Topic- Life Insurance Business in Bangladesh

Course: Risk & Insurance Management

Course ID: FIN440
Semester: Spring2022
Section: 01
Submitted To
Md. Mehedi Hasan, CFA, FRM
Department of Finance
School of Business and Entrepreneurship
Independent University, Bangladesh

Submitted By

Name ID
1. Moumita Chakraborty 1821842
2. Sumi Akter Eani 1820399
3. Jannatul Kabir Meem 1821811
Tamanna Aktar 1830496
4. Nusrat Jahan Chowdhury 1920179
6. Mashrafi Rahman Nadvi 1922127

Page | 1
 Letter of Transmittal

Md. Mehedi Hasan

Independent University Bangladesh
Date:1 April,2022
Subject: Submission of report on ‘‘Life Insurance Business in Bangladesh’
Dear Sir,
With due respect, it is my pleasure and honor to be your students and have this opportunity to
present a report. While preparing the report I’m given my best effort thoroughly on the topic, and I
believe and hope that my report will provide a clear conception and will reflect my hard work as
much as possible. Though I’m in the learning phase of my career, this helped me gain sufficient
knowledge. It is indeed a challenging and interesting experience.
Hence, I am here by submitting my report hoping that you will appreciate my informative and
detailed approach. In case of any further clarification or queries about the report, you are most
welcome to have discussions with me.
Thank you very much for all your support, which helped me significantly in preparing this report.

Thank you.
Best regards,
1. Moumita Chakraborty
2. Sumi Akter Eani
3. Jannatul Kabir Meem
Tamanna Aktar
4. Nusrat Jahan Chowdhury
6.. Mashrafi Rahman Nadvi

Contents
Page | 2
ABSTRACT.................................................................................................................................... 4
INTRODUCTION........................................................................................................................... 5
OVERVIEW.................................................................................................................................... 7
Insurance policy: [ CITATION Mis \l 1033 ]...................................................................................7
Policy conditions: [ CITATION Mis \l 1033 ]..................................................................................7
Conditions relating to commencement of risk:.................................................................................7
Conditions of premium:................................................................................................................. 8
Conditions relating to continuation of policies:................................................................................8
Lapse condition:........................................................................................................................... 9
Claims conditions:........................................................................................................................ 9
Features of life insurance:............................................................................................................9
PROGRESS OF LIFE BUSINESS...................................................................................................11
ASSETS & LIABILITIES............................................................................................................... 12
IDRA............................................................................................................................................ 14
The activities of IDRA:............................................................................................................... 14
PAST AND PRESENT CONDITIONS[ CITATION Zah \l 1033 ]...................................................15
Bangladesh period (1971–1973)...................................................................................................15
Problem in life insurance business:...............................................................................................16
Way of solution of life insurance problems:...................................................................................16
Insurance Analysis......................................................................................................................... 17
1. Descriptive Analytics.........................................................................................................18
2. Diagnostic Analytics.......................................................................................................... 18
3. Predictive Analytics........................................................................................................... 18
4. Prescriptive Analytics........................................................................................................18
How to reduce the risk associated with someone's life insurance........................................19
FINDINGS.................................................................................................................................... 22
RECOMMENDATIONS................................................................................................................ 23
CONCLUSION............................................................................................................................. 23
REFERENCES.............................................................................................................................. 24

Page | 3
ABSTRACT

The present situation of Bangladesh's life insurance sector is examined in this research. Illiteracy,
claim settlement, lack of product diversity, inadequate risk management, and reinsurance
concerns were among the issues identified in this study. The findings and recommendations are
offered in order to make the life insurance business in Bangladesh more dynamic and
economically advantageous. In general, the purpose of life insurance is to reduce financial loss
or hardship in the event of the insured person's death. Life is so unpredictable since any
unforeseen event might occur at any time, resulting in unanticipated losses. Furthermore, life
insurance provides protection against unanticipated losses. Unexpected changes in customer
behavior toward life insurance companies, on the other hand, might spell disaster for the
insurance business. For life insurance plans, sales managers are having difficulty recruiting new
clients and maintaining existing ones. The next parts will go deeper into the details of the life
insurance market.

