ASSIGNMENT COVER PAGE

Course Code FIN: 307

Course Title Principle Of Banking & Insurance

What question will you consider before choosing a life
insurance policy? What are the main purposes of life insurance
Assignment Topic
policy? How does insurance help economic development in
our country?
Exam’s Name Principle Of Banking & Insurance

Student’s ID 045-22-1-00-04-08-1030

Student’s Name Morsheda Sarah Mumu

Semester’s Name and
Spring-2022
Year
Course Teacher’s
Mr. Shib Sankar PodderReceived
Name and Designation
Department’s Name Business Administration

Date of Submission April 19,2022

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has been previously submitted for assessment at this or any other institution.

Student’s signature Morsheda Sarah Mumu Date April 19,2022

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My Assignment topic is, “What question will you consider before choosing a life
insurance policy? What are the main purposes of life insurance policy? How does
insurance help economic development in our country?”

Life insurance may be defined as the contract whereby the insurer in consideration of a
premium undertakes to pay a certain sum of money either on the death or on the expired of a
fixed period. (M.N. Mishra)

There are 44 General Insurance Companies that offer insurance over various schemes in
Bangladesh.

Once you've decided to purchase life insurance, choosing the right life insurance company
and plan is critical. The following are 25 questions you should ask when deciding which
company to do business with and which plan to purchase.

1. What is the insurance plan monthly and annual premium?

➢ Premiums can vary greatly depending on the plan and benefits. Some plans may offer
discounts if you pay the premium on an annual basis.
2. Is there a waiting period before coverage begins?
➢ Some plans include a waiting period between when you begin paying your premium
and when your benefits begin.
3. Are there circumstances where benefits are not paid?
➢ Most plans have benefit exceptions where they may deny benefits.
4. Does the plan require a physical exam?
➢ Most plans require a physical exam to be done prior to the plan going into effect. In
many cases, it will have to be done at your expense by an approved doctor.
5. How might your lifestyle affect your life insurance coverage before and after it takes
effect?
➢ Before issuing a life insurance policy, most insurance companies analyze lifestyle
characteristics, and these factors may have an impact on the premium you pay when
the plan goes into effect.
6. What happens if you miss a monthly premium or are late on a payment?
➢ Nonpayment of the life insurance premium or a late payment may impact your
benefits and if the policy remains in force.
7. Does the life insurance plan have a cash value if you decide to cancel the policy?
➢ Some plans will have a cash value if you terminate the policy before benefits are paid
out, you should understand this of any policy you may buy.
8. What is the process to change life insurance beneficiaries?
➢ Over the course of the policy term, you many need to make policy changes, such as
who you have identified as a beneficiary, you should understand this process before
you buy.
9. What happens if you decide to relocate outside of the state or to another country?
 ➢ While most life insurance companies operate nationwide, each state has different
insurance laws, you should understand how moving to another state or country may
impact your policy and plan benefits.
10. Under what circumstances can an insurance policy be cancelled?
➢ Most life insurance policies have exclusions that allow the insurer to cancel the
policy; you should be aware of these limitations
11. Are there situations where the premium may change?
➢ There are a wide variety of life insurance plans with just as many options for
premiums. You should be fully aware of how your premiums many change over the
course of the policy.
12. How are benefits paid out?
➢ You should determine how policy benefits will be paid out to your beneficiaries
before selecting any plan.
13. How long does it take for benefits to be paid out?
➢ Many life insurance policyholders purchase life insurance to pay for their burial
expenses, if this is the case for you, knowing how long it takes for benefits to be paid
out will be especially important.
14. Can I increase or decrease the benefit amount after plan goes into effect?
➢ Your life insurance needs may change over the course of the policy, and you should
understand if you can change the benefits after it goes into effect.
15. How long has the insurance company been in business?
➢ When selecting an insurance company, you should know how long they have been in
business, who owns the company and who runs it.
16. How many policyholders does the insurance company have?
➢ The size of an insurance company and number of policyholders may impact their
ability to pay out benefits and should be a factor you consider in selecting an
insurance company.
17. Who do I contact with insurance plan questions, after it goes into effect?
➢ Some insurance plans have the insurance agent who sold the policy provide customer
service, others have a separate customer service group, knowing this may impact your
selection of an insurance company.
18. Is there any information about the insurance firm available on the internet?
➢ Knowing a life insurance agents and company's reputations should be a factor in
determining who you want to acquire a life insurance policy from.
19. Can I pay my premiums online or by credit card?
➢ If you want to pay all your bills by check or online, knowing how to pay your
premium may influence which firm you choose to work with.
20. Can a family member make premium payments if I am no longer able?
➢ Your life circumstances may change, and you should fully understand how to keep it
in good standing should you no longer be able to make premium payments.
21. Is there a application fee to apply for the plan?
➢ Some insurance companies require an application fee prior to making a final decision
to provide your life insurance.
22. Does the insurance company offer a final expense life insurance plan?
➢ A final expense life insurance plan is designed to literally pay for a person’s burial
and outstanding debts. Depending on the benefits you are looking for, this may be the
plan that is right for you.
23. What is the appeals process if benefits are denied?
➢ In some cases, an insurance company may deny benefits, you should fully understand
the insurance company appeals process if this occurs.
24. Can the insurance company change benefit terms after the policy goes into effect?
➢ There are situations where an insurance company many change benefit terms after
your insurance plan goes into effect, you should know what these are.
25. What happens to my policy if the insurance company is sold or changes ownership?
➢ While there may not be a clear-cut answer to this question, since situations may vary
greatly, you should ask this question and make sure you are comfortable with the
answer you receive.

