ReportOn

Principles of Insurance

Topic:American Life Insurance Co. in BD

Assigned By:

Performed By:

MD. RASHEDUZZAMAN

2nd Year; 3rd Semester [BBA]

Date of Submission: Septembers 28, 2004

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September 28, 2004 Gazi Md. Hasan Jamil Course Coordinator

Faculty of Business & EconomicsDaffodil International University102, Sukrabad, Mirpur RoadDhaka-1207.

Subject: Submission on the report (Principles of Insurance) Of American life insurance co. in BD ” .

Dear Sir:

Here is the report on ALICO that we would like to submit for the partial requirement of our B.B.A. program.

In preparing the Report, we made sincere efforts to present the relevant information pertinent to this report and have analyzed them accordingly.

In this connection, may we, urge up on the benign honor of yours to go through the report and let us know about any change and adjustment on the report, if made.

Thanking You.

Sincerely Yours:

…………………….. ID:

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Acknowledgement

At the very onset, we would like to express our deep sense of gratitude to Mr. Md. Gias Uddin, member of “American life insurance co. in BD” for providing us valuable information & some recent statistics for the accomplishment of the report.

We are also indebted to our honorable course instructor Gazi Md. Hasan Jamil who has shown us the proper guideline to proceed on with this report. We would like to express our sincere gratitude to him for all he has taught us over the whole semester.

Now our special thanks for Dear Sazal or Hasan via who has also put his head to gather with us for the successful completion of the report. The special thanks also goes to one of our team members Kanij Fatema & Ismat-Ara who has contributed their maximum efforts for this report.

Finally, a silent stream of gratitude is for our most adorned parents whose blessings are always with us in this windy world.

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Preface

Theory is obviously a big fact for practical implication. But without practical practice theory may become useless. Particularly as a student of Business Administration, we need to practice the theories we learn through a semester for the better understanding of business & economic environment. Considering the facts, our course instructor Mr. Gazi Md. Hasan Jamil has taken the initiative to assign every group to analyze different insurance company in Bangladeshi context. The need for life insurance is simple; you should consider life insurance if anyone depends on your income. Essentially, you transfer the risk (loss of your income) to the insurer by paying a fee, or “premium,” to the insurer. The insurer, with a large capital base and expertise in risk selection and management, is better able to accept this risk than any single individual would be. When our course instructor assigns this job, first we went to the “Alico of Bangladesh”. We tried to collect all the relevant information & statistics pertinent to our report.We enjoyed the fieldwork, library work and done our report in a friendly atmosphere and under special care of our honorable Jamil Sir.

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Table Content` Executive summary 8

1.0 Introduction 91.1.Origin of the report 91.2.Objective 91.3.Scope of the report 91.4.Methodology 9-10

2.0 Background 102.1.Life insurance 102.2.What is life insurance 102.3.About ALICO 10-11

3.0 113.1.Our services & network 113.2.Our believe & message 113.3.Our strength 113.4.Strength of insurance 11

4.0 Insurance: needs in life 12

4.1

4.1.Personal needs 124.1.2.Education costs 124.1.3.Burial expenses & estate planning 134.1.4.Investment income 134.1.5Charity 13

4.2

Business needs 134.2.1.A business continuation insurance plan 134.2.2.Buy-self agreement 134.2.3.Life insurance as employee benefits 13

5.0 Types of insurance 135.1.Term life insurance 135.2.Endowment life insurance 14-155.3.Whole life insurance 15

5.45.4.Other types of whole life insurance 155.4.1.Universal life insurance 155.4.2.Variable universal life insurance 15-16

6.0 Financial statement 176.1Financial stability 17-18

7.0 Policies 19

7.1

7.1.0.Education protection plan 207.1.1.How the EPP works 207.1.2.At maturity 207.1.3Incase of your death 20

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7.1.4On death of the child before maturity 20-217.1.5Payments on your disability 217.1.6Specimen premium amount for DPR 217.1.7Bonuses 21

7.2

Three payment plan 227.2.1.Three payment 227.2.2.Premiums 227.2.3.Optional benefit 227.2.4.Protection 227.2.5Attractive feature’s 237.2.6.Contract 237.2.7.This policy can cover 23

7.3

Lifetime become PLUS 247.3.1.Natural death benefit 247.3.2.Additional coverage 247.3.3.It has S-Way protection 247.3.4.Limitations 24-257.3.5.Schedule of benefit & premiums 25

7.4

Executive five 267.4.1Terms & conditions 267.4.2.Definition 26-277.4.3.Policy schedule of benefits 27-297.4.4.Special features 297.4.5.Condition 29-317.4.6.Exceptions 31-32

7.5 Hospital care 337.5.1Special features 33-347.5.1You need the hospital care 34

7.6 Critical care 357.6.1Introduction 357.6.2.Stroke 357.6.3.Key factor 357.6.4.Why depend on critical care7.6.5.Schedule of benefits

8.0 Income Pamphlet9.0 Recommendation 10.0 Bibliography

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Executive summary

At the beginning of the semester, we were assigned this major report writing assignment. Our honorable faculty provided us a guideline for preparing this report. We followed this outline in a very strict manner. The introductory part of the report includes origin of the report, objective, scope of the report, methodology & limitations. Then we proceeded on with the very primary concept of insurance policy that means backgrounds &it work with people. The scenario of insurance policy in BD has focused from different point of view. After a general look, we concentrated on insurance life, its effects, its recent situations, and their activities and related other issues. The sequential rate pamphlet and its information has highlighted accordingly. A list of providing benefits has represented in the report. Finally, we have analyzed the problems, suggestions or strategies and recommendations & concluded the report. There are number of limitations for which we would not able to represent it as we have sketched to do.

