Questions and Answers
Who is protected under the In-Contestability Clause included under a Life Assurance Policy?
As per the Suicide Clause, if the Life-Assured dies as a result of suicide after 3 years of the issue of policy, what does the beneficiary receive?
What does the First Premium Receipt (F.P.R.) signify?
Identify the document that evidences a contract between the insurer and the insured.
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How will a complex language in a certain policy document, which leads to ambiguity, generally be construed?
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With regards to mis-statement of age, select the valid option.
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Which of the following is not a part of a standard policy document?
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Identify the circumstances under which the policyholder would need to appoint an appointee.
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Illustrate the purpose of the grace period.
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When is a policy deemed to be lapsed?
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How many persons can be nominated under a policy?
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What is meant by 'Risk-Classification'?
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Which one of the following statements is incorrect regarding the numerical rating method of underwriting?
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Which one of the following bodies regulates the insurance companies in India?
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Who among the following are not regulated by the Insurance Regulatory and Development Authority of India (I.R.D.A.I.)?
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What is the prime purpose of insurance regulation?
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Which one of the following bodies can issue the license to work as individual agents in India?
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Which one of the following bodies regulates the capital market in India?
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Third-party Administrators (T.P.A.s) are regulated by which of the following bodies?
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What is the basic insurance legislation of the country that governs insurance business in India?
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Which one of the following bodies has prescribed the regulations for protecting the interests of policyholders?
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When did the Insurance Act come into effect?
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The Insurance Regulatory and Development Authority (I.R.D.A.) was established in the year:
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Which section of the Insurance Act 1938 prohibits the use of rebates as an inducement to take an insurance policy?
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Minimum academic qualification of a specified person is:
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Which one of the following can form the basis for a valid consumer complaint?
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Which one of the following cannot form the basis for a valid consumer complaint?
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Which one of the following statements is correct, with regard to 'Sub-Standard Lives', under risk classification?
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Which one of the following statements is correct, with regard to 'Declined Lives', under risk classification?
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What does the acceptance of a risk with a lien on a sum assured imply?
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If the insured survives the plan’s entire term, what is the claim known as?
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What are the periodic payments made to the insured during the term of the policy called?
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In case of hospitalization, what is it called when an insurance company pays the treatment costs?
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What occurs when the ABC Insurance Company ascertains a survival claim?
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Which one of the following statements is incorrect with regard to 'Surrender' of the policy?
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Choose the correct statement regarding the Critical Illness (C.I.) Rider.
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In the event Mr. Nimesh dies within the policy term, what will be paid?
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What is the stipulated period within which a policy can be repudiated if material facts are false?
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According to the I.R.D.A.I. regulations, what is the stipulated period for life assurance claims to be settled?
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Which document is needed for a claim in case of accidental death?
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Which one of the following documents needs to be submitted by the nominee in the event of natural death?
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What claim is payable only to the assignee or nominee?
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Which element of a valid contract relates to insurance premium?
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Which statement compares gambling to insurance?
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Gambling contracts are similar to insurance contracts.
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What is the principle of Uberrima Fides in insurance?
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When does insurable interest need to be present in the case of life insurance?
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Insurable interest is not required at the time of making a claim for property insurance.
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If Mr. Mahesh sells his house after taking out an insurance policy, can he still make a claim for damage?
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What is the proximate cause of death in the scenario where Mr. Rahul contracted pneumonia?
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Can Mr. Ramesh buy life assurance on his friend's life?
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Study Notes
In-Contestability Clause
- Protects the Insured from claim rejections after the policy has completed three years.
- Important under Section 45 (Indisputability Clause) of the Insurance Act.
Suicide Clause
- Beneficiary receives no claim if suicide occurs within three years of policy issue.
- After three years, the clause typically pays out the full face-amount of the policy.
First Premium Receipt (F.P.R.)
- Indicates that the policy contract has begun and is in effect.
- Represents the initiation of coverage once payment is confirmed.
Standard Documents
- Proposal-Form is crucial for evidencing the contract between insurer and insured.
- Policy Document must be signed by a competent authority as per legal requirements.
Policy Language and Interpretation
- Ambiguities resulting from complex language are generally interpreted in favor of the Insured.
Age Mis-Statement
- An under-statement results in a policy re-issue at a reduced amount.
- An over-statement may lead to premium refunds.
Standard Policy Provisions
- Examples include the suicide clause and pregnancy-related exclusions.
- Specific provisions are tailored to individual policies.
Grace Period
- Offers policyholders additional time to pay premiums before cancellation.
- Important feature that allows for policy retention in case of missed payments.
Nomination Rights
- Nomination can only be made at the time of policy purchase.
- Nominees receive full rights to the claim upon the insured's death.
Policy Lapse
- A policy is deemed lapsed if premiums are unpaid beyond the grace period.
- Policies can be reinstated if the insured provides evidence of insurability.
Policy Loan
- Loans against a policy can be obtained easily, with minimal requirements for repayment.
- No collateral is typically required for small loans.
Surrender Value
- Available when premiums have been paid for at least three years.
- Represents the cash amount available to the policyholder upon cancellation.
Number of Nominations
- Multiple persons can be nominated under a policy, enhancing flexibility for beneficiaries.
Assignment of Policy
- Assignment allows transfer of policy rights, including benefits upon the insured's death.
- Essential for estate planning and managing life insurance benefits.
