% @ha(ing grade 1 to 9A +ut they are gi(en Rs 1500 )er month in sha)e o% salary as medi"ine allo'an"e*
26 L+ 3+ S+*"#%(:
-ollo'ing are the t'o main ty)es o% lea(es? :asual lea(e $edi"al lea(e 19 days "asual lea(es are allo'ed to all em)loyees in a year *the medi"al lea(e or a))li"ation lea(e is allo'ed %or 29 days in a year *unused lea(es are a""umulated and a%ter t'o years these lea(es in e1"ess o% 190 days "an +e en"hased# in "ase o% death all lea(es# not utili.ed# "an +e en"hased*
,* R+(" S+*"#%(:
=hen sale manager is )romoted to area manager he is "ategori.ed as A# &# :# and he is entitled to his o'n o%%i"e at his o'n "hoi"e at the e1)enses o% state li%e *a good lo"ation is sele"ted +y A$* A%ter sele"tion o% )la"e# .onal head is in%ormed a+out the lo"ation# +y a))li"ation 'ritten +y A$* This a))li"ation is trans%er to P4!S de)artment %or the analysis o% lo"ation o% the o%%i"e* This lo"ation is analy.ed +y .onal rent "ommittee @KR:A* A lease agreement is made 'ith the landlord a%ter analy.ing the a))ro(ed ma) %or the lo"ation and )ro)erty registration %orm* The o%%i"e rent entitlement %or "ategories o% A# &# :# Am is Rs * 2000# Rs 2000# 4Rs 2000G10000 P*$* res)e"t%ully*
D6 C ,#" - S+*"#%(:
62
INTERNSHIP REPORT
This se"tion is res)onsi+le %or )ur"hase# sale and maintenan"e o% %urniture 4 %i1tureC eFui)ment et" *a .onal )ro"urement "ommittee is "onstituted %or )ur"hase o% assets* The assets are )ur"hased %rom suita+le su))lier a%ter "riti"ally analy.ed the Fuotation o%%ered +y di%%erent (enders* Ea"h year assets are de)re"iated X 10P )*a* the entry %or the )ur"hase asset is made in the register %or %i1ed assets* Ea"h year the "losing +alan"e is intimated to PO Lara"hi*
AUDIT DEPARTMENT
Audit de)artment o% state li%e do internal audit o% transa"tions 'hi"h o""ur on daily +asis* $anagement o% any organi.ation is res)onsi+le %or ensuring that )ro)er a""ounting re"ords are ke)t and its assets are sa%eguard* To +est dis"harge this res)onsi+ility instituting a system o% internal "ontrol is essential to ensure that 'ork is )ro)erly "arried out +y the em)loyees* The organi.ation then relay on its system %or the )rodu"tion o% relia+le management in%ormation and the %inan"ial a""ounts # and to )re(ent ERROR9FRAUD AND LOSS OF ORGANI>ATIONJS ASSETSa"tually internal audit is a )art o% internal "ontrol*
I("+!( - C%("!%-:
65
INTERNSHIP REPORT
Internal "ontrol may +e de%ined as 'hole system o% "ontrol# %inan"ial and other'ise# esta+lished +y the management in order to "arry out the +usiness o% the organi.ation in an ordinary manner# sa%eguard its assets and se"ure# as %ar as )ossi+le *the a""ura"y 4 relia+ility o% its re"ords* It may +e noted that the "on"e)t o% internal "ontrol goes +eyond %inan"ial and a""ounting matters and the "ustody o% organi.ation assets to in"lude "ontrols designed to im)ro(e o)erational e%%i"ien"y and adheren"e to organi.ation )oli"ies*
P!+= P%$"=
)0#": )0#":
66
INTERNSHIP REPORT
Audit a%ter making )ayment is "alled )ost audit* In !RO<P 4 PENSION mainly is )re audit is used*
E4"+!( -= )0#":
The audit 'hi"h is done through the e1ternal )arties like "hartered %irms* !O;T organi.ation auditR:ommer"ial Audit? Audit o% the Pakistani !O;T o'ned organi.ation is done through the A!P
INTERNSHIP REPORT
areas in the system# internal "ontrol *in state li%e some items are su+Me"t to )reGaudit 'hile some are su+Me"t to )ostGaudit*
)0#":
