Statelife Insuranc E: Internship Report

INTERNSHIP REPORT
STATELIFE
INSURANC
E
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CORPORAT
ION
INTERNSHIPREP
ORT
PRESENTED TO:
PRESENTED BY:
FARHAN JAVED ARAIN
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SINDH UNIVERSTY
MIRPURKHAS
CAMPUS
ACKNOWLEDGEMENT
All gratitude and thanks to almighty ALLAH the Gracious, The Most merciful
and Beneficent who gave me courage to undertake and complete this task. I am
very much obliged to my ever caring and loving parents whose prayers have
enabled to reach this stage.
I am grateful to almighty ALLAH who made me able to complete the work
presented in this report. It is due to HIS unending mercy that this work moved
towards success.
I am highly indebted to my teachers for providing me an opportunity to learn
about the insurance system of Pakistan which is vital ingredient of BBA(Hons)
program. I am very great full to officers of STATE LIFE for providing me guideline
for the completion of this report.
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I feel great pride and pleasure on the accomplishment of this report.
EXECUTIVE SUMMARY
I started my internship in state life insurance corporation of Pakistan at
Mirpukhas zone 1 June 2015.
I worked for six weeks there and it gives me a lot of practical knowledge about
the operation of an insurance company .I has learned many things in this
duration. In the following pages I have summarized my experience,
observations and working activities which I observed in my six week internship.
This report will discuss internship with state life .It will outline following.
History
Departments
Swot analysis
Financial analysis
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The source of information used during the preparation of this report includes
Personal observations
Discussions with staff & management
Annual reports
Handouts
Different websites
Report is based on my personal experience & observations about insurance
sector which I gain during my internship in state life.
CONTENTS
Sr. No Description Page No.

1. INSURANCE 6
2. Definition 7
3. History 7
4. Principles 7
5. Types of insurance 9
6. Life Assurance 10
7. INTRODUCTION OF STATE LIFE 15
8. History 16
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9. Functions 16
10. Achievements 17
11. Core Values 19
12. Organizational Structure 20
13. PRODUCTS 25
14. Individual Life Products 26
15. Group life Insurance Products 40
16. DEPARTMENTS 52
17. P&GS 53
18. AUDIT DEPATMENT 57
19. PH&S 60
20. NEW BUSINESS 66
21. AGENCY 72
22. FINANCE&ACCOUNTS 75
23. PERFORMANCE HIGHLIGHTS 78
24. RECOMMENDATION & CONCLUSION 88
25. BIBLIOGRAPHY 90
Part: 1
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INSURANC
E
INSURANCE
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DEFINTIONS:
Insurance can be defined into a number of ways. Some of them are as follows:
A contract between an insurance company and a person or group which
provides for a money payment in case of covered loss, accident or death
Insurance is a contract between two parties whereby one party agrees to
undertake the risk of another in exchange for consideration known as premium
and promises to pay a fixed sum of money to the other party on happening of
an uncertain event (death) or after the expiry of a certain period in case of life
insurance or to indemnify the other party on happening of an uncertain event
in case of general insurance. The party bearing the risk is known as the 'insurer'
or 'assurer' and the party whose risk is covered is known as the 'insured' or
'assured'
It is a system whereby contributions are received from insuring public and
pool of money is created from where the claims are paid to few unfortunate
persons who died during the insurance period
History of Insurance
Insurance began as a way of reducing the risk of traders, as early as 2000 BC in
China and 1750 BC in Babylon. Life insurance dates only to ancient Rome;
"burial clubs" covered the cost of members' funeral expenses and helped
survivors monetarily. Modern life insurance started in 17th century England,
originally as insurance for traders, merchants, ship owners and underwriters
met to discuss deals at Lloyd's Coffee House, predecessor to the famous Lloyd's
of London. Thus from Lloyds of London insurance begins
PRINCIPLES OF INSURANCE
In every sort of contract there are some principles which must be followed in
order to accomplish the contract. Following are the principles of every
insurance contract.
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Principle of utmost good faith

An insurance contract is one of utmost good faith. What this means is that
allmaterial facts about an insured risk must be disclosed to the insurers at
the time of completing the proposal form, or subsequently if the facts
change.
Principle of indemnity
Indemnity means that the insurers agree to compensate in the event of loss
such that the insured is left substantially in the same position financially
after the loss as she was before it but the insured cannot profit from a loss.
Principle of contribution
If more than one policy covers the same risk it is not possible for the insured
to claim on both and make a gain. In this situation each of the insurers
involved would be required to contribute a proportionate amount of the
loss - this is known as the principle of contribution
Principle of subrogation
In the event of a claim and where the insurers have fully indemnified the
insured, the insured's original interests can be taken over by the insurers -
this is known as the principle of subrogation.
For example, where a third party causes damage to the insured's
property, after the insurers have settled the claim they can
pursue the third party for the cost of the damage.
Principle of average
Underinsurance can have serious implications when insuring a property.
Underinsurance means that the replacement value of the property or the
value of the contents has been understated on the proposal, thereby
lowering the premiums paid.
The principle of average means that the amount of the claim
payment will be reduced proportionality if the property was not
insured to the full amount of its replacement cost.
Principle of proximate cause

In the event of a claim the insurers will want to ascertain if the cause of the
loss was an insured risk. The principle of proximate cause relates to this and
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is define as: The efficient cause which brings about a loss with no other
intervening cause which breaks the chain of events.
Insurable interest
You must have an interest (insurable interest) in the thing insured. If you
could insure something which you did not have an insurable interest in
(ownership of) it would be possible to gain in the event of another's loss!
Insurable risk
The risk which is going to cede must be insurable
TYPES OF INSURANCE:
There are two types of insurance
General Insurance:
General insurance is basically an insurance policy that protects you against
losses and damages other than those covered by life insurance. For more
comprehensive coverage, it is vital for you to know about the risks covered to
ensure that you and your family are protected from unforeseen losses
General insurance include following types of insurance.
Vehicle insurance
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Health insurance
Home insurance
Property insurance
Liability insurance
Credit insurance
Marine insurance
Aviation insurance
Travel insurance
Professional indemnity
Life Insurance:
Life insurance covers the life of a person.
Life insurance provides a monetary benefit to a decedents family or other
designated beneficiary, and may specifically provide for income to an insured
person's family, burial, funeral and other final expenses. Life insurance policies
often allow the option of having the proceeds paid to the beneficiary either in a
lump sum cash payment or an annuity.
Now we will discuss this in detail as this is the main point of discussion.
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LIFE ASSURANCE
Types of Life Insurance:
Life insurance may be divided into two basic classes temporary and
permanent or following subclasses - term, universal, whole life and
endowment life insurance
Term Insurance
Term assurance provides life insurance coverage for a specified term of years in
exchange for a specified premium. The policy does not accumulate cash value.
Term is generally considered "pure" insurance, where the premium buys
protection in the event of death and nothing else.
These are main factors to be considered in term insurance.
1. Face amount (protection or death benefit),
2. Premium to be paid (cost to the insured), and
3. Length of coverage (term)
Various insurance companies sell term insurance with many different

combinations of these three parameters. The face amount can remain constant
or decline. The term can be for one or more years. The premium can remain
level or increase. Common types of term insurance include Level, Annual
Renewable and Mortgage insurance.
Level Term Policy

Level Term policy has the premium fixed for a period of time longer than a year.
These terms are commonly 5, 10, 15, 20, 25, and 30 and even 35 years. Level
term is often used for long term planning and asset management because
premiums remain consistent year to year and can be budgeted long term. At
the end of the term, some policies contain a renewal or conversion option.
Guaranteed Renewal
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Guaranteed Renewal, the insurance company guarantees it will issue a policy of

equal or lesser amount without regard to the insurability of the insured and
with a premium set for the insured's age at that time. Some companies
however do not guarantee renewal, and require proof of insurability to
mitigate their risk and decline renewing higher risk clients (for instance those
that may be terminal).
Annual Renewable Term

Annual renewable term is a one year policy but the insurance company
guarantees it will issue a policy of equal or lesser amount without regard to the
insurability of the insured and with a premium set for the insured's age at that
time.
Mortgage Insurance
Another common type of term insurance is mortgage insurance, which is
usually a level premium, declining face value policy. The face amount is
intended to equal the amount of the mortgage on the policy owners residence
so the mortgage will be paid if the insured dies.
A policy holder insures his life for a specified term. If he dies before that
specified term is up (with the exception of suicide see below), his estate or
named beneficiary receives a payout. If he does not die before the term is up,
he receives nothing.
Permanent Life Insurance

Permanent life insurance is life insurance that remains in force (in-line) until the
policy matures (pays out), unless the owner fails to pay the premium when due
(the policy expires OR policies lapse). The policy cannot be canceled by the
insurer for any reason except fraud in the application, and that cancellation
must occur within a period of time defined by law (usually two years).
Permanent insurance builds a cash value that reduces the amount at risk to the
insurance company and thus the insurance expense over time. This means that
a policy with a million dollar face value can be relatively expensive to a 70 year
old. The owner can access the money in the cash value by withdrawing money,
borrowing the cash value, or surrendering the policy and receiving the
surrender value.
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The four basic types of permanent insurance are whole life, universal life,
limited pay and endowment.
Whole Life Coverage

Whole life insurance provides for a level premium, and a cash value table
included in the policy guaranteed by the company. The primary advantages of
whole life are
Guaranteed death benefits;
Guaranteed cash values,
Fixed and known annual premiums,
And mortality and expense charges will not reduce the cash value shown in the
policy.
The primary disadvantages of whole life are premium inflexibility, and the
internal rate of return in the policy may not be competitive with other savings
alternatives.Also, the cash values are generally kept by the insurance company
at the time of death, the death benefit only to the beneficiaries.
Riders are available that can allow one to increase the death benefit by paying
additional premium. The death benefit can also be increased through the use
of policy dividends. Dividends cannot be guaranteed and may be higher or
lower than historical rates over time. Premiums are much higher than term
insurance in the short-term, but cumulative premiums are roughly equal if
policies are kept in force until average life expectancy.
Cash value can be accessed at any time through policy "loans" and are received
"income-tax free". Since these loans decrease the death benefit if not paid
back, payback is optional. Cash values support the death benefit so only the
death benefit is paid out.
Universal Life Coverage

Universal life insurance (UL) is a relatively new insurance product intended to
provide permanent insurance coverage with greater flexibility in premium
payment and the potential for a higher internal rate of return. There are
several types of universal life insurance policies which include "interest
sensitive.
Limited-Pay
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Another type of permanent insurance is Limited-pay life insurance, in which all

the premiums are paid over a specified period after which no additional
premiums are due to keep the policy in force. Common limited pay periods
include 10-year, 20-year, and paid-up at age 65.
Endowments
Endowments are policies in which the cash value built up inside the
policy, equals the death benefit (face amount) at a certain age. The age
this commences is known as the endowment age. Endowments are
considerably more expensive (in terms of annual premiums) than either
whole life or universal life because the premium paying period is
shortened and the endowment date is earlier.
Endowment Insurance is paid out whether the insured lives or dies, after a
specific period (e.g. 15 years) or a specific age (e.g. 65).
This is type of life insurance whereby a specific term is selected and premiums
are paid throughout that term or earlier death. If life insured survives
that term the sum insured along with accrued bonuses is paid as
maturity value .This class of insurance carries loan and surrender value
provided the policy has been enforced at least two consecutive years.
There are different types of endowment insurance.
Simple endowment
Anticipated endowment
Joint life endowment
Progressive endowment
Children endowment
Single premium endowment
Family pension endowment
Optional maturity endowment
Mortgage protection endowment
Personal pension endowment
Annuities endowment
Riders or Supplementary Contracts

