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INTERNSHIP REPORT
STATELIFE
INSURANC
E
INTERNSHIP REPORT
CORPORAT
ION
INTERNSHIPREP
ORT
PRESENTED TO:
SIR ASLAM PATHAN

PRESENTED BY:
KASHIF ILLAHI
2
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2K8/BBA/193
8TH
SEMESTER
UNIVERSITY OF
SINDH, JAMSHORO
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 Sir Aslam Pathan for providing me
an opportunity to learn about the insurance system of Pakistan
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which is vital ingredient of BBA program. I am very great full to

officers of STATE LIFE for providing me guideline for the
completion of this report.
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 Hyderabad zone 13 June 2011.
I worked for six weeks there and it gives me a lot of practical
knowledge about the operation of an insurance company .I
haslearned 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
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report will discuss internship with state life .It will outline
following.
History
Departments
Swot analysis
Financial analysis
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
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Sr. No
Description
Page No.
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24.
25.
INSURANCE
Definition
History
Principles
Types of insurance
Life Assurance
INTRODUCTION OF STATE LIFE
History
Functions
Achievements
Core Values
Organizational Structure
PRODUCTS
Individual Life Products
Group life Insurance Products
DEPARTMENTS
P&GS
AUDIT DEPATMENT
PH&S
NEW BUSINESS
AGENCY
FINANCE&ACCOUNTS
PERFORMANCE HIGHLIGHTS
RECOMMENDATION & CONCLUSION
BIBLIOGRAPHY
6
7
7
7
9
10
15
16
16
17
19
20
25
26
40
52
53
57
60
66
72
75
78
88
90
Part: 1
INTERNSHIP REPORT
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
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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.
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
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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 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
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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
Health insurance
Home insurance
Property insurance
Liability insurance
Credit insurance
Marine insurance
Aviation insurance
Travel insurance
Professional indemnity
Life Insurance:
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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.
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.
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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
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.
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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.
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
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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
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).
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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.
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:
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1. The Corporation has reduced up to33% in the premiums

on the past and potential Life Policies for the benefit of the
Policyholders.
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
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CHRONOLOGY OF
EVENTS
Taking over of management of life insurance companies 19
March 1972
Establishment of state life insurance corporation
Nov, 1972
1st
Reduction of premium rates on new policies

Nov, 1972
1st
Reduction of premium rates on old policies

1973
1st Jan,
Establishment of UK branch
1974
1st
Jan,
Merger of units and formation of zones

1975
1st
Oct,
Establishment of branch office in Dubai
July 1978
Establishment of agency office in Kuwait
May, 1983
Establishment of Multan zone

1985
1st
Oct,
Establishment of Faisalabad zone

1986
1st
march,
Establishment of Gujranwala zone

1986
1st
July
Establishment of Sucker zone

1990
1st
April,
Establishment of branch office in Pakistan

1992
May,
CORE VALUES
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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
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.
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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:
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
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North Region
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
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Lahore Western Zone

Gujranwala Zone
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
PRODUCTS
LIFE
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.
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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
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:
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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.
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
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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.
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.
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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.
ii.
iii.
Continue the policy in the same manner as earlier by

switching the plan for the benefit of another child.
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.
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 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
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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
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
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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 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.
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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.
However if the life insured dies before completion of term of the
policy, basic sum insured plus attached bonuses will be paid to
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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
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Years. The child will have an option of either collecting the

benefit in a lump Sum or in five equal annual installments.
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
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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
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
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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 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.
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WP is available to lives between 18 and 55 years of ages. It can

be attached with following plans:

Endowment Assurance
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
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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

Endowment Assurance
Shad Abad Assurance
Shehnai Policy
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
Dates
Option Date Ages
10 24
25 27
28-30
31-33
34-36
37
25, 28, 31, 34, 37, 40

28, 31, 34, 37, 40
31, 34, 37, 40
34, 37, 40
37, 40
40
6
5
4
3
2
1
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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
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.
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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

Endowment Assurance
Shad Abad Assurance
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.
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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.
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:
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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.
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
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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 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
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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:
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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.
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
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INTERNSHIP REPORT
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.
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?
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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.
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:
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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.
aa
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.
aa
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.
aa
Pension Scheme:
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
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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.
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
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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 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
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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:
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
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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:
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There are no of subsections in this department ;
1. Medical Section:
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
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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.
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.
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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

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 .
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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:
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
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INTERNSHIP REPORT
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:

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 preaudited 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.
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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
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
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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.
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:

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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.
ii.
iii.
Original policy document

Copy of National Identity Card
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.
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.
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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.
ii.
iii.
iv.
v.
School/college certificate showing date of birth

