Changes
'''Overview of Life Insurance'''<br>
A basic understanding of the Life Insurance life insurance industry was developed through secondary resources like websites, journals etc. This answered question like what is life insurance, why people go for it, what various types of life insurance are available and how segmentation is done in the Life Insurance life insurance industry. The Term Life Insurance was analyzed in detail because people over 60 years of age, the focus area for this study, generally opt for this insurance type.<br>
:* [http://www.transamerica.com '''Transamerica Life Insurance companyCompany''']:* [http://www.aig.com '''American General Life company Company (AIGAG)''']:* [http://www.prudential.com/ '''Prudential Financial (Pruco life insurance companyLife Insurance Company)''']:* [http://www.genworth.com '''Genworth Financial (Genworth life insurance companyLife Insurance Company)''']
:* [http://www.ing-usa.com/ '''(ING) Reliastar Life Insurance company''']
'''Ratings of the Life Insurance life insurance companies considered'''
'''Sensitivity Analysis'''<br>
The sensetivity analysis was used to understand the companies' response to different health conditions on the basis of the variation in the premium amount. TO To enable this, the key health parameters were also determined since they have a major impact on the premium charged.
==Assumptions==
''Source: http://en.wikipedia.org/wiki/Life_insurance''
===Why people go for Life Insurancelife insurance===
* To make sure their family will be well taken care of if they die.
* To minimize tax burden and to ensure whatever they have earned goes to their heirs since it is a tax free way to transfer their wealth.
===Types of Life Insurance===
Broadly, Life Insurance life insurance is divided into Temporary Life Insurance classified as temporary life insurance and Permanent Life Insurancepermanent life insurance. These can be further sub-classified. Various life insurance policies prevailing in United States are:
[[Image:types.jpg|thumb|center|600px|[http://www.metlife.com/individual/insurance/life-insurance/index.html#overview Source: metlife.com]]]
'''Benefits of term life insuranceTerm Life Insurance:'''
[[Image:benefits.jpg|thumb|center|500px|[http://www.genworth.com/content/products/lifeinsurance/term_life_insurance.html source: genworth.com]]]
===Segmentation in Life Insurancethe life insurance industry===Segmentation in Life Insurance the life insurance industry is done on the basis of:
Companies call refer to these segments as 'rating classes'. Different companies give different weights to different diseases and they have their own health check-list while developing these rating classes. All the people in a rating class do would not have the same life span but they have a fairly predictable life expectancy. This gives companies a basis to determine the premiumspremium amount.
==Sensitivity Analysis==
Each of these the health classes stated above has been further categorized on the basis of smoking habits of an individual as follows:.
===Premium charged for “Non-Smokers” in different health classes===
===Premium charged for “Smokers – less than 1 pack a day” in different health classes===
===Premium charged for “Smokers – more than 1 pack a day” in different health classes===
* Transamerica charges the least premium in all health classes except for the Standard Plus health class in which Prudential charges the least and in Standard health class in which AIG charges the least for women.
* ING seem to be very risk averse in this category for men as the premium charges for all health classes is among the highest at $413 (except for the Standard Class in which Prudential charges a monthly premium of $414 ).
* For women , different companies charge the highest premium chargers vary as followsfor different health classes:
==Points to note==
* Companies consider Best and Preferred health class customers in the same segment as the premium charged is same for both these classes.
* Transamerica charges low premium across all categories of health classes. So we can say that they are trying to tap the major chunk of the market by competitive pricing strategy.
==Constraints==
* This study incorporates only five insurance companies because of the constraint of data availability.
* The study is limited only to the state of California; however, we it was observed that the premium charges in other states are were similar to that of those in California.