Riders are modifications to the insurance policy added at the same time the
policy is issued. These riders change the basic policy to provide some
feature desired by the policy owner.
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Types of Riders
Life insurance companies offer different types of riders. These are of following
types.
ACCIDENTAL INDEMNITY BENEFITS (AIB)
ACCIDENTAL DEATH BENEFITS (ADB)
FAMILY INCOME BENEFIT RIDER (FIBR)
GUARANTED INSURABILITY RIDERS (GIR)
REFUND OF PREMIUM RIDER
TERM INSURANCE RIDER (TIR)
WAVIER OF PREMIUM RIDER (WPR)
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Part: 2
INTRODUCTI
ON OF
STATE LIFE
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BRIEF HISTORY
The Life Insurance Business in Pakistan was nationalized during March 1972.
Initially Life Insurance business of 32 Insurance Companies was merged and
placed under three Beema Units named A, B and C Beema Units.
However, later these Beema Units were merged and effective November 1,
1972 the Management of the Life Insurance Business was consolidated and
entrusted to the State Life Insurance Corporation of Pakistan.
State Life Insurance Corporation of Pakistan is headed by a Chairman and
assisted by the Executive Directors appointed by Federal Government. Up to
July 2000 the Corporation was run by Board of Directors constituted under Life
Insurance (Nationalization) Order 1972. In July 2000, under Insurance
Ordinance 2000, the Federal Government reconstituted the Board of Directors
of State Life which runs the affair of this Corporation.
The basic structure of the Corporation for Individual Life Insurance consists of
Four Regional Offices
Twenty-Six Zonal Offices
Few Sub-Zonal Offices
111 Sector Offices
461 Area Offices
For Group & Pension there are

Four Zonal Offices
6 Sector Offices
20 Sector Heads
FUNCTIONS
PERFORMED BY
OFFICES
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Zonal Offices
The Zonal Offices deal exclusively with Sales and Marketing Underwriting of
Life Insurance Policies and the Policyholders Services
Regional Offices
Regional Offices, each headed by a Regional Chief, supervise business activities
of the Zones functioning under them.
Principal Office
The principal office, based at Karachi, is responsible for corporate activities
such as investment, real estate, actuarial, overseas operation, etc.
MAJOR
ACHIEVEMENTS
The major function of the State Life Insurance Corporation of Pakistan is to
carry out Life Insurance Business; however, it is also involved in the other
related business activities such as
Investment of policyholders fund in Government securities
Stock market
Real Estate
The major achievements of State Life are as under:

1. The Corporation has reduced up to33% in the premiums on the past and
potential Life Policies for the benefit of the Policyholders.
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2. It is a profitable organization and it paid Rs.2.657 billion as dividend to

the Government of Pakistan since its inception in 1972.
3. State Life has played very vital role in the economy by providing
employment to the people of the country
As permanent employees
As part of its marketing force
Investing the huge funds in different sectors of the economy.
4. . The Investment Portfolio of State Life as at 31.12.2010 stands at

Rs.191.445 billions.
5. Investment portfolio also includes investment in Real Estate which stands
at
Book value Rs.2.538 billion as at 31.12.2010
6. Whereas
Fair value is Rs.21.681 billion as at 31.12.2010
7. The Paid up Capital increased from Rs.10 million in 1972 to Rs.1, 100
million in 2010.
8. The Premium income increased from Rs.0.317 billion in 1972 to
28.367billion in 2010.
9. Similarly Investment income including rental income increased from
Rs.0.81 billion in 1972 to 274.152 billion in 2010.
10.Total statutory fund of State Life stands at Rs.199.445 billion in 2010 as
against Rs.1.494 billion in 1972.
11.State Life is smoothly striving towards its objective of making life
insurance available to large section of the society by extending it to
common man.
As at December, 2010 the total number of policies in force
Under individual life 2.895 million
Under group life insurance 3.754 million
CHRONOLOGY OF
EVENTS
Taking over of management of life insurance companies 19 March 1972
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Establishment of state life insurance corporation 1st Nov, 1972

Reduction of premium rates on new policies 1st Nov, 1972
Reduction of premium rates on old policies 1st Jan, 1973
Establishment of UK branch 1st Jan, 1974
Merger of units and formation of zones 1st Oct, 1975
Establishment of branch office in Dubai July 1978
Establishment of agency office in Kuwait May, 1983
Establishment of Multan zone 1st Oct, 1985
Establishment of Faisalabad zone 1st march, 1986
Establishment of Gujranwala zone 1st July 1986
Establishment of Sucker zone 1st April, 1990
Establishment of branch office in Pakistan May, 1992
CORE VALUES
MISSION:
To remain the leading insurer in the country
by extending the benefits of insurance to all
sections of society and meeting our
commitments to our policy holders and the
nation.
QUALITY POLICY:
To ensure satisfaction of our valued policyholders in processing new business,
providing after sales service and optimizing return on Life Fund through a
quality culture and to maintain ourselves leading life insurer in Pakistan
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OBJECTIVES:
To run life insurance business on sound line.
To run life insurance business on sound line.
To provide more efficient service to the policyholders.
To maximize the return to the policyholders by economizing on
expenses and increasing the yield on investment.
To make life insurance a more effective means of mobilizing national
savings.
To widen the area of operation of life insurance and making it available
to as large a section of the population as possible, extending it from the
comparatively more affluent sections of society to the common man in
towns and villages.
To use the policyholders fund in the wider interest of the community.
ORGANIZATIONAL
STRUCTURE
It is headed by chairman Mr. Shahid Aziz Siddiqi who is a CHIEF EXECUTIVE of
the corporation and appointed by the government the other administrative
level and authorities is given below
MANAGEMENT HIERARCHY:
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ORGANOGRAM:
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Board of Directors:
It comprises of 7 directors, chairman and secretary board who are responsible
for making plans and policies to achieve the set goals of the organization.
Mr. Shahid Aziz Siddiqi CHAIRMAN
Mr. Qamar Zaman Chaudhry DIRECTOR
Mrs. Spenta Kandawalla DIRECTOR
Mr. Aslam Faruque DIRECTOR
Mr. Amin Qasim Dada DIRECTOR
Mr. Rasheed Y.Chinoy DIRECTOR
Syed A. Wahab Mehdi DIRECTOR
Syed Hur Riahi Gardezi DIRECTOR
Mr. Akbar Ali Hussain SECRETARY BOARD
Executive Directors:
It comprises of 4 members responsible for implementation of policies and
directives of the board of directors.
Syed Arshad Ali
Ms. Nargis Ghaloo
Mr. Mohammad Yahya
Mr. Allah Rakha Aasi
Regions:
There are 4 regions in Pakistan headed by regional chiefs responsible for
looking after all the zones under his administration. These regions are;
Southern Region
Central Region
Multan Region
North Region
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Zones:
There are 26 zones in Pakistan headed by the zonal head responsible for
procurement of business to achieve the set business target of the organization.
The basic structure of the Corporation consists of:
Four Regional Offices,
Twenty-Six Zonal Offices,
A few Sub-Zonal Offices,
111 Sector Offices,
A network of 461 Area Offices across the country for Individual Life Insurance;
Four Zonal Offices,
6 Sector Offices with 20 Sector Heads for Group & Pension are involved in the
Marketing of Life Insurance Plans policies and products offered by State Life
and a Principal Office.
The Zonal Offices deal exclusively with Sales and Marketing. Underwriting of
Life Insurance Policies and the Policyholders Services. Regional Offices, each
headed by a Regional Chief, supervise business activities of the Zones
functioning under them. The Principal Office, based at Karachi, is responsible
for corporate activities such as investment, real estate, actuarial, overseas
operations, etc.
Karachi (Southern) Zone
Karachi (Central) Zone
Karachi (Eastern) Zone
Hyderabad Zone
Quetta Zone
Sukkur Zone
Mirpurkhas Zone
Larkana Zone
Lahore Central Zone
Lahore Western Zone
Gujranwala Zone
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Faisalabad Zone
Sargodha Zone
Sialkot Zone
Multan Zone
Sahiwal Zone
RahimYar Khan Zone
Dera Ghazi Khan Zone
Bahawalpur Zone
Peshawar Zone
Rawalpindi Zone
Abbottabad Zone
Gujrat Zone
Islamabad Zone
Mirpur (AK) Zone
Swat Zone
Group and Pension:
There are 4 zonal offices of Group &Pension and under these zones there are
many sector offices;
Group and Pension Rawalpindi Zone

Group and Pension Peshawer Zone
Group and Pension Karachi Zone
Group and Pension Lahore Zone
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Part: 3
PRODUCTS
As we know that SLIC has dominated life insurance market and it acquires
about 90% market share of life insurance. So it has introduced a great number
of products and it is offering products appropriate for every inhabitant of
Pakistan
SLIC offers different products for

Individual life
Group life insurance
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INDIVIDUAL LIFE
PRODUCTS
Whole Life Assurance:
It is a unique combination of protection and savings at a very economical
premium. Death at any time before age 85 years terminates payment of
premiums and the sum insured and attached bonuses become payable. In the
event the insured survives to the policy anniversary at age 85 years, the policy
matures and the sum insured plus bonuses become payable. Under this plan
the rates of bonuses are usually much higher than the other plans and they
help in increasing not only protection but also the investment element of the
policy substantially. This plan is best suited for youngsters who have at initial
stages of their careers and cannot afford to pay high premiums. Individuals
who anticipate requirement of a lump sum in far future can also this plan
Endowment Assurance:
Its a safest and surest method of guaranteed cash provision either at a
specified time or at death (Allah forbid). Under these policies, the sum insured
plus bonuses are payable at the end of the specified number of years or at
death of the life insured if earlier. Premiums are payable for the specified
number of years or till death, if earlier. The benefits under the plan can be
further increased by attaching supplementary covers.
The plan serves the requirements of a family in various shapes by way of
financial help at retirement, education of children or provision of capital for
business.
Anticipated Endowment Assurance:

