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IC-33 Chapter 3

Chapter 3

  1. Loan is generally available on Endowment plans and not on Money back, Term or pension insurance plans.
  2. If their two nominees in a policy then there is no fixed % which can be given to them because there is no specific limit like that.
  3. If a persons gets insurance and named his daughter as nominee he has to appoint an appointee but if he fails to get signature of appointee and died then the claim amt. would be given to his legal heirs and not to the appointee or to the nominee.
  4. PAN Card or Permanent Account Number Card is considered to be as standard age proof.
  5. If a person instead of drinking alcohol and smoking mentioned in the proposal form as ticking NO to the relevant columns then it is considered that he has breached the company by cancelling the facts.
  6. If a person has got health insurance from more than one companies say of Rs 1,00,000 and 2,00,000 then falls sick and make medical expenses of Rs.50,000, then he would get claim from only one company just because of the principle of Indemnity.
  7. Both the parties to the contract must agree and understand the same thing in the same sense is known as CONSENSUM AD IDEM.
  8. Any number of nominees can be placed in a policy as there is no fixed and specific rule regarding it.
  9. If two policies are of Equal SA and equal mode for Ex. Qly mode and No. Of installments paid are also equal and issued on the same date, then still their can be a difference between the Surrender Value of them just because of the term of the policy.
  10. Assignee can not make a fresh nomination in a policy after the assignment.
  11. Insurance Cover starts after the issue of First Premium Receipt.
  12. Indisputability clause is applicable for 2 years.
  13. An agent should suggest the surrender of the policy only if policy has been mis-sold and do not match with the needs of the customer.
  14. If a life insurance policy is issued with a LIEN then it should be mentioned in the “Schedule” Part of the policy document.
  15. Minimum age to enter into a contract is 18 Years.
  16. Principle of indemnity is applicable to General Insurance only and not to Life Insurance.
  17. Principle of Indemnity denotes that insurance can not be used to make profits.
  18. If a person takes a loan upon an insurance policy and does not pay the principle amt. of loan and even interest in installments or so then that policy would be got surrendered by the insurer.
  19. Principle of Utmost good faith is not applicable to facts of common knowledge, Facts of law and Facts which are not material or important for the underwriting.
  20. The obligation of the insurer in case of a whole Life Policy is mentioned in “Operative Clause “Part of the policy.
  21. The Principle of Utmost good faith applies to both the insurer and the Proposer.
  22. If a person transfer his policy to the another person as a security for the loan he has taken and with the condition that he would get his policy back after giving money to him then this would be the instance of the “ CONDITIONAL ASSIGNMENT ‘.
  23. A contract exists between the insurer and the proposer only when the proposal is accepted unconditionally by the insurer.
  24. A policyholder can take a loan on Whole Life policy but not on Money Back Policy.
  25. If a person is 34 years of age and is having 2 children then he would be coming under “HIGH LEVEL” as Risk Appetite Level.
  26. Life insurance is although important for every age group but on Pre Retirement stage or Age Group, it is most important.
  27. If a person Buys Life Insurance on the Life of another person then that person who is buying the policy is known as the Proposer/ Policyholder and the person on whose name policy is purchased is known as the Life Insured.
  28. Nomination does not transfer the title of the policy whereas in assignment the title is transferred from the assignor to the assignee after the assignment.
  29. The reason of the Surrender of the policy may be the Financial Problems of the policyholder.
  30. If on maturity of the policy only 25% of its value is received by the policyholder then this instance can be happened because this can be a Paid Up Policy.
  31. Insurers insist upon the Age Proof Document to assess the risk or For Risk Assessment.
  32. Ombudsman’s Address should be mentioned on the “Information Statement “Part of the family.
  33. Proposal Form is the Basis of Insurance Contract.
  34. If Sum Insured is reduced to 25 years from a 30 years policy then it would be because of the policy might have been made “Paid Up “by the policyholder.
  35. If a person takes Govt. Securities for a fixed term and wants to take his money back before the expiry of the term of the securities then he would get only the “Discounted Value” of that security.
  36. If no insurable interest is attached to an insurance policy then insurance contract would not be valid for most of the cases.
  37. In a pension Plan Illustration Guaranteed and Non Guaranteed Par shows the benefits for an annuitant.
  38. Baptism Certificate is preferable to Ration Card as an age proof if an agent wants to login in a policy.
  39. The Principle of utmost good faith is applicable throughout the term of an Insurance policy. (Whether Term Insurance or any Other Life insurance.)
  40. If a person although fills the proposal form but does not submit it to the insurance company then it would be effecting offer and acceptance part of the insurance contract.
  41. If a person has taken an endowment policy for 20 years and then after 10 years wants to take a loan then he can take loan up to the certain % of the Surrender value of the policy.
  42. The premium is considered to be or deemed to be paid when cheque amt. is deposited into the insurer’s account.
  43. A Client can reject the policy with 15 days of receiving of it.
  44. If a person has taken up policy for 15 years and after 9 years he is not in a position to continue it then he can make this policy as Paid Up.
