Report on

DIFFERENT TYPES OF POLICIES IN INDIA

INTRODUCTION

Term life insurance or term assurance is life insurance that provides coverage

at a fixed rate of payments for a limited period of time, the relevant term. After

that period expires, coverage at the previous rate of premiums is no longer

guaranteed and the client must either forgo coverage or potentially obtain

further coverage with different payments or conditions. If the life insured dies

during the term, the death benefit will be paid to the beneficiary. Term

insurance is the least expensive way to purchase a substantial death benefit on a

coverage amount per premium dollar basis over a specific period of time.

Term life insurance can be contrasted to permanent life insurance such as whole

life, universal life, and variable universal life, which guarantee coverage at fixed

premiums for the lifetime of the covered individual unless the policy owner

allows the policy to lapse. Term insurance is not generally used for estate

planning needs or charitable giving strategies but is used for pure income

replacement needs for an individual. Term insurance functions in a manner

similar to most other types of insurance in that it satisfies claims against what is

insured if the premiums are up to date and the contract has not expired, and does

not provide for a return of premium dollars if no claims are filed. As an

example, auto insurance will satisfy claims against the insured in the event of an

accident and a home owner policy will satisfy claims against the home if it is

damaged or destroyed by, for example, a fire. Whether or not these events will

occur is uncertain. If the policy holder discontinues coverage because he has

sold the insured car or home, the insurance company will not refund the full

premium. This is purely risk protection.

A term insurance policy is a pure risk cover policy that protects the

person insured for a specific period of time. In such type of a life

insurance policy, a fixed sum of money called the sum assured is paid to

the beneficiaries (family) if the policyholder expires within the policy

term. For instance, if a person buys a Rs 2 lakh policy for 15 years, his

family is entitled to the sum of Rs 2 lakh if he dies within that 15-year

period.

If the policy holder survives the 15-year period, the premiums paid are

not returned back. The advantage, apart from the financial security for an

individual’s family is that the premiums paid are exempt from tax.

These insurance policies are designed to provide 100 per cent risk cover

and hence they do not have any additional charges other than the basic

ones. This makes premiums paid under such life insurance policies the

lowest in the life insurance category.

AIMS AND OBJECTIVES

Depending on their objectives, there are at least three types of life insurance

policy classifications.

A life insurance policy could offer pure protection (insurance), another variant

could offer protection as well as investment while some others could offer only

investment. In India, life insurance has been used more for investment purposes

than for protection in one’s overall financial planning.

Let us check to see the different types of life insurance policies in India.

Pure Insurance Products

Term Plans

Unfortunately, in the pure insurance category, there is only one product

available which is called term insurance. Term insurance policy covers only the

risk of your dying. You pay premium year on year to the insurance company

and if you die, the insurance amount, called the Sum Assured, is paid out to the

nominees. If you survive, you don’t get anything and lose the yearly premiums

you paid.

Insurance-cum-Investment Products

As the name goes, these are plans that provide insurance and along with it

return on investments.

Endowment Plans

Take a term plan and add an offer of some returns on the premiums you pay –

that is an endowment policy for you. If you survive the policy term, you get the

sum assured plus the returns and if you die during the policy tenure, you still get

the sum assured plus some returns. To get these returns along with the life

cover, you end up paying more premium.

Without-profit endowment plans : These plans do not participate in  the

profits the insurance company makes each year. Apart from the sum assured,

you could possibly get a loyalty bonus, which is a onetime payout made in

appreciation of your sticking to the insurance company.

With-profit endowment plans : These plans share the profits the insurance

company makes each year with the policyholder.  So they offer more returns

than without-profit endowment plans and are more expensive as well – that it,

for all parameters considered same, the premiums will be higher than without-

profit endowment plans.

Money-back plans

Money-back plans are variants of endowment plans with one difference – the

payout can be staggered through the policy term.  Some part of the sum assured

is returned to the policy holder at periodic intervals through the policy tenure. In

case of death, the full sum assured is paid out irrespective of the payouts already

made.

Whole-life plans

Term plans, endowment plans and money back plans offer insurance cover till a

specified age, generally 70 years. Whole-life plans provide cover throughout

your life. Usually, the policyholder is given an option to pay premiums till a

certain age or a specified period (called maturity age).

On reaching the maturity age, the policyholder has the option to continue the

cover till death without paying any premium or  encashing the sum assured and

bonuses.

