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|---|---| |**Benevolent**<br>**Societies/**<br>**Friendly**<br>**Societies**|Greeks of 7th Cy. AD, used to pay in advance to take care of the<br>family of members who died and also the funeral expenses of the<br>member.<br>Similar practices were followed in England as well.| |**Rhodes**|Traders of Rhodes who were sendi...
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Benevolent
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Insurance Regulatory and Development Authority of India (IRDAI) in April 2000 as a statutory regulatory body for the insurance industry.f) An amendment of the Insurance Act in 2021, has allowed Foreign investors, tohold up to 74% of the paid up equity capital in an Indian Insurance company. Foreign insurers can now est...
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Insurance industry today (As on 30
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persons have similar assets which are exposed to similar risks. Their assets are also referred to as ‘risks’ in many contexts.d) This pool of funds is used to compensate the few who might suffer the lossescaused by a **peril** .e) This process of pooling funds and compensating the unfortunate few is carriedout through ...
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Insurance reduces Risk Burden
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who can be individuals or corporates. The benefits they pay to policyholders are contractual obligations. Insurance contracts are meaningful only if the Insurers are financially capable of taking over the risks and compensating for the losses, if and when they occur. The structure arises from application of the mutuali...
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Mutuality
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spread of Malaria.**c)** **Changes made in dangerous or hazardous operations,** while usingmachinery and equipment or in the performance of other task - e.g. (i) wearing helmets inside construction sites; (ii) wearing gloves and face shields while handling chemicals.**d)** **Leading a healthy lifestyle** - helps in red...
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Changes made in dangerous or hazardous operations,
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the **severity** (amount of loss). This works in different ways – (a) If the amount of loss is very high, and the probability of its occurrence is small, the cost of the risk would be low as such instances may be very few. (b) Even if the amount of13loss is small, if the probability of its occurrence is very high, the ...
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Diagram 6:
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to the prospect to enable the prospect to decide on the best cover that would bein his or her interest”.If the proposal and other connected papers are not filled by the customer, a certificate may be incorporated at the end of proposal form from the customer that the contents of the form and documents have been fully e...
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G.
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India?I. PM Jan Arogya Yojana - Ayushmaan Bharat II. PM Fasal Bima Yojana III. PM Suraksha Bima Yojana IV. All of the above**Summary**Insurance is risk transfer through risk pooling.Commercial insurance business as practiced today started at the Lloyd’sCoffee House in London.An insurance arrangement involves the follow...
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Summary
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scarcity and its ownership or possession by someone. **Insurance of assets**Insurance provides protection only against financial losses arising from unexpected events and not natural wear and tear, of assets due to usage overtime.We must note that **insurance cannot protect an asset from loss or damage** . An earthqua...
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Insurance of assets
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On this basis one may identify three types of risk events or situations: **Critical**Where losses are of such a magnitude; that may result in total loss or bankruptcy. Losses can be critical when the accident results in significant and22severe impact, disability, damage to equipment and the environment, which may be r...
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Critical
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under the policy, such claims are clearly fraudulent and could be justifiably rejectedA classic instance of moral hazard is purchasing insurance for a factory and then burning it down to collect the insurance amount or buying health insurance after onset of a major ailment.24**c)** **Legal hazard** is more prevalent in...
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Legal hazard
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because of a principle known as the “Law of large numbers”. It states that the larger the size of the pool of risks, the actual average of losses would be closer to the estimated or expected average loss.**c)** **Insurance Companies to remain Solvent:**If the pools of risks and the premium pools created are not suffici...
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Insurance Companies to remain Solvent:
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b) Risk c) Hazard d) Risk pooling e) Offer and acceptance f) Lawful consideration**Answers to Test Yourself****Answer 1** - The correct option is II.28## CHAPTER C-03## PRINCIPLES OF INSURANCE**Chapter Introduction**In this chapter, we discuss the principles, based on which the mechanism ofinsurance works.a) Utmost Goo...
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Answers to Test Yourself
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of premium and the terms and conditions. The insured has an obligation to fully and accurately disclose all facts that are material to an insurancecontract.Whether an undisclosed fact was material or not would depend on the circumstances of the individual case and could be decided ultimately only in a court of law. The...
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Example
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answers were incomplete.**b.** **Duty to Disclose:** In the case of insurance contracts, the duty to disclose ispresent throughout the entire period of negotiation until the proposal is accepted and a Life Insurance policy is issued.Once the Life Insurance policy is accepted, there is no further need to disclose any ma...