All )ayment (ou"hers o% salaries# e1"e)t 3e"em+er# /anuary and "hanges* Sta%% o(ertime %ortnightly* $onthly %i1ed o(ertime to sta%% Entertainment to o%%i"ers %or sitting late $onthly o%%i"erEs entertainment and ne's)a)ers $onthly "ar rental to o%%i"ers $onthly tea e1)enses to sta%% Air ti"ket Air insuran"e Tele)hone antise)ti" +ills La+or "harges O%%i"e tele)hones :urrent t monthly salary ad(an"es
69
INTERNSHIP REPORT
PHS de)artment )er%orms %ollo'ing %un"tions* Rene'al or re(i(al o% )oli"ies Alteration in the )oli"y Payments o% death "laims Payment o% maturity "laims Payment o% inMury "laims
INTERNSHIP REPORT
A-"+! "#%(:
Alteration may +e done in ta+le or in "onditions or in sum insured* The endorsement 'ill +e atta"hed 'ith original )oli"y do"uments %or alteration )ur)ose*
K#(0$ %'
-"+! "#%(
This alteration in"ludes alteration in Sum insured Ta+le 4 term Load A%ter re(i(al term 4 "ondition S)e"ial re(i(al a%ter re(i(al :hange in terms 4 "onditions
C%("! *") -
-"+! "#%(
-or legal )oint o% (ie' this alteration is "alled "ontra"tual alteration* Alteration may ha(e s)e"i%ied )eriod %or alteration in the )oli"ies %or e1am)le in anti"i)ated )oli"ies +e%ore the 2 year o% term o% )oli"y alteration "an +e made* In /ee(an Sathi )oli"y i% any alteration is done it should +e done 'ithin one year* -or this )oli"y the e(aluation 'ill +e on -inan"ial as)e"t Physi"al as)e"t $oral as)e"t
70
INTERNSHIP REPORT
$ode o% )ayment is usually yearly then )oli"y holder in the time on need say to "hange it in the monthly# Fuarterly# hal% yearly* E1"ess is "harged %or this )ur)ose*
Half yearly Quarterly Monthly 52 % of annual premium 27 % annual premium 9% of annual premium
71
INTERNSHIP REPORT
I(L)!& C- #.:
I% State Li%e insuran"e )oli"y "ontains an A""idental 3eath 4 Indemnity &ene%it @AI&A su))lementary "o(er# and the insured ha(e sustained an inMury as s)e"i%ied in the "ontra"t# he "an a))ly to state li%e %or an inMury "laim 'ithin 20 days o% sustaining the a""ident* -or lodging inMury "laim# there is need to send a 'ritten intimation o% the a""ident mentioning therein the date o% a""ident to ser(i"ing State Li%e .onal o%%i"e* A%ter re"ei)t o% intimation %rom insured# the "ase 'ill +e %urther looked into and .onal o%%i"e 'ill "onta"t a""ordingly*
/ #($"
State Li%e insuran"e )oli"y )ro(ides a (alua+le %a"ility o% loan to meet immediate %inan"ial e1igen"ies* Poli"yholder "an a(ail a loan u) to 90P o% net surrender (alue o% )oli"y* On )oli"y loans# state li%e "harge marku) X o% 10P )er annum
72
INTERNSHIP REPORT
"om)ounded semiannually* I% )oli"yholder is interested to a(ail loan under his )oli"y# he "an a))ly %or loan*
7,
INTERNSHIP REPORT
,* Pension +ook in original %or )ost retirement death @the same 'ould +e returned +a"k a%ter (eri%i"ationA* 2* Attestation? All the )hoto"o)ies must +e attested +y the "on"erned !a.ette o%%i"er* NOTE: The )ro(ision o% all a+o(e reFuirements 'ould ensure the Fui"k settlement o% the "laims* 3e%i"ien"y o% any one o% the a+o(e 'ould result in the delay in the "laim settlement*
C%..+!*# - G!%),$:
P!%*+0)!+ / R+G)#!+.+(" '%! "1+ $+""-+.+(" %' D+ "1/D#$ 2#-#"& C- #.$:
1* 3eath intimation? The )oli"yholderRem)loyer is reFuired to send the 'ritten death intimation# to the In "harge :laims o% "on"erned !rou) 4 Pension .one* 2* On re"ei)t o% intimation# a%ter ne"essary "he"king# the ne"essary "laim %orms 'ould +e sent to the )oli"yholderRem)loyer +y the :laims de)artment o% the !rou) 4 Pension .one* ,* The )oli"y holderRem)loyer is reFuired to %ill in the "laim %orms# )ro)erly sign and stam) them and send them +a"k to the !4P .one along 'ith the %ollo'ing reFuirements*