Unit-linked insurance plans (ULIP)

In all the above mentioned insurance-cum-investment products, you have no say

on where your money is invested. To keep your money safe, most of these

products will invest in debt. Unit-linked insurance plans give you greater

control on where your premium can be invested.

IMPORTANCE OF TOPIC

Insurance is an integral part of any personal financial plan. The type of

insurance and the amount of coverage you obtain all depends on your unique

financial and family circumstances, and must be evaluated carefully. When

considering purchasing coverage, you should review all the potential risks and

the financial impact of these risks on your financial health. This will help you

determine what options to look for and what questions to ask. What you need to

keep in mind is that you do not want to be underinsured or overinsured, which

means you have to do your homework before you buy. And as with any type of

financial product, you must read the fine print and consult with a competent

advisor.

Let's review what we've learned:

Insurance is a form is risk management in which the insured transfers the

cost of potential loss to another entity in exchange for monetary

compensation known as the premium.

Insurance works by pooling risks. Because the number of insured

individuals is so large, insurance companies can use statistical analysis to

project what their actual losses will be within the given class. This allows

the insurance companies to operate profitably and at the same time pay

for claims that may arise.

Underwriting is the process of evaluating the risk to be insured. This is

done by the insurer when determining how likely it is that the loss will

occur, how much the loss could be and then using this information to

determine how much you should pay to insure against the risk.

The insurance contract is a legal document that spells out the coverage,

features, conditions and limitations of an insurance policy.

Property and casualty insurance is insurance that protects against property

losses to your business, home, or car and/or against legal liability that

may result from injury or damage to the property of others. This type of

insurance can protect a person or a business with an interest in the insured

physical property against losses.

An auto insurance policy typically covers you and your spouse, relatives

who live in your home and other licensed drivers to whom you give

permission to drive your car.

Homeowners insurance typically covers the dwelling (the structure),

personal property and contents, and some forms of personal liability. The

policy may cover direct and consequential loss resulting from damage to

the property itself, loss or damage to personal property, and liability for

unintentional acts arising out of the non-business, non-automobile

activities of the insured and members of that insured's household.

Umbrella insurance helps you protect your assets if you are sued.If you

are worried that the liability insurance coverage you have through your

auto or property policies is still not enough, you can consider adding an

umbrella policy.

Health insurance is a type of insurance that pays for medical expenses in

exchange for premiums. The way it works is that you pay your monthly

or annual premium and the insurance policy contracts healthcare

providers and hospitals to provide benefits to its members at a discounted

rate.

An indemnity plan, sometimes called a fee-for-service plan, is a type of

insurance that reimburses you according to a schedule for medical

expenses, regardless of who provides the service.

The HMO is the most common type of insurance policy people own and

the one most frequently provided by employers. HMOs provide a wide

range of comprehensive healthcare services to a group of subscribers in

return for a fixed periodic payment.

PPOs are a group of healthcare providers that contract with an insurance

company, third-party administrators, or others (like employers) to provide

medical care services at a reduced fee.

A point of service plan is a hybrid plan that combines aspects of an

HMO, PPO and indemnity plan. This type of plan is more flexible in that

it allows you to decide at the time you need services to elect to use the

POS plan's physician to arrange in-network care (HMO feature), or to go

outside the network or hospital and pay a higher portion of the cost.

Disability insurance can replace a portion of the salary you were making

before you became disabled and unable to work after a serious injury or

illness.

Disability insurance providers rate their premiums based on your job and

the level of risk involved in doing that job.

The reason to buy long term care insurance is to protect your assets in

case you need to pay for assisted living, home care or a nursing home

stay.

Life insurance provides you with the opportunity to protect yourself and

your family from personal risk exposures like repayment of debts after

death, providing for a surviving spouse and children, fulfilling other

economic goals (such as putting your kids through college), leaving a

charitable legacy, paying for funeral expenses, etc.

Whole life insurance provides guaranteed insurance protection for the

entire life of the insured, otherwise known as permanent coverage. These

policies carry a "cash value" component that grows tax deferred at a

contractually guaranteed amount (usually a low interest rate) until the

contract is surrendered.

Universal life insurance , also known as flexible premium or adjustable

life, is a variation of whole life insurance. Like whole life, it is also a

permanent policy providing cash value benefits based on current interest

rates.