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Duty to Disclose:
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(c) the date of revival of the policy or (d) the date of the rider to the policy,whichever is later.33The insurer needs to communicate the reasons on which the policy is questioned in writing to the insured or his/ her legal representatives, nominees or assignees.The expression "fraud" means any act committed by the in...
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B.
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insurance, insurable interest should be present both at the time of taking the policy and at the time of claim with some exceptions like marine policies inwhich case it must exist at the time of claim.35In case of fire and accident insurance, insurable interest should be present both at the time of taking the policy an...
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C.
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the damage was due to the ‘normal wear and tear’ of the car and the airconditioning system, which was an excluded peril in the insurance policy. Mr Ajay approached the Court and after examining the survey report which said that the car was 12 years old and neither the car nor the air-conditioning had been serviced/ rep...
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Scenario 2:
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insurer and insured agree on the value of the property to be insured, at the38beginning of the insurance contract. In the event of total loss, the insurer agrees to pay the agreed amount of the policy. This type of policy is known as “ **Agreed Value Policy** ”.**b)** **Underinsurance:** Consider a situation now where ...
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Agreed Value Policy
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compensation paid by the airline, say, Rs 15 lakhs.**F.** **Contribution:**Like Subrogation, ‘Contribution’ also follows from the Principle of Indemnity. Hence, it is also called a ‘corollary’ of Indemnity. Contribution is a principle that arises in general insurance contracts. It tells us how the liability is to be me...
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F.
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provide financial protection against certain specified risks for a price or consideration known as the premium. The contractual agreement takes the form of an insurance policy.**2.** **Legal aspects of an insurance contract**This section looks at some features of an insurance contract and considers thelegal principles ...
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Legal aspects of an insurance contract
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the premium in advance. In other words, insurance protection cannot be sold oncredit basis in India.Section 64 VB of the Insurance Act 1938 states, “No risk to be assumed unless premium is received in advance”. No insurer shall assume any risk unless and until the premium is received in advance or is guaranteed to be p...
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Solicitation
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policy of the company and the product offered. All continuity benefits are maintained if the policy is renewed within the grace period. However Claims, if any, during the break period will not be considered. As per IRDAI Regulations, the grace period is 15 days in case of Monthly mode of Premium collection and 30 days ...
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Motor Policies
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disclosed as part of the terms and conditions of the insurance contract and referred to as Short period scales.**Important****i.** **Coercion** - Involves pressure applied through criminal means.**ii.** **Undue influence** – using one’s position to dominate the will of anotherperson, to obtain an undue advantage over t...
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Important
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premium the insurer would require to accept the risk and whether any extra conditions are to be imposed on the risk - all these are part of **underwriting** .It is also important to know what rate is to be charged and how the rates aremade.**Definition**Underwriting is the process of determining whether a risk offered ...
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Definition
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and that the prices are decided on a scientific basis.**2.** The insurer should plan for the possibility of withdrawal of the products in thefuture and the options that would be available to the policyholder on such withdrawal of the product.**3.** The withdrawn product shall not be offered to the prospective customers...
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C.
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fire are more than stone structures; hence, a higher premium is required to insurethe wooden structure.The same concept applies to Life and Health Insurance also. An individual suffering from high blood pressure or diabetes has higher chances of suffering aheart attack.**Test Yourself 1**Identify the two factors that a...
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Test Yourself 1
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similar type and quality.**Test Yourself 2**What is pure premium?I. Premium sufficiently big enough to pay for losses only II. Premium applicable to marginal members of the society III. Premium after loading for administrative costs IV. Premium derived from the most recent loss experience period**2.** **Deductible**‘De...
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Test Yourself 2
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the premises. In Life Insurance the usual practice is to apply loading for adverse health,habits, heredity or occupational factors.**Key Terms**- Deductibles- Franchise**Answers to Test Yourself****Answer 1** - The correct option is I.**Answer 2** - The correct option is I.59#### CHAPTER C-0 6## CLAIMS PROCESSING**Cha...
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Key Terms
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as “Act of God” perils. These perils may result in losses to many policies of insurer in the affected region. Surveyors are appointed for assessment of certain categories of non-life insurance claims.In such major and catastrophic losses, the surveyor is asked to proceed to the loss site immediately for an early assess...