This is a modified form of endowment assurance and is also called Three
Payment Plan. Besides fulfilling the long-term financial needs, it also helps in
meeting the short-term financial exigencies. As the name suggests, the plan
offers three payments throughout term of the policy.
The plan offers survival benefits equal to 25% of sum insured on completion of
1/3rd and 2/3rd term of the policy. If the policyholder does not withdraw the
survival benefits, a very attractive special reversionary bonus is available. On
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completion of term of the policy, the remaining 50% sum insured plus accrued
bonuses shall be payable. If the life insured expires during term of the policy,
sum insured, accrued bonuses, unclaimed survival benefits and special
reversionary bonuses are payable. The plan is suitable for the individuals who
have long-term financial needs but also anticipate requirement of money
relatively earlier. Three Payment Plans helps fulfilling these short-term financial
needs without terminating the actual contract.
Sadabahar Plan:
Sadabahar is an anticipated endowment type with-profit plan that provides
lump sum benefit at certain stages during the premium-paying term or on
earlier death. In addition, this plan has a built-in Accidental Death Benefit
(ADB) rider so that the policyholder gets an additional sum assured in case of
death due to an accident.
This plan is a safe instrument for cash provision at the time of need. With this
plan, the policyholder can secure greater protection and continued prosperity
for the family at affordable cost affordable cost.
Admissible Ages and Terms this plan is available to all members of the general
public, aged from 20 to 60 years nearest birthday. Both males and females may
purchase this plan. Terms offered under this plan are 12, 15, 18, 21, 24, 27 and
30 years.
Survival Benefits:
On completion of one-third of the policy term, 20% of basic sum assured can
be taken by the policyholder. Another 20% of the sum assured can be taken on
completion of two-third of the policy term and the remaining 60% of basic sum
assured plus accrued bonuses (if any) shall be payable at the end of the policy
term in the event of survival of the assured.
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1) If the option to withdraw an installment of 20% sum assured is not

exercised on the due date or within 6 months after the due date, a
special bonus will automatically be added to the policy at the end of 6
months. In this event:
2) On death of the assured while the policy is in force, the special bonus
will be payable in addition to (1) Basic Sum Assured (2) Other
Reversionary Bonuses accrued on the policy and (3) the amount of any
installment left with State Life.
3) On the maturity date, the special bonus will be payable together with all
the installments of the sum assured remaining with State Life, in addition
to regular reversionary bonuses accrued on the policy.
4) So long as the policy remains in force, the policyholder may surrender

the unclaimed installment of sum assured together with the related
special bonus. The aggregate cash surrender value of the two shall not
be less than the amount of the said unclaimed installment.
5) The reversionary bonuses as per usual practice will continue to be

allotted each year on the basic sum assured (if in force) as and when
Actuarial Surplus is declared. However the unclaimed installments of the
sum assured and related special bonus will not participate in State Lifes
Actuarial Surplus.
Death Benefits:
The full basic sum insured plus accrued bonuses are payable on death of
insured any time while the policy is in force. In addition, if death occurs as a
result of an accident, additional amount equal to one basic sum assured,
subject to maximum limit, will be paid. The usual maximum on the ADB of Rs. 4
million will apply and premium will be calculated accordingly
Bonuses:
This policy will participate in State Lifes surplus. Rates of bonus applicable will
be 25% higher than those on anticipated endowment plan.
Under endowment insurance these plans are available.
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Shad Abad Assurance:

Shad Abad Plan is an extended form of endowment assurance. The benefits
under the policy increase manifold in the event of death of the life insured.
On completion of term of policy, sum insured plus bonuses attached to the
policy are payable. However, on death during the policy term, the death benefit
consists of double of sum insured with accrued bonuses. In case of death due
to accident, the death benefit consists of four times the sum insured plus
bonuses. The coverage can be further widened by attaching supplementary
covers with the policy.
This plan meets the requirements of those who appreciate the basic savings
purpose of endowment assurance but also like some additional cover to
protect loved ones in case they die, Allah forbid, before maturity.
Child Education & Marriage Assurance:

Child Education & Marriage Assurance is a plan for the protection of childs
future. It provides a lump sum benefit for the child at the completion of the
policy term. On completion of term of the policy, full sum insured together
with the accrued bonuses become payable to the policyholder.
If the policyholder dies (Allah forbid) before completion of the term, a family
income benefit of Rs 240 per 1000 sum insured per annum is paid to the child
until the completion of policy term. Further, future premiums under the policy
are waived and policy remains in force with full sum insured and continues to
participate in State Lifes surplus and receive bonuses. Upon the completion of
policy term, the child gets two options of either getting the proceeds in a lump
sum or in five equal installments.
i. Continue the policy in the same manner as earlier by switching the plan
for the benefit of another child.
ii. Get a refund of all the previous premiums paid till the death of the child
or the cash value of the policy, whichever is higher and terminate the
contract.
iii. Continue the policy without naming another child in which case the
benefit of Refund of Premium [as provided above under condition (b)]
will not be available.
Child Education & Marriage Plan is suited for the parents who are
conscious about the future of their children. The term of the plan is such
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that the lump sum benefit becomes payable when the child attains a
predetermined age of 18, 21 or 25 years. These ages may be selected
considering the occasion at which children generally need financial
assistance for higher education, marriage, or setting up business.
Depending upon your individual needs, the plan is available in two
separate versions of with and without built-in family income benefit. In
addition to parent, this plan can also be affected by grandparents,
uncles, aunts or any other person who is paying for the maintenance of
the child
JeevanSathi Assurance:
This is a joint life plan and covers lives of two partners say husband and wife
simultaneously. Premiums are payable till the end of the specified term or till
death of either of the insured persons, if earlier. The plan contains extensive
benefits; an overview of which appears as under:
On the death of the first life, the sum insured will be paid to the survivor.
Further premiums under the policy will be waived, but the insurance
protection of the second life will continue. Also, the policy will continue to
participate in profits of the Corporation. On death of the second life, again the
sum insured will be paid together with the attaching bonuses. In this event the
policy will terminate.
If the second life survives the term of the policy, he or she will be paid sum
insured together with the attached bonuses, even though the sum insured has
been paid once, on the death of the first life. If both the lives survive the term
of the policy, the sum insured will be paid to them jointly, only once, together
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with the attached bonuses. Different supplementary covers are also available
for increasing coverage under the policy.
Child Protection Assurance:

This is a joint life assurance and covers the lives of child and either of the
parents. If the policyholder and the child both survive full term of the policy,
sum insured and accrued bonuses become payable. If the policyholder dies
before completion of term of the policy the payment of premiums ceases and
the child is paid an income of Rs 100/- per thousand sum insured per annum
till the completion of the policy term. On completion of policy term, sum
insured inclusive of bonuses accrued till the death of the policyholder is paid to
the child.
If the child dies (Allah forbid) before maturity of the policy and during lifetime
of the policyholder, the death claim payable to the policyholder depends on
the age at death of the child.
As the name suggests, the plan is suitable for parents who want to cater future
financial needs of their children in case of death of the breadwinner of the
family. The plan has a unique feature of providing coverage on the life of child.
The coverage of the policy can further be widened by attaching supplementary
covers.
Sunehri Policy:
Sunehri Policy is an innovative life insurance product. It is flexible, secure and
meets the challenges of inflation quite economically. Under a special feature of
this plan, from third policy year onwards, sum insured under the policy and
premium will increase by 6% per annum without providing any evidence of
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insurability. From the third policy year onward, the policyholder is provided
with a statement showing the buildup of cash value of the policy and sum
insured for the year. The policy also participates in the surplus of State Life and
currently the rate of bonus is Rs 105 per thousand per annum of the adjusted
opening cash value.
Optional Maturity Endowment:

It is an endowment assurance with a built in option to mature early. The plan is
available for individuals aged 20 to 45 years. The policyholder has following
options regarding maturity of this plan.
After the policy has been in force for 20 years or more, the policyholder
gets an option to mature the policy for a proportionately reduced sum
insured.
After the policy has been in force for 20 years or more, the policyholder,
depending on his or her needs, can mature the policy in parts.
Let the policy mature at originally selected term. In this case the
policyholder gets an additional bonus.
The policy participates in bonuses declared by State Life from time to time.
Please click here for details of bonuses currently available for this plan.
Coverage under the policy can also be enhanced by attaching supplementary
covers.
Nigehban Plan:
This plan provides term insurance cover for a period ranging from 5 to 10 years.
As the name suggests, this plan is meant to provide protection during the term
of the policy only i.e. sum insured is payable on death if it occurs during the
term of insurance while the policy is in force. The plan does not carry any
survival benefits, maturity benefits, surrender values, loan values etc. The
policies will be without profits. The plan is available in two versions namely,
with single premium and with annual premiums. Attaching certain
supplementary covers can widen the coverage under the plan.
MuhafazPlus Assurance:
Muhafaz Plus provides a substantial sum of money on maturity or earlier death
(Allah forbid) of the life insured. On maturity, the policyholder will receive sum
insured plus bonuses attached with the policy.
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However if the life insured dies before completion of term of the policy, basic
sum insured plus attached bonuses will be paid to the dependants
immediately. In case of death due to accident, the double of the sum insured is
paid. In addition, the dependents will also be paid an income of Rs 240 per
thousand sum insured per annum for a fixed period of 15 years. The first
payment will fall due on the policy anniversary immediately after the death of
the life insured.
SHEHNAI POLICY:
Features:
Shehnai Policy is an innovative life insurance product. It provides a solution to
the problems of many concerned parents who want to save now in order to
provide for their childrens higher education, marriage and other expenses
when the need arises. The term of the plan is such that the lump sum benefit
becomes payable as the child attains the age of 25 years. Shehnai Policy also
caters from the ravages of inflation. This is done by the option of automatic
increase of 6% per annum in sum insured and premium from third policy year
onward. From the fourth policy year onward, the policyholder is provided with
a statement showing the buildup of cash value of the policy and sum insured
for the year. The policy also participates in the surplus of State Life and
currently the rate of bonus is Rs 105 per thousand per annum of the adjusted
opening cash value
Maturity Benefit:
The policy matures when the child attains age 25 years. At maturity the cash
value of the policy is paid to the child. The cash value includes all the bonuses
attached with the policy.
Death Benefit:
If the life insured dies during term of the policy, premium payments stop and
the sum insured applicable to the policy year of death is deferred to be payable
when the child attains age of 25. At the time of death of the life insured, the
said sum insured is added to the adjusted opening cash value to be called the
enhanced cash value and participates in State Lifes surplus until it is paid out
to the child when he or she attains the age of 25
Years. The child will have an option of either collecting the benefit in a lump
Sum or in five equal annual installments.
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SUPPLEMENTARY
CONTRACTS
SLIC offers a number of supplementary covers to enhance coverage under
different plans. These supplementary covers can be attached with the main
policy and are not available exclusively.
Accidental Death & Indemnity Benefit (AIB)
Accidental Death Benefit (ADB)
Family Income Benefit (FIB)
Waiver of Premium (WP)
Special Waiver of Premium (SWP)
Term Insurance (TI)
Guaranteed Insurability (GI)
Refund of Premium Rider (RPR)
Hospital & Surgical Benefit (H&S)
Accident Death & Indemnity Benefit (AIB):

This supplementary cover provides for payment of additional amount equal to
the sum insured under the policy in the event of death by accidental means, or
in the event of loss of two or more limbs or loss of sight in both eyes. One-half
of the sums insured will be paid for loss of one limb; one-third of sum insured
in the event of loss of one eye and one-fourth of sum insured will be paid for
loss of thumb and index finger. Moreover, weekly indemnities are also available
for total and partial disability of the life insured as a result of the accident. If
the life insured becomes permanent and total disable, an annuity of 10% of
sum insured will be payable for a maximum period of ten years.
AIB is suitable for office commuters and individuals who travel and use
different modes of transport. The rates of premium for this supplementary
benefit range from Rs 4 to Rs10 per thousand sum insured depending upon the
occupational rating of proposer for standard lives whose age should be
between 18 to 55 years.
AIB can be attached with following plans:
Whole Life Assurance
Endowment Assurance
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Anticipated Endowment Assurance

