A REPORT ON CASE STUDIES OF SANDHANI LIFE INSURANCE COMPANY LTD.

Insurance & Risk Management (F-210)

DEPARTMENT OF FINANCE UNIVERSITY OF DHAKA

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Submitted To

Tahmina AkhterAssistant Professor,Department of Finance, Faculty of Business Studies, University of Dhaka.

Submitted BySection: B

No. Name Roll No. Comments1 Kanak Mondal 18-016

2 Md. Robiul Aowul 18-026

3 Md. Sarwar Jabed 18-058

4 Supti Chowdhury 18-106

5 Suchi Marma 18-1966 Nasrin sultana 18-208

Submission Date: 23rd January, 2014

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23rd January 2014

ToTahmina AkhterAssistant Professor,Department of Finance,Faculty of Business Studies,University of Dhaka.

Subject: Submission of Term Paper on “CASE STUDIES OF SANHANI LIFE

INSURANCE COMPANY LTD.”. Dear Madam, It is an honor for us to submit the `Project Report’ on “CASE STUDIES OF

SANDHANI LIFE INSURANCE COMPANY LTD.” which is prepared as a partial

requirement of the course named “Insurance & Risk Management (F-210)” of BBA program

under Department of Finance of the Faculty of Business Studies, University of Dhaka.

We would like to convey our special thanks and gratitude to you for patronizing our

effort & for giving us proper guidance and valuable advice. We have tried our best to cover

all the relevant fields. We earnestly request you to call upon us if you think any further work

should be done on the topic that you have chosen for us.

Thanking you and looking forward to receive your cordial approval of our submission.

Yours Sincerely,

Md. Robiul AowulID: 18-026On behalf of the group members.

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EXECUTIVE SUMMARY

As a course requirement for Insurance & Risk Management (F-210) the report is on a “CASE

STUDIES OF SANDHANI LIFE INSURANCE COMPANY LTD.” which is assigned to

us by our course teacher, Tahmina Akhter, lecturer, Department of Finance, University of

Dhaka.

From this report, what we can learn about is given below:

1. Sandhani life insurance company

2. Functions of Sandhani life insurance company

3. Features of Sandhani life insurance company

4. Policies of Sandhani life insurance company

5. Sandhani Life's Vision & Mission

6. Premium

7. Bonus

8. Surrender value

9. Case studies and its subtle analysis

This is the report and related matter that you have assigned us on different lectures in this

semester. The report carrying essential rules and regulation that carry important meaning. We

also have been informed on Sandhani Life Insurance & its policies and features. We try our

best to make the report an excellent. This report is made according to your direction. We

appreciate you having this report as it will, we hope, help us in our academic and carrier life.

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PART Content Page No.

Introduction 6

PART-ONE Sandhani life insurance company

Policies of Sandhani Life Insurance CompanySandhani Life's Vision & MissionStrategic Objectives Features of Sandhani Life Insurance Company

9

9

101111

PART- TWO CASE ONE

Case descriptionIssues to be discussedCase AnalysisDecision

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14141517

PART- THREE

CASE TWO

Case descriptionIssues to be discussedCase AnalysisDecision

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19202021

Reference 22

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TABLE OF CONTENT

INTRODUCTION

In this chapter we tried to describe the origin of the report, objective of the report, scope and

limitations of the report.

ORIGIN OF THE REPORT

The BBA Program under the department of finance offers a course named “Insurance & Risk

Management (F-210)” which requires submitting a report on a specific topic determined by the

course instructor. The report under the headline ‘CASE STUDIES OF

SANDHANI LIFE INURANCE COMPANY LTD.’ has been prepared towards the purpose.

OBJECTIVE OF THE REPORT

There are several objectives to conduct the study which are:

1. Sandhani life insurance company

2. Functions of Sandhani life insurance company

3. Features of Sandhani life insurance company

4. Policies of Sandhani life insurance company

5. Premium

6. Bonus

7. Surrender value

METHODOLOGY

To prepare this report we have collected data from different published materials. Then we

have conducted a secondary study. After that we have prepared an informative and reliable

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report. We also collect data from internet .This way we collected primary data from personal

visit of Sandhani Life Insurance Company. Thus we have used both primary and secondary

report to prepare this report.

LIMITATION OF THE REPORT

Every study has some limitations. We faced some usual constraints during the course of our

preparation for the report. Lack of experience and knowledge are to main obstacle to prepare

this report.

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CASE STUDIES OF SANDHANI LIFE INSURANCE COMPANY LTD.

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Part One:

SANDHANI LIFE INSURANCE COMPANY LTD.

SANSANDHANI LIFE INURANCE COMPANY LTD.

Sandhani Life Insurance Company Ltd. is one of the leading Life Insurance Company in

Bangladesh since 1990.

Clients are the spirit of our business, so we build a genial & realistic relationship with clients.

SLIC enlarge its network by establishing agency offices. As a result in 31st December 2010

8.61 lac Policyholder is now under the shade of Sandhani.

SLIC provide Life Insurance coverage in the remote area as well as within all the people of

the country.

The core business activities of SLIC covers Micro Insurance for the Poor People, Ordinary

Life Policy for the General, Group Insurance for the Corporate, Education Policy for the

Students, Hajj Policy for the Religious People and so on.

To be a competent service provider, SLIC maintain the quality, also increasing the growth

rate by maximizing the Return on Investment.

As a whole SLIC is a complete package with corporate practice, diversified business profile

and foster entrepreneurship.

Policies of Sandhani Life Insurance Company

Commitments

To build a safe and sound prospect for every Individual, Society and Community.

Policyholder

SLIC seeks to build an ever relationship with the policyholder by providing a qualitative

service.

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Employees

SLIC seeks to enhance employees skill, efficiency and make them more innovative and

dedicative by providing effective professional training and a highly motivated remuneration

package.

Shareholders

SLIC seeks to satisfy the shareholders by achieving consistent operating performance and by

disclosing transparent financial information.

Business Partner

SLIC seeks to maintain excellent relationship with its business partners.

Community

SLIC seeks to live up its responsibilities to the community by providing various types of

Philanthropic activities to play a supportive role to protect our social, cultural, environmental,

economical and national interest.

Sandhani Life's Vision & Mission

1. To ensure social & family protection through Life Insurance Policy of all the families of

Bangladesh.

2. To ensure highest possible services to Shareholders & Policyholders of the company with

modern technology & dedicated professionalism.

3. To settle & handover insurance claims to the doorstep of policyholders or their nominees

within quickest possible time.

4.To provide highest dividend & bonus to the shareholders & policyholders respectively.

5. To increase asset, investment & life fund with modern technology & most efficient

management.

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Strategic Objectives

In order to achieve company’s long-term goal, it has maintain a number of key business

objectives which are:

Prompt claim settlement;

Improve staff-client relationship;

Enhancement of employees’ skill and efficiency;

Maximize shareholders’ wealth through a sustainable return on their

investment;

Maintenance of social commitment;

Establishment of corporate governance.

Features of Sandhani Life Insurance Company

Ethical Principles

We are committed to living by the principles and practices established by our corporate and

social responsibility and business ethics, which enable us to manage effectively our impact on

the society and environment.

Integrity & Honesty

We believe only integrated, honest and sincere employees can bring the company in a

sustainable position.

Objectivity

We are committed to serve our clients and beneficiaries and conduct all business activities

according to the business principles.

Accuracy and In Timely Manner

We are very much aware about the accuracy of all the calculation and evaluation by using the

report of the expertise and serve to the valued clients in timely manner.

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Performance in due care

To maintain the professional competence, it requires a continuing awareness and an

understanding of relevant technical professional and business developments, so as a public

service provider we exercise a sound judgment in applying professional knowledge and skill

in the performance of such service.

Safety & Confidentiality

According to the principles of safety and confidentiality we are alert to the possibility of

inadvertent disclosure of information of a prospective client or employer and the

identification, evaluation and elimination of hazards that could cause harm to our employees,

property and the environment.

Respect and Trustiness

We earn the trust and respect of our shareholders, employees, clients and business partners by

being honest, fair & open and honoring our commitments.

Accountability & Transparency

We are in practice of highest level of accountability and transparency regarding our product,

business activities, performance and financial results to meet the expectation of all the valued

users and beneficiaries.

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CASE STUDIES OF SANDHANI LIFE INSURANCE COMPANY LTD.

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Part Two:

CASE ONE

CASE ONENasim was a 40-year-old office manager at a manufacturing company. He and his wife- Mina

aged 35 years along with their only son- Nahid of 18 years old were living together happily

but economic crisis and constant political stick cornered him to the point that he was thinking

how to save up additional amount and ensure his only son’s future.

As a single bread-earner, Nasim was very aware of his financial vulnerability. A friend, who

had been in similar situation, recommended that Nasim chat to a financial adviser.

Nasim's adviser discussed his various options and made a plan that would financially protect

his and his family, if something should happened to him. His wife and son could have a better

future. Nasim wanted to make sure that his son would be able to afford to go to university, if

he wanted to.

On his advisor’s recommendation Nasim took out a life insurance and recovery policy for

tk.1,000, 000 for 20 years as well as for his wife of tk.500, 000 for 20 years and for his son’s

education of tk.500, 000 for 10 years. He is requred to pay premium quarterly.

Just two years later, Nasim was unable to cover up the entire premium so he decided to

surrender his wife’s life insurance policy and applied for surrender value.

After that he continued to run the policy and as time passed he got his money and his son-

Nahid also could finish his education without any problem.

ISSUES TO BE DISCUSSED

As we can see that this case about middle-aged salary man who wants to has an additional

savings and protects his family. According to the advices of financial crisis, he contacts two

term life insurance policy under his own name and another for his wife-Mina as well as one

high education support plan for his son-Nahid.

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Analyses of this case are required-

1. The exact amount of payment required to have paid.

2. Whether to get bonus and its policy.

3. The required surrender value

4. The policy of higher education support plan.

CASE ANALYSIS

PREMIUM

Premium is paid according to tables given by Sandhani Life Insurance Company Ltd.

According to table Nasim required to pay 54.15 taka per thousand and his wife 52.56 taka per

thousand and for his son, according to table of premium for high education it requires 203.80

taka per thousand.

Along with the premium there are extra premium- 2% for half-yearly and 3% for quarterly

premium.

Premium of Nasim’s for quaterly tk.13943.6.

Premium of Nasim’s wife-Mina for quaterly tk.6767

Premium of Nasim’s son Nahid for quaterly tk.26239.

BONUS

Sandhani Life insurance Company ltd. has been tremendously working to render better

services to its valued clients at their utmost satisfaction. The transparent and accountable

services rendered by the efficient and qualified officials of the company have earned

reputation for their prompt and instant services. Due to their sincere services the rate of

conservation of policies through earning of renewal premium has reached to a prestigious

level.

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In conformity with this continuous success, the company declares bonus in a higher more rate

every after two years. The bonus is paid with the maturity, death, paid up and surrender

amount.

Nasim’s wife Mina had got bonus when the policy was surrendered.

SURRENDER VALUE

Surrender value the amount the policyholder will get from the life insurance company if he

decides to exit the policy before maturity.

As Nasim surrendered his wife’s life policy after toe years later then he can claim surrender

value.

After much pbsrevation and considering the cost, the company decided to pay 80% of the

amount of payment had paid. So, Nasim’s wife got 80% of given premium therefore she

would be given 43308.8 taka.

Higher Education Support PlanIn the modern society, most of the parents expect that let their children be highly qualified

and become renowned. But our countries public universities cannot fulfill their specific

expectation of our children’s parents because of limited scope (seats) for the students. For

example, in the University of Dhaka 20/25 deserving students have to contest for a seat to be

admitted. However, private universities in a larger sense take the drive to eliminate rush in

higher education, although it is very much expensive. But parents of mediocre families

cannot afford such huge expense. In solving these burning questions Sandhani Life Insurance

Company Ltd. of Bangladesh step forward to broaden scopes of higher education with

provision of giving loan to the students who can have the chance to build up their bright

future career

A student under this insurance plan can have loan of Taka 10000 (min) and 300000 (max)

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DECISIONSAfter the analysis of case we can come to a conclusion that Nasim did 3% percent additional

amount of premium while he could pay less if had paid the premium yearly basis. As for

bonus Nasim had it when the policy matured and his wife’s policy was surrendered. The

amount of bonus is purely on the profit of company. High education support plan waa really

helpful to Nahid to complete his higher education.

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CASE STUDIES OF SANDHANI LIFE INSURANCE COMPANY LTD.

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Part Three:

CASE TWO

CASE TWO

Jamal and his wife Lisa took out Term Life Insurance cover. They had both always dreamed

of bringing up their children in the country.

Five years after they married, and only six months after their son Shuvo was born, they found

the land they had dreamed of building their home on. They took out a large mortgage to buy

it and a Term Life policy as protection in case something unexpected happened.

Then six months ago, whilst driving home from the office,, Jamal's car collided with another

and he was killed instantly. Lisa was absolutely devastated. Jamal was only 32 years old.

They like many thought that this could not happen to them.

Today Lisa and Shuvo are grateful for the insurance cover. The lump sum they received

helped pay off the mortgage on the house and land and Lisa still had enough capital to invest

to maintain the lifestyle they were accustomed to. Lisa has since sold that property and

bought a small cottage nearby so the children can still grow up in the country as Lisa and

Jamal had dreamed.

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ISSUES TO BE DISCUSSEDThis case is about to discuss the ways of covering up financial disruption ina middle class

family due to uncertain peril in a smooth flow of life.So, it is to discuss about the following

core issues.

1. Terms and conditions in case of a loan against life insurance policy.

2. How to handle such a loan issue in case of a premature death.

3. The appropriateness of such kind of financial strategy for a middle class family.

CASE ANALYSIS

Loan Against life Insurance Policy

When a loan is given against a life insurance policy, the lender usually expects to be repaid

from the policy’s death benefit after the policy holder dies, and one would not typically be

required to repay the loan during his lifetime.

If one has a terminal life insurance policy, he may be able to obtain a tax-free loan through

the insurance company with no questions asked about his health or finances. The amount he

can borrow and the interest rate is specified in the life insurance policy. He must continue to

pay premiums.

Issues to consider:

The loan must be repaid with interest or one’s beneficiaries will receive a reduced

benefit when he dies.

One should be able to do a simple loan transaction using insurance company forms

and receive his money quickly if his policy allows loans.

One’s credit rating or other assets are not taken into consideration for this type of

loan.

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One must page the loan interest or your policy may lapse (close). One’s policy will

provide for a loan interest rate that is either fixed (will not change) or variable (likely

to change). Find out how much he will be paying in interest.

.

Accidental Death

The payment due to of an accidental death insurance policy, which is often a clause or a rider

connected to a life insurance policy. The accidental death benefit is usually an amount paid in

addition to the standard benefit payable if the insured died of natural causes.

As Jamal died a premature death and he used the policy as collateral after that his entire

premium has granted and paid the policy amount to1 the successor.

DECISIONAs the issues of case are observed, to analyze the appropriateness of this financial strategy for

such kind of a middle class family was prime point to have a decision regarding this case. In

some extent the strategy was really appropriate. As Jamal is the only earning member of the

family, the best decision was to use the life insurance policy as a mortgage of their loan.

Instead of life insurance policy, if there would be any other asset, it would be ruining for the

family when Jamal died. The reason behind is, in that case they would have lost both the

asset and the financial protection (as only earning member died). But here the consequences

were really positive due to such a ‘policy mortgage based loan’ strategy. So, the ultimate

decision is to name this as an example of appropriate financial strategy in such a

circumstance.

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Reference1. Sandhani life insurance company’s policy paper

2. www.sandhanilife.com/

3. www.sandhanilife.com/contact...

4. www.sandhanilife.com/photo_g.

5. www.sandhanilife.com/board_d.

6. sandhani_life_in.paracalls.com/

7. http://www.essentialfs.com.au/case-studies.html

8. http://newsroom.melbourne.edu/news/case-study-reveals-

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