Variable life insurance is designed to combine the traditional protection

and savings features of whole life insurance with the growth potential of

investment funds. This type of policy is comprised of two distinct

components: the general account and the separate account. The general

account is the reserve or liability account of the insurance provider, and is

not allocated to the individual policy. The separate account is comprised

of various investment funds within the insurance company's portfolio,

such as an equity fund, a money market fund, a bond fund, or some

combination of these.

METHOD AND METHODOLOGY

Because term life insurance is a pure death benefit, its primary use is to provide

coverage of financial responsibilities for the insured or his or her beneficiaries.

Such responsibilities may include, but are not limited to, consumer debt,

dependent care, university education for dependents, funeral costs, and

mortgages. Term life insurance may be chosen in favor of permanent life

insurance because term insurance is usually much less expensive[1] (depending

on the length of the term), even if the applicant is an everyday smoker. For

example, an individual might choose to obtain a policy whose term expires near

his or her retirement age based on the premise that, by the time the individual

retires, he or she would have amassed sufficient funds in retirement savings to

provide financial security for the claims.

Payout likelihood and cost difference

Both term insurance and permanent insurance use the same mortality tables for

calculating the cost of insurance, and provide a death benefit which is income

tax free. However, the premium costs for term insurance are substantially lower

than those for permanent insurance.

The reason the costs are substantially lower is that term programs may expire

without paying out, while permanent programs must always pay out eventually.

To address this, some permanent programs have built in cash accumulation

vehicles to force the insured to "self-insure", making the programs many times

more expensive.

Pension Plans

Pension plans are investment options that let you set up an income stream in

your post retirement years by giving away your savings to an insurance

company who invests it on your behalf for a fee. The returns you get depends on

a host of factors like how much you contributed and when is it that you started,

the number of years when you want the money to come to you and at what age

that starts.

Death benefit

The death benefit of a whole life policy is normally the stated face amount.

However, if the policy is "participating", the death benefit will be increased by

any accumulated dividend values and/or decreased by any outstanding policy

loans. (see example below) Certain riders, such as Accidental Death benefit

may exist, which would potentially increase the benefit.

Hypothetical claims example

A person buys a whole life policy in 1974 at age 30, and names his or her

spouse as beneficiary. The person dies in 2004

Policy face amount $25,000 (includes cash value of $12,242)

Less outstanding loan - 8,144 ($5,000 loan, plus 10 years interest)

Plus dividend values + 16,300 (per original scale... actual dividends were

greater during this period)

Death benefit paid = $33,156 amount of check paid to spouse.[2]

Maturity

A whole life policy is said to "mature" at death or the maturity age of 100,

whichever comes first.[3] To be more exact the maturity date will be the "policy

anniversary nearest age 100". The policy becomes a "matured endowment"

when the insured person lives past the stated maturity age. In that event the

policy owner receives the face amount in cash. With many modern whole life

policies, issued since approximately 2000, maturity ages have been increased to

120. Increased maturity ages have the advantage of preserving the tax-free

nature of the death benefit. In contrast, a matured endowment may have

substantial tax obligations.

ACTUAL DATA

Life insurance protection comes in many forms, and not all policies are created

equal, as you will soon discover. While the death benefit amounts may be the

same, the costs, structure, durations, etc. vary tremendously across the types of

policies.

Whole Life

Whole life insurance provides guaranteed insurance protection for the entire life

of the insured, otherwise known as permanent coverage. These policies carry a

"cash value" component that grows tax deferred at a contractually guaranteed

amount (usually a low interest rate) until the contract is surrendered. The

premiums are usually level for the life of the insured and the death benefit is

guaranteed for the insured's lifetime.

With whole life payments, part of your premium is applied toward the insurance

portion of your policy, another part of your premium goes toward administrative

expenses and the balance of your premium goes toward the investment, or cash,

portion of your policy. The interest you accumulate through the investment

portion of your policy is tax-free until you withdraw it (if that is allowed under

the terms of your policy). Any withdrawal you make will typically be tax free

up to your basis in the policy. Your basis is the amount of premiums you have

paid into the policy minus any prior dividends paid or previous withdrawals.

Any amounts withdrawn above your basis may be taxed as ordinary income. As

you might expect, given their permanent protection, these policies tend to have

a much higher initial premium than other types of life insurance. But, the cash

build up in the policy can be used toward premium payments, provided cash is

available. This is known as a participating whole life policy, which combines

the benefits of permanent life insurance protection with a savings component,

and provides the policy owner some additional payment flexibility.

