It is an important obligation for the insurer to answer the questions in the proposal correctly and to inform the insurer of the matters known to the insured and the insurer should know. In case of breach of this obligation, the insurer may withdraw from the contract or keep the contract in force by receiving an additional premium.
The person who has an insurance contract based on her/his life is called insured, the person who insures the life of the insured by paying the premium is called the insurant and although not a party to the insurance contract, the person who has an insurance contract in favor and who has the right to demand compensation as a rule, if the risk occurs, is also called beneficiary.
The insurant may insure his or her life or life of any other person against the possibility of death or survival. In order for insurance to be carried out on the life of another person, it is necessary to have the benefit of the beneficiary during the life of that person. If the benefit clause disappears after the conclusion of the contract, the contract becomes void from then on; however, the value of early termination is paid to the insured.
In life group insurances, expense share, brokerage commission (or production expense), and operating expense deductions can be made at rates determined by the company according to the specifications of the tariffs. At the same time, in case of terminating the insurance before the period specified in the contract has expired, an early termination deduction may be applied.
Except for the insurance products from which the accumulation premium is received, it is obligatory to provide a guarantee of return at the technical interest rate.
The insurant may withdraw from the contract within fifteen days after the insurer informs her/him that s/he may exercise her/his right to withdraw. It is proved by the insurer that the information has been made. If no information has been provided, the right to withdraw expires one month after the first premium has been paid. The insurant may withdraw from the contract by paying half of the agreed premium before the insurer's liability begins. In case of partial withdrawal from the contract, the premium that the insurant is obliged to pay is half of the premium related to the withdrawal.
The premiums paid in life insurance are tax-deductible and the actual cost of the premium paid is reduced. If the insurance is contracted by an insurance company based in Turkey and headquartered in Turkey, 50% of the premium paid in the life insurances for which the personal, wife and young children of the insured are received, and the whole premium paid in the life insurances, which include only death, accident, illness, and disability coverage, can be deducted from the income tax base. Amount deductible from the income tax base:
• For wage earners, 15% of the salary in the month the premium is paid;
• For those who are obliged to give annual returns, 15% of the income they declare
• It is limited to the annual amount of the minimum gross wage. Personal insurance premiums paid by employers on behalf of their employees can be discounted as an expense in determining their commercial earnings. The total amount of contributions paid by employers to the private pension system on behalf of their employees and premium payments for personal insurance to be made subject to discount cannot exceed 15% of the wage obtained in the month of payment and the annual amount of the minimum wage.
Annual life insurance premiums are determined by age. According to the insurance company, there are premium tables where occupation and gender are also taken into account. The premium is calculated by taking into account the selected collateral amounts.
After deductions are made from premiums paid from cumulative life insurance, risk premium, expense share, and brokerage commission (or production expense), the remaining amount is directed to the investment. This directing is made in accordance with the daily dividend basis within the scope of The Life Group Insurance Regulation and in accordance with the Securities restrictions set out in the regulation to protect the insured.
According to the first paragraph of Article 1500 of the Turkish Commercial Code, the insurant may leave the insurance by terminating the contract at any time in the insurance contracts which have been in force for at least one year and which have paid an annual premium. According to the second paragraph of the same article in case of insurance against the possibility of life, it is necessary to prove that the insured is healthy in order to demand the value of separation from the insurer. However, Cumulative Life Insurance is long term insurance for at least 10 years. In case of early termination, deductions can be made over the accumulation amount depending on the duration of the insurance. Due to high production costs in the early years, the cumulative dividend amount may remain lower than the premiums paid in case of early termination.
It is possible to change the insured and the insurant appointed in the cumulative life insurance policy.
The insurer is obliged to lend money to the insurant at the request of the insurer and at the time of the claim at the value calculated in accordance with the generally accepted actuarial rules in insurance contracts that have been in force for at least one year and have been paid an annual premium. The contract remains in force as long as the interest on the debt is paid at maturities agreed by the parties. If interest is not paid at maturity, the insurer sends a notice letter to the insurant and invites her/him to pay the debt within three months with the interest and costs incurred. If the debt is not paid within this period, the insurer shall pay the debt to the company and collect the receivables along with the interest and expenses incurred. The remaining amount is returned to the insurant.
In the case of an insurance contract, which has been in force for at least one year and has been paid an annual premium, the insurer may not terminate the contract and ask for a premium for this reason if the insurant does not fulfill the obligation to pay the premium afterward. In this case, insurance becomes exempt from premium payment. In insurance exempt from premium payment, the insurance fee is paid according to the ratio between the premium paid and the premium to be paid in accordance with the contract.
The insurant may not change the beneficiary if he/she gives up his/her right to change the beneficiary, even though he/she has written it into the insurance policy. However, in case of hesitation, it is assumed that the right to change the beneficiary is reserved.