Guess Who?

Sachin Tendulkar

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Journey into Sachins Life

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Sachin s Life Journey..

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Just like Sachin, every individual passes through different life stages

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The Stages In Human Life Cycle

0- 25 Years dependent on Parents for everything 25 30 Years pressure of Job & Marriage

30-60 Years pressure of Childrens Education & Marriage

60 - 80 Years Retirement & old age

My Fears
DEATH DISEASE

DISABILIT Y

DESTITUTIO N

The M factor
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MONEY..
Inescapable truth that money is means to many an end.
EDUCATION

HOUSE

FOUR WHEELER

EARLY RETIREMENT

Similarly in your case, you also have gone through different life stages
School College Work

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What were the expenses in each life stage?

Similarly what will be your expenses later on in your life ?

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Financial Goals to achieve in the coming years

5 -10

10-15

15 +

Is there a solution for the same?

Earn Wisely
Dont care

No Time

Save Regularly

Invest Smartly
No Discipline No Knowledge

o o o o o o o o o o o

Gold Real Estate Shares Equity Mutual Fund Public Provident Fund Government Bond & Securities National Savings Certificate Post Office Savings Scheme Insurance Banks Savings account & Fixed deposits

Investment options available in the Market

Financial Pyramid
Retirement

Wealth

Childs Education/Marriage

Life Insurance & Health Insurance

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Concept of Card Pyramid

This is a pyramid made of cards What would happen if one card is removed from bottom?

Same concept applies while planning for various financial goals.

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The Financial Pyramid

Financial planning continues as long as we make investments and till the goal is achieved But it gets affected or even stops in case of health expenses or unfortunate event of death.

Life Insurance and Health Insurance forms the foundation for any financial plan.
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Integrated Approach to Financial Planning

Cash Protection
Planned / Unplanned

Family Protection Protection against disability Protection against Dreaded diseases

Integrated Financial Planning

Investment

Retirement Children Education Asset creation

Various investment options to create wealth

How about a journey into life

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Choice is yours

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nf U

r o

se e

n e

f n

r o

se e

n e

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Yield

nf U

re o

se

n e

Inflation 3 Ds

Emergency
U f n r o s e

en e

Opportunity
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You

Possibly dont have any control

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We are puppet in the hands of Unforeseen & Uncertainty

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We wait mercilessly For our turn to come

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Protect the family from Unforeseen & Uncertainty

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We require money all the way Money while we Live Money for Opportunities in life Money for the D factor Money for Emergencies

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Unforeseen + Uncertainty = LODE (of life)

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In which life stage do you think LODE does not exist ?

A g e

Infancy

Life Stages

Growth Adulthood
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Old age

LODE runs parallel to life line

A g e

Infancy

Life Stages

Growth Maturity
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Decline

No Escape

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P rovision & P rotection

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But for

Power of Life Insurance

Insurance is a mechanism that helps to reduce the effect of such adverse situations.

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 An Insurance Agent explains concept of Insurance and helps them buy the ticket for the BIG SHIP

Insurance is always

SOLD
never

BOUGHT

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Need is Provision + Protection = Life long

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Insurance is NOT Investment Insurance is BETTER than Investment

How Insurance Works?

In a village there are 400 houses, each valued at Rs 20,000. Every year on an average, 4 houses get burnt, resulting into a total loss of Rs 80,000.

Insurance as a Risk sharing Device

People exposed to the same risk come together and agree that if any one member suffers a loss, the same will be shared by others, who will make good to the person who lost

Larger Impact

Unfortunate Few

Fortunate Many

Larger Impact reduced to smaller manageable impacts

Purpose & Need of Insurance

The damage due to the perils is the Risk the asset is exposed to

Peril Damage/ Financial loss

Cannot be prevented

Asset
Risk can be insured against

Insuring Human Life

Human Being is an Income Generating Asset

It can be lost due to early death It can be Non Functional due to Accident or Sickness

Insuring Life
Risk for Human beings

Dying too Early

Living too Long

Economic Loss

Principles of Insurance
Life Insurance Contract Principle of Utmost Good Faith (Uberrima Fides) Insurable Interest

The Indian Contract Act 1872

A contract is an agreement between two or more parties to do or to abstain from doing an act and which is intended to create a legally binding relationship

An Agreement enforceable by Law is a contract

Essentials of a Valid Contract

Essentials of a valid Contract

The Life Insurance Contract

Insurer will pay claims

Agreement

Insured will pay Premiums

On happening of insured event or survival to a specified term

Principles of Life Insurance

Utmost Good Faith

Insurable Interest

Insurance Contract is based on Fair Play

Utmost Good Faith

Positive Duty to voluntarily disclose, accurately and fully, all facts material to risk being proposed, whether requested or not.

Utmost Good Faith is also called Uberrima Fides

What is a Material Fact ?

Any Fact or Circumstance

Which Influences

The Mind of a Prudent Underwriter

In Fixing the premium

In determining whether to take the risk

What is Insurable Interest ?

Relationship with subject Matter Recognized in Law and gives Legal Right to a person

To insure that Subject Matter

Insurable Interest is the monetary interest

Who have Insurable Interest in each other?

Any person has unlimited insurable interest in himself Husband and wife in each other Creditor on Debtor (To the Extent of Outstanding Mortgage with Interest) Surety on Principal (To the extent of Debt) Partners in business Employer on its employees Parents in Lives of their Minor Children

When do these Principles apply ?

Insurable Interest interest is required at the time of entering the contract Utmost Good Faith is required Throughout the contract

Terminology of Insurance
Rs.10,00,000

Sum Assured Maturity Benefit SA + Bonus 55 Yr Maturity Benefit Death Benefit Premium SA + Bonus

Policy Term 25 Yrs 30 Yr Entry Age

Type of Products in Life Insurance

Traditional Plan Term Plan Endowment Plan Money Back Plan Children Plan Pension Plan Health Plan

ULIP Plan

Regular Premium Single Premium

ULIP - Terminology
Premium

Allocation Charges

Mortality Charge

FMC

Admin Charges

No. of Unit Net Allocation in Fund NAV Death Benefit NAV X No of Units Fund SA / Fund value

Maturity Benefit

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