Universal Life

Universal life insurance, also known as flexible premium or adjustable life, is a

variation of whole life insurance. Like whole life, it is also a permanent policy

providing cash value benefits based on current interest rates. The feature that

distinguishes this policy from its whole life cousin is that the premiums, cash

values and level amount of protection can each be adjusted up or down during

the contract term as the insured's needs change. Cash values earn an interest rate

that is set periodically by the insurance company and is generally guaranteed

not to drop below a certain level.

Variable Life

Variable life insurance is designed to combine the traditional protection and

savings features of whole life insurance with the growth potential of investment

funds. This type of policy is comprised of two distinct components: the general

account and the separate account. The general account is the reserve or liability

account of the insurance provider, and is not allocated to the individual policy.

The separate account is comprised of various investment funds within the

insurance company's portfolio, such as an equity fund, a money market fund, a

bond fund, or some combination of these. Because of this underlying

investment feature, the value of the cash and death benefit may fluctuate, thus

the name "variable life". Variable

Universal Life

Variable universal life insurance combines the features of universal life with

variable life and gives the consumer the flexibility of adjusting premiums, death

benefits and the selection of investment choices. These policies are technically

classified as securities and are therefore subject to Securities and Exchange

Commission (SEC) regulation and the oversight of the state insurance

commissioner. Unfortunately, all the investment risk lies with the policy owner;

as a result, the death benefit value may rise or fall depending on the success of

the policy's underlying investments. However, policies may provide some type

of guarantee that at least a minimum death benefit will be paid to beneficiaries.

Term Life

One of the most commonly used policies is term life insurance. Term insurance

can help protect your beneficiaries against financial loss resulting from your

death; it pays the face amount of the policy, but only provides protection for a

definite, but limited, amount of time. Term policies do not build cash values and

the maximum term period is usually 30 years. Term policies are useful when

there is a limited time needed for protection and when the dollars available for

coverage are limited. The premiums for these types of policies are significantly

lower than the costs for whole life. They also (initially) provide more insurance

protection per dollar spent than any form of permanent policies. Unfortunately,

the cost of premiums increases as the policy owner gets older and as the end of

the specified term nears.

Term polices can have some variations, including, but not limited to:

Annual Renewable and Convertible Term: This policy provides protection for

one year, but allows the insured to renew the policy for successive periods

thereafter, but at higher premiums without having to furnish evidence of

insurability. These policies may also be converted into whole life policies

without any additional underwriting.

Level Term: This policy has an initial guaranteed premium level for specified

periods; the longer the guarantee, the greater the cost to the buyer (but usually

still far more affordable than permanent policies). These policies may be

renewed after the guarantee period, but the premiums do increase as the insured

gets older.

Decreasing Term: This policy has a level premium, but the amount of the death

benefit decreases with time. This is often used in conjunction with mortgage

debt protection.

Many term life insurance policies have major features that provide additional

flexibility for the insured/policyholder. A renewability feature, perhaps the most

important feature associated with term policies, guarantees that the insured can

renew the policy for a limited number of years (ie. a term between 5 and 30

years) based on attained age. Convertibility provisions permit the policy owner

to exchange a term contract for permanent coverage within a specific time

frame without providing additional evidence of insurability.

Food for Thought

Many insurance consumers only need to replace their income until they've

reached retirement age, have accumulated a fair amount of wealth, or their

dependents are old enough to take care of themselves. When evaluating life

insurance policies for you and your family, you must carefully consider the

purchase of temporary versus permanent coverage. As you have just read, there

are many differences in how policies may be structured and how death benefits

are determined. There are also vast differences in their pricing and in the

duration of life insurance protection.

Many consumers opt to buy term insurance as a temporary risk protection and

then invest the savings (the difference between the cost of term and what they

would have paid for permanent coverage) into an alternative investment, such as

a brokerage account, mutual fund or retirement plan.

ANALYSIS

In India, insurance has a deep-rooted history. Insurance in various forms has

been mentioned in the writings of Manu (Manusmrithi), Yagnavalkya

(Dharmashastra) and Kautilya (Arthashastra). The fundamental basis of the

historical reference to insurance in these ancient Indian texts is the same i.e.

pooling of resources that could be re-distributed in times of calamities such as

fire, floods, epidemics and famine. The early references to Insurance in these

texts have reference to marine trade loans and carriers' contracts.