National Identity card
Valid passport
Discharge certificate (in respect of ex-defense forces
Personnel)
Certificate of age by the policyholder organization
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vi.
B.
1.
2.
3.
4.
5.
6.
Birth certificate issued by local body/cantonment

board
(Any one of the above)
For disability claims:
Employees statement.
Employers statement.
Attending Surgeons statements.
(Claim forms A, B, and C, respectively).
X-rays and medical investigation reports etc, if any.
(All the photo copies must be attested by the concerned
Gazetted Officer).
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.
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
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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 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
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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.
2.
3.
4.
5.
Proposal section
Underwriting section
Calculation section
Policy issue section
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.
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.
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Types of underwriting
I.
II.
Lay underwriting
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.
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
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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 nonmedical 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.
79
INTERNSHIP REPORT
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.
80
INTERNSHIP REPORT
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
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
81
INTERNSHIP REPORT
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 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.
82
INTERNSHIP REPORT
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.
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.
83
INTERNSHIP REPORT
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:
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
84
INTERNSHIP REPORT
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
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
SR-------- 35%
SO------- 15%
SM------ 8%
QUARTER BONUS
2.5%
2.5%
2%
Persistency bonus:
It gives on the persistency of the last year business.
85
INTERNSHIP REPORT
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.
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
86
INTERNSHIP REPORT
Part: 6
PERFORMANCE
HIGHLIGHTS
87
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
2010
24,853.2
31,943.0
88
INTERNSHIP REPORT
Premium Income-Group Life
89
INTERNSHIP REPORT
YEAR
2005
(RS. IN
MILLION)
2,560.1
2006
2,879.6
2007
2,809.6
2008
3,543.2
2009
2010
3,513.7
3,705.3
90
INTERNSHIP REPORT
Investment Income
Year
(Rs.
In
Milli
ons)
2005
13,105.5
2006
14,923.8
2007
17,505.2
2008
19,134.6
2009
2010
21,544.7
27434.1
91
INTERNSHIP REPORT
Total Premium Income:

Total Premium
Income:
YEA (Rs. In
R
Millions)
2006
30915.4
2007
36221.9
2008
41829.9
2009
49911.6
2010
63072.9
92
INTERNSHIP REPORT
Investment Portfolio:
Investment
Portfolio
Year
2005
(Rs. In
Millions)
124,983.7
2006
142,158.8
2007
161,965.8
2008
182,874.2
2009
2010
205,804.2
93
235,934.5
INTERNSHIP REPORT
Life Fund:
Life Fund
Year
2005
(Rs. In
Millions)
122,775.2
2006
137,958.8
2007
156,737.3
2008
177,459.1
2009
199,445.3
2010
230,422.0
94
State Life Insurance Corporation of Pakistan invests its

in 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.
INTERNSHIP REPORT
funds
Govt.
Securities:
Total
Assets:
These include instruments issued by Government

of Pakistan such as Treasury bills, Pakistan
Total Assets
Investment Bonds etc.
Year Approved
(Rs. In Govt. Securities:
These include instruments as Wapda Bonds,
Millions)
Provincial Securities/TFCs etc
2005 Loans: 132,017.1

2006
these include loans in the form of Term finance

149,448.6
certificates
etc.
Portfolio 2008
2007 Investment
169,821.4
As at 31-12-2009
2008
2009
2010
193,117.6
(Rs. in
millions)
217,685.4
Particulars
Portfolio
251,478.1
145,687
Govt. Securities
TFCs/Approved
Govt. Securities
Equities
Bank Deposits
Investment
properties
Policy Loans
4,598
24,450
12,485
2,538
16,046
205,804
Part :8
95

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INTERNSHIP REPORT

SIR ASLAM PATHAN

which is vital ingredient of BBA program. I am very great full to

The source of information used during the preparation of this

Report is based on my personal experience & observations

In every sort of contract there are some principles which must

Principle of utmost good faith

understated on the proposal, thereby lowering the premiums

Principle of proximate cause

Life insurance covers the life of a person.

Common types of term insurance include Level, Annual

Level Term Policy

Annual Renewable Term

Permanent Life Insurance

Whole Life Coverage

Guaranteed death benefits;

Universal Life Coverage

This is type of life insurance whereby a specific term is selected

ACCIDENTAL INDEMNITY BENEFITS (AIB)

Four Regional Offices

For Group & Pension there are

1. The Corporation has reduced up to33% in the premiums

Under group life insurance

Reduction of premium rates on new policies

Reduction of premium rates on old policies

Merger of units and formation of zones

Establishment of branch office in Dubai

Establishment of agency office in Kuwait

Establishment of Multan zone

Establishment of Faisalabad zone

Establishment of Gujranwala zone

Establishment of Sucker zone

Establishment of branch office in Pakistan

To remain the leading insurer in the country

Mr. Qamar Zaman Chaudhry

Mrs. Spenta Kandawalla

Mr. Aslam Faruque

Mr. Amin Qasim Dada

Mr. Rasheed Y.Chinoy

Syed A. Wahab Mehdi

Syed Hur Riahi Gardezi

Mr. Akbar Ali Hussain

There are 26 zones in Pakistan headed by the zonal head

Lahore Western Zone

Group and Pension:

SLIC offers different products for

Whole Life Assurance:

It is a unique combination of protection and savings at a very

Anticipated Endowment Assurance:

The plan offers survival benefits equal to 25% of sum insured

Admissible Ages and Terms this plan is available to all members

On completion of one-third of the policy term, 20% of basic sum

addition, if death occurs as a result of an accident, additional

Shad Abad Assurance:

Child Education & Marriage

If the policyholder dies (Allah forbid) before completion of the

Continue the policy in the same manner as earlier by

Child Protection Assurance:

completion of term of the policy the payment of premiums

Optional Maturity Endowment:

the dependants immediately. In case of death due to accident,

Years. The child will have an option of either collecting the

Accidental Death & Indemnity Benefit (AIB)