The document provides an overview of various life insurance products and their key features: - Life insurance plans can be categorized based on whether the sum assured is paid on death or maturity. Premiums vary depending on factors like the plan type, payment term, and insured's age. - Limited payment policies require premiums to be paid only for a certain number of years, as opposed to the entire policy term under whole life plans. - Riders can be added to basic plans to enhance coverage for things like critical illness or accidents. - Children's policies insure minors and vest ownership to the child upon reaching adulthood.

1. CHAPTER I
INTRODUCTION TO
INSURANCE

2. Insurance compensates losses from specified
events.
Insurance compensates losses to the full extent
of lost income.
Assets may be damaged by external causes,
hence insurance is necessary.
Consequences of adverse situations are only
reduced by insurance. They are not eliminated.

3.  Insurance benefits in replacement of the monetary losses, but
only to some extent.
 The possibility that it will rain during a cricket match can be an
insurable risk.
 The possibility that ones marriage will work out successfully or
that the son will get admission in the prestigious college he has
applied for are not an insurable risk.
 Both peril and risk are important in deciding the amount of
insurance.
 The amount of sum assured decided on is the amount payable
under life insurance policy.
 Insurance does not mean that the person can compromise on
the safety to be taken.

4.  Principles of insurance works on
 Sharing
 Probabilities of large nos.
 Trust
 Randomness
 Mutual help
 Proportionate contributions.
 Both Life and Non-Life insurers can transact Micro
insurance.

5.  Risk refers to the loss that happens.
 Only uncertain risk can be insured.
 A human being is an asset, which has economic value,
is income earning and I is perishable
 The income generated can be used to measure a
human being’s value.
 A human being is an asset which perishes when he dies
or become disabled to work

6.  The insurance as a trustee is responsible to pay a
genuine claim.
 The insurer as a trustee is also responsible to see that
the life Fund is safe And earns maximum interest
 It is also responsible to give priority to the
policyholders.

7.  Risk is not common to all assets.
 The greater the number of trials, greater the
probability of the actual experience coming
closer to the estimate.
 The probability of an event is mentioned either
as a percentage or as a ratio.

8.  The probability of ‘one in a hundred’s valid.
 a. When it happens once in a hundred trails.
 b. Even when the event happens 50 times in a 1000 trails.
 c. when the event does not happen even once in a 100 trials
(it might happen 2 in 200 still the probability holds).
 Insurance is legitimate when an adverse happening is
likely.
 Insurance covers harmful consequences.

9.  Life Insurance is arranged if someone may die or
someone may live
 The principle of indemnity is not applicable to
life insurance.

10.  Insurance benefit individuals, society and in turn
the country.
 Insurance not only reduces the burden on
individuals’ families, but also the Society.

11.  Life insurance is better than other avenues of
savings in respect of
a. Marketability b. Liquidity c. Transferability
 And most important useful in emergency.

12.  Insurance is related to probable loss
 In Insurance, Premium is based on Expectations
of losses.
 In Insurance, all the policyholders do not share
the losses equally, it does not prevent risk and it
does not compensate the losses in full.

13.  An insurer placing insurance with another
insurer is called reinsurance
 Living too long is a risk and also dying too soon.
 Perils are not avoidable.
 Probabilities of death and of survival is mutually
exclusive
 There is no substitute for life insurance.

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15.  Chapter 2 –
Principles of Life Insurance

16.  A life insurance policy is a contract
enforceable by law.
 The principle of utmost good faith applies to
life insurance as well as non life insurance
 The principle of utmost good faith applies to
medical as well as non medical cases.

17.  The principle of utmost good faith is meant to
protect the interest of the community of
policyholders
 The principle of utmost good faith is important
to ensure
 That the premium charged is correct
 That no one gets an undue advantage
 That there is no adverse selection

18.  The responsibility to comply with the principle of
utmost good faith rests with both the parties proposer
as well as insurer.
 The principle of utmost good faith does not apply to .
 Facts of common knowledge
 Facts of law
 Facts which are not material for underwriting

19.  Capacity to contract applies to both parties
 Consent to the contract can be implicit
 Facts which happen after the policy has
commenced need not to be reported
 Facts which happen before policy has
commenced need to be reported.

20.  A life insurance policy becomes invalid if, the statements in the
proposal are found to be substantially wrong.
 The principle of utmost good faith will operate in an existing
policy if the policy has lapsed and it has to be revived.
 The existence of insurable interest is decided by
 The interest which proposer has in the assets being insured .
 The relationship between the proposer and the object of insurance

21.  In the case of Life insurance, insurable interest
should exist at the inception of insurance policy.
 In the case of life insurance the principle of
insurable interest operates
differently than in other forms of insurances.

22.  Under general insurance, because of principle of
indemnity assessment of losses are made at the
commencement of proposal as well as claim,
which can lead to difference of opinion between
insurer and claimant.

23.  The Claim payable is proportionate in non life
insurance & dependable on Sum assured in life
insurance .
 The Claim payable doesn’t depend upon income
of deceased person neither loss of income to
the family nor as per determined by a surveyor.

24.  To find Human life value accurately is difficult
but it can be reasonably estimated.

25.  The need of insurance doesn’t depend on the
age of person , place where he stays as far as life
insurance is needed.

26.  Insurance can be for a purpose of collateral
security and also to have comfortable retired life.
 People hesitate to buy life insurance because
they are not aware of their risk as well as they
prefer to enjoy the present.

27.  Life insurance can support in the event of
sudden death , to have comfortable retirement
as well as to have one’s investment plans.
 Many People think that they do not need life
insurance and there is no hurry to buy life
insurance it may be due to less awareness.