Page | 4
INTRODUCTION

Life insurance is a contract between two parties which are an insurer and an insured in which the
insurer guarantees to pay a specific sum of money to the insured or beneficiary in the event of the
insured's death, the policy's maturity, or the terms of the contract. Life insurance is different from
other types of insurance due to the subject matter, which is a human being. In this sense, this is not
an indemnification contract; we cannot value our lives in terms of money. It is the most valuable
asset for an individual or a society. It serves as a family's protection in the event of the insured's
death or as an investment in old age after the expiration date.

Maintaining successful client connections, on the other contrary, is a business requirement. Main
factor that affects against a particular monetary loss, marketing strategies such as constructing
the insurance policy and formulating the insurance policy, claim payment if a loss is incurred,
fulfill the customer's investment need by providing a specific benefit against the insured amount
on the insured person, and providing various economic facilities to the customers such as getting
a loan are all examples of insurance.

0:1: Life insurance business

It first appeared in England in the sixteenth century. The first piece of evidence was William
Page | 5
Gybbons' life insurance policy, which was issued on June 18, 1653. The together society, which was
founded in 1696 and evolved at exchange alley, was its first registered office. Since
1706, the famous amicable organization for a perpetual assurance office has also been in
existence. [ CITATION Mis \l 1033

Bangladesh's government nationalized the insurance industry in 1972 with the Bangladesh
Insurance Order 1972. All 49 insurance businesses and organizations transacting insurance
business in the country were placed in the public sector under five corporations as a result of this
decision, with the exception of postal life insurance and overseas life insurance companies. Jatiya
Bima Corporation, Tista Bima Corporation, Karnafuli Bima Corporation, Rupsa Jiban Bima
Corporation, and Surma Jiban Bima Corporation were the companies involved.

[ CITATION Ins15 \l 1033 ]

Analyses descriptive and diagnostic both rely on historical information to explain what happened
and why. Using historical data, predictive analytics and prescriptive analytics project what will
happen in the future and how you can influence that outcome. In a forward-thinking
organization, analytics help you make smart decisions that benefit your business-or save lives, in
our example from a hospital.

Page | 6
OVERVIEW
Insurance policy: [ CITATION Mis \l 1033 ]
The kinds of insurance policy are:

Policy Tenure Premium Claim at Beneficiary

payment till
Whole life Whole life Death Death Others as
mentioned
Term insurance 1,2,3……n As Death or term Death Others as
available mentioned
Pure 1,2,3……n As Death or term Survival Self
endowment available
Ordinary 1,2,3……n As Death or term Death or Self or Others
endowment available survival as mentioned
Double 1,2,3……n As Death or term Death or Self or Others
endowment available survival as mentioned
1- Insurance Policy
Term insurance is quite useful for a new businessman. They adopt this policy in order to avoid a
corporate disaster in its early stages. The claim amount is the key distinction between ordinary
and double endowment. In a traditional endowment, a set amount is paid regardless of whether
the beneficiary dies or lives. In a double endowment policy, however, a basic payment is given
at death and a double amount if he lives to the conclusion of the term.

Policy conditions: [ CITATION Mis \l 1033 ]

To keep the insurance industry running smoothly, policy conditions are required. Despite the fact
that it is not a profitable business, they must be vigilant in order to avoid a loss situation. There are
five major types:

1) Conditions relating to commencement of risk

2) Conditions of premium
3) Conditions relating to continuation of policies
4) Lapse conditions
5) Claims conditions.

Conditions relating to commencement of risk:

The date on which the insurance company begins to cover the risk is referred to as the
commencement of risk, and that day is referred to as the date of commencement.

 Start of risk: This policy comprises the insurance's terms and conditions and is a
Page | 7
 document that may be used as proof of insurance.
 Proof of age: The rate of premium is directly proportional to the age of the insured,
because an insurance company will never issue a policy to an elderly person who
will be responsible for their losses.

