State Life Insurance Policies-An asset

The State Life Insurance Corporation of Pakistan and it's life insurance policies.Are these an asset?

Today we are going to discuss a very important question.The question is"ARE THE LIFE INSURANCE POLICIES ISSUED BY THE STATE LIFE ARE AN ASSET?let us see how your life insurance analyst analyses the situation? 

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Life insurance    بیمه زند گی  zaroori nahi  بلکه bohat zaroori hay

 Today’s question is: 

  بیمه زندگی بهی اورمنا فع  بهی

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ا یک کروڑ
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Are the policies issued by The State Life Insurance Corporation of Pakistan are an asset? Should the status of these policies be declared by the contestants of the election 2013?

A  great question. In today’s post wee will find out the answer to this question.

There may be different opinions. Some will say yes and others will say no. But I, (your life insurance analyst) am of the view that “Life Insurance Policies(ALL SUCH POLICIES WHO HAVE CASH SURRENDER VALUE) issued by The State Life” are an asset and should be treated as such. These policies need to be declared by the contestants of election 2013 along will other assets. What is the logic behind it? In this post well discuss the same.

Frequently Asked Questions.
Q. An Endowment Life insurance Policy. Why do you think it is an asset?

A. I will like to answer this question with an illustration.

YOU can not afford
 to say "NO".

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Let us suppose that a 35 years old healthy man (Standard Life)10 years ago purchased an endowment plan of 20 years term. The sum assured is PKR5,000,000.00 ( 50 LACS).The premium was PKR245000.00 per annum. During these ten years he paid 10 premiums to continue the policy. Thus to the State Life he paid PKR2,450,000 only.

Now do you see the logic why life insurance policy should be treated as an asset?

  This gentle man after paying only PKR245000.00 (FYP) created an asset of 50 LACS sum assured instantly. Should this gentleman die in the first year the State Life will honor the contract and will pay PKR50 LACS + accrued bonus to the beneficiaries.
 
In 10 years this gentle man has paid PKR2,450,000.00.This is a pure asset. If he takes the original policy bond with him and  now goes to the office of the State Life and says “I want to discontinue my policy.Give my money back to me”. The State life will again honor the contract. With a professional smile the state life will give him a cheque  in 5 working days. And I assure the the State Life will give him more and more money what he paid to The State Life in 10 years. Yes the State life will also pay him the accrued bonuses of 10 years.

But the sad aspect the story is that he will no more enjoy the life insurance cover. He will now be without the umbrella of insurance. He and his all loved ones will be without any security, protection and cover. This will be a loose loose situation for every one concerned.
Q. I am too 35 years old man.I have a term insurance plan of 10 years.For 10 years i paid a single premium of PKR269750.00.Is this life Insurance policy issued by The State Life an asset?My sum assured too is PKR 50 lacs.  
A. No.Not at all.It IS NOT  an asset. 
Q.You say No.It should NOT be treated as an asset.What is the logic behind it? 
  A.You have asked a great question and and i am delighted you asked this question.The reason is that term insurance policy have:
No survival benefit.
No maturity benefit.
No surrender value.
No loan value etc.
 I have made this point very clear HERE...ALL SUCH POLICES WHO HAVE CASH SURRENDER VALUE SHOULD BE TREATED AS AN ASSET.
For more details please visit the official website of THE STATE LIFE.

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