Insurance in its current form has its history dating back until 1818, when

Oriental Life Insurance Company[3] was started by Anita Bhavsar in Kolkata to

cater to the needs of European community. The pre-independence era in India

saw discrimination between the lives of foreigners (English) and Indians with

higher premiums being charged for the latter. In 1870, Bombay Mutual Life

Assurance Society became the first Indian insurer.

At the dawn of the twentieth century, many insurance companies were founded.

In the year 1912, the Life Insurance Companies Act and the Provident Fund Act

were passed to regulate the insurance business. The Life Insurance Companies

Act, 1912 made it necessary that the premium-rate tables and periodical

valuations of companies should be certified by an actuary. However, the

disparity still existed as discrimination between Indian and foreign companies.

The oldest existing insurance company in India is the National Insurance

Company , which was founded in 1906, and is still in business.

The Government of India issued an Ordinance on 19 January 1956 nationalising

the Life Insurance sector and Life Insurance Corporation came into existence in

the same year. The Life Insurance Corporation (LIC) absorbed 154 Indian, 16

non-Indian insurers as also 75 provident societies—245 Indian and foreign

insurers in all. In 1972 with the General Insurance Business (Nationalisation)

Act was passed by the Indian Parliament, and consequently, General Insurance

business was nationalized with effect from 1 January 1973. 107 insurers were

amalgamated and grouped into four companies, namely National Insurance

Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance

Company Ltd and the United India Insurance Company Ltd. The General

Insurance Corporation of India was incorporated as a company in 1971 and it

commence business on 1 January 1973.

The LIC had monopoly till the late 90s when the Insurance sector was reopened

to the private sector. Before that, the industry consisted of only two state

insurers: Life Insurers (Life Insurance Corporation of India, LIC) and General

Insurers (General Insurance Corporation of India, GIC). GIC had four

subsidiary companies. With effect from December 2000, these subsidiaries have

been de-linked from the parent company and were set up as independent

insurance companies: Oriental Insurance Company Limited, New India

Assurance Company Limited, National Insurance Company Limited and United

India Insurance Company Limited.

CONCLUSION

By 2012 Indian Insurance is a US$72 billion industry. However, only two

million people (0.2% of the total population of 1 billion) are covered under

Mediclaim, whereas in developed nations like USA about 75% of the total

population are covered under some insurance scheme. With more and more

private companies in the sector, this situation is expected to change. ECGC,

ESIC and AIC provide insurance services for niche markets. So, their scope is

limited by legislation but enjoy some special powers.

Insurance Repository

On 16 September 2013, IRDA launched 'Insurance Repository' services in

India. It is a unique concept and first to be introduced in India. This system

enables policy holders to buy and keep insurance policies in dematerialized or

electronic form. Policy holders can hold all their insurance policies in an

electronic format in a single account called electronic insurance account (eIA).

Insurance Regulatory and Development Authority of India has issued licenses to

five entities to act as Insurance Repository:

CDSL Insurance Repository Limited ( CDSL IR ) , SHCIL Projects Limited

Karvy Insurance repository Limited NSDL Database Management Limited

CAMS Repository Services Limited

Legal structure

The insurance sector went through a full circle of phases from being

unregulated to completely regulated and then currently being partly deregulated.

It is governed by a number of acts.

The Insurance Act of 1938[4] was the first legislation governing all forms of

insurance to provide strict state control over insurance business.Life insurance

in India was completely nationalized on 19 January 1956, through the Life

Insurance Corporation Act. All 245 insurance companies operating then in the

country were merged into one entity, the Life Insurance Corporation of India.

The General Insurance Business Act of 1972 was enacted to nationalize about

100 general insurance companies then and subsequently merging them into four

companies. All the companies were amalgamated into National Insurance, New

India Assurance, Oriental Insurance and United India Insurance, which were

headquartered in each of the four metropolitan cities.Until 1999, there were no

private insurance companies in India. The government then introduced the

Insurance Regulatory and Development Authority Act in 1999, thereby de-

regulating the insurance sector and allowing private companies. Furthermore,

foreign investment was also allowed and capped at 26% holding in the Indian

insurance companies.

In 2006, the Actuaries Act was passed by parliament to give the profession

statutory status on par with Chartered Accountants, Notaries, Cost & Works

Accountants, Advocates, Architects and Company Secretaries.A minimum

capital of US$80 million(Rs.400 Crore) is required by legislation to set up an

insurance business.