28.  Risk can be retained , there is insurable interest
existing between partners.

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30.  CHAPTER-3
 PREMIUMS AND BONUSES

31.  The premium is the price paid by the
policyholder to secure insurance.
 The amount of premium varies according to
the insurance plan.
 The premium under a life insurance policy may
be paid monthly , quarterly, semi annually or
annually.

32.  The annual premium may be less than twelve times
the monthly premium.
 The annual premium is not equal to the SA divided
by the term of the policy and The annual premium
does not increase as the term of the policy increases.
(there is a fixed formula to derive A.P.)
 The annual premium for a long term policy is less
than for a short term policy.

33.  Premium depends upon Age of the person,
family history and the Medical history of the
person to be insured.
 The premium actually paid by the policyholder
depends upon the level of risk as assessed by
the insurer.

34.  The premium collected in the early years is more than
what is required.
 The pure premium will be Less than the office
premium.
 The net premium will be Less than the risk premium.

35.  The premium is loaded because of Likely expenses.
 The premium rates printed in the promotional
literature are Office premiums.

36.  The reason for charging level premiums is that the
risk increases as age increases and it is convenient to
both policyholder and insurer.
 The practice of charging level premiums, makes it
convenient to the policyholder reduces the likelihood
of lapses and adds to the reserves of the insurer.

37.  Adjustments are made to the tabular premiums
because of The health of the person insured,
The frequency of premium payment, The
occupation of the person insured.
 Premium rates are determined by the actuaries
of insurers.
 The age next birthday is either higher than the
age nearest birthday or equal to nearest
birthday.

38.  The premium calculated on mortality alone is called
risk premium.
 Insurers collect premium in advance.
 In life insurance, profit is determined by The actuary
who makes a valuation

39.  In the business of life insurance, valuation
means an actuarial exercise to determine
adequacy of funds.
 The addition to the life fund in a year
represents the moneys set aside by the insurer
for the policyholders.
 The addition to the life fund arises because of
the practice of charging level premiums.

40.  A life insurer does a valuation because it is a
statutory requirement, it is necessary to be able
to declare dividends to shareholders and it tells
the insurer how well it is managing the
business.
 The surplus in the life fund represents the
profits of the business, the excess premium
collected by the insurer and the dues to the
shareholders.

41.  The surplus disclosed in a valuation means that the
interests of the policyholders are safe, the funds of
the insurer are adequate to meet its liabilities and the
business is being managed well.
 The life fund belongs to the policyholders.
 In a valuation, the actuary calculates the fund that the
insurer must have and the liability of the insurer

42.  Bonus is declared out of the surplus declared
by the actuary.
 The minimum percentage of the surplus to be
set-aside for policyholders is ninety.
 Interim bonus valid Till the next declaration of
bonus.

43.  A bonus becomes possible because actual experience
is better than expectations, the assumptions made in
constructing the premium were conservative and
there is a loading for bonus in the premium.
 Surplus in the life fund does not signify, that the
premium rates must be revised downwards, the
premium rates are appropriate, or the company is too
miserly in expenditure. It only signifies that insurer is
solvent.

44.  When a certain level of bonus is declared, it
does not means that this level will be
maintained in future years but it is the bonus
for that particular year.

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46.  CHAPTER- 4
 Life Insurance Products

47.  A plan of insurance is said to be different from
another if, the conditions when the sum assured
becomes payable are different.
 Every plan of insurance is a combination of two basic
plans
 Plans of insurance cannot be compared by comparing
the premium rates
 A whole life plan is basically a term insurance plan
with an indefinite term

48.  The sum assured under some policies increases
every year whereas under some policies
reduces every year

49.  The S.A payable on death can be more than the S.A
payable on maturity or death.
 The SA is not always payable immediately on death or
survival it may be paid long
after the death of the insured
 The SA can be payable in a lump sum as well as in
instalments.

50.  In a limited payment policy, the premium is
not paid as long as the
policy is in force. premium stops before the
end of the term.

51.  For the same age and SA, the premium under an
ordinary Whole Life policy Will be less
than in a limited payment Whole Life policy
 For the same age, SA and term, the premium under an
Endowment policy Will be less
than in a limited payment Endowment policy

52.  Limited payment plan policies may be preferred
by persons Who are first class LIVES AND IN
THE BEST OF THEIR LIVES.
 Limited payment plan policies may be preferred
by persons Who do not expect to be in active
employment for long
 The educational annuity policy is NOT an
annuity policy, ALSO IT is NOT meant for
ONLY persons having young children

53.  IN AN INCREASING TERM POLICY, SA
INCREASES EVERY YEAR
 Only participating policies are entitled to the
benefit of bonus

54.  IN A CONVERTIBLE PLAN THE
CONVERSION IS DONE WITHOUT
UNDERWRITER
 In a convertible plan, the conversion is done
on the request of the policyholder

55.  If the option of conversion is not exercised,
the policy will continue as before
 If the option of conversion is not exercised,
the policy will NOT come to an end
 Convertible plan policies do not participate in
bonuses

56.  A joint life policy MAY cover a married couple
under one policy
 A joint life policy may cover partners in
business under one policy
 The premium of a joint life policy DOES
NOT depend on the age of the older person

57.  The bonus on a joint life policy is calculated on
THE SINGLE SA AND NOT THE
DOUBLE SA
 IN A JOINT LIFE POLICY The premium
CHARGED will be less than the cost for
insuring the two persons separately
 IN A CHILDREN’S POLICY IT’S THE
MINOR CHILD WHO IS INSURED