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1.0Introduction

1.1 Origin of the Report

The term paper “American Life Insurance Company (ALICO) has started at the beginning of the semester under the instruction of our course instructor (Principle of Insurance) Gazi Md. Hasan Jamil

1.2 ObjectiveThe main objective of this report is to see what insurance is, the benefits of insurance and those fields where they implemented, its feasibility, and some policies of insurance

1.3 Scope of the ReportThe report is concentrating on insurance policy based on the Alico insurance company in Bangladesh and the sources of Internet only. It is not containing enough in-depth study from any other source.

1.4 Methodology-The entire report is prepared depending solely on secondary data, taken from the Internet and Alico of Bangladesh. -No primary data were obtained.-The report will be descriptive.

1.5 LimitationsThe limitations to prepare this report are as follows:The accuracy of the report depends upon the accuracy of the information furnished by the Internet and Alico of Bangladesh.

Lack of in-depth understanding of certain terms and concepts prevented us

from going into details.

Lack of vivid research.

Time limitation has also been there.

Lack of Alico’s financial statement.

They do not published annual report.

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2.0 Background

2.1Life Insurance In the following, we provide a very general overview of the types of life insurance products that are offered in the marketplace. Each of these products is offered in some form by ALICO through its branches and subsidiaries.  2.2What is life insurance? A Life insurance policy is a contract between you (the policyowner-insured) and an insurance company (the insurer). Under the terms of a life insurance contract, the insurer promises to pay a certain amount of money (death benefit) to someone you choose (a beneficiary) when you die, in exchange for your premium payments

2.3 About AlicoAmerican Life Insurance Company (ALICO) incorporated in 1921, is one of the largest international life insurance company in the world. The company markets a broad range of life & other insurance product in over 50 countries worldwide. ALICO is a number of the American International Group, Inc. (AIG), the leading U.S. based international insurance organization.

ALICO Bangladesh is the oldest operation in the company’s Middle East, Africa & South Asia (MEASA) division tracing its origin back to 1952 when it entered Pakistan with business activities also extending to erstwhile East Pakistan. The company started full service branch operation in BD in 1974 & has since been marketing individual & group life insurance product with remarkable success. ALICO has been the market leader in BD since 1997 & as at yearend 2001, had about US$820 million (equivalent) of life insurance in force.

ALICO plays an important role in the economy of BD. Its Assets in BD at year end 2001 totaled approximately US$153 million, ALICO BD invests its entire investible surplus locally, mostly in govt. securities / banks, thereby allowing usage of the progressively increasing fund in such public interests as infrastructure development, industrialization & employment generation. Besides, with nearly 4000 career agents & 230 dedicated employees, ALICO is a major employer in the country.

3.0

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3.1Our Services and Network

Our services are available from individual to massive concern from (life) all risk analysis by appropriate insurance. At the other end of your telephone call or e-mail and even of your doorstep.

3.2Our Believe and Messages

We believe the client must stand of the center of all our activities. Our ability to optimally fulfill the client’s requirement is based on three strategic capabilities: best risk management advice, maximum security with minimum cost and personalized service.

3.3Our StrengthConstant pursuit of suitable strategies has mad the company a leading insurer of Bangladesh for over a decade. Out dividend rate is the highest in the general insurance industry of Bangladesh 35% for the last 6 years. We have built up a strong financial base as well as massive reinsurance protection to absorb any size of risk of any diversification.

3.4Strengths of Insurance:

As the Insurance Company, initially I have the following strengths:

o Sufficient capitalo New technologyo Skilled agentso Efficient administrationo Customer careo Regularity in serviceo Availability of financing & efficient financial

structureo Advertisement & publicityo Located in a reputed areao Marketing research facility

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4.0Insurance: Needs in lifeThe need for life insurance is simple; you should consider life insurance if anyone depends on your income. Essentially, you transfer the risk (loss of your income) to the insurer by paying a fee, or “premium,” to the insurer. The insurer, with a large capital base and expertise in risk selection and management, is better able to accept this risk than any single individual would be.  This risk transfer may be helpful in both personal and business situations. 

4.1.Personal needs: 4.1.1Dependent's Support: The major reason people buy life insurance is to replace income that would be lost because of the death of an income earner. If you support or help support a family, the loss of income that would result from your death could mean that your surviving dependents may face financial difficulties. Household expenses continue, utility bills and school fees must be paid, and food and clothing must be purchased. Life insurance provides you with a sense of security in the knowledge that the life insurance money will be available to help support family members in case of your death.

