Insurance Regulatory & Development Authority is regulatory and development authority under Government of India in order to protect the interests of the policyholders and to regulate, promote and ensure orderly growth of the insurance industry. It is basically a ten members' team comprising of a Chairman, five full time members and four part-time members, all appointed by Government of India. This organization came into being in 1999 after the bill of IRDA was passed in the Indian parliament |
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Powers and Functions of IRDA
Impact Of IRDA On Indian Insurance Sector:
The creation of IRDA has brought revolutionary changes in the Insurance sector. In last 10 years of its establishment the insurance sector has seen tremendous growth. When IRDA came into being; only players in the insurance industry were Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC), however in last decade 23 new players have emerged in the filed of insurance. The IRDA also successfully deals with any discrepancy in the insurance sector.
Types of Life Insurance:-
Term Insurance Plans: Term insurance is the cheapest form of Life Insurance available. Since a term insurance contract only pays in the event of an eventuality, the life cover comes at low premium rates. Term insurance is a useful tool to purchase against risk of early death and/or protection of an asset (housing loan)
Endowment Plans: Endowment plans are savings and protection plan(s) that provide a dual benefit of protection as well as savings. Endowment plans pay a death benefit in the event of an eventuality; should the customer survive the benefit period, a maturity benefit is paid to the life insured
Whole of Life Plans: A Whole of Life plan provides Life Insurance cover to an individual up to a specified age (85 or 100). A whole of life plan is suitable for an individual who is looking for an extended Life Insurance cover and/or wants to pay premium over as long a tenure as possible, to reduce the amount of up front premium payment
Single Premium Plans: Single Premium plans are investment plans offered by a Life Insurance company. The insurance company generally pays a guaranteed interest rate on the single premium investment. Returns from single premium plans are tax free in the hands of the customer
Pension Plans: Pension plans allow an individual to save in a tax-deferred manner. An individual can either contribute through regular premiums or make a single premium investment. Savings accumulate over the deferment period. Once the contract reaches the vesting age, the individual has the option of choosing an annuity plan from a Life Insurance company. An annuity is paid till the life time of the insured or a pre-determined period depending upon the annuity option chosen by the life insured
Money Back Plans:Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, this scheme provides for periodic payments of partial survival benefits as follows during the term of the policy, of course so long as the policy holder is alive.
In the case of a 20-year Money-Back Policy (Table 75), 20% of the sum assured becomes payable each after 5, 10, 15 years, and the balance of 40% plus the accrued bonus become payable at the 20th year.
For a Money-Back Policy of 25 years (Table 93), 15% of the sum assured becomes payable each after 5, 10, 15 and 20 years, and the balance 40% plus the accrued bonus become payable at the 25th year.
An important feature of this type of policies is that in the event of death at any time within the policy term, the death claim comprises full sum assured without deducting any of the survival benefit amounts, which have already been paid. Similarly, the bonus is also calculated on the full sum assured.