Jeevan Sathi Assurance
Child Education & Marriage Assurance
Shad Abad Assurance
Shehnai Policy
Child Protection Assurance (For adult life only)
Muhafiz Plus Assurance
Nigehban Plan
Optional Maturity Plan
Accidental Death Benefit (ADB):

This supplementary cover will provide for payment of an additional amount
equal to sum insured in the event of death by an accident as defined in the
contract. On payment of a modest premium, a handsome accidental
coverage is obtained through this supplementary cover. ADB is highly
recommended for individuals who travel daily through road transport.
The cover is available to lives between 5 and 55 years of ages. Maximum
term of this supplementary benefit is not allowed to exceed the premium
paying term of the basic policy, or 60 years of age of the life proposed
whichever is earlier
ADB can be attached with following plans:
Endowment Assurance
Shehnai Policy
Child Protection Assurance
Nigehban Plan
Family Income Benefit (FIB):
This supplementary cover provides that incase of death of the life insured
during term of this cover, an annuity of 10% to 50% per annum of the basic
sum insured will be payable till the completion of term of this cover. For
instance, if a life insured has taken 25% FIB supplementary cover for 20 years
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on his policy having sum insured of Rs 1,000,000. If the life insured expires
during term of FIB, say at the end of fourth year, an annual sum of Rs 250,000
will be payable for rest of 16 years.
While the basic plan provides a lump sum, FIB provides a regular stream of
income to the dependents and helps in meeting the day to day expenses. This
supplementary cover is available to lives between 18 and 55 years of ages. It
can be attached with following plans:
Endowment Assurance
JeevanSathi Assurance
Shad Abad Assurance
Shehnai Policy
Waiver of Premium (WP):
This supplementary cover provides for waiver of due premiums in the event of
the life insureds Total and Permanent Disability caused by accident as defined
in the contract. With the help of WP, the life insured gets relieved of vagaries of
paying premiums in case of his or her being incapacitated as a result of
accident. The rate of premium for standard risk will be Rs 0.50 to 1.00 per
thousand of sum insured depending upon the age of life insured.
WP is available to lives between 18 and 55 years of ages. It can be attached
with following plans:
Endowment Assurance
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Special Waiver of Premium (SWP):

This supplementary cover will provide for waiver of premiums under the policy
in case of the life insureds Total and Permanent Disability due to accident or
disease which renders him unable to engage in any occupation.
With the help of SWP, the life insured gets relieved of vagaries of paying
premiums in case of his or her being incapacitated as a result of accident or
disease. SWP is available to lives between 20 and 55 years of ages. SWP can be
attached with following plans:
Endowment Assurance
Term Insurance (TI):

In the event of death of the life insured during term of TI supplementary cover,
the sum insured will be payable in addition to the benefits payable under the
basic policy. Suppose, Mr. A, covered under a policy of Rs 1,000,000, and also
attaches TI supplementary cover with his policy. In case of his death during
term of TI, a sum equal to Rs 1,000,000 will be payable under this
supplementary cover. This will be in addition to the benefits payable under
main policy.
This supplementary cover is an excellent opportunity for individuals who want
to enhance coverage of their policy substantially on payment of a meager
amount of premium. TI is available to lives between 18 and 55 years of age. TIR
can be attached with following plans:
Endowment Assurance
Shad Abad Assurance
Shehnai Policy
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Guaranteed Insurability (GI):

Under this supplementary cover, State Life gives the policyholder a right to
purchase additional life insurance up to specified maximum amounts on
specified further dates at standard rates, without evidence of insurability being
required at such later dates.
The specific further dates on which additional insurance can be taken are the
policy anniversaries of the basic policy nearest the 25th, 28th, 31st, 34th, 37th
and 40th birthdays of the life insured. Thus the option dates for various issue
ages
Issue Ages No of Option Option Date Ages
Dates
10 24 6 25, 28, 31, 34, 37, 40

25 27 5 28, 31, 34, 37, 40
28-30 4 31, 34, 37, 40
31-33 3 34, 37, 40
34-36 2 37, 40
37 1 40
This supplementary cover is available only to standard lives between 10 and 37

years of ages and who are not engaged in hazardous occupations. Only one GI
will be issued on the life of any one person. GI is available only at the time of
issue of the basic policy and cannot be attached to the policy after its issuance.
Individuals who foresee increase in their insurance needs in the near future can
get benefit from this supplementary cover. It saves them from providing any
further evidence of insurability in case they desire to enhance coverage under
the policy. GI can be attached with following plans:
Endowment Assurance
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Refund of Premium Rider (RPR):

RPR provides for refund of premiums paid under the policy in the event of
death of the life insured during term of the policy. It is an ideal form of
enhancing the life cover under the policy with a modest increase in premium.
This supplementary cover is available to lives between 20 and 60 years of ages.
The available term ranges from 10 to 25 years. RPR can be attached with
following plans:
Endowment Assurance
Shad Abad Assurance
Hospital and Surgical Benefits (H&S):

This supplementary cover provides benefits in case of hospitalization of the life
insured, in State Lifes approved hospitals, as a result of sickness or accident.
On payment of double amount of premium specified for H&S, the benefits and
their limits will also be doubled.
H&S is available to lives between 18 and 50 years of ages. The available term
ranges from 10 to 25 years. RPR can be attached with following plans:
Endowment Assurance
Shad Abad Assurance
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GROUP LIFE
INSURANCE
PRODUCTS
These includes
Term Insurance Scheme
House Building & perquisites Insurance Scheme
Pay Continuation Scheme
Group Endowment Insurance Scheme
Group Pension Scheme
Term Insurance Scheme:
Group Term Insurance Plan provides life insurance coverage to the
member of a group, such as the employees of an employer. The amount
of coverage of each member is determined with reference to either his
designation or salary or employment category or some other similar
variable.
This plan provides insurance protection to the members of a group at a
very affordable minimum possible cost, 24 hours coverage around the
world.
By promoting a sense of financial security amongst the employees it
contributes to improving the working environment for the employer
resulting in higher productivity.
In most cases the employer is legally obliged to provide insurance cover
to his employees. This plan helps the employer to fulfill this requirement.
Premiums are tax-deductible for the employer. Total premium under
group term insurance is lower as compared to sum of premium of all
policies if issued individually to each life, due to savings in expenses.
On death of any insured member the sum assured on his life is paid for
the benefit of his surviving family. This benefit is payable regardless of
the total number of the deaths even if the total amount paid out exceeds
the total premiums received under the policy.
However, if in any three-year period State Life earns a net profit on any
policy, then some share in the profit is passed on to the policyholder,
depending upon the total number of members in the scheme. This share
can go up to 90% in case of large sized schemes.
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The supplementary contracts or riders which can be attached with this

scheme are:
PTD (Accident) Rider:
Under this rider the insured member is entitled to payment of the sum assured
in case of any accident causing permanent and total disability, which includes
loss of two limbs or two eyes or loss of hearing in both ears or severe facial
disfigurement. If the disability is permanent but not total then some
percentage of the sum assured is payable depending upon the severity of the
disability. In this regards the same schedule of disabilities is applicable as is
prescribed under the labor laws. In case of a temporary accidental disability
causing absence from work a fortnightly benefit calculated at the rate of Rs.
3,000 per month or the monthly salary whichever is less is payable.
A.D.B. Rider:
Under this rider the death benefit of an insured member is doubled if the
death was caused by an accident.
Natural Disability Rider:

Under this Rider if an, insured member is rendered incapable of pursuing any
occupation or vocation for gainful employment due to permanent disability
caused by disease or sickness then he is entitled to the sum assured as benefit .
Critical Illness Rider:

If an employee contracts any of the following critical illnesses while insured
under this rider then he is entitled to the rider sum assured as benefit.
Covered critical illnesses include.
Heart attack
Coronary Artery by-pass surgery
Stroke
Cancer
Kidney Failure
Major organ transplant such as heart, kidney or liver
The insured member must survive for at least 31 days after contracting the
illness to become eligible for his benefit. Some restrictions apply during the
first two years of coverage.
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Suitable For:
The plan is suitable for employers who desire to provide financial security to
their employees by means of insurance coverage or for members of a
professional body or association or some welfare association or a social club
who desire to avail insurance protection on their life.
House Building & Perquisites Insurance

Scheme:
Under this plan each member of the group is insured for the total amount of
loan outstanding against him inclusive of accumulated interest. The amount of
Insurance is the actual amount of loan outstanding on the date of death
whereas the premium is charged on the average loan outstanding over the
whole policy year.
It provides financial security to employers and financial institutions against the
risk of untimely death of any of their indebted employee or client. Very often
the family of the deceased person is not is a position to repay the loans taken
out by him, especially if the deceased person was the sole breadwinning
member of the family. In such a case the insurance coverage provides an
assurance to the creditor that he would be able to recover his capital without
causing hardship to the distressed family.
The creditor is also protected from the headache of constantly monitoring
cases of delayed repayments of loan in hardship cases caused by unforeseen
death of a bread winning family member. The premium due under this policy
may be recovered by the creditor from the borrowers along with the loan
repayment installments.
Benefits:
Benefits of this plan are
In case of death of an insured member of the scheme the total amount
of the loan outstanding against him including accumulated interest is
payable to the policyholder. In case State Life earns a profit on any policy
during a 3-year period, the policyholder is also entitled to some share in
the profits depending upon the size of the group.
Riders or supplementary contract that can be attach with this plan is
PTD (Accident) and NDB rider may be attached with this plan. These
riders provide insurance cover against permanent disability due to
accidental and natural causes rendering the insured member unable to
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earn a livelihood for himself and his family.