58.  IN A CHILDREN’S POLICY The insured child becomes the
owner of the policy on vesting date
 IN A CHILDREN’S POLICY The vesting date is a policy
anniversary
 IN A CHILDREN’S POLICY The deferred date is a policy
anniversary
 IN A CHILDREN’S POLICY The policy vests at age 18 last
birthday
 IN A CHILDREN’S POLICY Risk will commence on
deferred date automatically

59.  IN A CHILDREN’S POLICY On the deferred date,
the insured child need not be a major
 IN A CHILDREN’S POLICY THE POLICY
HOLDER CAN DO THE ASSIGMENT AT ANY
POINT OF TIME
 IN A CHILDREN’S POLICY The ownership of the
policy changes on the vesting date AS THE CHILD
BECOMES A MAJOR AND HENCE THE
OWNER OR THE POLICY HOLDER

60.  On vesting UNDER A CHILDREN’S PLAN, the insured
person CANNOT change the term of the policy
 On vesting UNDER A CHILDREN’S PLAN the insured
person CANNOT increase the SA
 A variable insurance plan combines an insurance plan with an
investment plan
 A variable insurance policy DOES NOT guarantee a return or
yield
 A variable insurance plan is good when investment conditions
are favourable AND THE stock market is booming

61.  Industrial assurance is NOT meant only for industrial
workers
 Industrial assurance is meant for people with low
incomes
 A salary savings scheme policy is NOT an industrial
assurance plan
 A salary savings scheme policy can be taken for a SA
of Rs.10 lakh
 In industrial assurance the lapse rates tend to be high

62.  salary savings scheme plans, the premium is
deducted from the pay roll
 industrial assurance plans, the premium is
PAID BY THE INDIVIDUAL.
 THE POLICY HOLDER , THE INSURER
AND the AGENT ALL ARE benefited if a
policy is under the salary savings schemE

63.  The premium under a SSS policy is paid monthly
 The premium under a SSS policy is one twelfth the
annual premium
 In a SSS policy, the policyholder has to ensure that
premium is paid
 In a SSS policy, the responsibility to pay premium is
with the employeE
 In life insurance, the word ‘rider’ refers to additional
clauses

64.  A rider DOES NOT modify THE existing condition
in the policy
 A rider supplements or adds to an existing condition
in the policy
 Riders provide supplementary benefits to the basic
plan
 A premium waiver option is allowed as a rider
 The premium on riders cannot exceed specified limits
of the basic premium

65.  IN SOME OF THE riders, THE PREMIUM
depends on the age of the insured person
 The premium on a rider varies according to the basic
plan
 There is no death risk cover in an annuity
 IN AN ANNUITY POLICY the payments may be
paid every month
 An annuity is NOT ONLY paid to the person who
takes out the annuity policy, IT CAN BE PAID TO
THE FAMILY MEMBERS ALSO

66.  An annuity CAN BE paid AFTER the death of the
person ALSO DEPENDING UPON THE
PREFERENCE OF THE PERSON WHO HAS
TAKEN the annuity policy
 An annuity policy guarantees a pension
 NO MEDICAL IS REQUIRED IN AN ANNUITY
PLAN
 Under an annuity certain policy, the annuity DOES
NOT stop after ANY certain period, IT JUST GETS
CONVERTED INTO A LIFE ANNUITY

67.  Under a deferred annuity policy, the annuity
commences ONLY AFTER THE COMPLETION
OF DEFERMENT PERIOD I,E AT THE
VESTING
 An annuity can be taken on a JOINT life ALSO
 In a life annuity, the risk of death is NOT covered
 Annuities purchased during different years may all
commence on the same date I,E ON VESTING

68.  In a deferred annuity policy, the premium
CAN be paid in a lump sum AS WELL AS IN
INSTALLMENTS
 In group insurance, the proposal is made by
the employer
 Group insurance covers a large numbers of
persons in one policy

69.  Group insurance is relatively cheaper than
individual insurances
 Salary savings schemes policies SHOULD
NOT BE CONFUSED AS group insurance
policies
 In group insurance the premium changes every
year

70.  In group insurance the premium is NOT paid by the
persons who are covered BUT BY THE
EMPLOYER
 The members of a housing society can negotiate for a
group insurance policy
 The members of a housing society can negotiate for a
group insurance policy
 A bank can take out a group policy for its account holders
 A finance company can take out a group policy for those
taking loans from

71.  The amount of cover in a group policy is NOT
DECIDED by individual members OF THAT
GROUP
 The amount of cover for each member is fixed by the
terms of the policy
 A master policy is issued in a group insurance policy
 NONE OF THE memberS in a group policy pays
the premium directly to the insurer
 Copies of the master policy are NOT given to all
members by the insurer BUT ONLY TO THE
EMPLOYER

72.  The group for THE insurance HAS TO BE PRE-
EXISTING FOR SOME OTHER PURPOSE
 Entry into the scheme and exit out of it, is NOT at
the option of the members
 Group business is socially very relevant
 A trade union can take out a group insurance policy
for its members

73.  A group insurance contract is NOT A CONTRACT
between the insurer and the insured persons
 Premiums under some group policies are paid by
governments
 group insurance differ from salary savings schemes
IN FOLLOWING WAYS:
 IN TERMS OF THE PERSONS WHO PAY THE
PREMIUM
 Responsibility to pay the premium
 THE PERSON Deciding to take the policy

74.  Group insurance differs from salary savings schemes
IN the FOLLOWING WAYS:
 NUMBER OF PERSONS INSURED UNDER A
POLICY
 Responsibility of employer
 Issue of premium receipt
 A group of travelers on a package tour cannot take
group insurance
 Members of a toddy tappers association can take
group insurance
 In group policies, the chance of adverse selection is
low

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76.  CHAPTER - 5 UNDERWRITING

77.  Proposal form is both a request and an offer to
enter an insurance contract.
 Selection and underwriting are same.
(Underwriting can also be termed as selection.)
 Policy is issued after the assessment of risk by
underwriter.
 In first class life or normal or standard life, the
premium charged is equal to tabular premium and
no extra bonus is given for the life being normal
or standard and bonus is given only as per the
normal terms and condition of the contract.