4.1.2 .Education Costs : One of your primary objectives may be to send your children to a university or college. Due to an untimely death, the tuition may become beyond your family's reach. Life insurance may be used to provide for the tuition expense. 4.1.3 Burial expenses and estate planning: Life insurance may be used to pay funeral or burial expenses. In addition, it may be used to pay inheritance taxes.  4.1.4 . Investment Income : Life insurance policies that accumulate savings can also be used as vehicles for personal savings and investment. Over a period of time, the accumulated savings in a permanent life insurance policy can grow to a substantial sum and, while growing, will still provide the insured with life insurance coverage.  4.1.5 .Charity : You can purchase life insurance in order to donate the proceeds to a charitable organization, such as a church or an educational institution.

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4.2.Business needs:

4.2.1.A business continuation insurance plan: When the owner or a key person (any person whose death would cause the business a significant financial loss) dies, a business continuation life insurance plan may be used to provide the necessary fund for the business' continued operation. 4.2.2.Buy-Sell Agreement: If your business partner dies and you don't have enough money to buy your partner's financial interest in the company, life insurance may be arranged to cover this cost.  4.2.3 . Life insurance as Employee Benefits : Businesses often use life insurance to provide benefits for their employees. Employers pay for all or part of these employee benefits as part of the total package under which they compensate their employees

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5.0Types of insurance Although you may hear about many names for different types of life insurance policies, the majority of policies contain benefits derived from one or more of three basic types. These types are briefly outlined in very general terms below. 5.1.Term Life Insurance: Term insurance is issued for a specific period, or “term.” This term usually ranges from 1 to 30 years. You may choose the length of the term that best suits you. Term insurance is considered an “affordable” insurance choice. If you are young with a family and need a large amount of protection without paying high premiums, this type of life insurance may be of interest to you.  Under a Term policy, in case of death during the term of the policy, your beneficiary receives the cash payment equal to the insurance amount, or “death benefit.” The death benefit amount is chosen when you buy the policy. Term insurance protection ends when the period or “term” is over, and only pays out in case of death. For this reason this product type offers higher protection at a lower cost. It is a pure “risk transfer” product.  Term insurance can be divided into three main types: level term, increasing term, and decreasing term. Level term means that the death benefit remains the same throughout the term of the policy. Increasing term means the death benefit gets larger throughout the term of the policy. Decreasing term means the death benefit gets smaller. 5.2.Endowment Life Insurance: Endowment life insurance generally guarantees that a sum of money will be available to you or your beneficiaries, whether you live until the policy ends (or “matures,”) or in case of an untimely death. Endowment insurance usually provides a guaranteed death benefit and has a savings component called the “cash value.” Generally, if you buy an endowment policy and keep it until maturity, it will provide a lump-sum cash payout equal to the insurance amount, or “death benefit.” In case of death before maturity, the death benefit would be paid to your beneficiary.  Endowment insurance can be useful for people who know that they will have to incur a specific expense in the future — like a wedding or college tuition. They know that regardless of what the future may hold, the expense will have to be paid. Endowment insurance allows them to be certain that the money will be there.

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5.3.Whole Life Insurance: Whole life insurance has many of the same features as Endowment insurance, but it is designed to remain in force during the insured's entire lifetime. Like Endowment insurance, it provides a guaranteed death benefit, and has a savings component called the “cash value.” As you pay your premiums, a portion of each payment is set aside to create the cash value. The insurance company typically invests the cash value, which continues to grow as long as the policy is in force. Some of the advantages of a policy's cash value are that: -         You can cancel or surrender the policy in total or in part and receive the cash value; however, since this is a long-term policy, in the early years the cash value may be small or even equal to zero.-         If you find that you need to skip a premium payment, you can use the cash value to continue your current insurance protection for some time.-         In most cases, you may borrow from the insurance company, using the cash value in your life insurance as collateral. 5.4Other types of whole life insurance: 5.4.1.Universal Life Insurance: Universal life insurance has all the features of Whole life insurance. In addition to those features, it offers flexibility in premium payment and face amount, and it provides current interest rates. Unlike whole life and term, Universal life allows you, after payment of your initial premium, to pay premiums at any time, in virtually any amount, subject to certain minimums and maximums. You also can reduce or increase the death benefit more easily than under traditional whole life policy. 5.4.2.Variable Universal Life Insurance: Variable universal life insurance has all the features of Universal life insurance coverage, but, instead of earning an interest rate, its cash value is linked to non-guaranteed equity investment funds, bond investment funds, or similar investments. Your premiums will be invested in the various investment options that you have chosen, and you assume the investment risks. The amount of the policy benefit is dependent on the performance of your investments.  