Authorities

The primary regulator for insurance in India is the Insurance Regulatory and

Development Authority of India (IRDAI) which was established in 1999 under

the government legislation called the Insurance Regulatory and Development

Authority Act, 1999.[5][6]

The industry recognises examinations conducted by IAI (for 280 actuaries), III

(for 2.2 million individual agents, 680 corporate agents, 380 brokers and 29

third-party administrators) and IIISLA (for 8,200 surveyors and loss assessors).

There are 9 licensed Web aggregators. TAC is the sole data repository for the

non-life industry. IBAI gives voice to brokers while GI Council and LI Council

are platforms for insurers. AIGIEA, AIIEA, AIIEF, AILICEF, AILIEA,

FLICOA, GIEAIA, GIEU and NFIFWI cater to the employees of the insurers.

In addition, there are a dozen Ombudsman offices to address client grievances.

Buying life insurance should be simple but has been made complex by the

different types of life insurance polices available and heavy mis-selling by

insurance agents. The investor should check to see what suits his overall

requirement and then buy one with a clear focus.

Whole life insurance, or whole of life assurance (in the Commonwealth of

Nations), sometimes called "straight life" or "ordinary life," is a life insurance

policy which is guaranteed to remain in force for the insured's entire lifetime,

provided required premiums are paid, or to the maturity date.[1] Premiums are

fixed, based on the age of issue, and usually do not increase with age. The

insured party normally pays premiums until death, except for limited pay

policies which may be paid-up in 10 years, 20 years, or at age 65. Whole life

insurance belongs to the cash value category of life insurance, which also

includes universal life, variable life, and endowment policies.

The other major form of life insurance is term life, which may be individual

term policies or group term certificates. As a general rule, term life is intended

for temporary use and has no cash value.

ANALYSIS

Buying life insurance is NOT a one-time event. Life changes and so do your life

insurance needs. In fact, experts suggest reviewing your life insurance needs

every few years, or when a major life event occurs.

At AccuQuote, our comprehensive, FREE life insurance policy review and

analysis will allow you to make an educated decision about your current life

insurance needs.

Reasons why you should consider reviewing your current life insurance

policy:

You want to make sure your family is adequately protected

You wonder if you can find a more affordable life insurance rate

You would like to see a term vs. permanent life insurance comparison

Your health has changed for the better, or worse

You would like to learn more about exercising the conversion option that

may be available on your existing term life insurance policy

Keep in mind a life insurance policy review and analysis is an excellent time to

revisit all of your life insurance needs. AccuQuote is here to help! We have a

portfolio of products and services, which includes Disability, Long-Term Care,

Accidental Death, Critical Illness Care and Final Expense life insurance that

may fit into your family's overall financial plan.

Not sure if your life insurance coverage provides adequate protection?

We encourage you to conduct a quick life insurance reality check. You may be

surprised at the amount of coverage you currently have compared to what you

actually need.

For a FREE life insurance policy review, call your lifetime AccuQuote agents at

800-589-0465. During our conversation, we will provide you with the

information you need to make an educated decision about your current and

future life insurance needs. We will determine additional coverage and product

needs for the entire family.

Decision and Risk Analysis

Expert risk analysis services can help you make better-informed decisions. Our

probabilistic decision models quantify risk and provide deep insight into real-

world systems where uncertainty can significantly affect possible outcomes.

Our quantitative models also identify inputs of particular sensitivity — where

small changes in values can have a disproportionate effect on end outcomes.

Your KCIC team will work with your data and your particular problem logic to

create an appropriate decision or risk model, which will accurately represent the

uncertainties in your model inputs and data.

Our specific capabilities include:

Analysis of variance: For inputs with available data, we provide in-depth

statistical analysis and insight into the factors most responsible for

variances within the data.

Sensitivity analysis: We provide quantitative measurements of the

sensitivity of possible outcomes to variation of uncertain inputs. This can

assist in determining the most crucial inputs to the model.

Forecasting: For inputs with available data, we construct stochastic time-

series or regression analysis models to predict future values and to

identify current trends in the uncertain input data.

REFERENCES

http://www.thewealthwisher.com/2010/12/19/types-of-life-insurance-

policies/#sthash.3MfAcf1V.dpuf

www.google.com

www.wikipedia.com

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