72
INTERNSHIP REPORT
S"hoolR"ollege "erti%i"ate sho'ing date o% +irth National Identity "ard ;alid )ass)ort 3is"harge "erti%i"ate @in res)e"t o% e1Gde%ense %or"es PersonnelA (* :erti%i"ate o% age +y the )oli"yholder organi.ation (i* &irth "erti%i"ate issued +y lo"al +odyR"antonment +oard @Any one o% the a+o(eA B6 F%! 0#$ 2#-#"& *- #.$: 1* Em)loyeeEs statement* 2* Em)loyerEs statement* Attending SurgeonEs statements* @:laim %orms A# &# and :# res)e"ti(elyA* ,* NGrays and medi"al in(estigation re)orts et"# i% any* 2* @All the )hoto "o)ies must +e attested +y the "on"erned !a.etted O%%i"erA* 5* The )ro(ision o% all a+o(e reFuirements 'ould ensure the Fui"k settlement o% the "laims* 6* 3e%i"ien"y o% any one o% the a+o(e 'ould result in the delay in the "laim settlement*
75
INTERNSHIP REPORT
The +usiness o% SLI: is initiated through ne' +usiness de)artment @N&3A 'hen insuran"e sales re) sells )oli"y to any "lient then this de)artment handles all the do"ument )ro"edures 3r* Nisar Ahmed Shah is the in "harge o% ne' +usiness de)artment* In this de)artment as the name sho's# ne' "ontra"ts start +et'een )ro)oses and insuran"e "om)any* Pro)oser is a )erson 'ho a))lies %or the insuran"e )rote"tion* M #( ')(*"#%( %' "1+ NB #$ )(0+!:!#"#(/ The de)artment is res)onsi+le %or )ro"essing the ne' +usiness introdu"ed +y the sales %or"e right %rom re"ei(ing a )ro)osal on the "ounter to mailing the )oli"y do"ument to the )oli"y holder It has (arious se"tions to )er%orm the di%%erent task relating to the a""e)tan"e or reMe"tion o% risks %or li%e insuran"e# the )ro)osals are re"ei(ed and initially is "he"ked in all res)e"ts i*e* :om)letion o% all "olumns and then )ro"essed +y the under'riters de)ending u)on 'hether they ha(e +een
76
INTERNSHIP REPORT
introdu"ed under the medi"al or non medi"al s"heme* The risk is assessed kee)ing in (ie' the %ollo'ing %a"tors )ersonal data # o""u)ation #)hysi"al and so"ial %eatures # health # %amily history o% the )ros)e"t # moral ha.ard # sour"e o% in"ome # nomination # relationshi) +et'een the nominee and the )ros)e"t * Pre(ious li%e insuran"e history o% the )ros)e"t i% any# %ield o%%i"erEs or sale re)resentati(e "on%idential re)ort in"luded in the )ro)osal %rom# -inan"ial under'riting i*e* Sour"e o% in"ome# its legality and )roo%# relationshi) +et'een the )ros)e"tEs in"ome and sum assure *in "ase o% %ield o%%i"ers or sale re)resentati(eEs re)orts ha(e more im)ortan"e* A%ter this assessment# the under'riting de"ision is made 'hi"h may +e a""e)tan"e o% a risk at ordinary rate or 'ith loading# "alling additional e(iden"es relating to health or %inan"ial status o% the )ros)e"t# )ost)oning %or a de%inite )eriod or straight a'ay de"lination* Premium rates# installments are the "he"ked and %irst )remium re"ei)ts are issued on re"ei(ing )ayments* In the last# )oli"y "ontra"t are issued under intimation to the %ield %or"e# and "on"erned de)artment like "ommission )ayment# agen"y administration# "om)uter di(ision and marketing* This in +rie% terms is the %un"tion on ne' +usiness de)artment* This is also a key %un"tion as the under'riters are res)onsi+le %or the %inan"ial health o% li%e institution* &y a""e)ting good risks they )romote )ro%ita+ility and gro'th# 'hi"h hel)s in meeting the %inan"ial o+ligations o% the li%e institutions to'ards the )oli"yholders# its em)loyees and go(ernment*