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A number of supplementary benefits can also be added to the various forms of life insurance policies. Adding riders to the life insurance policy usually provide these additional benefits. The most common supplementary benefits include: -   Accidental Death Benefit: If the insured dies as a result of an accident, the insurer will pay an amount of money in addition to the basic death benefit provided by the life insurance policy. -   Waiver of Premium for Disability Benefits: The insurer waives its right to collect premiums that become due while the insured is totally disabled. -  Disability Income Benefits: The insurer provides a monthly income benefit to the policy owner insured if he becomes totally disabled. - Critical Illness Benefits: The insurer agrees to pay a portion of the policy's face amount to a policy owner insured that suffers from one of a number of specific, critical illnesses

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6.Financial statement

6.1Financial stability

FINANCIAL STABILITY   The financial condition of a life insurance organization is an important element in public confidence. In this regard we believe the fundamental factors listed below are significant. The following is a COMPARATIVE ANALYSIS of these basic factors, comparing

AMERICAN LIFE INSURANCE COMPANY

with 25 of the largest United States life insurance companies issuing life insurance to the general public. Since these 25 companies have an average of over 100 years of life insurance experience, and own a major portion of the invested assets and life insurance in force of all the companies, a favorable comparison of these factors can be indicative of financial stability.

BASIC SIGNIFICANT FACTORS -- AS OF DECEMBER 31, 2001 DERIVED FROM THE ANNUAL STATEMENT

SOLVENCY   A wide margin of Assets over Liabilities can be a significant safety factor. This indicates financial soundness and a Company's ability to meet all obligations as they become due. Assets for each $100 of Liabilities as of December 31, 2001.

SURPLUS FUNDS   (including Capital, if any) Per $100 of Policy Reserves: A high surplus ratio may indicate a company's ability to take emergencies in stride. It shows the proportion of surplus funds to the policy reserve liabilities.

Avg 25 of the largest U.S. Life Co's $ 105.12 Avg 25 of the largest U.S. Life Co's $ 11.60

American Life Insurance Co $ 119.79 American Life Insurance Co $ 48.72

SURPLUS TO LIFE INSURANCE IN FORCE Ratio of surplus for each $1,000 of Life Insurance in Force: A high ratio of surplus to life insurance in force may indicate further proof of financial strength and stability.

LIQUID ASSETS Assets in Bonds, Stocks, Cash and Short-Term Investments for each $100 of Liabilities: A high ratio may indicate a more liquid investment position to cover unforseen emergency cash requirements that may arise.

Avg 25 of the largest U.S. Life Co's $ 8.88 Avg 25 of the largest U.S. Life Co's $ 46.89

American Life Insurance Co $ 26.15 American Life Insurance Co $ 69.24

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FINANCIAL STATEMENT SUMMARY AS OF DECEMBER 31, 2001

Admitted Assets$28,471,147,993

Policy Reserves$9,654,681,593

Total Liabilities$23,767,231,153

Total Income$8,906,190,017

Gross Surplus (inc. Capital, if any)$4,703,916,840

Insurance in Force$179,864,000,000

7.Policies

Plans of ALICO

#Education Protection Plan

#Three payment plan

#Income Growth Plan

#Endowments

#Hospital care

#Critical Care

#Lifetime Income plus

#Executive Five

#The facilities of Accidental Loss

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7.1.Education Protection Plan

EDUCATION PROTECTION PLAN (EPP) is the foundation on which you can build your Child’s future and career.Your child depends on YOU and the INCOME you provide for education and other necessities of life. You want your child to have higher education to give him/her a good start in this increasingly competitive world. The cost of higher education has been on the rise for many years now. How can you make sure that the needed amount is available at the time your Child is ready to go to College / University? You may find it difficult to come up with the funds unless you plan for it and save regularly. Even if you do save regularly, you can still not be sure that you will live long enough to complete the savings plan.

7.1.1 HOW the EPP Works: You select the period of the Plan to suit the AGE of your CHILD at which you want the Policy Proceeds to be paid. The options are many; you can select any period from 10 to 25 Years.

The benefits of this PLAN are as follows:

7.1.2. AT MATURITY On survival of the insured Child at Maturity, the Full Face Amount of the Policy PLUS Bonuses is paid. The money can be used to pay for his/her higher education. On if he/she will find the money very helpful in starting a career. It can also be used for expenses such as marriage

7.1.3 IN CASE OF YOUR DEATH

A) All future PREMIUMS under the policy will be WAIVED and the policy would continue in full force.

B) INCOME for EDUCATION equal to1% of the Face Amount will be paid EVERY MONTH to the insured child till the Maturity of the Policy.

C) At Maturity, he/she would receive the benefits stated above.

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7.1.4.ON DEATH OF THE CHILD BEFORE MATURITY

Full face Amount PLUS Accrued Bonuses are payable, subject to Juvenile Endorsement.

7.1.5 Payments on Your Disability: For a small additional premium, you can add a very valuable benefit – Disability Protection Rider, that will provide (1) In event of your total and permanent DISABILITY DUE TO SICKNESS OR ACCIDENT, all future premiums will be WAIVED, (2) Income equal to 1% of the face Amount will be paid, EVERY MONTH, to the child till the maturity of the policy, and (3) At Maturity, he/she would receive the benefits stated above.