In such a case the attaching riders can facilitate the creditor in recovering
the outstanding amount of loan.
This plan is suitable for employers who have a scheme for providing
loans to their employees for house building, purchases of conveyance or
any other goods of household use. It is also suitable for banks that are in
the business of granting loans to their clients for purchase of house or
conveyance or for some business venture. Similarly leasing companies
and other financial institutions with similar facility may find this plan
quite attractive.
Pay Continuation Scheme:
1. Manpower is still considered as one of the most important elements of
productions in spite of the dramatic growth of microchip based
automation in all walks of life, especially in commerce and industry. The
overall efficiency of an organization therefore depends upon the quality
of the manpower of its employees. The more devoted, hardworking and
loyal the employees the higher the reward to the employer in the form
of greater efficiency and profitability. Quality manpower can be attracted
by offering a good employee benefits package based on ensuring
security and peace of mind of the workforce so that a greater
commitment is obtained from them. This is why the enlightened
employer pays particular attention to the welfare and well being of their
workforce through various employee benefits scheme.
2. One of the functions of such schemes is to provide protection to the

employees dependants in the event of his death. Progressive employers
do provide group insurance which pays a lump sum to the dependants.
This however does not last long. What is required in addition is a regular
monthly income for a period of time. To meet this Requirement State Life
proudly presents a plan, which offers invaluable protection to the
employees family during his working life. The familys regular monthly
income is protected for 15 years or until age 60 whichever is earlier. In
this way coverage is provided for pay upon the death of the employee.
This is illustrated by the following example: -
a. Supposing the pay of an employee is Rs 2000/- per month. If death
takes place at age 47 then the benefits payable will be Rs2000/-
per month up to age 60, I-e., for a period of 13 years. Total amount
payable Rs.3,12,000/-
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b. If death takes place at age 35 then the benefit payable will be

2,000/- per month for a period of 15 years. Total amount payable
Rs. 3,60,000/-
3. Annual premiums will be calculated on the basis of the employees pay

and his age and will be payable at the beginning of each scheme year. If
this policy qualify for profit commission it will be payable in accordance
with the rules at the end of 3 years.
4. Cover without medical evidence is allowed on the same basis as group
term with the monthly benefits being converted into a lump sum
equivalent. The total of the benefits so arrived at should, however not
the maximum allowable under the policy exceed.
Group Endowment Insurance Scheme:

Group Endowment Scheme is a unique saving and protection scheme through
which the employees of an employer can enjoy insurance protection
throughout their service and also get a lump sum cash amount upon their
retirement if they survive up to retirement.
In Pakistan most employers do not operate any pension scheme for their
employees although some employers may have a provident fund scheme or a
gratuity scheme. The expected benefits at retirement under a typical provident
fund scheme and gratuity scheme combined are woefully inadequate for a
retiring employee for maintaining his standard of living after retirement unless
he supplements these benefits with his own personal savings. Keeping this in
view some employers may wish to encourage a habit of saving amongst their
employees for their own welfare. Group Endowment Insurance Scheme can be
a means of introducing a compulsory saving scheme for the employees under
the sponsorship of the employer. Participation in the scheme is usually
compulsory. However, if participation in the scheme is voluntary, at least 75%
of eligible employees must participate.
Benefits:
Under this scheme each employee is provided insurance protection for an
amount which may be flat or depends upon the designation or salary of the
employee. The amount of insurance is payable on maturity or death if it occurs
earlier. In most cases the term of the endowment insurance for each employee
is determined in such a way that the policy matures at or near his retirement
date.
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This enables the maturity proceeds to coincide with retirement and

supplement the retirement benefits.
Profit Participation:
The endowment insurance is issued on a with profits basis. The same bonus
rate is applicable as for the corresponding individual endowment insurance
policies.
Premium Rates
The same premium rates are applicable as for individual endowment policy but
with the added attraction that in group form some volume discounts are also
applicable depending upon the size of the annual premium.
Surrender Value
The policy acquires Surrender Value in respect of a member after insurance
cover has been in force for at least two years on that member and no
premiums are in default.
Loan Facility
Under this scheme if the member needs immediate liquidity and a policy has
acquired Surrender Value in respect of member, he/she can avail a maximum
loan of 80% of the net surrender value of the policy.
Continuation Privileges :
If an employee leaves the service of the employer, he can surrender his policy
against the Net Surrender Value. He is also provided with the option of
continuing his endowment insurance coverage in an individual capacity without
any evidence of good health, for the same sum assured and term as he was
enjoying during his service. The premium rates applicable to the policy are the
same as are generally applicable to the same class of business in and individual
capacity.
The ADB, PTD (Accident) and NDB can be added to this policy if desired.
Suitable For:
This plan is suitable for employers who desire to inculcate a habit of saving
amongst their employees in addition to providing them insurance against
premature death.
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Group Pension Scheme:

State life, have become increasingly aware of the predicament of progressive
employers wanting to better the lifestyle of their employees by providing
financial security and job satisfaction, but not being able to do so, due to lack
of availability of avenues and opportunities. This booklet is a guide to the State
Lifes Pension Scheme that enables an employer to provide substantial benefits
to employees and ensure a higher state of well being for them. It explains the
institution, administration and benefits of the pension scheme and with the
help of expert professionals in our Pensions Division, we can assist you in
availing it, in your own and your employees interest. Our representatives will
only be too pleased to be of any service to you.
Introduction:
Once the working life of an individual is over, or he has retired, what will he live
on? This is a question which every individual faces during his working life and is
of equal importance to a concerned employer. Personal savings, Provident
Fund and Gratuity are the normal assets he acquires. If not spent prudently,
these assets can fritter away in a short time.
State lifes Pension Scheme is the only source which provides a steady monthly
income, when other sources of income stop.
This booklet explains step-by-step the nature of the Pension Scheme, how it
operates and what are its benefits to the employer as well as to the employees.
What is Pension Scheme?
Basically it is a saving, or calls it a contribution, which is collected during the
working life of an individual and invested profitably. After retirement the
individual is entitled to a steady monthly income from a fund built up from the
earlier savings.
In a sense, it is a reward to the employee, granted today, while money is to be
received on retirement.
Benefits/Why a Pension Scheme?

We advise a pension scheme due to following benefits to the Employees:
o After retirement when the monthly pay-cherub stops, the
individual starts receiving a regular monthly income in the form of
a pension.
o While contribution to the scheme, the individual gets a tax
concession.
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o The individual, after retirement, need not fear of a drastic

reduction in his standard of living.
o All pensions are completely tax-free.
o Retirement comes as planned and not abruptly as a shock.
Benefits to the Employer:
Contributions to the Pension Scheme by the employer are treated
as business expenses and deductible in full.
The knowledge that at the end of the career, the employee will get
a regular pension helps to build up his job loyalty and the
adherence to the job, to the employers satisfaction.
Employer does not have to find money to compensate an
employee when he ceases to work.
Shows that the Management cares for their staff and is concerned
about their welfare.
Attracts new employees.
Retirement of personnel is planned in advance, removing
uncertainty both for the employer and the employee.
Promotion channels in the management hierarchy are unclogged .
Comparison with Provident Fund and Gratuity:

a. Provident Fund:
This is like a savings bank. The contribution of the employer as well as the
employee along with interest accumulated over the years is handed over to the
employee on his retirement.
However, in case an employee wishes to leave before retirement is due,
employers contribution may not have to be paid; or only part payment may be
made.
b. Gratuity:
Gratuity is exclusively the employers contribution for the benefit of the
employee. From half to a full months salary is credited for every year of
service. Reserves are set aside in the balance sheet but they do not attract tax
concession, unless it is a funded scheme.
The security of the employee to receive the gratuity is dependent on the
continued existence of the employer and his profits, except in case of a funded
scheme.
c. Pension Scheme:
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In comparison with the aforementioned two retirement benefits the Pension

Scheme has distinct advantages:
Payments through Pension Scheme are guaranteed for
life.
A pensioner can look forward to his retirement with
confidence and security.
Pension Scheme is the only method through which
regular income accrues to an employee after retirement.
The payment of the pension is not dependent upon the
fortune of the employer.
Lump sum comparable to those received from Gratuity
or Provident Fund, can still is drawn by commutation or
the pension while maintaining a steady monthly income.
State Life maintains a full-fledged pension Department capable of handling
each and every scheme in the most competent and professional manner. It has
actuaries, lawyers and other experts, besides offering a unified administrative,
technical and investment service. An employer can relieve himself of the
tedious and cumbersome work by using the professional service offered by
State Life, the major ones being:
Designing a Pension Scheme according to an employers
exact requirements, in addition to determining the rate
of contribution etc.
Preparation of explanatory documents, if required, for
consideration by employees.
Assisting the employers legal advisers with the
preparation of Trust deed and Rules.
Providing reasonable assistance in negotiations with the
Central Board of revenue for approval of the scheme.
Maintenance of Individual records of members of the
scheme, their contributions, the employers
contribution, and pension accrued etc.
Facilities for payment of pensions, when due
Security:
All policies issued by State Life are guaranteed and enjoy full financial security,
backed by the Government under Article 35 of Life Insurance Nationalization
Order 1972.
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Payment of Pension
The pension will be payable by monthly installments; commencing from the
retirement of member and ceases upon his death.
Guaranteed Payments
By incorporating a Guaranteed Pension period, payment can be ensured for a
defined period say 5 to 10 years, whether or not a pensioner is alive after
retirement, if, however, a pensioner survives the guaranteed period, pension
will continue throughout his lifetime.
Supplementary Benefits
They may be termed as supplementary, but are indeed those invaluable
finishing touches that make the picture complete. Employees would not feel
secure unless their families were provided for in the event of their untimely
demise. At a little extra cost employees may be given peace of mind by
providing these benefits, some of which are listed below:-
a) Widow's Pension (upon death in service)

The pension will be payable to the wife of a member if he dies while in service.
Normally, a widows pension is one half of the members pension entitlement.
b) Widows Pension (upon death after retirement)

The pension is payable to the wife if the member dies after retirement. In this
case also a widows pension is one half of the pension the member was
receiving. The widows pension, in either case would be payable for life but
would cease in the event of remarriage.
c) Orphan's Benefits
The inclusion of orphans benefits in Pension Scheme along with the widows
pension, gives the scheme a level of completeness. A normal scale of orphans
benefit is 33% of the widows pension per child, payable upon the childs
attainment of age 18 or earlier marriage. Limit is imposed on the number of
children who can claim such benefits.
d) Retirement Aspects
Pension will be payable to a member according to a predetermined scale on
the normal retirement date fixed by the employer.
e) Early Retirement
A member who retires before his normal retirement date on account of
becoming incapacitated, or for any other reason, may be granted a reduced
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immediate pension to commence on the day following the actual date of

retirement.
f) Late Retirement
A member who remains in employers service after the normal retirement date
will receive an appropriately increased pension on retirement.
g) Withdrawal Benefits :
If a member withdraws from the service of the employer before the normal
retirement date due to any reason and without any entitlement to early
retirement pension, his future contribution, or contribution made on his behalf,
will cease.
Benefits to be paid on withdrawal will depend upon the withdrawal from
service rules of the scheme. In such a case one of the following procedures
may be adopted:
Refund of contribution:
If a member withdraws from the contributory scheme a refund is made of all
the contributions made by the employee.
Deferred Paid-Up Pension:
A withdrawing member may be allowed a deferred paid-up pension of the
amount accrued to his account on the date of withdrawal. The reduced
pension will commence on his normal retirement date.
Group Provident Fund Insurance Scheme:

Group Provident Fund Insurance Scheme provides life insurance coverage to
the members of the provident fund scheme of an employer. The amount of
coverage of each member depends upon his age and the amount of his
provident fund balance at any time.
What Need Does It Fulfill?
Young employees normally have short service to their credit and consequently
their Provident Fund balance is also quite meager. In case of unfortunate death
of such a person the provident fund amount is not adequate for meeting the
financial needs of the family such as schooling of the children, their marriage
expenses and housing accommodation. Group Provident Fund Insurance
Scheme is specially designed to meet such an eventually since the benefits
under the scheme are on a sliding scale.
Benefits:
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On the death of any member of the provident fund scheme his family is paid a
lump sum amount equal to the amount of his fund balance on the date of his
death multiplied by a factor depending upon the age of the employee at death.
The factors applicable for a typical scheme are already given above however
the employer in a particular case may adjust these factors to suit his own
special requirements. If the scheme has 200 or more members then at the end
of three years the fund is also entitled to some share in the profits depending
upon the size of the scheme.
Riders:
Any rider which can be added with group term insurance plan can also be
added with this plan such ADB, PTD (Accident), NDB or Critical Illness Cover
Education Continuation Scheme:

Education of children is clearly cherished by every parent. While parent is alive
there is no problem. But un foreseen can happen sometimes disrupting the
education of children. To protect against these Eventualities State life has
designed this plan.
AIM:
The purpose of this plan is to provide smooth continuation of education of
child until he/she completes education.
BENEFITS:
In event of (God forbid) insured father or guardian death SLIC will provide
following benefits: School fee will be paid for remaining period of children
education In addition, an amount equivalent to 12 months fee be payable for
uniform, books, stationery, and other expenses. An increase of 5% per annum
in payment will be given in order to cater inflation. All payments will be made
to school for benefits of children.
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Part: 4
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SLIC has following departments which performs the different functions of SLIC.
These departments are;
Personnel & General Service Department
Audit Department
Finance &Accounting Department
Policyholder Service Department
New Business Department
Agency Department
PERSONNEL &
GENERAL SERVICE
DEPARTMENT
This division has dual functions
1. Personnel management
2. General services
This department performs following functions;
FUNCTIONS:
Personal Management
Personnel policies, motivation, incentive and implementation of service
regulations
Office management development
Personnel management
Liaison with government labor relations and maintenance or office
discipline including investigation against officers and staff
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General Services
Procurement
Purchase of goods and services
Uniforms
Communication
Other services
Maintenance
Office machines & equipment
Furniture & fixture
Transport & conveyance
Telephone and telex
Receipt and dispatch
Assets register
Service like canteen security and cleanliness
Relation of personnel & general service
department with other departments:
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Management Hierarchy:
SECTIONS:
Personnel Section:
All the employee matters such as appointment, promotion, demotion, transfer
and allowances are dealt by personnel section. Annual confidential reports-
ACR the employees are prepare, under the supervision of this section, by the
departmental heads.
For the appointment of the staff, an advertisement is initiated in the
newspaper. Zonal head is competent authority for this appointment. This
appointment also depends on the business of zonal office .the appointment of
officers is done by principal office Karachi or regional office. Selection
committee constituted by zonal head conducts test and interview.
For promotion of the employees, there are ACRS are necessary and minimum
three years are required to remain in one cadre. Each employee is promoted by
the criteria and instructions set by principal office. PO or Regional office does
promotion of officers.
In Lahore there are 362 office employees, 9 sector head and 43 area managers
(AM).
Sub Sections:
There are no of subsections in this department;
1. Medical Section:
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All the medical expenses are beard by SLIC provided that these are incurred in
approved hospital the expenses of medicine are reimbursed. The
reimbursement of medicine is not allowed to staff (having grade 1 to 8) but
they are given Rs 1500 per month in shape of salary as medicine allowance.
2. Leave Section:
Following are the two main types of leaves:
Casual leave
Medical leave
18 days casual leaves are allowed to all employees in a year .the medical leave
or application leave is allowed for 48 days in a year .unused leaves are
accumulated and after two years these leaves in excess of 180 days can be
enchased, in case of death all leaves, not utilized, can be enchased.
3. Rent Section:
When sale manager is promoted to area manager he is categorized as A, B, C,
and he is entitled to his own office at his own choice at the expenses of state
life .a good location is selected by AM. After selection of place, zonal head is
informed about the location, by application written by AM. This application is
transfer to P&GS department for the analysis of location of the office. This
location is analyzed by zonal rent committee (ZRC).
A lease agreement is made with the landlord after analyzing the approved map
for the location and property registration form.
The office rent entitlement for categories of A, B, C, Am is Rs .2000, Rs 2000,
&Rs 2000-10000 P.M. respectfully.
4. Stationary Section:
This section maintain the record of stationary such as paper, pencil, envelops
printed letters, forms, calculators, etc .when ever any department requires the
stationary ,the concerned department fills a requisition slip. The stationary is
issued to concerned department and is recorded in the register.
5. Capital Section:
This section is responsible for purchase, sale and maintenance of furniture &
fixture; equipment etc .a zonal procurement committee is constituted for
purchase of assets. The assets are purchased from suitable supplier after
critically analyzed the quotation offered by different venders.
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Each year assets are depreciated @ 10% p.a. the entry for the purchase asset is
made in the register for fixed assets. Each year the closing balance is intimated
to PO Karachi.
6. Daily Attendance:
All the employees of Group and pension call their attendance before starting
their duty. If any employee is not at time than he will call late attendance and
three late attendances will be considered a casual leave .
7. Record of Employees:
There is complete record of employees who are at work or have retired. And all
necessary data is maintained about every employee as date of appointment,
date of retirement, promotions, medical services and all other data.
AUDIT DEPARTMENT
Audit department of state life do internal audit of transactions which occur on
daily basis. Management of any organization is responsible for ensuring that
proper accounting records are kept and its assets are safeguard. To best
discharge this responsibility instituting a system of internal control is essential
to ensure that work is properly carried out by the employees. The organization
then relay on its system for the production of reliable management information
and the financial accounts , and to prevent ERROR,FRAUD AND LOSS OF
ORGANIZATIONS ASSETSactually internal audit is a part of internal control.
Internal Control:
Internal control may be defined as whole system of control, financial and
otherwise, established by the management in order to carry out the business
of the organization in an ordinary manner, safeguard its assets and secure, as
far as possible .the accuracy & reliability of its records. It may be noted that the
concept of internal control goes beyond financial and accounting matters and
the custody of organization assets to include controls designed to improve
operational efficiency and adherence to organization policies.
Objects of Internal Audit

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Internal audit is an independent appraisal function established within an

organization to examine and evaluate its activities as service to the
organization. The object of internal audit is to assist member of the
organization is effective discharge of their responsibilities. To this end internal
auditing furnishing those with analyses, appraisal, recommendations, counsel,
and information concerning the activities are viewed.
Internal auditor should:

Review the system to ensure compliance with those policies, plans,
procedures, laws and regulations which could have a significant impact
on operations and report, and determine whether the organization is in
compliance.
Review the means of safeguard assets and as appropriate verify the
existence of such assets.
Appraise the economy and efficiency with which resources are
employed.
Internal auditor should be independent of the activities they audit
Internal auditors are independent when they can carry out their work
freely and objectively.

TYPES OF INTERNAL AUDIT:
Pre- audit:
Audit before making payment is called pre audit.
Post- audit:
Audit after making payment is called post audit. In GROUP & PENSION
mainly is pre audit is used.
External-audit:
The audit which is done through the external parties like chartered firms.
GOVT organization audit/Commercial Audit: Audit of the Pakistani GOVT
owned organization is done through the AGP
Objectives of Internal Accounting Controls:

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The system of internal accounting control is intended not only to maintain an

adequate method of processing accounting data but also to safeguard the
organization against possible financial loss due to fraud or error. The control is
designed to ensure that;
The organization receives and enters its accounting records, all the income and
revenue to which it is entitled.
All expenditure is properly authorized.
All assets are properly recorded and safeguard.
All liabilities are properly recorded and provision is made for known or
expected losses.
The accounting records provide a reliable basis for the preparation of
accounts.
Internal Audit Role in State Life:
Accurate information is one of the essential factors in the process of decision
making both policy and management; this is as true in state life as in any other
organization. in the absence of accurate and dependable information
management/board of directors are unable to make policy and management
decisions .as the function is passed downward to the infrastructure of state life,
function of internal audit apart from the verification of financial evaluation to
pin point week areas in the system, internal control .in state life some items are
subject to pre-audit while some are subject to post-audit.
List of payment subject to post audit:

All payment vouchers of salaries, except December, January and
changes.
Staff overtime fortnightly.
Monthly fixed overtime to staff
Entertainment to officers for sitting late
Monthly officers entertainment and newspapers
Monthly car rental to officers
Monthly tea expenses to staff
Air ticket
Air insurance
Telephone antiseptic bills
Labor charges
Office telephones
Current t monthly salary advances
Payments subject to pre-audit:
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All increase in retainer ship payments will be preaudited.

All payment vouchers of recoveries on account of bank loan
association/union subscription p.f contributions, income tax at source
and insurance premium, will be pre-audited in July and December only.
All cases where accident benefit is payable will continue to be pre-
audited.
POLICYHOLDER &
SERVICE
DEPARTMENT
Management Hierarchy ofPHS Department:
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PHS department performs following functions.

Renewal or revival of policies
Alteration in the policy
Payments of death claims
Payment of maturity claims
Payment of injury claims
Renewal/ Revival of Policies:
PHS does renewal or revival of policies. Renewal of policies is done when term
of the policy ends and policyholder wants to renew his policy. Revival is done of
those policies which has been lapsed due to none payment of policies
premium. A lapsed policy may be revived during the lifetime of the life insured,
but within a period of 5 years from the due date of the first unpaid premium
and before the date of maturity. Revival of a lapsed policy is considered either
on non-medical or medical basis depending upon the age of the life insured at
the time of revival and the sum to be revived.
Alteration:
Alteration may be done in table or in conditions or in sum insured. The
endorsement will be attached with original policy documents for alteration
purpose.
Kinds of alteration
Calculated alteration
Contractual alteration
Calculated alteration
This alteration includes alteration in
Sum insured
Table & term
Load
After revival term & condition
Special revival after revival
Change in terms & conditions
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Contractual alteration
For legal point of view this alteration is called contractual alteration.
Alteration may have specified period for alteration in the policies for example
in anticipated policies before the 4 year of term of policy alteration can be
made.
In Jeevan Sathi policy if any alteration is done it should be done within one
year.
For this policy the evaluation will be on
Financial aspect
Physical aspect
Moral aspect
Mode of payment is usually yearly then policy holder in the time on need say
to change it in the monthly, quarterly, half yearly. Excess is charged for this
purpose.
Half yearly 52 % of annual premium
Quarterly 27 % annual premium
Monthly 9% of annual premium
Procedure for Maturity Claims:

A good news letter is send to policyholder consists of following information.
It is a matter of great pleasure that your policy has matured. It is a time to fulfill
the goals that you had set years back. For collecting maturity benefits, please
send a written request along with following documents to your servicing State
Life zonal office:
Original policy document
Copy of National Identity Card
Maturity discharge voucher duly verified by your bank
If your signature has changed over the years, please send us your three
specimen signatures of old and new styles.
Immediately on receipt of above documents, we will process the case further
for payment of amount due, if any, against maturity claim under above policy.
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Procedure for Death Claim:

State Life insurance policies provide wide range of benefits in case of death of
the persons covered against them. If loved one covered under any of State Life
has expired, you should lodge a death claim with state life. All you have to do is
to send a written intimation to the zonal office of State Life servicing the policy
against which you are lodging a death claim.
State life will, after evaluating the case, contact for other required documents
for processing of death claim.
Survival Benefit Claim:

If Anticipated Endowment Assurance policy has completed 1/3rd or 2/3rd term
of the policy, it can withdraw a sum equal to 25% of the sum insured of policy.
For withdrawal of Survival Benefit, send a written request along with following
documents to the servicing State Life zonal office:
i. Original policy document
ii. Copy of National Identity Card
iii. Survival Benefit discharge voucher duly verified by your bank
iv. If the signature of persons has changed over the years, then are need to
send three specimen signatures of old and new styles
Immediately on receipt of above documents, state life will process the case for
payment of amount due, if any, against survival benefit claim under above
policy.
Injury Claim:
If State Life insurance policy contains an Accidental Death & Indemnity Benefit
(AIB) supplementary cover, and the insured have sustained an injury as
specified in the contract, he can apply to state life for an injury claim within 20
days of sustaining the accident. For lodging injury claim, there is need to send a
written intimation of the accident mentioning therein the date of accident to
servicing State Life zonal office.
After receipt of intimation from insured, the case will be further looked into
and zonal office will contact accordingly.
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Procedure for Loan against Insurance Policy:

State Life insurance policy provides a valuable facility of loan to meet
immediate financial exigencies. Policyholder can avail a loan up to 80% of net
surrender value of policy. On policy loans, state life charge markup @ of 10%
per annum compounded semiannually. If policyholder is interested to avail loan
under his policy, he can apply for loan.
Procedure for Volunteer Policy Surrender

If policy holder wants to surrender his policy he informs to the state life about
its decision and fills a form of surrender of policy after that his request will be
entertained and surrender amount will be transferred to policyholder.
PROCEDURE OF DEATH CLAIMS IN GROUP

LIFE INSURANCE;
Procedure to lodge Death Claim
Procedure / requirement for the settlement of death claims
Death intimation, on death of any government employee, the department /
employer sends the written death intimation to the Incharge Claims concerned
G&P zone along with the death certificate.
On receiving the death intimation, the department / employer would
sent the claim forms C & D by the claim department of the Group &
Pension Zone.
The Department / employer is required to fill in the claim forms C & D,
properly sign and stamp them and send them back to the concerned
G&P zone, along with the following requirements.
1. Death certificate, issued by Local Municipal body, Cantonment bodies,
Union Councils, Services hospital, Government hospitals, Semi
Government hospitals, Railway hospitals and Trust hospitals (any one of
the above). In case of tribal areas, the death certificate issued by political
agents, Commissioner, Assistant Commissioner, Magistrate Class-I are
also acceptable.
2. NIC of the deceased and the claimants (attested photocopies).
3. Pension book in original for post retirement death (the same would be
returned back after verification).
4. Attestation: All the photocopies must be attested by the concerned
Gazette officer.
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NOTE:
The provision of all above requirements would ensure the quick
settlement of the claims.
Deficiency of any one of the above would result in the delay in the claim
settlement.
Commercial Groups:
Procedure / Requirement for the settlement of
Death/Disability Claims:
1. Death intimation: The policyholder/employer is required to send the
written death intimation, to the In charge Claims of concerned Group
& Pension zone.
2. On receipt of intimation, after necessary checking, the necessary
claim forms would be sent to the policyholder/employer by the
Claims department of the Group & Pension zone.
3. The policy holder/employer is required to fill in the claim forms,
properly sign and stamp them and send them back to the G&P zone
along with the following requirements.
For Death Claims:

1. Death certificate, issued by the local bodies, cantonment board,
services hospitals, government hospitals, semi government hospitals
and railway hospital. (Any one of above)
2. Last attending physicians statement.
3. Post Mortem report and FIR/police investigation report in case of
Accidental death benefit.
A. For Age proof:
i. School/college certificate showing date of birth
ii. National Identity card
iii. Valid passport
iv. Discharge certificate (in respect of ex-defense forces Personnel)
v. Certificate of age by the policyholder organization
vi. Birth certificate issued by local body/cantonment board
(Any one of the above)
B. For disability claims:
1. Employees statement.
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2. Employers statement.
Attending Surgeons statements.
(Claim forms A, B, and C, respectively).
3. X-rays and medical investigation reports etc, if any.
4. (All the photo copies must be attested by the concerned Gazetted
Officer).
5. The provision of all above requirements would ensure the quick
settlement of the claims.
6. Deficiency of any one of the above would result in the delay in the claim
settlement.
NEW BUSINESS
DEPARTMENT
Management Hierarchy of New Business Department
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The business of SLIC is initiated through new business department (NBD) when
insurance sales rep sells policy to any client then this department handles all
the document procedures
Dr. Nisar Ahmed Shah is the in charge of new business department. In this
department as the name shows, new contracts start between proposes and
insurance company.
Proposer is a person who applies for the insurance protection.
Main function of the NB is underwriting
The department is responsible for processing the new business
introduced by the sales force right from receiving a proposal on the
counter to mailing the policy document to the policy holder
It has various sections to perform the different task relating to the
acceptance or rejection of risks for life insurance, the proposals are
received and initially is checked in all respects
i.e. Completion of all columns and then processed by the underwriters
depending upon whether they have been introduced under the medical
or non medical scheme. The risk is assessed keeping in view the
following factors
personal data , occupation ,physical and social features , health , family
history of the prospect , moral hazard , source of income , nomination ,
relationship between the nominee and the prospect . Previous life
insurance history of the prospect if any, field officers or sale
representative confidential report included in the proposal from,
Financial underwriting i.e. Source of income, its legality and proof,
relationship between the prospects income and sum assure .in case of
field officers or sale representatives reports have more importance.
After this assessment, the underwriting decision is made which may be
acceptance of a risk at ordinary rate or with loading, calling additional
evidences relating to health or financial status of the prospect,
postponing for a definite period or straight away declination. Premium
rates, installments are the checked and first premium receipts are issued
on receiving payments.
In the last, policy contract are issued under intimation to the field force,
and concerned department like commission payment, agency
administration, computer division and marketing. This in brief terms is
the function on new business department. This is also a key function as
the underwriters are responsible for the financial health of life
institution. By accepting good risks they promote profitability and
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growth, which helps in meeting the financial obligations of the life

institutions towards the policyholders, its employees and government.
Process of dealing with new customer:
First of all sale rap motivate the customer to take policy.
Then sale rap fills proposal form for that customer.
Then sale rap takes Rs 500 as token money as underwriting fee for
customer.
Then proposal form come in new business for allotment of proposal
number where proposal number for a particular customer is allotted.
Then process of underwriting is done. If the customer fulfills the
requirements of underwriting then further process continues otherwise
request is rejected and underwriter suggests some other alternative.
If underwriter accepts the proposal then calculation of premium is done.
After the calculation of premium the policy number is allotted and policy
bond is issued to customer.
Sections of New Business

1. Proposal section
2. Underwriting section
3. Calculation section
4. Policy issue section
5. Computer section
1. Proposal Section:
In proposal section policy number is allotted to a new customers proposal for
future reference. All the work performed in proposal section is entered in a
register called proposal register.
First of all issue the proposal number and then record the proposal number,
serial no, age, table & term and then SR, AR, PR no and the name of owner of
policy form.
These proposal forms are attaching with balance statements with the issue no
but those policy form that have no balance statements take a side. Those who
have balance statements send it to the underwriting department.
There are some other forms which have some objections if they are clear than
recorded into the ledger to OK its mean ok.
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Underwriting Section:
Underwriting is the process through which the underwriter assesses the risk
associated with the insurance proposal. Underwriter verifies the proposal
information provided in the proposal form. If he feels that client should have a
medical checkup than SLIC have its own panel of doctors to provide medical
assistance.
Types of underwriting
I. Lay underwriting
II. Final authority
I. Lay underwriting:
A junior underwriter who checks all the documents of policyholder, if the
documents are correct, then he sends to final authority.
II. Final authority:
A person who checks all the documents and decision of lay underwriter makes
final decision.
Underwriting panel:
The underwriting specialist check the case thoroughly and see his name, NIC
no, age, weight, height, nominee, name occupation and address. If they think
there is something wrong then they must be conscious and call medical report
or other tests of medical.
If they seem that case are correct they fill the form of policy brief sheet of
bottom line which they enter the height, weight and also give the rate about to
see his occupation and they can also use some code which they give different
occupational person.
For example carpenter code is 161.if they forget the code of any occupational
person then they give code of 078.they think that 078 codes, is best solution.
They sign the form and send to doctors.
Doctors panel:
The doctor panel head is known as CMA (CHIEF MEDICAL ADVISOR) i.e. Dr.
Naeem and also authorized doctors Dr Saira who has recommended the case
by underwriters for medical reports etc.
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They must check the nominee name, NIC no and his occupational stress. If the
policy holder has some disease problem then they can mark them his case by
N.D and they can also give a declaration certificate that if he die during two
years then the company cannot pay the claim. The maximum limit of N.D case
is 15, 00,000.
If the policyholder has government employee then they can give the categories
no 4 such as school teacher, doctor etc. but if they are carpenter, bricks holder
then they can give 5,6.
There are basically three categories of female.
Government job and education
Private illiterate
Household
But the male have only one category.
If the case has 10, 00,000 then only one person sign but if they are Rs 20,
00,000 then they are Rs 30, 00,000 then three persons can check.
If the policyholder are smoker then they will allow only smoking daily 6 up to
10.but if they smoke 20 up to 25 then they are not capable to grant the policy.
The doctors also decide & check the age and check the underwriting
requirement table e.g. if the person age is 18-40 then they have Rs 200,000
sum insured and they are non-medical case.
2. Calculation section:
In calculation section calculation of premium is done. Premium can be pay in
the following way;
Yearly
Half yearly
Quarterly
Monthly
Rate of interest and premium rate is calculated.
Rate of premium depends upon the age of a person. If the age is higher, then
more rates will be charged and if age is low then low rate will be charged. Rate
also depends upon the maturity period.
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Different tables are used for calculating the rate of premium.