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On account payment
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respective laws applicable. Thus, insurers can recover the loss from shipping companies, railways, road carriers, airlines, port trust authorities etc.**Example**In the case of non-delivery of consignment, the carriers are responsible for the loss. Similarly, the port trust is liable for goods which are safely landed b...
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Example
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refuse to pay the claim on the ground that the policy is void because it was obtained through fraudulent non-disclosure of material facts (breach of the legal duty of ‘utmost good faith’), the issue has to be resolved through litigation.**D.** **Other dispute resolution mechanisms**As per IRDAI regulations, all policie...
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D.
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terms of such prospectusWhether the plan is participative or non-participativeThe allowable Add-on covers (also called Riders in Life insurance) on the productand their benefits are also stated.Other important information which a Prospectus includes:1. Any differences in covers and premium. E.g. for different age group...
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Test Yourself 1
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as name, father’s name, address and other identifying inputs. To determine the true identity of their customers, documents like address proof, PAN card, photographs etc. are collected with the proposal.In respect of Life and Health insurances, details of the proposers’ family members (including parents) indicating thei...
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Declaration in the Proposal Form
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II. Amount expected to be claimed III. Duty to Disclose material facts IV. Confidentiality of details given**Some examples of such notes are:**‘Non-disclosure of facts material to the assessment of the risk, providing misleading information, fraud or non-co-operation by the insured will nullify the cover under the poli...
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Some examples of such notes are:
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individuals, corporates, partnership firms, trusts and foundationsiii. Income proof documents and financial status, esp. in case of high-valuetransactionsiv. Purpose of insurance contract73**a)** **Age Proof – for Personal Lines**While dealing with person related insurances like Life, Health, Personal Accident, etc. In...
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Age Proof – for Personal Lines
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afford to treat them indifferently. The role of customer service and relationships is important in the service sector and more so for insurance.Every enterprise has a goal to delight its customers. This can be explained by examining how buying insurance differs from buying a car.A car can be seen, touched, test driven ...
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Quality of service
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builds goodwill and brand value, which helps in expanding the business.**Test Yourself 1**What is meant by customer lifetime value?I. Sum of costs incurred while servicing the customer over his lifetime78II. Rank given to customer based on business generated III. Sum of economic benefits that can be achieved by buildin...
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Test Yourself 1
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them and be known by them.All the people one knows and approaches may not be proper candidates for insurance or they may not be interested in buying. It is thus necessary to **qualify** them so that one targets only those who are likely to buy insurance. The prospecting process becomes successful only when an agent is ...
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Invite for an Interview:
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He/ she also **needs to be a risk assessor, underwriter, risk management** **counsellor, designer of customised solutions and a relationship builder** (who thrives on building trust and long-term relationships), all rolled into one.**2.** **The Proposal stage**The agent has to support the customer in filling out the pr...
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The Proposal stage
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name of such proposer/ policyholder.83**6.** **Service after issuance of Policy Document and Receipt for Premium**Once the premium is paid by the customer, the insurer is bound to issue a receipt. A receipt is also to be issued even in case the premium is paid inadvance.The agent may approach the insured and enquire wh...
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Service after issuance of Policy Document and Receipt for Premium
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**work and outside. Communication skills are the most important of these soft** **skills.****1.** **Process of communication**What is communication?All communications require a sender, who sends a message, and a person who received that message. The process is complete once the receiver has understood the message of th...
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Process of communication
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talk, walk, sit and stand, all says something about us, and what is happeninginside us.87It is often said that people listen to only a small percentage of what is actually said. What we don’t say may speak a lot more about us in a louder way. Obviously, one needs to be very careful about one’s body language.**a)** **Co...
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Confidence
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benefits of some of our health plans. Could you help us by asking us your doubts?”89**Paraphrasing the speaker’s exact words** – “So, you are saying that ‘our health plans are not attractive enough’ – Have I understood you correctly?”**Test Yourself 4**Which among the following is not an element of active listening?I. ...
Final IC 38 - WA_Composite - English.md
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Paraphrasing the speaker’s exact words
Final IC 38 - WA_Composite - English_045
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**Answer 5** - The correct option is III.92## CHAPTER C-09## GRIEVANCE REDRESSAL MECHANISM**Chapter Introduction**Insurance industry is essentially a service industry where customer expectations are constantly rising. There is dissatisfaction with the standard of services. Despite continuous product innovation and sign...
Final IC 38 - WA_Composite - English.md
C-09
Answer 5
Final IC 38 - WA_Composite - English_046
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The complaint registration process involves two steps – (i) Registering oneself by entering one’s policy details and (ii) Registering one’s complaints and viewing the status of the complaints. Complaints are then forwarded to the respective insurance companies and IRDAI facilitates disposal of Grievances.IGMS tracks co...
Final IC 38 - WA_Composite - English.md
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C.
Final IC 38 - WA_Composite - English_047
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service and compensation, if any claimed exceeds Rs. 1 crore but does not exceed Rs.10 crores.  It also has appellate and supervisory jurisdiction to entertain appeals fromthe District Commission.  Other powers and authority are similar to those of the District Commission.**iii.** **National Consumer Disputes Redress...
Final IC 38 - WA_Composite - English.md
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National Consumer Disputes Redressal Commission
Final IC 38 - WA_Composite - English_048
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any of the following: i. To **return** to the complainant the **price** (or premium in case of insurance)and/ or charges paid by the complainant ii. To award such amount as **compensation** to the consumers for any loss orinjury suffered by the consumer due to negligence of the opposite party iii. To remove the defects...
Final IC 38 - WA_Composite - English.md
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Nature of complaints
Final IC 38 - WA_Composite - English_049
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 the insurance company had rejected the complaint or  the complainant had not received any reply within one month afterreceipt of the complaint by the insurer. ii. The complainant is not satisfied with the reply given by the insurer iii. The complaint is made within one year from the date of rejection by theinsurance...
Final IC 38 - WA_Composite - English.md
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Recommendations by the Ombudsman
Final IC 38 - WA_Composite - English_050
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2. The Consumer Protection Act, 2019 3. District Commission4. State Commission5. National Commission6. Insurance Ombudsman**Answers to Test Yourself****Answer 1** -The correct answer is I.100## CHAPTER C-10## REGULATORY ASPECTS FOR WEB AGGREGATORS**Chapter Introduction**In this chapter, we discuss Regulatory aspects of...
Final IC 38 - WA_Composite - English.md
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Answers to Test Yourself
Final IC 38 - WA_Composite - English_051
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2. The chief executive officer appointed exclusively to carry out thefunctions of a Web Aggregator; **m.** “Solicitation” for the purpose of these Regulations is defined as theapproach of a Prospect by an insurer or an intermediary with a view to convince the Prospect to purchase an insurance policy; **n.** “Telemarket...
Final IC 38 - WA_Composite - English.md
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Schedule I of these Regulations.
Final IC 38 - WA_Composite - English_052
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**g.** The Authority is of the opinion that the grant of license will be in theinterest of policyholders.**3. Application seeking Grant of License.****a.** An applicant, seeking grant of License as Web Aggregator shall make anapplication to the Authority in **the application Form A (Application for** **grant of certifi...
Final IC 38 - WA_Composite - English.md
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Schedule I of these Regulations.
Final IC 38 - WA_Composite - English_053
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Authority may refuse to renew the license.105**5. Employees of the Web Aggregator:****a.** The employees of the Web Aggregator involved in insurance solicitationand verification should have completed the fifty hours of theoretical and practical training on insurance from an institution recognized by the Authority from ...
Final IC 38 - WA_Composite - English.md
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Transfer of shares
Final IC 38 - WA_Composite - English_054
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Authority.ii. The process of transfer of shares of Web Aggregator shall be as given in FormAB (Transfer of shares) of Schedule XII of these regulations.**8. Grant of registration certificate by IRDA****i.** When the application is filed after fulfilling all the required conditions andafter submitting all the required d...
Final IC 38 - WA_Composite - English.md
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Policy of Board
Final IC 38 - WA_Composite - English_055
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which shall be given access to the Authority on remote basis.d) An Authorised Verifier may shift from one insurance Web Aggregator/ Tele marketer to another after obtaining a No Objection Certificate from his previous employer or 30 days of requesting for the same whichever is earlier.**15.** **Duties and Functions of ...
Final IC 38 - WA_Composite - English.md
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Duties and Functions of web Aggregators.
Final IC 38 - WA_Composite - English_056
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shall necessarily include details relating to, though not limited to, the following: i) Time-frame and mode of transmission of leads to be shared ii) Onus of complying with regulatory and other legal requirements onboth the parties to the agreement iii) Identifying the different data elements to be shared (viz., name o...
Final IC 38 - WA_Composite - English.md
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null
Final IC 38 - WA_Composite - English_057
{ "file_size": 20885, "chunk_index": 57, "chunk_tokens": 1000, "has_examples": false, "has_tables": false, "key_concepts": [] }
iii) Fails to adhere to the Code of Conduct specified above. iv) Furnishes wrong or false information for obtaining a license; or concealsor fails to disclose material facts in the application submitted for obtaining a license; v) Fails to furnish any information relating to his activities as an insuranceWeb Aggregator...
Final IC 38 - WA_Composite - English.md
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null
Final IC 38 - WA_Composite - English_058
{ "file_size": 20885, "chunk_index": 58, "chunk_tokens": 953, "has_examples": false, "has_tables": false, "key_concepts": [] }
may be designated by them and notified to the Authority, and shall be available on all working days to such officers of the Authority, authorised in this behalf by it for an inspection. **e.** All the Electronic Records, books and documents, statements, contractnotes etc., referred to in these Regulations and maintaine...
Final IC 38 - WA_Composite - English.md
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Chapter Introduction
Final IC 38 - WA_Composite - English_059
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It is known as **Human Life Value (HLV)** and is used worldwide.The HLV concept considers human life as a kind of property or asset that earns an income. It thus measures the value of human life based on an individual’s expected net future earnings. Net earnings means the income a person expects to earn each year in th...
Final IC 38 - WA_Composite - English.md
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Human Life Value (HLV)
Final IC 38 - WA_Composite - English_060
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|---|---| | Duration: The contract is generally short<br>period or for one year renewable basis| The contract is generally long term<br>though some one year renewable<br>contracts are also prevalent| | Uncertainty: In general insurance<br>contracts, the concerned risk event is<br>uncertain. No one can be certain abo...
Final IC 38 - WA_Composite - English.md
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Nature of life insurance risk
Final IC 38 - WA_Composite - English_061
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company and invest the balance premiums in instruments that yield higher returns.Let us consider the arguments for and against traditional cash value insurance contracts.**a)** **Advantages**i. Insurance has historically been proven as a **safe and secure investment** **offering** a minimum guaranteed rate of return, w...
Final IC 38 - WA_Composite - English.md
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Advantages
Final IC 38 - WA_Composite - English_062
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various stages in life, during which he/ she is expected to play a series of roles These stages are illustrated in the diagram given below.**Diagram 2:** **The Economic Life Cycle**124**Life Stages and Priorities****a)** **Learner (till say age 20 -25)** :The stage when one is preparing for hisfuture byimproving his or...
Final IC 38 - WA_Composite - English.md
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Diagram 2:
Final IC 38 - WA_Composite - English_063
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particular role, a number of needs come up for which funds have to be provided.**Example**When a person gets married and starts a family of his own, he may need to have his own house. As children grow older, funds are needed for their higher education. As an individual goes well past middle age, the concern is for havi...
Final IC 38 - WA_Composite - English.md
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Example
Final IC 38 - WA_Composite - English_064
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need to have all three types of products. In a nutshell one may say there is:i. A need to save – For cash requirementsii. A need to insure – Against uncertaintiesiii. A need to invest – For wealth creation**6.** **Risk profile and investments**As an individual moves through various stages in the life cycle, from young ...
Final IC 38 - WA_Composite - English.md
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Risk profile and investments
Final IC 38 - WA_Composite - English_065
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while upgrading it over time.**iv.** **Inflation**Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. This leads to a fall in the value of money. As a result, the purchasing power of money gets reduced. Inflation can play havoc post retirement. Financial plannin...
Final IC 38 - WA_Composite - English.md
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Inflation
Final IC 38 - WA_Composite - English_066
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type of policy is best suited.**i.** **Life insurance** may be decided by estimating the income and expenserequirements of the dependents in the event of premature death of the bread winner.**ii.** **Health insurance** requirements may be assessed in terms of thehospitalisation expenses that are likely to be incurred i...
Final IC 38 - WA_Composite - English.md
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Life insurance
Final IC 38 - WA_Composite - English_067
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meet his needs post retirement and deciding on various retirement options for meeting these needs. Retirement planning involves three phases**a)** **Accumulation:** Accumulation of funds is done through various kinds ofstrategies to set aside money for investment with this purpose.**b)** **Conservation:** Conservation ...
Final IC 38 - WA_Composite - English.md
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Accumulation:
Final IC 38 - WA_Composite - English_068
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**Answer 3** - The correct option is III.136## CHAPTER L-03## LIFE INSURANCE PRODUCTS: TRADITIONAL**Chapter Introduction**The chapter introduces you to the world of life insurance products. It begins by talking about products in general and then proceeds to discussing the need for life insurance products and the role t...
Final IC 38 - WA_Composite - English.md
L-03
Answer 3
Final IC 38 - WA_Composite - English_069
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insurance policy to a client, an Agents should be able to justify the suitability of the product for the client’s needs.In other words, the Agent takes into account the particular prospect’s risk profile- age, income, family status, life stage, financial and family goals, investment objectives, insurance portfolio alre...
Final IC 38 - WA_Composite - English.md
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Riders in Life Insurance Products
Final IC 38 - WA_Composite - English_070
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insured suffers from a specified disability during the term of the contract, a disability benefit would be paid to the beneficiaries/ insured person. The benefits will continue till the death of the insured person.**Diagram 2:** **Disability****c)** **Term insurance as a rider**Protection under Term Life is usually pro...
Final IC 38 - WA_Composite - English.md
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Diagram 2:
Final IC 38 - WA_Composite - English_071
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account. He/ she can withdraw cash in the form of a policy loan from this cash value or even redeem it by surrendering the policy for its cash value.142In case of outstanding loans, the amount of loan and interest get deducted from the pay-out to the beneficiaries upon death.**A whole life policy is a good plan for the...
Final IC 38 - WA_Composite - English.md
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A whole life policy is a good plan for the main earner of the family who wishes
Final IC 38 - WA_Composite - English_072
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addition to a guaranteed sum assured, a share in the surpluses( bonuses) that are generated by the insurer. These are known as ‘With Profit’ plans.**6.** **Non-participating products**The Policy holders who buy non-linked without profit [non par] plans are paid a benefit that is fixed and guaranteed at the beginning of...
Final IC 38 - WA_Composite - English.md
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Non-participating products
Final IC 38 - WA_Composite - English_073
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designed to help protect one from the risk of outliving one’s income. Through annuitization, one’s contributions are converted into periodic payments that can last for life.Individuals can avail of pension benefits by purchasing pension plans from insurance companies. Pension plans can be **on accumulation or deferred*...
Final IC 38 - WA_Composite - English.md
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Saral Pension:
Final IC 38 - WA_Composite - English_074
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4. Money back policy 5. Par and non-par schemes 6. Reversionary bonus146**Answers to Test Yourself****Answer 1** -The correct option is III. **Answer 2** - The correct option is I.147## CHAPTER L-04## LIFE INSURANCE PRODUCTS: NON-TRADITIONAL**Chapter Introduction**The chapter introduces you to the world of non-traditio...
Final IC 38 - WA_Composite - English.md
s146
Answers to Test Yourself
Final IC 38 - WA_Composite - English_075
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became very popular. Its features are **flexible premiums, flexible face amount** **and death benefit amounts.** Unlike traditional policies, where fixed premiums have to be paid periodically to keep the contract in force, universal life policies allow the policyholder (within limits) to decide the amount of premiums h...
Final IC 38 - WA_Composite - English.md
e2019
Unit linked insurance
Final IC 38 - WA_Composite - English_076
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policyholder’s account at the date when the claim payment is due to be made. A unit is created by dividing an investment fund into a number of equal parts.**ii.** **Transparent structure**The charges for insurance cover and expenses in ULIPs are clearly specified. Once these charges are deducted from the premium, the b...
Final IC 38 - WA_Composite - English.md
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Transparent structure
Final IC 38 - WA_Composite - English_077
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It has other applications as well. It can be applied to the creation of trusts with resultant insurance benefits; it can be applied for creating a policy covering key personnel of industries and also for redeeming mortgages. We shall briefly describe these various applications of life insurance.**Learning Outcomes**154...
Final IC 38 - WA_Composite - English.md
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Learning Outcomes
Final IC 38 - WA_Composite - English_078
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manager, or someone with specific skills or knowledge which is especially valuable to the company.**b)** **Insurable losses**The following are the losses for which key person insurance can provide compensation:156i. Losses related to the extended period when a key person is unable towork, to provide temporary personnel...