78.  An underwriter acts in the interest of the
policyholder as well as the insurance company.
An underwriter charges extra premium for
physical hazards.
Body measurements may indicate physical
hazards.

79.  Physical hazard affects the probability of death.
 Financial underwriting is done to evaluate the
possibility of moral hazard.
 The underwriting assessment includes the intention
of proposer for taking insurance and the genuineness
for the need of insurance.

80.  Moral hazard may be suspected in cases where life to
be insured is old or insurance is for a very large
amount.
 It is not possible to quantify the extent of moral
hazard.
 An underwriter uses financial and medical data .
 Medical referee is a doctor in the panel and not the
underwriter.

81.  The medical referee only sees the reports
received by the insurer and does not examine
the life to be insured.

82.  In some cases, the underwriter consults the reinsurers
before deciding.
 If the underwriter feels that the risk is more, he may
impose a lien.
 A ‘lien’ may be imposed by the underwriter if the
additional risk is expected to wear off in course of
time .
 A ‘lien’ operates for a specific period.
 A ‘clause’ restricts the benefits under the policy.

83.  A ‘clause’ excludes specific risks.
 Medical examination may not be required in all the
policies.
 The system of non - medical underwriting is
introduced because Medical examiners are not
available in all areas
 The system of non - medical underwriting is
introduced because most of the cases are found to be
standard lives (acceptable at Ordinary Rate OR)

84.  Under the system of non-medical underwriting, there
is restriction on both the SA and age.
 Working and educated women are treated on par with
men.
 The agent is expected to make his report commenting
on the risk factors and the agent’s report is important
for the underwriter.

85.  By writing a truthful report, the agent is
helping the insurer and the life to be insured.
 Smoking and drinking are hazards inviting
additional premium.
 Underwriting is the process of verifying the
level of risk of each new entrant.

86.  In the case of a lien, the amount payable on
death will vary from year to year

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88.  CHAPTER-6
 INSURANCE DOCUMENT

89.  The proposal is the basis of the insurance contract.
 The proposal can be signed in any language and not
necessary to be signed in the language in which it is
printed.
 The proposal should be written by the proposer
himself / herself.

90.  The declaration in the proposal must be signed by the
proposer.
 The information in the proposal form is used for
underwriting,if found incorrect can nullify the
insurance contract
 If the proposal form is filled up in a language not
known to the proposer, The person who filled up the
form has to sign a declaration.

91.  Personal statements are required in all the
cases and need not be witnessed by the agents.
 A copy of the proposal has to be given to the
proposer.
 A copy of medical report is never given to the
proposer .

92.  The medical report, The agents’ confidential report to
the insurer, The medical referee’s advice are
confidential and will not be given to the proposer.
 The proposal form and personal statement contain
information relevant to determine the level of risk,
Moral hazard and Insurable interest.

93.  FPR is the evidence of the insurance contract
begun.
 Policy document is the evidence of the
insurance contract.
 The medical examiner depends upon the
statements in the personal statement.

94.  The FPR is issued when The first premium is
adjusted in the office.
 The date of commencement of the policy
Cannot be later than the date of issue of the
FPR.
 Policies can be back dated to any date within
the financial year .

95.  The second quarterly (monthly,half-yearly)
premium after commencement is called
renewal premium.
 If a policyholder has doubts about the policy
he has applied for, he can Ask for cancellation
within fifteen days (free-look period) of issue
of the policy.

96.  In the case of SSS policies, the employer does
not get the renewal premium receipts.
 In the event of a dispute, the policy document
will be referred to.
 A policy is specific and relevant only to a
particular contract.

97.  The nomination may be made later by an
endorsement.
 The change in terms will be made by
endorsements.
 When a policy is converted, an endorsement is
made on the policy.

98.  Changes in the terms of the policy are made
through endorsements.
 When a policy is converted, an endorsement is
made on the policy.
 IRDA has not prescribed proposal forms for
all insurers

99.  Endorsements on a policy form part of the
insurance contract , and it must be typed on or
attached to policy.
 The family history appears in the personal
statement.
 Clauses and Endorsements modify the
conditions in the policy.

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101.  Chapter 7
 Policy Conditions

102.  If the age proof submitted along with proposal form
later found to be false,
 The insurer can declare the policy null & void (ab initio)
 Insurer can revise the premium on the basis of the actual age
from the commencement ,
 Insurer can revise the premium & other terms of the
contract.
 Age is material information which can affect the terms
of underwriting.

103.  Age is not only important for the underwriting
but to consider the need for medical tests also.
 Days of grace depends on the frequency
(mode) of premium payment.
 The number of days of grace can be 30/31or
15.

104.  If premium is not paid within the days of grace ,
the policy lapses.
 In the case of SSS , if the premiums are
deducted by the employer.

105.  If the premium was due on 15th July & 16th August is a
Sunday , the grace period will end on 17th August
(Monday)
 If the monthly premium was due on 24th February in a
leap year (Tuesday), the grace period will end on 10th
March (Wednesday)
 If death occurs in grace period , the premium due will
not be waived.