7.1.6 Specimen Premium Amount for DPR:If you wish to add the Disability Protection Rider (DPR) to this policy, the ALICO Agent will provide you necessary and Rates. As an example, if your age is 25 Years and you wish to buy a 18-Year Term EPP Policy for your 2-year Old Child with the Face Amount of Tk. 100000, your EPP Yearly premium with DPR would be Tk 6,864.

7.1.7 BONUSES: The policy will participate in profits declared in the form of Reversionary Bonus and Capital b Growth Bonus (Terminal Bonus), if applicable.

Other Attractive Features: -Cash Value, Paid-Up Value, and Extended Term Insurance Value are guaranteed.

-Your premium will never increase.

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7.2Three payment planALICO’S Three-payment plan provides very high insurance protection & attractive returns on your investment at a very low cost.

7.2.1 Three payments:The unique feature of the plan is that ALICO pays the face amount in 3

installments.-25%of the face amount is paid at the end of 1/3of the term of the policy.-Another 25% is paid at the end of 2/3rd of the term of the policy.-You can use the money to meet any of your needs or invest it wherever you want to get maximum returns.-At maturity the remaining 50% of the face amount is paid with bonus.7.2.2 Premiums:

You can provide the premiums at yearly, semiannually, even or quarterly. Bonus:

Your policy will participate in the profits declared in from of Reversionary Bonuses & Capital Growth Dividends. These are based on our current scales, which may change in the future.7.2.3 Optional benefit:

24-HOUR Accidental Death Benefit (ADB) Provides for double the face amount in case of death by accident.

ALICO representatives will provide you are the detail of the policy & optional benefit & assist you in planning a well-balanced program of saving & protection to suit your particular needs. 7.2.4 Protection:

For the entire duration of the policy you are insured for the FULL FACE AMOUNT PLUS the accrued BONUS. In the event of death, NO DEDUCTION is made for the installments already paid. You are insured for the FULL AMOUNT till the last day.

7.2.5 Attractive features:

-Your premiums will never increase.-Cash values, paid-up values, extended term insurance values are guaranteed.-Like all other policies, the premium is INCOME TAX DEDUCTABLE. 7.2.6 Contract:

Under the policy, various types of policies can adjust with this policy.-HOSPITAL CARE -CRITICAL CARE-EXECUTIVE FIVE etc But extra premium should pay for these policies.7.2.7 This policy can cover:

Following decease, can cover this policy-1.Stroks, first heart attack2.Cancer 3.Koronarry artery surgery

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7.3Lifetime Income PLUS:

Monthly income benefit up toTk.20000 with Plan1The lifetime income plus guarantees a cheque-a-month for the lifetime of your spouse

or children or yourself if you suffer an Accidental loss of life or Permanent Total disability as per policy definition.

Accident medical expense reimbursement up to tk.100000 per injury with plan1:Your original bills directly related to the treatment of a covered Accidental

injury will be reimbursed to you in full, subject to the limits under each plan, whether incurred for in-patient treatment, including private doctor’s visit, laboratory tests, X-ray, physiotherapy or prescribed medicine.

7.3.1 Natural death benefit:

In case of natural loss of life, the beneficiary will receive a cash payment of tk.10000 in one lump sum.

7.3.2 Additional coverage: Accidental in hospital income up to tk.1000 everyday under plan1:

In case you are confined in an eligible hospital due to a covered accident, a daily in-hospital income will be payable to you as per schedule of benefits. This benefit is payable regardless of bills & even if confined in a free but eligible hospital.

7.3.3 It has 5-way protection:

1.In case of natural death, the beneficiary will receive a cash payment in one lump sum.

2.In case of accidental death, the beneficiary will receive a lifetime income with 20 years guaranteed.

3.in case of permanent total disability, the insured will get a lifetime income with 20 years guaranteed.

4.In case of treatment of accidental injury, the insured will get accident medical expanse reimbursement.

5.In case of hospitalization due to accident, the insured will receive accident in-hospital daily income.

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7.3.4 Limitations:-There are a few exclusions such as suicide, murder, war risk, serving in the Armed Forces, etc. Full details will be in the policy.

-The lifetime monthly income benefit should not exceed an insured’s monthly income with a maximum of tK.20000.

-Maximum lifetime income amount under all your policies with ALICO should not exceed TK.20000 per month.

-Maximum principal sum under all your policies with ALICO under single premium is TK.6000000

-The special offer rates available to most occupations. However, ALICO reserves the right to decline or restrict the amount of coverage’s for certain occupations.

