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Questions and Answers
Who is protected under the In-Contestability Clause included under a Life Assurance Policy?
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?
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?
What does the First Premium Receipt (F.P.R.) signify?
Identify the document that evidences a contract between the insurer and the insured.
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?
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.
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?
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.
Identify the circumstances under which the policyholder would need to appoint an appointee.
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Illustrate the purpose of the grace period.
Illustrate the purpose of the grace period.
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When is a policy deemed to be lapsed?
When is a policy deemed to be lapsed?
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How many persons can be nominated under a policy?
How many persons can be nominated under a policy?
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What is meant by 'Risk-Classification'?
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?
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?
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.)?
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?
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?
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?
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?
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?
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?
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?
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:
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?
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:
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?
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?
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?
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?
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?
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?
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?
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?
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?
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?
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.
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?
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?
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?
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?
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?
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?
What claim is payable only to the assignee or nominee?
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Which element of a valid contract relates to insurance premium?
Which element of a valid contract relates to insurance premium?
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Which statement compares gambling to insurance?
Which statement compares gambling to insurance?
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Gambling contracts are similar to insurance contracts.
Gambling contracts are similar to insurance contracts.
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What is the principle of Uberrima Fides in insurance?
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?
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.
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?
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?
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?
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.