106.  The premium is deemed to be paid when the
cash, cheque or D.D is received.
 When a policy lapses the contract comes to an
end.
 When a policy lapses some benefits are
protected

107.  If the insured dies during the days of grace , the
claim will be admitted.
 The non-forfeiture clause is relevant only when the
premium is not paid.
 Non-forfeiture provisions exist because
 It is not fair to the policyholder to deny everything to the
policyholder
 The insurance Act requires it
 There is an accumulated reserve under the policy

108.  Following are non-forfeiture options.
 Policy becomes paid up
 Payment of surrender value
 Automatic advance of premium

109.  Surrender value factor increases with the
duration elapsed; therefore in case of paid up
policies surrender value increases.
 When policy lapses vested bonus will not be
forfeited.

110.  The reserve accumulates under a policy because
of level premiums.
 Paid up option is effective from date of first
unpaid premium.
 Any paid up policy does not participate in future
bonuses; it will also not be entitled to any
interim bonus.

111.  A policy is made paid up only if the paid up value is of
a minimum amount.
 If the paid up value is not up to a level the cash value
will be paid.
 When premium is advanced from surrender value , the
policy does not lapse.
 The premium advanced under the non-forfeitures
option, remains a debt.
 In case of automatic advance of premium , policies are
entitled to bonus.

112.  In amount of SA payable on death; automatic
premium advance is same as extended term
assurance.
 In the duration for which the policy will remain in
force; automatic advance of premium differ from
extended term assurance.
 In automatic premium advance option ,the full
installment premium is advanced.
 Non-forfeiture options seeks to protect the
policyholder’s interest

113.  When policy lapses it is neither beneficial to the
policy holder nor to the Insurer.
 A lapse is effectively a case of adverse selection.
 Lapse may happen because of temporary financial
difficulties.
 A revival is the opposite of a lapse.
 A revival is as important as a new proposal for
insurance.
 Revivals are in the interest both, policyholder as well
as insurer

114.  In case of revival Requirement of medical examination
is depends on the S.A & varies according to the
duration of lapse.
 On revival ,the relevant S.A for revival will be the
original S.A less paid up value.
 A revived policy effectively is, a new contract.
 Non-disclosure at the time of revival can nullify the
policy.

115.  On revival, the original terms of the policy may
be changed.
 Duty to disclose all material facts, revives on
revival.

116.  Assignment changes the title to the policy
 Nomination doesn’t change the title to the policy.
 Assignee immediately become the policyholder.
 An assignee is the absolute owner of the policy .
 In conditional assignment, till the condition satisfy the
assignee is absolute owner of the policy

117.  An assignor cannot cancel the assignment.
 Nomination can be cancelled by insured.
 Absolute assignment holds good even after maturity.
 Nomination holds good only till maturity.
 In assignment the property is transferred to assignee.
 Nomination doesn’t transfer the property.

118.  The assignment can be made on separate paper .
 Assignment becomes effective immediately once
it is made .
 Nomination becomes effective after it is
notified to the insurer.

119.  Assignor receives rights as per the conditions
mentioned in conditional assignment.
 A policy which is absolutely assigned , the rights
can be again retransferred to the assignor when
the assignee reassigns the policy.

120.  A NOMINATION CAN BE MADE UNDER
A CHILDREN’S DEFERRED POLICY
AFTER VESTING DATE .
 THE NOMINATION IS INTENDED TO
MAKE CLAIM SETTLEMENTS EASIER

121.  THE NOMINATION CAN BE IN FAVOUR
OF MORE THAN ONE PERSON
 IN THE CASE OF MANY NOMINEES,
THE CLAIM WILL BE PAID TO THEM
JOINTLY, ITS NOT DIVIDED AMONG
THEM.
 NOMINATIONS CAN BE MADE BEFORE
POLICY COMMENCES .

122.  THE NOMINATIONS CAN BE MADE ONLY BY
THE INSURED HIMSELF.
 ASSIGNEE IS FREE FROM THE ASSIGNOR’S
OBLIGATIONS UNDER THE POLICY.
 NOMINATIONS CAN BE DONE TO A MINOR .
 A NOMINEE DOESN’T BECOME THE OWNER
OF POLICY.

123.  A PERSON TO WHOM ONE OWNS MONEYS CAN BE
MADE A NOMINEE
 A NOMINATION CAN BE MADE IN FAVOUR OF AN
INSTITUTION
 IF THE NOMINEE IS A MINOR, THE CLAIM CANNOT
BE PAID TO THE GUARDIAN , ITS PAID TO
APPOINTEE.
 IF THE NOMINEE DIES, THE CLAIM CANNOT BE PAID
TO THE HEIRS OF THE NOMINEE ,AS THERE IS NO
TRANSFER . ( THE INSURED NEED TO CHANGE THE
NOMINATION

124.  IF THE ASSIGNEE IS DEAD, THE CLAIM CAN
BE PAID TO THE ASSIGNEE’S HEIRS .
 AN ASSIGNEE CAN ASSIGN THE POLICY
FURTHER TO ANOTHER PERSON
 THE ASSIGNEE CAN TAKE A LOAN UNDER
THE POLICY.
 THE NOMINEE CANNOT MAKE A FURTHER
NOMINATION UNDER THE POLICY

125.  THE CLAIM AMOUNT BELONGS TO THE
HEIRS OF THE DECEASED
 AN ASSIGNEE BECOMES THE
POLICYHOLDER
 A NOMINATION CAN BE MADE IN JOINT LIFE
POLICIES
 THE POLICY HAS TO BE GIVEN TO THE
INSURER AT THE TIME OF SURRENDER OR
LOAN

126.  LOANS CAN BE GIVEN TO A POLICY
WHICH MAY BE IN FULL FORCE OR
WHICH MAY BE LAPSED PROVIDED
POLICY HAS A SURENDER VALUE.
 LOANS ARE AVAILABLE ON PAID UP
POLICIES

127.  A POLICY IS FORECLOSED WHEN THE
PRINCIPLE LOAN AND ACCUMULATED
INTERESTCOULD BECOME MORE THAN
THE SURRENDER VALUE.
 A POLICY IS NOT FORECLOSED WHEN THE
LOAN IS NOT REPAID
 A POLICY IS NOT FORECLOSED AT THE
TIME OF CLAIM

128.  OUTSTANDING AMOUNTS OF LOANS ARE
DEDUCTED FROM THE CLAIM AMOUNT
 FORECLOSURE ACTION CANNOT BE TAKEN
TILL A NOTICE IS SERVED ON THE
POLICYHOLDER
 A POLICY WHICH IS FORECLOSED CAN BE
REINSTATED
 FORECLOSURE CAN BE DONE ONLY AFTER
INFORMING THE POLICYHOLDER

129. MWPA
 UNDER A MWP ACT POLICY, THE BENEFICIARIES MUST BE
SPECIFIED AT THE COMMENCEMENT OF THE POLICY IF A
POLICY IS UNDER THE MWP ACT,
 IT CANNOT BE SURRENDERED BY THE BENEFICIARIES
 A LOAN CANNOT BE TAKEN BY THE TRUSTEES
 IF A POLICY IS UNDER THE MWP ACT, THE POLICYHOLDER
IS
 NOT THE LIFE INSURED
 NOT THE BENEFICIARIES
 THE TRUSTEE
 THE BENEFICIARIES UNDER THE MWP ACT CANNOT BE
ANY MEMBER OF THE FAMILY. IT SHOULD BE EITHER
WIFE OF CHILDREN.
 THE BENEFICIARIES PERMITTED UNDER THE MWP ACT
DEPEND ALSO ON RELIGION
 MWP ACT POLICY CANNOT BE SURRENDERED

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131. CHAPTER 8- CLAIMS

132.  A claim is a demand by the policy holder to
fulfill the insurer’s obligations.
 A claim arises when the insured event
happens.
 A request for a loan or surrender is not
considered a claim.

133.  A claim is paid after the completion of the
claims settlement process not immediately on
death
 THE INSURERS DO NOT MAKE
ENQUIRIES IN THE CASE OF
MATURITY CLAIMS .

134.  THE INSURER MAKES ENQUIRIES ONLY IN
THE CASE OF EARLY CLAIMS
 A DEATH CLAIM WITHIN TWO YEARS OF
COMMENCEMENT OR REVIVAL IS TREATED
AS AN EARLY CLAIM
 A DEATH CLAIM WITHIN TWO YEARS OF AN
ALTERATION IS NOT TREATED AS AN
EARLY CLAIM.

135.  MATURITY CLAIM CHEQUES ARE PAID
TO THE TRUSTEES IN A MWP ACT
CASE. AND NOT TO BENEFICIARIES
OR POLICY HOLDERS

136.  MATURITY PROCEEDS ARE PAID TO
THE HEIRS, IF THE POLICYHOLDER
DIES EARLIER TO TAKING THE
CLAIM.
 MATURITY PROCEEDS ARE NOT PAID
TO THE NOMINEE, IF THE
POLICYHOLDER DIES EARLIER TO
TAKING THE CLAIM.

137.  CLAIMS MAY BE PAID ON THE BASIS
OF INDEMNITY, IF TITLE IS NOT
ESTABLISHED

138.  IF A PERSON IS MISSING FOR SEVEN YEARS,
THE CLAIM IS CALLED A DEATH CLAIM.
 IN THE CASE OF A MISSING PERSON,
PREMIUMS HAVE TO BE PAID TILL COURT
JUDGMENT .
 IN THE CASE OF A MISSING PERSON, THE
CLAIM ARISES FROM THE DATE THE COURT
DECREES HIS DEATH AND NOT THE DATE
FROM WHICH HE IS MISSING .

139.  SURVIVAL BENEFITS CANNOT BE SETTLED
ON INDEMNITY BASIS, IF ORIGINAL POLICY
IS LOST. A DUPLICATE POLICY HAS TO BE
MADE .
 IF ORIGINAL POLICY IS LOST, DUPLICATE
POLICY IS NOT NECESSARY FOR MATURITY
PAYMENTS.

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141.  Chapter 9
 Linked Life Insurance Products

142.  ULIPS PROVIDE FOR FLEXIBILITY
 IN ULIPS, NAVS ARE NOT DECIDED BY THE
INSURERS THEMSELVES
 IN ULIPS THE DEATH BENEFIT MAY NOT BE
A GUARANTEED FIGURE
 IN ULIPS THE ENTIRE PREMIUM PAID IS
INVESTED IN THE CHOSEN FUND
 THE PREMIUMS, IN EXCESS OF RISK COVER,
IS INVESTED AS DESIRED BY THE
POLICYHOLDER

143.  IN ULIPS THE INSURANCE COVER
MUST BE A MINIMUM MULTIPLE OF
THE PREMIUM
 ULIPS CAN BE SURRENDERED ONLY
AFTER THREE YEARS
 LOANS ARE NOT GIVEN UNDER ULIPS
 ULIPS CANNOT BE ISSUED AS
PARTICIPATING POLICIES

144.  THE NAVS OF ALL THE FUNDS OF ALL THE
INSURERS WILL VARY
 THE OFFER PRICE CAN BE HIGHER THAN
THE BID PRICE
 THE OFFER BID SPREAD, WILL IN SOME
CASES BE ZERO
 THE OFFER BID SPREAD IS THE
DIFFERENCE BETWEEN THE TWO PRICES