-irst o% all sale ra) moti(ate the "ustomer to take )oli"y* Then sale ra) %ills )ro)osal %orm %or that "ustomer* Then sale ra) takes Rs 500 as token money as under'riting %ee %or "ustomer* Then )ro)osal %orm "ome in ne' +usiness %or allotment o% )ro)osal num+er 'here )ro)osal num+er %or a )arti"ular "ustomer is allotted* Then )ro"ess o% under'riting is done* I% the "ustomer %ul%ills the reFuirements o% under'riting then %urther
77
INTERNSHIP REPORT
)ro"ess "ontinues other'ise reFuest is reMe"ted and under'riter suggests some other alternati(e* I% under'riter a""e)ts the )ro)osal then "al"ulation o% )remium is done* A%ter the "al"ulation o% )remium the )oli"y num+er is allotted and )oli"y +ond is issued to "ustomer*
16P!%,%$ - S+*"#%(:
In )ro)osal se"tion )oli"y num+er is allotted to a ne' "ustomerEs )ro)osal %or %uture re%eren"e* All the 'ork )er%ormed in )ro)osal se"tion is entered in a register "alled )ro)osal register* -irst o% all issue the )ro)osal num+er and then re"ord the )ro)osal num+er# serial no# age# ta+le 4 term and then SR# AR# PR no and the name o% o'ner o% )oli"y %orm* These )ro)osal %orms are atta"hing 'ith +alan"e statements 'ith the issue no +ut those )oli"y %orm that ha(e no +alan"e statements take a side* Those 'ho ha(e +alan"e statements send it to the under'riting de)artment* There are some other %orms 'hi"h ha(e some o+Me"tions i% they are "lear than re"orded into the ledger to OL its mean ok*
U(0+!:!#"#(/ S+*"#%(:
<nder'riting is the )ro"ess through 'hi"h the under'riter assesses the risk asso"iated 'ith the insuran"e )ro)osal* <nder'riter (eri%ies the )ro)osal in%ormation )ro(ided in the )ro)osal %orm* I% he %eels that "lient should ha(e a medi"al "he"ku) than SLI: ha(e its o'n )anel o% do"tors to )ro(ide medi"al assistan"e*
79
INTERNSHIP REPORT
T-pes o, "n&er.ritin+
I* II* I6 Lay under'riting -inal authority L & )(0+!:!#"#(/:
A Munior under'riter 'ho "he"ks all the do"uments o% )oli"yholder# i% the do"uments are "orre"t# then he sends to %inal authority* II6 F#( )"1%!#"&:
A )erson 'ho "he"ks all the do"uments and de"ision o% lay under'riter makes %inal de"ision* U(0+!:!#"#(/ , (+-: The under'riting s)e"ialist "he"k the "ase thoroughly and see his name# NI: no# age# 'eight# height# nominee# name o""u)ation and address* I% they think there is something 'rong then they must +e "ons"ious and "all medi"al re)ort or other tests o% medi"al* I% they seem that "ase are "orre"t they %ill the %orm o% )oli"y +rie% sheet o% +ottom line 'hi"h they enter the height# 'eight and also gi(e the rate a+out to see his o""u)ation and they "an also use some "ode 'hi"h they gi(e di%%erent o""u)ational )erson* -or e1am)le "ar)enter "ode is 161*i% they %orget the "ode o% any o""u)ational )erson then they gi(e "ode o% 079*they think that 079 "odes# is +est solution* They sign the %orm and send to do"tors* D%*"%!J$ , (+-: The do"tor )anel head is kno'n as CMA 7CHIEF MEDICAL ADVISOR8 i*e* 3r* Naeem and also authori.ed do"tors 3r Saira 'ho has re"ommended the "ase +y under'riters %or medi"al re)orts et"* They must "he"k the nominee name# NI: no and his o""u)ational stress* I% the )oli"y holder has some disease )ro+lem then they "an mark them his "ase +y N*3 and they "an also gi(e a de"laration "erti%i"ate that i% he die during t'o
78
INTERNSHIP REPORT
years then the "om)any "annot )ay the "laim* The ma1imum limit o% N*3 "ase is 1D9 <<9<<<6 I% the )oli"yholder has go(ernment em)loyee then they "an gi(e the "ategories no 2 su"h as s"hool tea"her# do"tor et"* +ut i% they are "ar)enter# +ri"ks holder then they "an gi(e 5#6* There are +asi"ally three "ategories o% %emale* !o(ernment Mo+ and edu"ation Pri(ate illiterate Household &ut the male ha(e only one "ategory* I% the "ase has 1<9 <<9<<< then only one )erson sign +ut i% they are R$ 2<9 <<9<<< then they are R$ 3<9 <<9<<< then three )ersons "an "he"k* I% the )oli"yholder are smoker then they 'ill allo' only smoking daily 6 u) to 10*+ut i% they smoke 2< ), "% 2D then they are not "a)a+le to grant the )oli"y* The do"tors also de"ide 4 "he"k the age and "he"k the under'riting reFuirement ta+le e*g* i% the )erson age is 19G20 then they ha(e Rs 200#000 sum insured and they are nonG medi"al "ase*
90
INTERNSHIP REPORT
3i%%erent ta+les are used %or "al"ulating the rate o% )remium* $ost "ommonly used ta+le isC Ta+le 0, Ta+le05 Ta+le07 Ta+le 12 Ta+le 19 Ta+le 18
A%ter "om)leting the "al"ulation# the num+er is allotted to )oli"y holder *in )oli"y issue se"tionC all the re"ords are maintained in the )oli"y register*
?6C%.,)"+! $+*"#%(
Ne' +usiness de)artment has its o'n "om)uter se"tion# 'hi"h "ontains all the re"ords o% )oli"y holders* The de)artment is "om)uteri.ed in 1885*'indo' AIN (ersion , is used %or sorting the data* A "ode num+er is allo'ed to ea"h )oli"yholder* There are t'o )rints used %or o%%i"e 'ork* One is ra' )rint 7 the other is o%%i"e "o)y* The ra' )rint is used to "he"k the re"ord o% ea"h )oli"yholder* And the o%%i"e "o)y is used %or their re"ord* Smart term )rogram I&$ are used and they start login +y "ollege and then enter the ne' +usiness de)artment and o)en the 'hole ta+le o% )ro)osal %orm no and his +io data* %irst they "an enter ta+le a and then )ro)osal no and series that means )ro)osal %orms series and then his name are also enter and )oli"y no and then also enter the ta+le and term and then issuing date o% under'riting and date o% re"ei)t and 'rite his date o% +irth #age# mode i*e* >early Ouarterly $onthly Similarly they "an allot the no and then 'rite )ostal "ode i*e*079 and then his address *
91
INTERNSHIP REPORT
So 'rite the sum assured and enter the AI& (alue and the rate 'hi"h they "an allot* They :an enter the series (ise -I& NO and they gi(e the "ommand o% )rint 'ith the re"i)ient )rinter no 0,
AGENCY DEPARTMENT
M ( /+.+(" H#+! !*1& %' A/+(*& D+, !".+(":
State li%e is one o% those %e' organi.ations 'hose )rodu"t is not o(er the "ounter +ut it has to +e introdu"ed to the e1)e"ted +uyer through a huge marketing* The marketing %or"e# usually kno'n as %ield 'orkers# is regulated through an im)ortant de)artment 'hi"h in
92
INTERNSHIP REPORT
insuran"e industry is "alled agen"y administration de)artment The agen"y administration results# trained# )romote and )ro(ide ser(i"es to its %ield 'orkers so as to ensure them skilled )ro%ession# sound "areer# handsome in"ome and many %ringe +ene%its to ease their li%e* Ser(i"e )ro(ided +y the SLI: is tangi+le and there%ore are not a"Fuired at the "ounter +y the )eo)le# 'ho need it so it must +e sold them through )ersuasi(e method* -ield %or"e o% SLI: is tangi+le and there%ore is )ersuasi(e method* -ield %or"e o% SLI: )lays an e%%e"ti(e role in selling o% intangi+le )rodu"ts* In order to maintain re"ord o% the %ield %or"e agen"y de)artment 'as esta+lished* The head o% agen"y de)artment is $r* Shakeel ansari and e1e"uti(e o%%i"er $r* Asi% mir *the main %un"tion o% this de)artment in"ludes re"ruitment# )romotion# and termination o% %ield %or"e# allied and medi"al %a"ility %or %ield %or"e* This de)artment is also res)onsi+le %or issuan"e and rene'al o% li"enses to the %ield %or"e* State li%e has t'o le(els o% re"ruitment*
R+*!)#".+(":
The sale re)resentati(e is a))ointed +y SORS$ *The reFuirement and "onditions %or the a))ointment o% SR are as %ollo's* State li%e has t'o le(el o% re"ruitment*
INTERNSHIP REPORT
Less than ,0 years o% age ha(ing N*I*:* They are )aid sti)end* &oth a+o(e ty)e o% sale re)resentati(e are registered under insuran"e ordinan"e 2000 and insuran"e rules 2002*they are reFuired to get their registration rene'ed a%ter e(ery t'o years and su+mit a statement and de"laration annually as reFuired under a+o(e re%erred ordinan"e 4 rules *Their )rimary Mo+ is to sell li%e insuran"e )oli"ies*
P!%.%"#%(:
SR is )romoted# u)on %ul%illment o% "ertain terms and "onditions and on a"hie(ement o% +usiness targets# to SO* Similarly SO is )romoted to S$ and S$ to A$*
P!#F+ H A: !0$:
The %ield 'orkers are moti(ated +y gi(ing those )ri.es and a'ards on their monthly and yearly a"hie(ements* The height o% it is an annual "on(ention 'hi"h held at a )rominent )la"e o% )restige in the "ountry in 'hi"h all the Fualities around the "ountry share their kno'ledge and e1)erien"e# enMoy re"reational a"ti(ities and a+o(e all get +ene%it o% "om)any o% su""ess%ul seniors* They dis)erse %illed 'ith thrill and enthusiasm to go at more height to "at"h ne' stars*
O"1+! B+(+'#"$:
In order to run their o%%i"es "om)any maintained %urnishes o%%i"es are )ro(ided and those 'ho 'ish to o)en their o%%i"ers# as they desire are )aid "ash "om)ensation in lieu o% an o%%i"e to maintain their o'n o%%i"es* State li%e gi(e their %ield 'orkers and %amilies a due "are %or 'hi"h they are "o(ered %or indoor and outdoor medi"al treatment# "onsultation %rom senior do"tors and %or "lini"al in(estigation %rom re)uted )athologi"al la+s In "ase o% "hroni" diseases additional medi"al %a"ilities are gi(en* Their li(es are also "o(ered %or hea(y sum o% insuran"e against a""ident and death through (ariety o% !rou) Insuran"e Poli"ies* The :om)any )ays the )remiums and %or
92
INTERNSHIP REPORT
additional "o(erage su+sidi.ed rate o% )remium is "harged 'hi"h is dedu"ted %rom their "ommission*
T+!.#( "#%(
Any agent o% SLI:# 'ho +eha(e negati(ely# (iolates the rules and regulation or indulge %raud or malG)ra"ti"e# "an +e terminated +y the .onal head* Any agent 'ho %ails to meet the annual Fuota o% ->P is demoted to immediate lo'er rank o% the %ield %or"e*
(0 D+.%"#%(:
L#*+($+:
The li"ense to 'ork as agent %or SLI: is issued +y the "ontroller o% insuran"e Lara"hi* At s)e"i%i" inter(al o% time# a list o% the %ield %or"e is trans%erred to "ontroller o% insuran"e Lara"hi %or ne' and rene'al o% li"ense* The list o% li"ense %ee is gi(en +elo'? SR @ne' li"ense %or IST yearA Y Rs 50 SR @rene'al o% li"enseA Y Rs 150 SR @rene'al 'ith late %eeA Y Rs 250 SORS$ @rene'al o% li"enseA Y Rs 250 SORS$ @rene'al 'ith late %eeA Y Rs 200 The agen"y de)artment is also in(ol(ed in the %ollo'ing matters o% %ield )ersons# 1* $edi"al o% %ield )ersons 2* Rent :ontest arrangement @gi(ing the )ri.es to those 'ho make good +usinessA
INTERNSHIP REPORT