Conditions of premium:

 Premiums can be computed and paid on an annual, half-yearly, quarterly, or even

monthly basis. When premiums are paid in installments rather than annually, and
the insured dies before all of the premiums for the current policy year have been
paid, the corporation deducts the unpaid installments from the policy year; the
corporation deducts the unpaid installment from the insured sum at the time of
setting the claim.
 Days of grace: Normally, payments are made on the due date. However, for the
convenience of policyholders, the premium can be paid over a longer period of
time known as days of grace. The grace period begins on the due date of the
premium and ends on the due date of the premium. If the grace period expires on
a holiday celebrated by the insurer's office when payments are due, the premium
must be paid the next working day to maintain the policy in force. The insurer is
not responsible for the delay in this case.
 Premium notification: If the policyholder does not forfeit the benefit of his policy,
he will receive notice of any outstanding premiums on a regular basis.

Conditions relating to continuation of policies:

➢ Unquestionable clause: It specifies that policies are indisputable after a specified amount
of time, namely two years from the date of issue, except in the case of non-payment of
premiums or fraud.
➢ Alteration in policies: Changes in policies include a change in class or term, a decrease in
the sum insured, an increase in the sum insured, a change in the manner of premium
payment, and the splitting up of a policy into multiple policies. Such changes should not
be permitted by the insurance because they may raise the insurer's risk.
➢ Exclusion
Page | 8
 ➢ Lost policy: If the policy is lost or destroyed, the policyholder must notify the insurance
company. After the fact has been investigated, the insurance will provide a duplicate
copy and a fee will be charged.
➢ Loans: The insurer may grant a loan based on the surrender value of the policies as
collateral. However, loans are not given based on non-accumulated surrender values.
➢ Nomination: The person to whom the insurance amount will be paid if the amount is
payable on death and who has been named by the policyholder.
➢ Assignment: Absolute and conditional assignments are the two types of assignments.
➢ Suicide
➢ Double accident benefit
➢ Disability benefit
➢ Extended disability benefit: The extended disability benefit waives the premium and pays
an amount equivalent to the sum assured in the event of permanent total disability.

Lapse condition:

➢ Lapse of policies:
➢ Revival of lapsed policies
➢ Special revival scheme
➢ Surrender value
➢ Extended term insurance
➢ Automatic premium loan
➢ Reduced paid up insurance

Claims conditions:

➢ Settlement of claims
➢ Settlement options

Features of life insurance:

[ CITATION Mis \l 1033 ][ CITATION Rej \l 1033 ]

1. Nature of general contract

2. Insurable interest
3. Utmost good faith
4. Warranties
5. Proximate cause
6. Assignment and nomination
7. Return of premium and
8. Other features
Page | 9
Generally Life Insurance Company gives major importance to the first three features and rests
are of complementary nature.

Nature of general contract: The valid contract should have the following
substances-

 Agreement : An offer is made when a proposal is submitted with a premium, and an

acceptance is made when an acceptance letter is sent.
 Competency of the parties: If the insurer has a license to conduct insurance business, he
will be legally competent to contract. Every individual who is of legal age of majority, of
sound mind, or whoever is not prohibited from contracting by law is competent to do so.
The insurer operates under the terms of the Articles of Association and Memorandum of
Association, as well as the Deeds of Partnership.
 Free consent of the parties: At the time of contracting, the insurer and the insured should
be of the same mind and must be aware of the specific nature of the risk to be covered.
 Legal consideration: A legal contract requires the presence of a valid value in exchange
for the insurer's commitments to pay a defined sum at maturity, death, or as specified in
the contract.
 Legal objectives: For a contract to be valid, the agreement objectives must be legal. It is
not prohibited by law, immortal, or contrary to public policy, and it does not violate any
law's restrictions. If any goal is proved to be illegal, it will be voided.

Insurable interest: it can be divided into two categories:

 In own life
 In other’s life.

Insurable Interest

Own’s life Other’s life

Proof is not required Proof is required

Page | 10
 Business relation Family relation

Utmost good faith: The principle of utmost good faith generally supported by three
significant legal doctrines: representations, concealment and warranty.

The statements made by the insurance applicant are referred to as representation. For example, if
you apply for life insurance, you may be asked questions about your age, weight, height,
occupation, health, family, and history, among other things.

The intentional failure of an applicant to reveal a key fact to the insurer is known as
concealment.

The declaration that becomes part of the insurance contract and is guaranteed to be true in all
respects by the maker is known as a warranty.

Other legal doctrines are:

 Material facts
 Duty of both parties
 Full and true disclose
 Extent of duty
 Legal consequence
 Indisputability of policy

PROGRESS OF LIFE BUSINESS

Though there are huge markets for life insurance policies, they are not that popular in
Bangladesh.

Jiban Bima Corporation (JBC) is Under the terms of the Insurance Act 1938, Insurance
Rules 1958, and relevant additional legislation enforceable in Bangladesh under the Bangladesh
Corporation Act 1973, the state-run life insurance provider in Bangladesh. The JBC began
operations on May 14, 1973, with assets and liabilities totaling TK. 157 million from 37 defunct
life insurance companies. JBC has been working since its beginnings.
Page | 11
 ➢ among the Bangladeshi people with two main goals: first, to cover risks and encourage
individuals to save, and second, to generate revenue for the country's economic
development through creative

life insurance plans. Private sector:[ CITATION Lis19 \l 1033 ]

 MetLife Bangladesh
 Fareast Islami Life Insurance Company Limited
 Delta Life Insurance Company Ltd.
 Meghna Life Insurance Company Ltd.
 National Life Insurance Company Ltd.
 Padma Islami Life Insurance Company Ltd.
 Popular Life Insurance Company Ltd.
 Pragati Life Insurance Ltd.
 Prime Islami Life Insurance Company Ltd.
 Progressive Life Insurance Company Ltd.
 Rupali Life Insurance Company Ltd.
 Sandhani Life Insurance Company Ltd.
 Sunflower Life Insurance Company Ltd.
 Sunlife Insurance Company Ltd.
 Zenith Islami Life Insurance Ltd.
 Mercantile Islami Life Insurance Ltd.
 NRB Global Life Insurance Company Ltd.
 Guardian Life Insurance Ltd.
 Chartered Life Insurance Company Ltd.
 Best Life Insurance Company Ltd.
 Protective Islami Life Insurance Co. Ltd.
 Sonali Life Insurance Co. Ltd.
 Sawdesh Life Insurance Co. Ltd.
 Diamond Life Insurance Co. Ltd.
 Alpha Islami Life Insurance Ltd.
 Trust Islami Life Insurance Co. Ltd.
 Jamuna Life Insurance Ltd.
 Golden Life Insurance Ltd.
 Homeland Life Insurance Company Ltd.
ASSETS & LIABILITIES

Page | 12
Bangladesh now has 45 general insurance firms and 31 life insurance companies in its insurance
market. In Bangladesh's insurance business, life insurance accounts for 73.5 percent of the
market, while non-life insurance accounts for only 26.5 percent. Life insurers earned TK 2,908.1
crores in gross premium income in 2017, while the total assets of all insurance companies were
TK 44,328 crores at the end of 2016. Between 2006 and 2014, the value of life insurance firms'
investments increased dramatically.

The term "bank assurance" refers to a bank's sale of an insurance company's product. It offers
prospects for growth in Bangladesh's insurance industry, with reciprocal benefits for banks,
insurers, clients, and regulators.

Bank assurance

Page | 13
IDRA

It is the only government agency responsible for regulating and growing Bangladesh's insurance
business, and it was established by the Bangladeshi Parliament on March 3, 2010. The Insurance
Act 2010 and the IDRA Act 2010 are the new laws that took effect on March 18, 2010.

The activities of IDRA:

1. To increase the efficiency of manpower and eliminate take-agents from the market.
2. A corporation must notify IDRA within two days of receiving a complaint about its
activities from a policyholder, shareholder, or stakeholder.
3. To ensure proper transparency in the acquisition and disposal of fixed assets, IDRA has
mandated that insurance companies obtain prior approval before purchasing, selling, or
transferring any property.
4. Ensuring that the company's decisions are consistent and adhere to all applicable laws.
5. In order to eliminate unhealthy business practices, it has taken steps to ensure that
tariff rates are correctly enforced, no business is conducted on credit, and
commission levels are maintained as stipulated.
6. IDRA has already published three laws and thirteen regulations, and 37 more are in the
process of being published.
7. In January 2015, it established the "BIROD NISPOTTI COMMITTEE-2012."
8. The government of Bangladesh has previously published and gazetted "JATIO BIMA
NITI-2014."
9. It has taken the initiative to place billboards at 23 strategic locations around Bangladesh's
highway and road network.

IDRA has inspected several insurance businesses and hired Chartered Accountant
firms to examine the books of many life insurance companies insurance firms as part
of IDRA's expense management and control.

In the nut shell, it is striving hard to keep the industry well regulated, despite its limited resources
and manpower.

Page | 14
PAST AND PRESENT CONDITIONS[ CITATION Zah \l 1033 ]

Bangladesh period (1971–1973)

There were 75 insurance companies doing business in East Pakistan, with 10 of them being
locally incorporated. Except for international insurance companies, both life insurance
businesses in Bangladesh were nationalized after the country's independence in 1971 under the
Bangladesh Insurance (Nationalization) Order 1972. The five new corporations were Bangladesh
Jatiya Bima Corporation, Karnafuli Bima Corporation, Tista Bima Corporation, Surma Jiban
Bima Corporation, and Rupsa Jiban Bima Corporation, and their sole purpose was to supervise
and control the activities of the 75 existing insurance companies. From January 1, 1973, until
May 14, 1973, these five corporations were in operation.

Following Bangladesh's independence, the insurance business was nationalized, and two firms,
Sadharon Bima Corporation for general insurance and Jiban Bima Corporation for life insurance,
were founded in Bangladesh.

Present position: After an early stage of displacement, adventure and experimentation have now
been established as a growing business distributed between the public and private sectors during
the last half-century. In Bangladesh, the insurance business was not a promising sector in its
early stages, but it is gaining momentum as the country's overall economic situation improves.
Until the year 2000, the government has provided approval to ten private life insurance businesse

Page | 15
Problem in life insurance business:
❖ Less public awareness
❖ Centralization
❖ Weak economy
❖ Poor financial position of the insurance companies
❖ Weakness in industrial sector
❖ Higher cost of business
❖ Problem of economic bases and effective principle
❖ Political instability
❖ Lack of supervision from the government
❖ Problem of planning administration
❖ Too much complexity
❖ Lack of capital, skilled staff and proper training and etc.

Because insurance companies occasionally engage in extremely speculative risk, there is a lack of
confidence between them and their consumers. Claim settlement issues jeopardize the customer-
insurer relationship, and the claims settlement procedure can be arduous and time-consuming.
Aside from that, Bangladesh's labor force lacks the essential skills and understanding to provide
high-quality insurance services. Bangladesh suffers from an unequal income distribution, with the
bulk of the population being impoverished, without disposable money, and unable to purchase
insurance, according to microeconomics. For statistical computations, insurance companies lack
access to precise and up-to-date population facts.

Way of solution of life insurance problems:

More actuary consultants and personnel with MBAs and Master's degrees are desperately needed
in the country. Furthermore, the insurance industry's technological capabilities require significant
improvement. It has been digitalized, with platforms being developed to improve customer
service and expedite processes. Bangladesh has made just a rudimentary use of contemporary
technology, with insufficiently developed websites and inefficient processes. Last but not least,
Bangladesh's regulatory framework remains a lot to be desired. In this circumstance, regulation
change in the insurance sector can boost the country's growth and save money by allowing easy
access to risk management technologies. According to the graph below, a 1% rise in
Bangladesh's insurance penetration rate can significantly contribute to the country's economy.

Page | 16
 1% rise in life insurance can mean for an economy

Insurance Analysis

The economy of Bangladesh is extremely vulnerable because it frequently experiences natural

disasters such as floods, cyclones, droughts, and hurricanes. Additionally, there are other factors that
deepen the risks for the economy, such as political strikes and economic issues like inflation, high-
interest rates, tax policy, deregulation, etc. Despite this, Bangladesh's insurance market is not very
large in relation to the level of risk. In order to better function the insurance industry and to progress
in this sector, it is important to know the factors that are responsible for the low growth of the
industry in Bangladesh. An empirical survey is presented in this paper to illustrate the current state
of the Bangladesh insurance industry. The study identified several problems such as lack of trust,
illiteracy, improper claim settlement, inadequate product diversification, inadequate information,
poor risk management, reinsurance problems, and so forth. Bangladesh's insurance market can
become more vibrant and useful for the economy by following the recommendations offered in this
study.

Page | 17
According to the study, there are many problems in insurance marketing in Bangladesh, including
low per capita income, low knowledge of agents, illiteracy among prospects (target customers),
religious superstitions, low awareness among prospects, low savings among target markets, lack of
continuity, lack of reminder, and negligence with policy documentation.

1. Descriptive Analytics.

Data is analyzed statistically to determine what happened in the past with descriptive analytics. By
providing context to stakeholders, descriptive analytics helps businesses understand how they are
doing. This can be done by using visualizations such as charts, graphs, and reports.

What are some practical applications of descriptive analytics? As an example, perhaps a high
number of patients are admitted to the ER in a short amount of time in a healthcare setting. Data
analytics enables you to recognize this as it happens, and it provides you with real-time information
(date, volume, patient details, etc.).

2. Diagnostic Analytics.

The diagnostic approach takes descriptive data a step further and provides a deeper understanding of
why something happened. Diagnostic analysis is sometimes referred to as root cause analysis. Data
discovery, data mining, drilldowns, and drill-throughs are all part of this process.

Using the healthcare example mentioned above, diagnostic analytics would examine the data and
conclude. As an example, you may be able to determine that the patients' symptoms -- high fever,
dry cough, fatigue -- are related. You now know why there was a spike in the number of patients at
the ER.

3. Predictive Analytics

The predictive analytics process involves feeding historical data into a machine learning model that
considers key trends and patterns. After applying the model to current data, predictions can then be
made as to what the next step will be.

As we mentioned in our hospital example, predictive analytics may predict an increase in emergency
room visits within the next few weeks. The data indicates that the illness is spreading rapidly.

4. Prescriptive Analytics.

Predictive data is taken to the next level by predictive analytics. What should you do now that you
know what will likely happen in the future? As a result, it proposes alternate courses of action and
outlines the potential implications of each.

Page | 18
How to reduce the risk associated with someone's life insurance

Ordinary Endowment Insurance Plan (with profit) of Jamuna Life Insurance Company
Limited
This popular and most widely known insurance plan ensures the deserved amount of money for
the recipient in case of his/her untimely death or at the end of their expiry date. If the recipient is
still living at the end of the expiration date of the insurance or in case of their untimely death
before the expiration date, they are paid their earned bonus along with the insured amount. This
amount helps bring delight and relief for the recipient during their retirement period. The
duration of this insurance plan is minimum of 10 years. Accident-related insurance (DIAB) and
death by accident and amputation (PDAB) can also be received with this plan. Discount can also
be enjoyed with the provided premium and its income tax free. A minimum of 50,000 taka of
insurance policy can be insured under this insurance plan.

Risks and how to mitigate them

The risk of large number of exposure units won’t affect it as much and difficult because there are
different types of insurers with different life situations. Accidental and unintentional losses are
definitely applicable as death is unpredictable and the prime motive of this insurance is to cover
the losses after the recipients’ death. The loss is determinable and measurable. The cause, time,
place and the amount of loss incurred by the recipients’ death can be determined and is
economically feasible for the recipient for which he will be able to pay for.

Money Back Term Insurance with guaranteed profit of Jamuna Life Insurance Company
Limited.
The main motive of this plan is to ensure the wellbeing of the family after the recipients’ death.
As it is not a savings driven plan, the premium rate is quite low. That is why this attractive plan
can be availed with the lowest amount of payment with durations of 10, 15 and 20 years. Should
the recipient pass away anytime during the duration of the plan, the determined sum amount will
be paid. If he/she is still alive at the end of the duration, the definite amount along with 25%
premium of the capital amount is returned for certain. This plan offers a least amount of 50,000
tk policy to be availed. Provision of premium method or a lump sum insurance plan is not
discounted in this plan and tax can be discounted in this plan.

Risks and how to mitigate them

The loss here is incalculable as the recipient won’t be able to measure or predict his/her own
death. So, after his death, the amount to be paid to the family can ensure their wellbeing. This
insurance plan is economically feasible as they can afford it as long as they’re alive and covers
accidental and unintentional losses as death can be anywhere, anytime but their families will
receive the amount. The loss is also determinable and measurable because the recipients’ income
was maybe the only income source for his family and the company will cover the expenses after

Page | 19
his death. The number of exposed units is very large. Also, there could be situations where the
recipient was the only one who ran the family, where other recipients can own a large sums of
money and can run smoothly even after the recipients’ death.

Ordinary Endowment Insurance Plan (without profit) of Jamuna Life Insurance Company
Limited.
This is same as ordinary endowment insurance plan but without profit. A definite amount of
money is paid during the insurances’ maturity duration should the recipient passes away in an
untimely manner. If the recipient is still alive at the end of the duration, the capital amount is
returned and offers a 10, 15, 20, 25, 30 and 35 years’ worth of policy. After covering the costs of
2 years of premium, this policy earns the advantage to be paid and transformed in a reduced
amount and similarly for the surrender value. The recipient can receive a maximum amount of
90% of debt of the surrender value if needed.

Risks and how to mitigate them

Number of exposure units is very large. This also covers accidental and unintentional losses as
death can be anywhere at any time but their families will receive the amount. It is also
economically feasible as it is tax free, is discountable and recipient can receive 90% of debt from
the surrender value. The calculable chance of loss is very low as it provides the option for saving
and is a great choice for salaried people. The loss is also determinable and measurable because
the cause, time, place and the amount of loss can be easily determined.

Single Premium Endowment Plan (Without Profits) in Jamuna life insurance Company
for those who are able to save at once, Jamuna Life Insurance Company Limited has developed a
plan that guarantees profits with a permanent deposit in the bank, considering life insurance.
Depending on the scheme, it will last seven, eight, ten, twelve and fifteen years. One premium
must be paid only once at the beginning of the insurance. A double sum assured will be paid in
case the insured dies at maturity or before maturity. Moreover, A minimum of 10 (ten) thousand
taka will be the insured amount. Unfortunately, in this scheme, DIAB/PDAB cannot be taken as
subsidiary insurance.

Risks and how to mitigate them

There are a large number of exposure units. As death can happen anywhere at any time, this
policy covers accidental and unintentional losses. The family will receive the amount due upon
death. Moreover, the loss can also be determinable and measurable due to the time, place, and
amount of loss being determinable and measurable. As it provides the option for saving, there is
very little chance of loss, which makes it an attractive option for salaried individuals. Since they
can afford the insurance plan for as long as they live, it is economically feasible.

Page | 20
Assurance cum Pension and Medical Benefit plan in Popular Life Insurance Company Ltd

Under this plan pensions plus medical benefit are provided from an age designated by the
policyholder for life, guaranteed for a minimum period of 10 years i.e., if the pensioner dies
anytime within 10 years his designated nominee will get pension plus medical benefit for
remaining term of 10 years. Before pension starts, if the assured policyholder dies, 10 times the
annual pension plus 10% of medical benefit be paid as a lump-sum to his nominee and the policy
is terminated upon such payment.

Risks and how to mitigate them

If one member of the family passes away prematurely, the remaining members of the family will
be entitled to a premium. If a person lives for more than ten years after receiving a pension, he or
she will be entitled to an allowance until death. But nothing will happen at the same time. So, no
catastrophic loss. Nobody knows when they will die. There is no way to predict it. When he dies,
the insurance plan will help the family. This loss is incalculable and accidental and unintentional
losses.

DPS in Popular Life Insurance Company Ltd

The purpose of this scheme is to consolidate the small savings of the underprivileged population
and make arrangements for payment in the form of one-time or monthly pension at the end of a
specified period.

Risks and how to mitigate them

The premium should be economically feasible. The insured must be able to pay the premium.
Premium must be much less than the face value of the policy. This DPS insurance policy is
opened by our insurance firm based on income. If anyone can't pay the monthly premium then he
loses some interest.

Endowment Assurance Plan in Popular Life Insurance Company Ltd

In case of untimely death or at the end of the insurance term, the policy will ensure the deserved
amount of money for the beneficiary. They are paid their earned bonus along with the insured
amount if the recipient is still alive at the end of the expiration date of the policy or if they die
before the expiration date. Such a payment can help the recipient feel relieved during their
retirement period. There is a minimum coverage period of 10 years. As part of this plan, you can
also receive accident-related insurance and death by accident and amputation. With the provided
premium, you can also get a discount and it's tax-free.