145.  A POLICYHOLDER CAN SWITCH
BETWEEN FUNDS AT ANY TIME
 THE PREMIUM TO BE INVESTED IN
THE FUND CAN BE INCREASED IN
ANY YEAR
 THERE IS ALWAYS A CHARGE FOR
SWITCHING BETWEEN FUNDS

146.  DEATH CLAIMS ARE PAID DURING THE
LOCK-IN PERIOD OF THREE YEARS
 THE NAV OF A FUND CAN BE LESS THAN
PURCHASE PRICE
 THE SA MUST NOT BE LESS THAN 5 TIMES
INSTALMENT PREMIUM
 THE SA MUST NOT BE LESS THAN 1.25 TIMES
SINGLE PREMIUM

147.  ONLY THE ALLOCATED PREMIUM IS
INVESTED IN THE FUNDS
 THE POLICYHOLDER IS RESPONSIBLE FOR
THE BENEFITS UNDER THE POLICY
 THE INSURER IS NOT RESPONSIBLE FOR
THE BENEFITS UNDER THE POLICY
 THE NAVS ARE PUBLISHED REGULARLY

148.  ONE CAN PAY ADDITIONAL PREMIUM IN
ANY YEAR FOR INVESTMENT
 IF ONE INCREASES THE PREMIUM, THE SA
WILL NOT BE INCREASED.
 THE LOCK IN PERIOD WILL APPLY, IF
ADDITIONAL PREMIUM IS PAID ANY YEAR
 IF THE POLICY IS TERMINATED EARLIER
THAN THE SPECIFIED TIME, A CHARGE HAS
TO BE PAID

149.  AN ADMINISTRATIVE CHARGE HAS TO BE PAID
EVERY YEAR
 RIDERS CAN BE AVAILED OF
 THE DEATH BENEFIT MAY BE ‘INTEGRATED’
 THE DEATH BENEFIT WILL BE THE BASIC SA ONLY
 PARTIAL WITHDRAWALS ARE PERMITTED
PERIODICALLY
 THE SA AND THE VALUE OF UNITS WILL BE PAID
TO THE LIFE ASSURED

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151.  CHAPTER 10- INSURANCE AGENCY

152.  The laws of ‘The Insurance Act’ The Contract
Act, The Income Tax Act, affect working of
insurance agent.
 A person is an insurance agent because of the
nature of his duties.
 An agent must look after the interests of the
insurer and the proposer.

153.  The functions of an agent differ according to the
insurer he is working for.
 A person is eligible to get the insurance agency license
only if he is above 18 yrs Of age, has undergone
training and has passed IRDA Examination.
 A License for insurance agency is given only if insurer
recommends the person.

154.  Individuals, Companies & Co-operative societies can get the
insurance agency license.
 A person with a criminal record will not be given the
insurance agency license.
 Broker is an intermediary, A specified person work for the
corporate agent, A cooperate insurance executive can work for
only one life insurance company.
 A Life insurance Agent is not an employee of an insurer, He
can work accordingly to his schedule, can also represent a
Mutual Fund, Small Savings Schemes, can also be a share
broker.

155.  Commissions may continue to be paid to the heirs, after the death of the
agent.
 A Life insurance agent should try to be aware of all the financial
instruments,
 Know the benefits of all life insurance plans, understand income tax laws
and Should also advise the best financial plans to the prospect.
 It’s good for life insurance agents to be expert in other financial
institutions.
 A life insurance agent should always carry his license and literature with
him and should not appear shabby.
 Life insurance always does not meet all the needs of all people, is not
always better than other investments and tax advantage is not only the
reason for buying Life insurance.

156.  A person cannot get commission on the premium
bought by him under policies if he does not have
license.
 A life insurance job is not over as long as the
policyholder or any member of his family is alive.
 When a policy lapses it means that the agent has
failed in his duties and has not explained the benefits
of insurance to the policyholder.

157.  In Insurance it’s good to have knowledge of all the benefits
about the plan, similar plans from the competitors and
relevant tax laws.
 Some people have no need for life insurance and some buy it
only for tax benefits.
 In market there are plenty of savings and investment
instruments available.
 An agent may not necessarily know everything that the
proposer wants to know.

158.  Ethical behavior leads to improved business and earnings
and it automatically comes when policyholder’s interest is kept
in mind and is prescribed in IRDA’s code of conduct.
 There is no need for an insurance agent to run down other
insurance companies.
 An agent has to reveal all the material facts to the customer
and should not worry about extra charge. (Utmost Good
Faith).
 Unethical behavior can affect the settlement of the early
claim.

159.  When the claim is repudiated, the agent
trustworthiness is affected.
 The agent must give complete and correct
information about the life assured.
 It is wrong if an agent suggests the customer to
terminate the existing policy and go for the new one
keeping his first years commission in mind.