Most commonly used table is;
Table 03
Table05
Table07
Table 12
Table 18
Table 19
3. Policy issue section:
After completing the calculation, the number is allotted to policy holder .in
policy issue section; all the records are maintained in the policy register.
4. Computer section
New business department has its own computer section, which contains all the
records of policy holders. The department is computerized in 1995.window AIX
version 3 is used for sorting the data. A code number is allowed to each
policyholder. There are two prints used for office work. One is raw print 7 the
other is office copy. The raw print is used to check the record of each
policyholder. And the office copy is used for their record.
Smart term program IBM are used and they start login by college and then
enter the new business department and open the whole table of proposal form
no and his bio data. first they can enter table a and then proposal no and
series that means proposal forms series and then his name are also enter and
policy no and then also enter the table and term and then issuing date of
underwriting and date of receipt and write his date of birth ,age, mode i.e.
Yearly
Quarterly
Monthly
Similarly they can allot the no and then write postal code i.e.078 and then his
address.
So write the sum assured and enter the AIB value and the rate which they can
allot. They
Can enter the series vise FIB NO and they give the command of print with the
recipient printer no 03
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AGENCY DEPARTMENT
Management Hierarchy of Agency Department:
State life is one of those few organizations whose product is not over the
counter but it has to be introduced to the expected buyer through a
huge marketing.
The marketing force, usually known as field workers, is regulated
through an important department which in insurance industry is called
agency administration department
The agency administration results, trained, promote and provide services
to its field workers so as to ensure them skilled profession, sound career,
handsome income and many fringe benefits to ease their life.
Service provided by the SLIC is tangible and therefore are not acquired at
the counter by the people, who need it so it must be sold them through
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persuasive method. Field force of SLIC is tangible and therefore is

persuasive method. Field force of SLIC plays an effective role in selling of
intangible products. In order to maintain record of the field force agency
department was established.
The head of agency department is Mr. Shakeel ansari and executive
officer Mr. Asif mir .the main function of this department includes
recruitment, promotion, and termination of field force, allied and
medical facility for field force. This department is also responsible for
issuance and renewal of licenses to the field force.
State life has two levels of recruitment.
Recruitment:
The sale representative is appointed by SO/SM .The requirement and
conditions for the appointment of SR are as follows. State life has two level of
recruitment.
Regular sales representatives:

Minimum qualification required is matric
Age at entry must not be less than 18 years.
Annual quota for SR is Rs 10000
Application for the issuance of license is necessary and is renewed after
each 3 years.
An application form, along with license fee Rs 50, attested photocopies
of documents and nomination form is submitted to the agency
department .a code number is allotted at the submission of application
to SR and he can start working as agent of the SLIC of Pakistan.
Graduate sales representatives:
Must be graduate required
Less than 30 years of age having N.I.C.
They are paid stipend.
Both above type of sale representative are registered under insurance
ordinance 2000 and insurance rules 2002.they are required to get their
registration renewed after every two years and submit a statement and
declaration annually as required under above referred ordinance &
rules .Their primary job is to sell life insurance policies.
76
INTERNSHIP REPORT
Promotion:
SR is promoted, upon fulfillment of certain terms and conditions and on
achievement of business targets, to SO. Similarly SO is promoted to SM and
SM to AM.
Prize & Awards:

The field workers are motivated by giving those prizes and awards on their
monthly and yearly achievements. The height of it is an annual convention
which held at a prominent place of prestige in the country in which all the
qualities around the country share their knowledge and experience, enjoy
recreational activities and above all get benefit of company of successful
seniors. They disperse filled with thrill and enthusiasm to go at more height
to catch new stars.
Other Benefits:
In order to run their offices company maintained furnishes offices are
provided and those who wish to open their officers, as they desire are paid
cash compensation in lieu of an office to maintain their own offices.
State life give their field workers and families a due care for which they are
covered for indoor and outdoor medical treatment, consultation from
senior doctors and for clinical investigation from reputed pathological labs
In case of chronic diseases additional medical facilities are given.
Their lives are also covered for heavy sum of insurance against accident and
death through variety of Group Insurance Policies. The Company pays the
premiums and for additional coverage subsidized rate of premium is
charged which is deducted from their commission.
Termination and Demotion:

Any agent of SLIC, who behave negatively, violates the rules and regulation
or indulge fraud or mal-practice, can be terminated by the zonal head. Any
agent who fails to meet the annual quota of FYP is demoted to immediate
lower rank of the field force.
License:
The license to work as agent for SLIC is issued by the controller of insurance
Karachi. At specific interval of time, a list of the field force is transferred to
controller of insurance Karachi for new and renewal of license.
The list of license fee is given below:
77
INTERNSHIP REPORT
SR (new license for IST year) = Rs 50

SR (renewal of license) = Rs 150
SR (renewal with late fee) = Rs 250
SO/SM (renewal of license) = Rs 250
SO/SM (renewal with late fee) = Rs 400
The agency department is also involved in the following matters of field
persons,
1. Medical of field persons
2. Rent
Contest arrangement (giving the prizes to those who make good business)
FINANCIAL AND
ACCOUNT
DEPARTMENT
This department maintains the record of all the cash transactions. It
prepares payroll for the regular employees and disburses the amount. It
also takes care of the fringe benefit such as medical facilities provided to the
office staff. Commission that is paid to sales representatives, sales officers
and sales managers are also calculated and paid through this department.
To keep the corporation on financial track balance sheets and income

statement also prepared on annually, monthly and weekly basis. The
principal office sends annual budget to the department and department is
responsible for proper utilization of cash disbursements. The department
also send budget forecast for new budget proposal.
Payment on behalf of the other zones and preparation of bank
reconciliation statements are also function of this department.
This department consists of following section:

Commission
Salary
Disbursement
Loan
Cash counter
78
INTERNSHIP REPORT
COMMISSION:
Commission department facilitates the field force by offering commission
and due bonuses .the department is directed to calculate and analyze the
earning of last year, providing advances and loans to field force and offer
other fringe benefits to motivates the field force.
Commission is only give to commission based persons who are SM, SO AND
SR.
Commission is calculated from the premium after subtracting the tax. Then
check that SM not takes any advanced loan and any claim from zonal,
regional.
Structure of commission:
First year premium QUARTER BONUS

SR-------- 35% 2.5%
SO------- 15% 2.5%
SM------ 8% 2%
Persistency bonus:
It gives on the persistency of the last year business.
On 80% business the commission is 1.1 percent. On 81, it is 1.2 and onward.
Second year premium

SR-------- 10%
SO------- 2%
SM------ 1%
THIRD YEAR PREMIUM
SR------ 5%
SO----- 1%
SM----- 0.5%
SALARY & LOAN:
Employees are lying in the four categories Related to their appointment and
their promotion. According to their category the funds, benefits and salary
are gives to employees. In this section loan application and salary form are
filled here related their category and then according to that make the
voucher slip and passed by the officer.
79
INTERNSHIP REPORT
CASH COUNTER:
In cash counter premium and loan amount is submitted .There is two
accounts for policy holders.
First year accounte.g. 1173 A/C
Renewal A/C
1089 A/C is account no of renewal account.
Collection is done in two ways:

Cash
Cheque
80
INTERNSHIP REPORT
Part: 6
PERFORMANCE
HIGHLIGHTS
81
INTERNSHIP REPORT
PRIMIUM Income- Individual Life:
YEAR (RS. IN MILLION)
2005 11,260.0
2006 13,112.0
2007 15,907.1
2008 19,152.1
2009 24,853.2
2010 31,943.0
82
INTERNSHIP REPORT
Premium Income-Group Life

YEAR (RS. IN MILLION)
2005 2,560.1
2006 2,879.6
2007 2,809.6
2008 3,543.2
2009 3,513.7
2010 3,705.3
83
INTERNSHIP REPORT
Investment Income
Year
(Rs.
In
Millio
ns)
2005 13,105.5
2006 14,923.8
2007 17,505.2
2008 19,134.6
2009
21,544.7
2010
27434.1
84
INTERNSHIP REPORT
Total Premium Income:
Total Premium Income:
YEAR (Rs. In Millions)
2006 30915.4
2007 36221.9
2008 41829.9
2009 49911.6
2010 63072.9
85
INTERNSHIP REPORT
Investment Portfolio:
Investment Portfolio
Year (Rs. In Millions)
2005 124,983.7
2006 142,158.8
2007 161,965.8
2008 182,874.2
2009
205,804.2
2010
235,934.5
86
INTERNSHIP REPORT
Life Fund:
Life Fund
Year (Rs. In Millions)
2005 122,775.2
2006 137,958.8
2007 156,737.3
2008 177,459.1
2009 199,445.3
2010 230,422.0
87
State Life Insurance Corporation of Pakistan invests its funds in
INTERNSHIP REPORT
accordance with the provisions contained in Insurance
Ordinance 2000, Insurance Rules 2002 and SRO(309) K of 1970
as amended to date by the Government of Pakistan.
Govt. Securities:
Total Assets:
These include instruments issued by Government of Pakistan
such as Treasury bills, Pakistan Investment Bonds etc.
Total Assets
Approved Govt. Securities:
These include instruments as Wapda Bonds, Provincial
Year (Rs. InSecurities/TFCs
Millions) etc
2005 Loans: 132,017.1

these include loans in the form of Term finance certificates etc.
2006 149,448.6
Investment Portfolio 2008
2007 169,821.4
As at 31-12-2009
(Rs. in
2008 193,117.6
millions)
2009 217,685.4
Particulars Portfolio
Govt. Securities 145,687

2010 TFCs/Approved251,478.1
4,598
Govt. Securities 24,450
Equities 12,485
Bank Deposits 2,538
Investment 16,046
properties
Policy Loans
205,804
Part :8
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INTERNSHIP REPORT

FARHAN JAVED ARAIN

I feel great pride and pleasure on the accomplishment of this report.

Sr. No Description Page No.

Principle of utmost good faith

Principle of proximate cause

Various insurance companies sell term insurance with many different

Level Term Policy

Guaranteed Renewal, the insurance company guarantees it will issue a policy of

Annual Renewable Term

Permanent Life Insurance

Whole Life Coverage

Universal Life Coverage

Another type of permanent insurance is Limited-pay life insurance, in which all

Riders or Supplementary Contracts

For Group & Pension there are

The major achievements of State Life are as under:

2. It is a profitable organization and it paid Rs.2.657 billion as dividend to

4. . The Investment Portfolio of State Life as at 31.12.2010 stands at

Establishment of state life insurance corporation 1st Nov, 1972

Group and Pension Rawalpindi Zone

SLIC offers different products for

Group life insurance

Anticipated Endowment Assurance:

1) If the option to withdraw an installment of 20% sum assured is not

4) So long as the policy remains in force, the policyholder may surrender

5) The reversionary bonuses as per usual practice will continue to be

Shad Abad Assurance:

Child Education & Marriage Assurance:

Child Protection Assurance:

Optional Maturity Endowment:

Accident Death & Indemnity Benefit (AIB):

Anticipated Endowment Assurance

Accidental Death Benefit (ADB):

Special Waiver of Premium (SWP):

Term Insurance (TI):

Child Protection Assurance (For adult life only)

Guaranteed Insurability (GI):

10 24 6 25, 28, 31, 34, 37, 40

This supplementary cover is available only to standard lives between 10 and 37

Refund of Premium Rider (RPR):

Hospital and Surgical Benefits (H&S):

The supplementary contracts or riders which can be attached with this

Natural Disability Rider:

Critical Illness Rider:

House Building & Perquisites Insurance

earn a livelihood for himself and his family.

2. One of the functions of such schemes is to provide protection to the

b. If death takes place at age 35 then the benefit payable will be

3. Annual premiums will be calculated on the basis of the employees pay

Group Endowment Insurance Scheme:

This enables the maturity proceeds to coincide with retirement and

Group Pension Scheme:

Benefits/Why a Pension Scheme?

o The individual, after retirement, need not fear of a drastic

Comparison with Provident Fund and Gratuity:

In comparison with the aforementioned two retirement benefits the Pension

a) Widow's Pension (upon death in service)

b) Widows Pension (upon death after retirement)

immediate pension to commence on the day following the actual date of

Group Provident Fund Insurance Scheme:

Education Continuation Scheme: