Insurance Loans24: LIFE INSURANCE ADVANTAGES

EMPLOYEES STATE INSURANCE

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The Employees’ State
insurance Act came into a  force in 1948,
laying  the foundations  for a nationwide  comprehensive 
social insurance program  the
first of its kind in South East Asia. The scheme covers an integrated  system of social insurance wherein  the benefits include  cash payments 
in the event of sickness, maternity, employments  injury benefits and pension  to the dependants, and medical  benefits 
to the workers and their families 
. From January 1997, an employees 
is required  to contribute 4.75%
of the payable and the employee 1.75% of the receivable  as the Employee’s state insurance Scheme  (ESIS) 
contributions . Though offering  a
comprehensive  social security scheme to
all Indian citizens  from Kashmir to
Kanyakumari  may be a far-fetchedc one ,
the  Government  as the first major step, announced  the launch of a comprehensive social
security  scheme, under the Rajiv Gandhi
Shramik Kalyan Yojana to  employees
covered  under the ESIS. This scheme was
put  into 
operations  on April 1, 2005, .
The scheme offers invalidity arising  out
of the non-employees as a result of retrenchment  , closure or permanent members   of the
workers will be supported by the Employees 
state insurance Corporations (ESIC) 
without any burden on the employer or employee.  The scheme provides  an unemployment  dole of fifty per cent of the wage of the
unemployed  to receive medical care in
the dispensaries  and hospitals of the
ESIC. To be eligible  and to get benefits
under this scheme , the workers should have contributed for a period of five
years before the cessation of employments.  </div>
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ENGINEERING INSURANCE:  As the
indicates these are policies  designed to
cover various risks associated with engineering 
applications during various  
stages of productions  or
constructions  as the case may be. These
policies are process-specific. There are different types of plans to meet
specific  requirements.  The Contractors.’ All risks policy is one
that safeguard the interest of  contractors  and principals in respect of civil
engineering  projects. This is an
all-risk cover and cover can also be extended 
for third party and other liabilities. The sum insured under the policy
is equal to the estimated  final erected
value of the contract  on a full cost
basis. In the event of underestimation 
due to cost escalation, the insurer applies the doctrine of average to
the extent of under -insurance. Another variations  is the Erections all Risks Policy that is
concerned with the erection  of electrical
plants and installations  including
machinery,  equipments  and structures with little or negligible  civil works terms and conditions are similar
to the Contractors, “All Risk Policy” . Under the contractors’ All Risk
Policy”  and Erection All Risk Policy, </div>
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The option  is available for additionally
insuring the contractor’s plant and machinery. If the sum insured is within the
specified  percentage  of the main contract then the additional
cover will be conterminous  with the main
contract of insurance . Wherever the sum insured exceeds the specified
percentage, the  contract   could be an annual contract, for the
contractors  could be using the machinery
and equipments in connections   with
other works too. the additional cover indemnifies the contractors  against unforeseen  and sudden physical loss or damage to the
plant and machinery due to any of the specified 
causes like burglary theft, riots, malicious acts, terrorism  fire explosions, storms, accidental damages,
faulty  handling etc., </div>
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The various
locations where the plant and machinery will be stored should be   declared to the insurer.  The insurance are  also allowed to issue  the contingency policy on a “First Loss
Basis” where the contractors  find it
difficult  to provide  the value of individual Contractors’ Plant
and Machinery (CPM) particularly in the case of mega projects. The insurers are
allowed  to issue such covers under the
“File & Use’ procedure subject to adequate reinsurance support.  In the case of the collapse of the New Air Terminal
built in Paris at a cost of $ 925 million, as nearly 400 firms were
involved  in the constructions  of the terminal, it was expected  that the investigations  team headed by prof. Jean Berthier might find
it difficult  to pin down the  responsibility  to any one firm. It was opined that in the
event of any fault by a company, the claims have to be met by the police unique
chantier, an engineering  insurance
policy that covers  the liability  of any firm involved in the constructions of
the terminal for a period of ten years from the date of completions  . It is reported that the reinsurance is
shared by Swiss Re, Munich Re, General Re, and SCOR Group of France. </div>
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EMPLOYEES STATE INSURANCE

The Employees’ State insurance Act came into a force in 1948, laying the foundations for a nationwide comprehensive social insurance ...