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161. CHAPTER 11-

162.  EVERY INSURER IN INDIA HAS TO COMPLY
WITH THE INSURANCE ACT
 THE INSURANCE ACT DEALS WITH
REGISTRATION OF INSURERS,
INVESTMENTS OF INSURANCE FUNDS,
LICENSING OF AGENTS
 THE INSURANCE ASSOCIATION IS
CONSTITUTED BY THE INSURANCE ACT

163.  IT IS AN OFFENCE IF AN AGENT GIVES A
REBATE
 IT IS AN OFFENCE IF AN INSURER GIVES A
REBATE
 A POLICYHOLDER HAVING A DISPUTE
WITH AN INSURER, HAS A RIGHT TO
APPROACH EITHER IRDA, OR
OMBUDSMAN OR CONSUMERS REDRESSAL
FORUM
 THE OMBUDSMAN IS NOT THE FINAL
AUTHORITY INVOLVING INSURERS

164.  THE INSURER HAS NO LIBERTY TO REJECT
THE DECISIONS OF THE OMBUDSMAN
 THE OMBUDSMAN’S AUTHORITY IS NOT
LIMITED TO CLAIMS MATTERS ONLY
 THE OMBUDSMAN IS NOT A JUDICIAL
AUTHORITY
 THE OMBUDSMAN WILL NOT HEAR
MATTERS ALREADY BEFORE OTHER
COURTS

165.  THE OMBUDSMAN’S RECOMMENDATIONS
ARE NOT BINDING ON THE COMPLAINANT
 INSURERS HAVE TO COMPLY, IF THE
COMPLAINANT ACCEPTS WHAT THE
OMBUDSMAN SAYS
 MATTERS REFERRED TO THE OMBUDSMAN
HAVE TO BE DECIDED IN ONE MONTH
 THE OMBUDSMAN CANNOT MODIFY THE
TERMS OF ACCEPTANCE OF THE PROPOSAL

166.  DISPUTE OVER THE AMOUNT
OFFERED BY THE INSURER TO
SETTLE A CLAIM, WHETHER A
PREMIUM HAD BEEN PAID IN TIME
OR NOT , WHETHER THE POLICY
SHOULD BE TREATED LAPSED OR
NOT CAN BE REFERRED TO THE
OMBUDSMAN

167.  COMPLAINT THAT THE ENQUIRIES BEING MADE
ARE UNJUSTIFIED AND DELAYING THE CLAIM,
SUCH COMPLAINS CAN BE REFERRED TO THE
OMBUDSMAN
 COMPLAINTS THAT THE INSURER IS DELAYING
THE CLAIM ON THE GROUNDS OF INVESTIGATION
WOULD BE HEARD BY THE OMBUDSMAN
 COMPLAINTS THAT THE PREMIUM WAS PAID ON
TIME BUT ACCOUNTED BY THE INSURER LATE
WOULD BE HEARD BY THE OMBUDSMAN

168.  COMPLAINTS THAT THE POLICY SHOULD NOT BE
TREATED AS LAPSED WOULD BE HEARD BY THE
OMBUDSMAN
 LIFE INSURANCE POLICIES PROVIDE SAVINGS IN
TAXES
 THE INCOME TAX RELIEF WILL NOT BE THE SAME
THROUGHOUT THE POLICY TERM
 THE SURRENDER VALUE IS NOT TREATED AS
INCOME
 THE CLAIM AMOUNT IS NOT TREATED AS INCOME

169.  TAX BENEFITS ARE NOT PART OF POLICY
CONDITIONS.
 THE TAX BENEFITS MAY BE CHANGED AT ANY
TIME THROUGH LEGISLATION
 A CONSUMERS FORUM IS NOT A SET UP
EXCLUSIVELY FOR INSURANCE MATTERS
 THERE CAN BE AN APPEAL MADE AGAINST THE
DECISION OF THE CONSUMER FORUM
 THE CONSUMER FORUM CAN SUMMON WITNESSES
 THE OMBUDSMAN CANNOT SUMMON WITNESSES

170.  THE INCOME TAX PRIVILEGES FOR
INSURANCE ARE NOT GUARANTEED
 IT IS NOT NECESSARY FOR EVERY AGENT
TO DO SOME BUSINESS IN THE RURAL
AREAS
 IT IS NOT NECESSARY THAT T HE BUSINESS
IN THE RURAL AREAS HAS TO BE DONE
ONLY BY THE RURAL AGENTS

171.  A RURAL AREA IS DEFINED IN THE IRDA
REGULATIONS
 NO AGENTS ARE APPOINTED SEPARATELY
TO WORK IN THE RURAL SECTOR
 ANY AGENT CAN DO BUSINESS FROM THE
RURAL AREAS
 THE IRDA HAS SPEICIFIED HOW MUCH
MINIMUM BUSINESS THE INSURERS CAN DO
IN THE RURAL AREAS

172.  THE INSURANCE ACT HAS STIPULATED
THAT INSURERS MUST DO MINIMUM
BUSINESS IN THE RURAL AREAS
 THE REQUIREMENT OF BUSINESS FROM
THE RURAL AREAS INCREASES EVERY YEAR
 THE MINIMUM REQUIREMENT IS IN TERMS
OF NUMBER OF POLICIES

173.  THE SOCIAL SECTOR IS NOT THE SAME AS
THE RURAL SECTOR
 THE SOCIAL SECTOR INCLUDES BACKWARD
CLASSES, UNORGANIZED SECTOR
 THE SOCIAL SECTOR CAN BE IN THE RURAL
AREAS AS WELL AS URBAN AREAS
 MICRO INSURANCE IS NOT MEANT FOR
THE RURAL SECTOR ONLY

174.  NO SPECIALLY APPOINTED AGENTS ARE
REQIURED TO SELL MICRO INSURANCE
 LIFE INSURANCE AGENTS CAN SELL NON-
LIFE MICRO INSURANCE PRODUCTS
 LIFE MICRO INSURANCE POLICY CANNOT
EXCEED RS. 50000 SA
 HEALTH INSURANCE COVERS CAN BE
PROVIDED UNDER MICRO INSURANCE

175.  COMMISSION FOR SELLING MICRO
INSURANCE IS LESS THAN ORDINARY
INSURANCE
 THE TERM FOR LIFE MICRO
INSURANCE POLICIES IS LIMITED
 A PERSON AGED 45 CAN BE GIVEN A
LIFE MICRO INSURANCE POLICY

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