+ene%it su"h as medi"al %a"ilities )ro(ided to the o%%i"e sta%%* :ommission that is )aid to sales re)resentati(es# sales o%%i"ers and sales managers are also "al"ulated and )aid through this de)artment* To kee) the "or)oration on %inan"ial tra"k +alan"e sheets and in"ome statement also )re)ared on annually# monthly and 'eekly +asis* The )rin"i)al o%%i"e sends annual +udget to the de)artment and de)artment is res)onsi+le %or )ro)er utili.ation o% "ash dis+ursements* The de)artment also send +udget %ore"ast %or ne' +udget )ro)osal* Payment on +ehal% o% the other .ones and )re)aration o% +ank re"on"iliation statements are also %un"tion o% this de)artment* This de)artment "onsists o% %ollo'ing se"tion? :ommission Salary 3is+ursement Loan :ash "ounter
COMMISSION:
:ommission de)artment %a"ilitates the %ield %or"e +y o%%ering "ommission and due +onuses *the de)artment is dire"ted to "al"ulate and analy.e the earning o% last year# )ro(iding ad(an"es and loans to %ield %or"e and o%%er other %ringe +ene%its to moti(ates the %ield %or"e* :ommission is only gi(e to "ommission +ased )ersons 'ho are S$# SO AN3 SR* :ommission is "al"ulated %rom the )remium a%ter su+tra"ting the ta1* Then "he"k that S$ not takes any ad(an"ed loan and any "laim %rom .onal# regional*
96
INTERNSHIP REPORT
P+!$#$"+(*& 2%()$:
It gi(es on the )ersisten"y o% the last year +usiness* On 90P +usiness the "ommission is 1*1 )er"ent* On 91# it is 1*2 and on'ard* Se"ond year )remium SRGGGGGGGG 10P SOGGGGGGG 2P S$GGGGGG 1P THIR3 >EAR PRE$I<$ SRGGGGGG 5P SOGGGGG 1P S$GGGGG 0*5P
SALARY H LOAN:
Em)loyees are lying in the %our "ategories Related to their a))ointment and their )romotion* A""ording to their "ategory the %unds# +ene%its and salary are gi(es to em)loyees* In this se"tion loan a))li"ation and salary %orm are %illed here related their "ategory and then a""ording to that make the (ou"her sli) and )assed +y the o%%i"er*
CASH COUNTER:
In "ash "ounter )remium and loan amount is su+mitted *There is t'o a""ounts %or )oli"y holders* -irst year a""ounte*g* 117, AR: Rene'al AR: 1098 AR: is a""ount no o% rene'al a""ount* :olle"tion is done in t'o 'ays? :ash :heFue
97
INTERNSHIP REPORT
P !": @
PERFORMANCE HIGHLIGHTS
99
INTERNSHIP REPORT
INTERNSHIP REPORT
INTERNSHIP REPORT
81
INTERNSHIP REPORT
I(3+$".+(" I(*%.+
82
INTERNSHIP REPORT
8,
INTERNSHIP REPORT
82
INTERNSHIP REPORT
I(3+$".+(" P%!"'%-#%:
I(3+$".+(" P%!"'%-#% Y+ ! 2005 2006 2007 2009 2008 2010 7R$6 I( M#--#%($8 122#89,*7 122#159*9 161#865*9 192#972*2 205#902*2 2,5#8,2*5
85
INTERNSHIP REPORT
L#'+ F)(0:
L#'+ F)(0 Y+ ! 2005 2006 2007 2009 2008 2010 7R$6 I( M#--#%($8 122#775*2 1,7#859*9 156#7,7*, 177#258*1 188#225*, 2,0#222*0
86
INTERNSHIP REPORT
87
INTERNSHIP REPORT
T%" - A$$+"$:
T%" - A$$+"$ Y+ ! 2005 2006 2007 2009 2008 2010 7R$6 I( M#--#%($8 1,2#017*1 128#229*6 168#921*2 18,#117*6 217#695*2 251#279*1
89
INTERNSHIP REPORT
88
State Li%e Insuran"e :or)oration o% Pakistan in(ests its INTERNSHIP REPORT %unds in a""ordan"e 'ith the )ro(isions "ontained in Insuran"e Ordinan"e 2000# Insuran"e Rules 2002 and SRO@,08A L o% 1870 as amended to date +y the !o(ernment o% Pakistan* Govt. Securities: These in"lude instruments issued +y !o(ernment o% Pakistan su"h as Treasury +ills# Pakistan In(estment &onds et"* Approved Govt. Securities: These in"lude instruments as =a)da &onds# Pro(in"ial Se"uritiesRT-:s et" Loans: these in"lude loans in the %orm o% Term %inan"e "erti%i"ates et"* Investment Portfolio 2008
As at 31-12-2009 (Rs. in millions) Particulars Govt. Securities TFCs !pproved Govt. Securities "#uities $an% &eposits 'nvestment properties (olicy )oans Portfolio *+,,-./ +,,0. 1+,+,2 *1,+., 1,,3. *-,2+-
12,,.2+
P !" :8
100