Term Life Insurance Policy | Parties & Participants

The parties and participants in a term life insurance contract include
• The company providing the coverage - The policy owner and the insured individual of the policy are not necessarily the same person although they usually are.
• The owner of the policy – The policy owner is the one who will pay for the policy. It can be, and usually is, the person who is covered by the contract. But the policy owner can be the spouse of the insured or a relative or even a business partner. Companies try to limit purchase of life insurance policies to those who have an insurable interest in the covered individual so the purchaser will actually suffer type of loss from the death of the individual.
• The insured individual - The insured individual is the one whose death causes the payment of the coverage amount of the policy. The insured individual is a participant but not necessarily a party to the contract. It is the this individual's health history, current health condition, family health history, status as a smoker, age, gender, etc. upon which the eligibility for coverage and premium amount are established.
• The beneficiary of the proceeds of the policy - The beneficiary is the named individual or entity who will receive the proceeds of the term insurance policy upon the death of the insured individual. The owner of the policy names who the beneficiary of the policy would be. The beneficiary is a participant but not a party to the contract. If the policy has an irrevocable beneficiary clause then that beneficiary must agree to any change in whom, the named beneficiary is.
Insurance companies have eliminated policy owners insuring individuals with whom the policy owner had no insurable interest (that is, who would not suffer a loss upon the death of, the insured). This was done to reduce speculative or scheming interest in insuring someone.

Insurance take wrath on corporate agents

The Insurance and Regulatory Development Authority (IRDA) has cancelled the licences of 4,261 corporate agents, including Housing Development Finance Corporation, HDFC Bank, Development Credit Bank, Standard Chartered Bank, after them unsuccessful to renovate their licences by March 31 this year.
The regulator has asked the people not to do any business with these entities.
IRDA chairman J. Hari Narayan said the licences would not be changed with presentation effect. There are 7,000 agents in the country selling life and non-life insurance policies.
However, Hari Narayan said the policies bought from these entities would stay valid. The insurer concerned will allocate another agent so that the policies can be converted.
Among the 4,261 agents, a famous entity is HDFC, which was selling policies of its general insurance supplementary HDFC Ergo.
The licence of HDFC Bank, which sold policies of HDFC Ergo and Bajaj Allianz General Insurance Company, has also been withdrawn.
The licences of Corporation Bank and Standard Chartered Bank for selling products of Life Insurance Corporation and Bajaj Allianz Life, respectively, have also been revoked.
Others in the list comprise Bajaj Capital Financial Services (Bajaj Allianz General Insurance and ICICI Prudential Life Insurance), Way2Wealth Consulting (Bajaj Allianz General Insurance and HDFC Standard Life), India Bulls Insurance Advisors (Birla Sun Life), India Infoline and Aditya Birla Money (ICICI Prudential Life Insurance policies).
However, Way2Wealth is planning to apply for an insurance brokering licence.
“In a corporate agency representation, one cannot sell products of more than one life and one non-life insurer. But with a brokering licence, products of different insurers can be sold,” an official said.