Final IC 38 - WA_Composite - English.md
L-06
Insurable losses
Final IC 38 - WA_Composite - English_079
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most cases the same throughout the term and are expressed as an annual rate.**Example**If the premium for a twenty year endowment policy for a given age is Rs. 4,800, it means that Rs. 4,800 has to be paid each year for twenty years.However it is possible to have some policies in which the premiums are payable only in ...
Final IC 38 - WA_Composite - English.md
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Example
Final IC 38 - WA_Composite - English_080
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‘loading’] the other elements to the net premium we get the gross or office premium**a)** **Mortality and Interest**Mortality is the first element in premiums. It is the chance or likelihood that a person of a certain age would die during a given year. To find out the expected Mortality of a person, “Mortality Tables” ...
Final IC 38 - WA_Composite - English.md
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Mortality and Interest
Final IC 38 - WA_Composite - English_081
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**contingencies + Bonus loading****Test Yourself 1**What does a policy lapse mean?I. Policyholder completes premium payment for a policy II. Policyholder discontinues premium payment for a policy III. Policy attains maturity IV. Policy is withdrawn from the market**B.** **Surplus and bonus****1.** **Determination of su...
Final IC 38 - WA_Composite - English.md
s164
Test Yourself 1
Final IC 38 - WA_Composite - English_082
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already attached bonuses. It is thus a bonus on a bonus. A way to express it may be as @ 8% of basic sum assured plus attached bonus.**iii.** **Terminal Bonus**As the name suggests, this bonus attaches to the contract only at the time of its termination [by death or maturity]. It is applicable only for the claims arisi...
Final IC 38 - WA_Composite - English.md
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Terminal Bonus
Final IC 38 - WA_Composite - English_083
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The prospectus should also provide:(a) a description of the contingency or contingencies to be covered by insurance; (b) the class or classes of lives or property eligible for insurance under theterms of such prospectus. In Life insurance, the prospectus should also mention about the Riders (also called Add-on covers i...
Final IC 38 - WA_Composite - English.md
null
Proposal Form:
Final IC 38 - WA_Composite - English_084
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of purchasing a life insurance policy and such a change would increase the chance of a loss. This is one factor that Life insurance underwriters take into account seriously when assessing the risk.Life insurance companies seek to guard against the possibility of individuals seeking to make a profit from the purchase of...
Final IC 38 - WA_Composite - English.md
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Example
Final IC 38 - WA_Composite - English_085
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insurance contractiv. The signature of the authorised signatory and policy stampv. The address of the local Insurance Ombudsman.**b)** **Standard Provisions**The second component of the policy document is made up of standard policy provisions, such as relating to proof of age, premium payment grace period etc. which ar...
Final IC 38 - WA_Composite - English.md
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Standard Provisions
Final IC 38 - WA_Composite - English_086
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insurability of the insured. Not only must her health be satisfactory but other factors such as financial income and morals must not have deteriorated substantially.**iii.** **Payment of overdue premiums with interest:** The policy owner isrequired to make payment of all overdue premiums with interest from due date of ...
Final IC 38 - WA_Composite - English.md
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Payment of overdue premiums with interest:
Final IC 38 - WA_Composite - English_087
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amount if the policy had been surrendered. In that case the insurance would have been terminated.Insurers charge interest on policy loans, which are payable semi-annually or annually. Although loan and interest are repayable periodically, If the loan has not been repaid, the insurer deducts the amount of outstanding (u...
Final IC 38 - WA_Composite - English.md
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Example
Final IC 38 - WA_Composite - English_088
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to them jointly, or to the survivor or survivors. Nominations made after the commencement of the policy have to be intimated to the insurers to be effective.176Section 39(11) of the Insurance Act says that where a policyholder dies after the maturity of the policy but the proceeds and benefit of his policy has not been...
Final IC 38 - WA_Composite - English.md
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Diagram 2:
Final IC 38 - WA_Composite - English_089
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doubt the alleged loss. Satisfactory proof may need to be produced that the policy has been lost and not dealt with in any manner. Generally the claim may be settled on the claimant furnishing an indemnity bond with or without surety.If payment is shortly due and the amount to be paid is high, the office may also insis...