“Life insurance is a contract of insurance, not a contract of compensation”

The primary purpose of life insurance is to provide a financial benefit to dependents upon
premature death of an insured person. The policy pays a specified amount called a “death
benefit” to the named beneficiary when the insured dies.

People purchase life insurance for many reasons; to provide an income to replace lost earning
potential, to fund business or partnership buy outs in the event of death of one of the business
owners, to fund retirement plans, to indemnify a loan in the event of premature death, to pay
for college educations, to provide dependency income for the family, and to protect future
insurability, are just a few.

A life insurance policy is designed to offer protection against the risk of death from an
accident, old age, a serious health condition or a life-threatening ailment. It provides coverage
or protection on your life, for a specified term or a defined time period, as long as premiums
are paid timely.
When the insured person dies, a claim is paid to the beneficiary depending on the terms of the
life insurance policy. It is critical to buy a life insurance protection cover that is suited to your
needs to ensure you are protecting your loved ones financially after your death.

Insurance is important not only in the corporate sphere, but also in the economy. It has a
significant influence on how firms develop, how individuals think about economics, and how
the world progresses. Insurance is the backbone of the economy, and while it may not be
something you enjoy, it is essential to the success of your company.
The insurance industry is one of the major players in the economy and contributes to the
world's economy. This is because they help in the smooth running of the world's economy
through the payment of insurance claims and are considered one of the safest investments for
people to have.
 In a variety of ways, insurance companies contribute to the strength and vitality of our
economy.
• Insurance companies assist businesses in reducing risk and protecting their
employees:
At its most basic level, insurance provides a protective safety net that allows organizations to
engage in higher-risk, higher-return activities than they would otherwise. These acts assist
firms in operating successfully, resulting in more jobs, and increased overall economic
activity.
• Insurance companies provide financial security to customers:
Consumers have become so accustomed to the routine that they are often unaware of the
daily onslaught of risk and uncertainty. Unexpected problems can strike at any time, whether
a car accident, house fire, a flooded basement after a major storm, or a work injury.
Insurance can help manage this uncertainty and potential loss by offering critical financial
protection. When a disaster strikes, an insurance policy can assist consumers in obtaining the
funds they require. If it weren't for insurance, many people in these scenarios would be
financially stressed and possibly insolvent.
• Insurance companies help in the funding of economic development projects:
Insurance companies often invest the premiums that are not utilized to pay claims and other
operating expenses. These investments frequently finance building construction and offer
other critical assistance to economic development projects around the country through stock,
corporate and government bonds, and real estate mortgages.
• Insurance has a favorable impact on the financial system's stability:
One of the most important industries in the service sector is insurance. Insurance firms are an
essential component of the financial system. In addition, insurance corporations have a
significant role in the formation of state budgets. They are large taxpayers in the state. Taxes,
as we all know, make up a large portion of the state budget. As a result, the insurance
industry plays a critical role in maintaining the stability of the tax and financial systems.
• Insurance provides employment:
Unemployment is one of the most serious economic issues. This is a problem that many
countries are dealing with these days. In most emerging countries, the number of unemployed
individuals is rising. However, the insurance system aids in the resolution of this economic
issue by providing employment.
• Insurance contributes to an increase in GDP:
GDP is one of the most important macroeconomic metrics. The volume of GDP is used to
determine each country's level of development. People can choose from a variety of
insurance plans offered by insurance firms. These premiums are used by insurance companies
in the financial and investment operations of the economy. As a result, this process boosts the
economy’s GDP.