7.3.5 Schedule of benefit & premiums

Plan 1 Plan 2 Plan 3 Plan4 Plan5

Benefits

Lifetime monthly income

20000 15000 10000 5000 2500

Accident monthly reimbursement

Up to tk.1000000

Up to tk.50000

Up to tk.30000

Up to tk.20000

Up to tk.10000

Natural loss of life

Tk10000 Tk.10000 Tk.10000 Tk.10000 Tk.10000

Accident in hospital daily

Tk.1000 Tk.750 Tk.500 Tk.250 Tk.150

Premium

Plan1 Plan2 Plan3 Plan4 Plan5

Single premium for3 years

Tk.33183 Tk.22969 Tk.15266 Tk.8400 Tk.4588

Single premium for5 years

Tk.53521 Tk.37047 Tk.24623 Tk.13549 Tk.7401

Lifetime income plus is offered to any employed person with good health & aged between 18 $ 59 years.

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7.4 Executive Five

7.4.1 Terms & conditions It is hereby agreed that in consideration of the of the payments in full of the

total premium applicable & if after the policy executive date, the named insured shall be die from natural causes prior to the expiry date or sustain accident bodily directly & independently of illness & all other causes which results within three hundred sixty five (365) days in losses covered hereunder, the company shall pay the amount of benefit specified in the policy schedule of benefit, subject to the terms, conditions, exceptions, & provisions contained in the policy.

7.4.2 Definitions:

Policy effective date wherever used in this policy shall mean 12:01A.M. (Local territory time) on 7 day following the Policy Application Date.

Named insured wherever used in this policy shall mean the insured, as stated in the application.

Injury wherever used in this policy means accidental bodily injury occurring while this policy is in force as to the named insured whose injury is the basis of claim, & resulting, directly & independently of all other causes, in loss covered by the policy.

Permanent partial disability wherever used in this policy shall means the total loss of functional use or complete & permanent severance.With reference to hand or foot: at or above the wrist or ankle joint.With reference to thumb & index: at or above the metacarpo phalangeal joint.With reference to the eyes, hearing or speech: the entire & irrecoverable loss of sight, hearing or speech as certified by a licensed physician specializing in Ophthalmology or Otolaryngology:

Permanent total disability wherever used in this policy means the named insured is unable to engage in any occupation or employment for compensation or profit for which the named insured is reasonably qualified by education, training or experience. If at the time of the loss, the named insured is unemployed, permanent total disability shall mean the total & permanent inability to perform all of the usual & customary duties & activities of a person of like age & sex.

Hospital wherever used in this policy means an establishment which meets all of the following requirement:

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-Holds a license as a hospital, if licensing is required in the country or govt. jurisdiction-Operates primarily for the reception, care & treatment of sick, ailing or injured persons as in-patients-Provides 24-houres a day nursing service by registered or graduate nurses-Has a staff of one or more physicians available at all times-Provides organized facilities for diagnosis & major surgical procedures-Is not primarily a clinic, nursing, rest or convalescent home or similar establishment & is not, other than incidentally, a place for alcoholics or drug addicts-Maintains X-ray equipment & operating room facilities.

In-patients wherever used in this policy means a person who is confined in a hospital as a resident patient & who is charged at least one (1) day’s room & board in the hospital.

Physician wherever used in this policy means a person legally licensed to practice medicine & surgery other the insured or a member of the insured’s immediate family.

7.4.3 Policy schedule of Benefits

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Benefit ALoss of lifeWhen death results from natural causes, the beneficiaries receive………..tk.10000

Benefit BAccidental Loss of lifeWhen death results from accidental injuries sustained by the insured, the beneficiaries receive………..tk.50000

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Benefit DPermanent total disability If, as a result of any accident, the insured is totally disabled for a period of 12 consecutive months from doing each & every job that he/she is reasonably qualified for by training, experience or education, & if at the end of 12 months is beyond hope of recovery, the insured receives a cash payment of……….100,000

Benefit EIn-hospital daily income due to accidentWhen as the result of accidental injuries the named insured shall be necessarily confined within a hospital as an in-patient under the continuous attendance of a physician, the company will pay daily benefit for each day of hospitalization upto 365 days………………….tk.100

Benefit CPermanent partial disabilityThe insured receives cash payment when accidental injuries result in any of the following losses:Loss of both hands & feet …………. Tk.75000Loss of both eyes……………………Tk.75000Loss of one hand & feet……………. Tk.75000 Loss of one hand & sight of one eye..Tk.75000Loss of one feet & sight of one eye…Tk.75000Loss of hearing in both ears…………Tk.75000Loss of speech……………………….Tk.75000Loss of either hand or feet…………...Tk.37500Loss of sight of either eye…………...Tk.37500Loss of thumb & index fingers………Tk.18750

7.4.4 Special features-24 hours worldwide coverage-One single payment-no renewal billing-Worldwide claim service-Pays in addition to any other insurance coverage you may have-Coverage remains in effect even if you move away, change your job or become uninsurable due to health problems-Non-cancelable for 5 years except in case of fraud, misrepresentation or non-payment of premium-A bonus of 20% of the premium paid will be refunded at the expiry of the policy term, provide that no claims have been submitted

7.4.5 Condition 1.this policy shall commence on the policy effective date & shall remain in effect for 5 years from said date.