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The advantage of life
insurance over other types of savings instrument available  in the market are as follows<br />
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 1)  Creates an Estate: Life insurance policy
creates an estate. At any point of time the value of any other type of saving is the
total accumulation in that account only. If the savings holder unfortunately
dies, the amount  available  to the dependents  is the accumulation only. In case of the life
insurance the moment a policy  is taken
an estate in created to the extent of the sum assured under the policy i.e. if
the policy owner dies, what becomes payable to the dependents is the sum
assured   the total value of the state
and not the total premiums paid. </div>
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 2)
Encourages thrift:  Life insurance
encourages  thrift i.e., forced and
compulsory  savings. In case of  other types of savings. the moment persons
feels the need for money, there is great attraction to which money from the
savings accumulation. The purpose for which the savings accounts is opened is
seldom fulfilled for that reason. in Life insurance policies there is a
built-in discouragement  to withdraw.
Only surrender value which is  a
small  percent  of the premium. paid will be available to the
policy owner  if he wants be to withdrawn
. The policy owner thus is forced to continue 
payment of premiums and never try to surrender a policy. This will
ultimately  fulfill the purpose fore
which the policy was purchased. </div>
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3) Gift to near and
dear: Life insurance policies cannot be attached by any court of law or
income-tax authorities. A  married man
can take  a policy under married Women’s
Property Act for the benefit of his wife and / children separately and create
separate estates for their benefits. Once a policy  is obtained under his legislation  the policy 
holder will not have any hold or right over it. Life insurance thus can
be used as  a gift to the near and
dear.  </div>
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4) Protection against liquidation
of property: A Life insurance policy can be utilised <o:p></o:p></div>
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 as a collateral  security for a housing loan. In case of unfortunate
death of the policy owner, the amount available 
under the Life insurance policy is adjusted towards the outstanding  loan and interest and the house is released
to the beneficiaries  without any
encumbrance. Without such a facility the family will have to self sell the
house in the open market to clear the loan. It will be a distress sale and so
would fetch only a fraction of the real market value  of the house. Life insurance thus affords
protection against forced liquidation of property. </div>
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5)  Acts
as an Emergency fund: If immediate 
liquid cash is needed a policy of Life insurance can be against to the
Life insurance company, a Bank or any other financial institution as security
for a loan. <o:p></o:p></div>
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Life insurance thus
can acts as an Emergency Fund. banks today grant educational loans to students
for higher education. They insist on a Life insurance policy as a
collateral  security.  6) No stamp duty: Transfer of property contained
in a Life insurance policy does not attract any 
stamp duty like other property. It can be done by an assignment under sec. 38 of
Insurance  Act  1938, either by an endorsement on the back of
the policy  document or on a stamp
paper.  7)  No tax on proceeds of policy: The processed
of a Life insurance policy including  any
bonuses paid are not liable for income tax. </div>
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 8) Tax Exemption: For gaining income tax exemptions under Sec. 80C of
Income tax act, a person, can pay 
premiums under policies is the  on
his /her life or an the life is spouses 
or children, whether major of minor married or unmarried.</div>
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(9)  Simple claim settlement: Settlement of a
claim under Life insurance  policies  is very simple. In case of  a death claim, the nominee receives the
policy moneys. Incase  of survival of the
policy  holder till the date of maturity
of the policy, the maturity claim is paid 
to the policy holder himself. </div>
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10)  Safe method  of Investments : Life insurance  is a safe and profitable investments. The
IRDA constituted  by the Govt of
India  in 1998 keeps a constant  watch and vigil over the financial positions
of the Life insurance  companies. There
are strict solvency margins to be maintained by the companies. The IRDA pays
special attention  to the safety of the
moneys paid by the policy holders. thus life insurance  provides a safe method  for investments especially by the middle
class.  11) Effective management of
funds: One of the important  criteria for
investments of funds, apart from safety and liquidity is management of funds. A
life insurance  company  will have the necessary experience and
expertise in this field and a policy holder gets the benefits of the same
entirely free. Moreover the policy holder will be free of all tensions.  </div>
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ADVANTAGES OF LIFE INSURANCE

The advantage of life insurance over other types of savings instrument available in the market are as follows 1) Creates an Est...

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EMPLOYEES STATE INSURANCE

ADVANTAGES OF LIFE INSURANCE

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