Risks and how to mitigate them

Page | 21
There are many different types of insurers and different life situations, so the risk of a large
number of exposure units won't be as great. Because death is unpredictable, unintentional, and
accidental losses are definitely applicable as the primary purpose of this insurance is to cover the
losses that follow the death of the insured. These losses can be quantified. Death of the recipients
can be determined, and the amount of loss they incurred due to their death can be determined and
economically feasible for them to pay.

Single Payment Endowment Assurance in Popular Life Insurance Company Ltd

It is a single Premium Policy offering for either 10- or 15-years term. Full sum assured along
with accrued bonus be paid either normal tenure of the policy expires or on death any time
before date of maturity. Premiums are based on the age of the proposer. This plan perfectly suits
the needs of the executive class.

Risks and how to mitigate them

An insurable risk must have the prospect of accidental loss. Suddenly If an insurer die, his family
will become helpless because the person who died was the only earning person. So, the losses are
incalculable and covered by an insurance policy. With this money, his family pays the expenses
and does any kind of business. The policy is given for a certain time and age. That’s why the
chance of loss can be calculable

FINDINGS
Some findings have been found from the report. These are-
* There are 31 life insurance firms in Bangladesh. However, none of these are particularly
successful in the insurance market.
* IDRA is a new organization that was founded in 2010 and is moving considerably faster
than in the past in terms of insurance-related responsibilities.
* The largest market share belongs to MetLife, the only foreign insurance business. As a
result, if the insurance business can be run efficiently, this industry has a good chance of
flourishing.
* There are numerous issues in Bangladesh's life insurance sector, which has caused the
industry to lag behind. The main challenges include a lack of public knowledge, fraud, a
weak economy, inadequate financial systems, and a lack of technology, among others.
* Life insurance may thrive by implementing effective measures such as raising public

Page | 22
 awareness, stressing technology, expanding the number of graduates in this field,
emphasizing the issue of consumer trust, and providing more cash to this industry, among
others.

RECOMMENDATIONS

Depending on the findings, some recommendations can be as

follows:
* New business company to life insurance sector should not get approval. IDRA should be
more effective in the context of Bangladesh.
* Appropriate efforts should be taken to ensure the growth of the life insurance industry.
* Making a list of problems and the steps that need to be taken to solve them.
* The general public should be informed about the life insurance system.

CONCLUSION

The importance of insurance in the business and individual sectors cannot be overstated. The
majority of businesses offer essentially the same service. As a result, the rivalry is becoming
increasingly fierce. In the competent market, some new enterprises will also begin
operations. The BGIC needs to expand its productive sector. A business can no longer
survive without investing in information technology. People use the internet to find their
desired requirements. As a result, insurance businesses must create a website in order to
attract more foreign and domestic investors. If we improve our economic situation and solve
our challenges, the life insurance industry in Bangladesh will expand. A strong insurance
industry, which may boost growth by providing guaranteed access to liquidity via insurance
coverage, can strengthen fundamental macroeconomic indices such as GDP growth,
unemployment, and foreign direct investment. A healthy capital market leads to economic
growth, while a strong insurance industry can help to reduce unemployment. Young
graduates will be able to discover a variety of jobs in the life insurance industry if they
receive proper training and education. Another major worry for a developing economy is
FDI, which will be backed by regulatory reforms in the areas of solvency and risk
management. A strong insurance sector can help to create an atmosphere and financial
stability.

Page | 23
REFERENCES

Insurance. (2015, February 25). Retrieved November 21, 2019, from

BANGLAPEDIA: http://en.banglapedia.org/index.php?title=Insurance

islam, Z. (n.d.). Poblems and prospects of insurance business in bangldesh. Retrieved from
www.academia.edu:
https://www.academia.edu/1767455/Poblems_and_prospects_of_insurance_business_in_bangldesh

Jibon bima corporation. (n.d.). Jiban Bima Corporation. Wikipedia, the free encyclopedia .

List of Insurance Companies in Bangladesh. ( 2019, August 21). Wikipedia, the free encyclopedia

. Mishra, M., & Mishra, S. In INSURANCE PRINCIPLES AND PRACTICE (p. 9).

Rashid, M. (2019, April 28). Transforming our insurance sector. Retrieved december 14, 2019,
from DhakaTribune.

Rejda, G. E. In Principle of risk management and insurance.

Page | 24