2.this policy shall terminate at the earliest of -The expiration of the five years period-When any of the named insured attains 70 years ago

3.this policy may not be cancelled by the insured or by the company except in the case of fraud, misrepresentation or non-payment of premium

4.the premium for this policy shall be considered fully earned by the company when collected.

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Premium Total premium for 5 years by ageAge …………………… premium18-34years……………………tk.151035-39years……………………tk.163040-44years……………………tk.179045-49years……………………tk.207050-55years……………………tk.2550

5.As soon as practicable after the happening of any event which could give rise to a claim under this Policy and in any case within one calendar month written notice there of must be given to the company, but notice of death must be given forthwith and the company shall have the right to have a post mortem examination of the body.

6.completed claim forms and written proof of loss must be furnished to the company within 90 days after the data of such loss. Failure to furnish such proof within the time required shall not invalidate nor reduce any claim if it was not possible to give proof within such time. However no proof will be accepted if furnished later than 1 year from the time the loss occurred.

7. Death shall not be presumed by reason of the disappearance of the Named Insured unless a competent authority issues a Certificate of Presumption of death, and only after 12 months have elapsed since the date of disappearance.

8. The company shall not be bound to notice or be affected by any notice of any trust charge or alienation relating to the Policy but the receipt of the insured or legal personal reprehensive shall in any case effectually discharge the Company.

9.The due observance and fulfillment of the terms, conditions and Endorsements of the policy shall be a condition precedent to any liability of the company hereunder.

10.this Policy becomes effective only if countersigned by an authorized representative of the company. No waiver of alteration in any of the terms of this Policy or neither any of its conditions nor any endorsement thereon will be held valid unless the same is signed by an officer of the company.

11. Indemnity, if any, for loss of life of a Named Insured is payable to the Beneficiary for such Named Insured named in the Application provided such beneficiary survives the Named Insured by 30 days, otherwise to the estate of the Named Insured. All other indemnities of this Policy are payable to the Insured. Any payment made by the company in good faith pursuant to this condition, shall fully discharge the company to the extent of the payment.

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12.the company, at its own expense, shall have the right and opportunity to examine a Named Insured when and as often as the company may reasonably require during the pendency of a claim hereunder, and also the right and opportunity to make any autopsy in case of death where it is not forbidden by law.

13. No action at law or in equity shall be brought to recover on this Policy prior to the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of this Policy. No such action shall be brought after the expiration of 3 years after the time written proof of loss is required to be furnished.

14. This Policy and the application for it, together with any supplementary contract applied for which are attached hereto and stated to be apart hereof, constitute the entire contract. All statements made in applying for the contract will be deemed, in the absence of fraud, representation and not warranties. No statement will be used to invalid the contract or to defend against a claim under it unless contained in the written application.

15. Age of the insured must be proved to the satisfaction of the Company before payment of any benefits under this policy. If the age of the insured has been misstated, any amount payable under thus policy shall be such as the premium paid would have purchased at the correct age.

** In witness whereof ALICO has caused this policy to be executed as of the policy effective date.

7.4.6 Exceptions: This policy does not cover any loss or expense caused by or resulting from:

1. Intentionally self-inflicted injury, suicide or any attempt thereat while sane or insane; nor

2. Assault or murder; nor3. War, invasion, act of foreign enemy, hostilities or warlike operations and all

acts of similar nature, conspiracy, military or usurped power , or any weapon or instrument employing atomic fission or radioactive force weather in tme of peace or war; nor

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4.any period a Named Insured is serving in the Armed forces of any country or international authority, whether in peace or war, and in such an event the Company, upon written notification by the Named Insured, shall return the pro-rata premium for any such period of service, nor

5.any loss sustained while flying in any aircraft or device for aerial navigation; nor6.congenital anomalies and conditions arising out of or resulting there from; nor7.bacterial infections or any other kind of disease; nor8.medical or surgical treatment except as may be necessary solely as a result of injury; nor9. Any bodily injury which shall result in hernia; nor

10.Stay in sanitariums for whatever reason and whatever treatment; nor 11.if the Named Insured is admitted to Hospital for the treatment of drug addiction, alcoholism, acquired immune Deficiency Syndrome, any mental disorder or for cosmetic surgery.

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7.5Hospital Care

The Hospital Care Accident and Sickness Hospital Income Supplementary Contract pays you the amount you selected when you or your insured family members are hospitalized, regardless of expenses, even in a free hospital. The cash income starts from the very first day of hospitalization and continues for up to 52 weeks for each confinement. For example, this can pay you up to Tk. 547,500 under plan 1.

The money you receive is paid in addition to any other insurance you may have. Use the additional cash anyway you wish- to replace lost income, to assist with family expenses or to help pay for the best possible medical care.

Remember, this cash income is paid directly to you regardless of expenses, even if you or any insured member of your family is hospitalized in a free hospital.

Even if you are enjoying other medical plans, you will always need EXTRA CASH to pay for the incidental expenses when you are hospital confined –that no medical plan will pay for, such as:

Upgrading the Hospital Facility Hotel and Travel Expenses

Companion’s Expenses Child Minding and Care

7.5.1 Special Features

Your choice of six coverage packages to supplement your life insurance cover.