Final IC 38 - WA_Composite - English.md
y179
Alteration
Final IC 38 - WA_Composite - English_090
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force a policy that has either been terminated because of non-payment of premiums or has been continued under one of the non-forfeiture provisions.A policy loan is different from an ordinary commercial loan in two respects, firstly the policy owner is not legally obligated to repay the loan and the insurer need not per...
Final IC 38 - WA_Composite - English.md
e13
Key Terms
Final IC 38 - WA_Composite - English_091
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These consist of those whose anticipated mortality corresponds to the standard lives represented by the mortality table.**ii.** **Preferred risks** These are the ones whose anticipated mortality is significantly lower than standard lives and hence could be charged a lower premium.**iii.** **Substandard lives** These ar...
Final IC 38 - WA_Composite - English.md
d184
Preferred risks
Final IC 38 - WA_Composite - English_092
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with regard to a life proposed for underwriting.**a)** **Acceptance at ordinary rates (OR)** is the most common decision. Thisrating indicates that the risk is accepted at the same rate of premium as would apply to an ordinary or standard life.**Diagram 3:** **Underwriting decisions****b)** **Acceptance with an extra:*...
Final IC 38 - WA_Composite - English.md
s187
Acceptance at ordinary rates (OR)
Final IC 38 - WA_Composite - English_093
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are assessed as part of **financial underwriting**, while medical aspects of health fall under **medical underwriting** .**a)** **Female insurance**Women generally have greater longevity than men. However they may face some problems with respect to moral hazard. This is because many women in Indian society are victims ...
Final IC 38 - WA_Composite - English.md
e188
Female insurance
Final IC 38 - WA_Composite - English_094
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can provide.**Examples** When a proposal is submitted at a branch located far away from the place of residence of the proposed insuredA medical examination is done elsewhere even when a qualified medical examiner is available near one’s place of residence.A third case is when a proposal is made on the life of another w...
Final IC 38 - WA_Composite - English.md
d189
Examples
Final IC 38 - WA_Composite - English_095
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and suicides.**Substance abuse** : Substance abuse refers to the use of various kinds of substances like drugs or narcotics, sedatives and other similar stimulants. Some of these are even illegal and their use indicates criminal disposition and moral hazard.**Test Yourself 2**Which of the following is an example of mor...
Final IC 38 - WA_Composite - English.md
c192
Substance abuse
Final IC 38 - WA_Composite - English_096
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balance among various salts in the urinary system. It can indicate any malfunctioning of the system.**d)** **Backdating:**Backdating means changing the start date of the policy to an earlier one. For example, you bought a Life insurance policy on 1st June, 2013 but later you think that the policy would have generated b...
Final IC 38 - WA_Composite - English.md
r1945
Backdating:
Final IC 38 - WA_Composite - English_097
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2. Standard life 3. Non-medical underwriting 4. Rating factor1945. Medical underwriting 6. Anti-selection**Answers to Test Yourself****Answer 1** - The correct option is III.**Answer 2** - The correct option is II.**Answer 3** - The correct option is II.195## CHAPTER L-09## LIFE INSURANCE CLAIMS**Chapter Introduction**...
Final IC 38 - WA_Composite - English.md
r1945
Answers to Test Yourself
Final IC 38 - WA_Composite - English_098
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contract itself. For instance, the date of maturity and the dates when the instalments of survival benefits may be paid under a money back policy are clearly laid out at the time of preparing the contract.**iii.** **Surrender value payments** are different from other claim payments.Here, unlike other claims, the event ...
Final IC 38 - WA_Composite - English.md
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Surrender value payments
Final IC 38 - WA_Composite - English_099
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**iii.** **Unit Linked Insurance Plan (ULIP):** In case of ULIPs, the insurer pays thefund value as the maturity claim.**iv.** **Money-back Plan:** In case of money-back policy, the insurer pays thematurity claim minus the survival benefits already paid during the term of the policy.The insurance contact terminates aft...
Final IC 38 - WA_Composite - English.md
k201
Unit Linked Insurance Plan (ULIP):
Final IC 38 - WA_Composite - English_100
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repudiated giving all the relevant reasons, within 30 days from the date of receipt of all relevant papers and required clarifications. However, if the insurer needs the claim to be investigated, it shall initiate and complete the investigation at the earliest, in any case not later than 90 days from the date of receip...
Final IC 38 - WA_Composite - English.md
k201
Role of an agent
Final IC 38 - WA_Composite - English_101
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