User talk:Vijay.garg.ca

Life Insurance Business
Life insurance business is a long term business. You can not expect to realise the benefits or the returns on your capital in the initial years of the business. It takes around 8-10 years to breakeven for a company. It requires huge amount of capital with a long term lock in period. So, please be careful in you are planning to start an insurance company i.e. Can you afford a your capital to be blocked for a long term period (at least 10 years), with a provision in your mind that the business will be incurring losses in the initial year of its operation. Like in most of the businesses, we look at the NPV of the business while evaluating the feasibility and viability of the project or business, but in case of life insurance, Emebedded Value is the term used to evaluate the business proposal, which is nothing but the present value of future profits of the business (expected to be generated by the business).

Actuaries are the back bone of the life insurance industry. They decide about the product mix, pricing strategy, lapsation rate, premium to be charged for a particular insurance product etc. So, all the important inputs to launch a new product are in the hands of the actuarial team of an insurance company. Let me tell you a very interesting fact about them is that they are very intellectual guys and highly paid (You can think of choosing it as a carreer option), may be due to demand/supply gap, not only in India but worldwide.

Hope, you enjoy reading this small article on Life Insurance Business.