The purpose of the research was to explicitly analyze the provision of Life Assur-ance policy loans using SIC Life Company Limited as a case study. The Poison distribution being one of the exponential families as well as the deviance of model tting was employed in analyzing the data. Microsoft excel programs especially the use of the development year concept, bar chart and curves were used in an-alyzing the data. It was revealed that policies with loans outstanding are more surrendered than those without loans. The Family Security as one of the classes of policies without loans outstanding is mostly surrendered as compared to the other classes of policies. From 1998 to 2013, the total numbers of policies surren-dered without loans outstanding were 44,889 whilst those with loans outstanding were 55,854; hence policies with loans outstanding are mostly surrendered as compared to those without loans.

1.1       Background of the Study
In recent years life assurance companies have witnessed tremendous growth. In Ghana, there are about 22 life assurance companies underwriting life assurance products. Each company comes out with innovative measures in order to woo clients into patronizing their products (Abdullah, 2011).

SIC Life Company Limited (SIC Life), originally existed as the life division of the erstwhile reputable multi-line insurer, the State Insurance Company of Ghana Limited ( SIC).The provision of the Insurance Act 2006, Act 724 made SIC Life to conform to and was therefore established as a fully licensed life insurance com-pany in 2007.It is currently the largest and most reputable life insurance company in Ghana controlling the largest share of life insurance market (Abdullah, 2011). Some of the products of SIC Life include: traditional policies (endowment poli-cies, whole life policies, riders, mortgage protection policy), Universal life policies (family security plan, Flexi-child education plan, Ultimate life plan and Educa-tion plan), Group life insurance schemes ( Group security plan, Group term with investment, Group term with personal accident and Group term only), Others ( Sika plan (okum-ka), loan protection plan, funeral insurance, school fees protec-tion plan, Guaranteed Endowment plan).

At SIC Life, a claim can be made in the following ways: Partial withdrawal, policy loans, paid-up, personal accident, maturity, surrender, among others. Par-tial withdrawal is accessing part of one’s cash value up to 60 %. Policy loan is using one’s cash value as a guarantee to borrow a loan facility from the company up to 85% of the cash value. When a policy holder stops with the payment of premiums, meanwhile, he has not closed down his policy, it is termed as paid-up. Maturity is the date the policy pays the cash value to the policy holder. The surrender is the sum of money an insurance company pays to the policy holder or annuity-holder if he/she voluntarily terminates it matures. Personal accident cover is an added bene t to the policy that caters for part of the assureds’ medical bills in the event of an accident. This project work seeks to help address how e ectively policy loans at SIC Life should be administered.

1.2       Problem Statement
Every limited company has the aim of making pro t in order to stay in business. Companies therefore raise capital using various means by ensuring the risk of incurring substantial debts are made minimal. SIC Life invests the premiums it receives in so many ways. One of the ways is giving out policy loans to poli-cyholders. A policy loan means using one’s policy cash value as a collateral to assess a loan. The Cash Values(CV) of policyholders are used as collaterals and this allow policyholders to borrow up to a maximum of 85% of the CV at 15% per annum rate of interest.

Repayment of the policy loans is either by cash or an additional deduction to premium at source where the assured works and/or is paid. In as much as the cash value remains positive, the assured can continue to assess as many policy loans as desired. Technically there is no insurance cover when the cash value turns negative hence cannot thus service the premium required for the sum as-sured. Most policyholders at this point upon seeing a negative CV are challenged to surrender their policies due to the inability to repay huge loans outstanding. Some do so and immediately reinstate whilst others feel disgruntle and opt out completely thereby making the company lose premiums in ows which directly have a nancial implication for the company in the long run. If this is allowed unchecked, it negatively a ects the company and thereby has the potentialities of diminishing the nancial fortunes. Most clients complain that the company should have deducted the outstanding loans outright from their premiums which too is not the practice of the company and is even debatable as to whether it is the approach to go by. There should therefore be limitations as to how policy loans should be granted out so that policy holders do not end up surrendering their policies prematurely as a result of policy loans. It constitutes ine ective investment management if the company continues to lose huge number of valued clients as a result.

For more Mathematics Projects Click here
Item Type: Ghanaian Topic  |  Size: 47 pages  |  Chapters: 1-5
Format: MS Word  |  Delivery: Within 30Mins.


No comments:

Post a Comment

Note: Only a member of this blog may post a comment.

Search for your topic here

See full list of Project Topics under your Department Here!

Featured Post


A hypothesis is a description of a pattern in nature or an explanation about some real-world phenomenon that can be tested through observ...

Popular Posts