You can select the Plan of your choice for you and your family.

The Daily Cash income continues for up to 52 weeks from the very first day to hospitalization.

The Cash Income is paid directly to you, to use any way you wish.

The Cash Income is payable regardless of expenses, even if you are confined in a free hospital.

No deductible amount or waiting period.

Benefits are payable in addition to any other insurance plan that you may have.

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7.5.2YOU NEED THE HOSPITAL CARE

THE HOSPITAL CARE In-Hospital Weekly Cash Income for You and Your Family

Benefits Plan 1 Plan 2 Plan 3 Plan 4 Plan 5 Plan 6

Accident & Sickness Tk.10, 500 Tk.7, 000 Tk.5,250 Tk.3,500 Tk.2100 Tk.1,750 Weekly Benefit

Double Benefit Tk.21, 000 Tk.14, 000 Tk.10, 500 Tk.7, 000 Tk.4, 200 Tk.3, 500 For 9 Dread Diseases

Annual Premium for Tk.5, 445 Tk.3, 629 Tk.2,723 Tk.1,815 Tk.1,089 Tk.908Adults Under Age 40:

40-49: Tk.6,804 Tk.4,536 Tk.3,402 Tk.2,268 Tk.1,361 Tk.1,134

50-59: Tk.7, 710 Tk.5, 141 Tk.3, 855 Tk.2, 570 Tk.1, 542 Tk.1, 285

(Renewals Only) 60-65: Tk.8, 769 Tk.5,846 Tk.4,389 Tk.2,923 Tk.1,754 Tk.1,462

Dependent Children: Tk.4, 083 Tk.2, 722 Tk.2, 042 Tk.1, 360 Tk.817 Tk.680(Ages 1-19 or 23 if full time student)

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7.6 Critical Care Critical Care

7.6.1Introduction: Critical Care is a special scheme designed to provide you and your family with the necessary financial protection if you are diagnosed and proved as suffering from any of the following twenty-five critical illnesses.

7.6.2 StrokeCancer (except cancer)First heart attackCoronary artery surgeryOther serious coronary artery diseasesHeart valve replacementMajor burnsBlindness Pulmonary arterial hypertension (primary)End-stage lung diseaseKidney failureSurgery to aortaAplastic anaemiaMajor organ transplantLoss of hearingLoss of speechMuscular dystrophyAlzheimer’s disease/irreversible organic degenerative brain disordersMotor neurone diseaseParkinson’s diseaseComaBenign brain tumourMajor head trauma Bacterial meningitisParalysis

7.6.3.Key Factor

Critical illness will affect more than 1 in 3 of us at some time in our lives. Source: Imperial Cancer Research, 1995.

1 in 4 men and 1 in 5 women die of heart disease, the most common cause of death. Source: The Independent (UK), July 1997.

An estimated 1 in 8 people aged 30 will contract cancer before age 65. Sources: ERC Frankona Reassurance, 1997.

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7.6.4 why we depend on critical care

At ALICO we care and believe that the most important thing for us is to make sure that all our clients are well protected in case they are diagnosed with any of the 25 critical illnesses listed in Section I.

When time is critical and you require immediate medical attention, Critical care will provide you with Lump Sum Payment of up to Tk. 5,00,000 payable upon diagnosis

And receipt of proof for one Critical Illness only.

7.6.5 Schedule of Benefits

Benefits

Critical Care Offers a Maximum Benefit of Tk. 5,00,000 and a Minimum benefit of Tk. 1,50,000.

The Critical Illness Lump Sum Payment will be made only once under this policy if you are diagnosed and proved with any of the 25 illnesses listed in Section.

Benefit & Premium TableAge Range Plin-1 Plin-2 Plin-3 Plin-4 Plin-5 Plin-6

BENEFITS: (In Taka)500,000 4,00,000 300,000 250,000 200,000 150,000 ANNUAL PREMIUM: (In Taka)

18-29 1848 1478 109 924 739 55430-34 2518 2014 1511 1259 1007 75535-39 3990 3192 2394 1995 1596 119740-44 7706 6164 4623 3853 3082 231245-49 13401 10721 8041 6701 5360 402050-54 23452 18761 14071 11726 9381 703655-59 39533 31626 23720 19766 15813 1186060-64(Renewals Only)

59635 47708 35781 29817 23854 17890

Note: This is an illustrative brochure- not a contract. Your policy will contain the exact terms of coverage and exclusions. Your ALICO Agent will assist you in planning a well-balanced program of saving and protection to suit your particular needs.

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8.Rate pamphlet

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Endowment at age

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Endowment plans

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Income growth plan

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Hospital care

Critical care

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Education Protection Plan (EPP) & Disability* Protection Plan (DPP)Annual Premium Per Tk 1000

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8. Recommendation

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Bibliography:

Report on ALICO.

Books from library

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Internet sources

--- The End --

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