Ordinary Revival of Policy
- Revival occurs within two years of lapse upon payment of overdue premiums with interest.
- Options include paying in installments or as a lump sum.
These key points provide a comprehensive understanding of various insurance concepts, clauses, and policies relevant to life insurance agents.### Standard Age-Proof Documents
- Documents not accepted as age-proof include horoscope and school-leaving certificate.
- Valid documents typically involve an employer's certificate or passport.
Anti-Selection in Insurance
- Anti-selection refers to the tendency of high-risk individuals to seek insurance coverage.
- Insurance companies use anti-selection processes to avoid selecting unfit insurance products and clients.
- Companies aim to assess and mitigate the risks associated with policyholders who are aware of their higher risk of loss.
High-Risk Individuals
- Individuals considered high-risk by insurance companies often include those who regularly consume certain substances (e.g., 'Paan Masala') or other stimulants.
Occupational Health Hazards
- Certain occupations, like film stunt artists and dancers in night-clubs, are generally exposed to specific health hazards like mining dust.
Accidental Hazards in Occupations
- Demolition experts face higher risks of accidental hazards compared to marketing executives or medical professionals.
Mortality Rate in Insurance
- Policies may stipulate a decreased death benefit if the assured dies from a specified cause within a certain period.
Numerical Rating Method in Underwriting
- Underwriters utilize the numerical rating method to assign points for both positive and negative risk factors.
- The total points assigned play a significant role in insurance acceptance and the potential for extra mortality ratings.
Judgment Method of Underwriting
- The judgment method allows underwriting to utilize subjective assessments and expert opinions, especially for complex cases.
Life Assurance for Healthy Individuals
- A healthy, non-smoker may apply for life assurance under ordinary rates, but could also face a lien or additional restrictions based on risk assessment.
Risk Classification
- Risk classification involves categorizing individuals based on their likelihood of experiencing loss, thereby determining premium classifications.
Sub-Standard Lives
- Sub-standard lives are individuals with higher anticipated mortality rates and could face higher premiums compared to standard lives.
Declined Lives
- 'Declined Lives' refers to those individuals whose anticipated mortality is deemed too high for insurable risk, making them unqualified for coverage.
Lien in Insurance
- Under a lien, if a life assured dies from a specified cause, only a decreased death benefit will be paid by the insurance company.
Insurance Claims Terminology
- The survival benefit refers to a specific payment made if the insured survives the term of an insurance plan.
- Payments for treatment costs during hospitalization are categorized as survival benefits.
Claim Assessment
- Insurance claims for survival are evaluated based on conditions detailed in the policy and must meet specific criteria outlined during the contract agreement.
Claim for Critical Illness Riders
- Claims for riders like critical illness are assessed similarly, with strict adherence to policy stipulations regarding claims support and documentation.### Insurance Concepts and Policies
- Demand for claim fulfillment is essential; insurers must honor contract promises.
- Surrender Value refers to the amount payable upon voluntary policy surrender, typically a percentage of premiums paid.
- Critical Illness (C.I.) Rider provides a payout upon diagnosis of specified critical illnesses listed by the insurer.
- Each insurance policy usually has specific terms regarding the payout, especially in case of the policyholder's death.
Policy Types and Outcomes
- Unit-Linked Insurance Plan (U.L.I.P.) combines life insurance with investment, where benefits depend on policy performance.
- Maturity Claims may differ, such as being calculated as the sum assured minus any survival benefits received.
Documentation and Claims
- A claim under a life assurance policy must be settled or disputed within a stipulated period, usually up to 30 days after submission of all relevant documents.
- In the event of death, the nominee must submit specific documents like the death certificate or inquest report depending on the circumstances (natural or accidental death).
- Additional documentation for accidental death claims includes a post-mortem report or the Certificate of Burial or Cremation.
Types of Insurance Coverage
- Death Claim is the payout to the nominee upon the insured's death, which provides security for dependents.
- Maturity Claims only pay upon policy completion and are subject to previously received survival benefits.
- Insurable Interest is crucial at the time of policy issuance, particularly in life insurance contexts.
Legal Aspects of Insurance
- Valid contracts require clear offer and acceptance, consideration, and capacity for parties involved.
- Misrepresentation or fraudulent intent can void contracts, leading to liability for the insurer.
- Contracts of adhesion bind both parties, and the insured usually must accept terms as presented.
Principles of Insurance
- Utmost Good Faith (Uberrima Fides) mandates complete transparency from the insured regarding material information.
- Age is a vital factor influencing policy underwriting, with discrepancies affecting premium rates.
Insurance Regulations
- Regulatory bodies, like the Insurance Regulatory and Development Authority of India (I.R.D.A.I.), oversee the compliance and protection of policyholders’ interests, especially regarding claim settlements and disclosure requirements.
Risk and Insurance
- Insurers require accurate material information for proper risk assessment and to prevent adverse selection in policy underwriting.
- Discharging contracts can occur under common legal principles such as frustration or mistake.
Conclusion
- Understanding the intricacies of insurance policies, claim processes, and legal stipulations is crucial for effective management and utilization of life assurance and investment plans.
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Description
Test your knowledge on life insurance principles and the roles of various stakeholders in the life insurance industry. This question bank covers the In-Contestability Clause and other essential topics relevant to insurance agents. Perfect for aspiring and current life insurance professionals.