  45. It is the Life insured whose age impacts the premium and not the policyholder or Proposer.
  46. A person can take insurance on the life of another person only if he suffers loss in case of the death of another person.
  47. At the time of calculating the surrender value SA, No. of years premium Paid and No. of Years premium to be paid, is all taken into account.
  48. If Claim intimation leads to publishing of an advertisement in the newspaper it would mean that policy might have lost.
  49. If the employer is having insurable interest in the life of an employee then this would be the case of “Key man’s Insurance.
  50. Payment of Premium and Sum assured are laid down in “Operative Clause “Part of the policy.
  51. The Condition that policyholder should pay premium regularly is mentioned in Policy Document, Prospectus and also the Proposal Form.
  52. In case of a illiterate proposer, the proposal form is filled up by the person who can understand it and he fills the proposal on behalf of the proposer and also give a declaration of it. In this type of cases the Thumb impression of the proposer is also required along with other documents.
  53. If Sum Assured is Rs. 5,00,000 and the declared bonus is 5% p.a. then the bonus for one year would be 25,000 Rs.
  54. Brother and Sister is not having insurable interests in the lives of each other whereas Co-surety and Surety, Employer- Employee and Husband- Wife all are having insurable interest in the life of each others.
  55. A Life insurance policy can be made Paid Up only if Savings Element exists in that policy.
  56. If a policyholder wants to revive his lapsed policy then two most important things required are Reinstement Fees and Proof of Continued Good Health.
  57. The Risk Commencement date of an insurance plan is the date on which premium is receipted or First Premium Receipt is issued.
  58. In case of General Insurance or say in case of Motor Insurance, Insurable interest exists until a person owns the asset like until he owns the vehicle in case of Motor Insurance.
  59. Changes in the policy can be made by or through endorsements.
  60. In case of Life Insurance Insurable Interest exists only at the inception of the policy whereas in General insurance it needs to be existing at the time of Claim also.
  61. On forecloser, if death claim arises before the payment of Surrender Value then the claim would be payable to the Legal Heirs of the life assured and not to the nominee or nominees.
  62. A contract by a person who is less than 18 years is simply invalid.
  63. Insurance Contract without insurable interest will Results into a WAGERING CONTRACT.
  64. Cooling Off or Free Look Period begins in an insurance policy when policy is received by the policyholder.
  65. A person is having an Unlimited Insurable Interest in his own life.
  66. Declaration in the proposal form is mandatory for a contract of insurance to be considered as a valid Contract.
  67. Non Discloser of Material Facts, Concealment of material facts & fraudulent misrepresentation of facts all leads to Breach of duty of Utmost Good Faith.
  68. Up To 20,00,000 Claim the District Level of Consumer Forum can be approached by the complainant.
  69. A Client can buy a new plan of insurance any time after the surrender of his existing policy by the agent.
  70. In case of life insurance, Insurable Interest should exist only at the inception of the policy.
  71. The additional premium is collected in a life insurance policy in which bonus is declared by the company. This additional Premium added is known as Loading.
  72. If insurance company found after 1 year that the life insured is suffering from Surgery then Indisputably Clause would be applicable ( Section 45 )
  73. In Marine Insurance the insurable interest should exist only at the time of claim.
  74. The Details of customers or Life insured are available in the Proposal Form.
  75. In an insurance Contract Consideration Means “Premium “.
  76. If a person surrenders the policy after paying 1st year premium only then he will get nothing as surrender value is become payable only when premium is paid for certain minimum number of years.
  77. In a life insurance plan the proposer’s duty of discloser is at the time of beginning of the contract and at the stage of the revival of the insurance contract.
  78. In case of an illiterate proposer if he happens to be a male then his Left hands Thumb impression and the declaration of the person who filled up the proposal form is required.
  79. Pooling of risk means all similar risks are pooled together.
  80. Paid Up Value= (SA* No of years premium Paid/No. of years premium to be paid)+ Vested Bonus till date.
  81. An Insurance contract commences when First Premium Receipt is issued.
  82. In case of a Joint Life Policy such as Husband & wife taking JLP there is no need to mention the name of nominee to this policy.
  83. Through assignment one policyholder can transfer money to third party barring nominee.
  84. 18 years is the minimum age for entering into a contract.
  85. To prove one’s identity as per KYC process the customer needs to submit the age proof, Identity proof and the address proof. Education proof is not the required document as per the KYC process.
  86. Net Premium is equal to Premium – Interest earning.
  87. “Operative Clause “Part of policy lays down mutual obligations of the parties regarding payment of premium by life assured and payment of sum assured by the insurer.
  88. If a person takes a policy of the life of another person then there is no need to mention the name of the nominee. Like a father taking policy on the name of his minor son.
  89. The contract is their in place only if the offer of one party is accepted unconditionally by the other party to the contract.
  90. Appointee’s role is their only when the nominee is minor.
  91. If a person takes an insurance policy for 15 years and could not pay premium after 4 years and wants to revive his policy in the 7th years then policy may be renewed on different terms and conditions.
  92. If in a life insurance policy later it comes to the picture that the proposer is not having the insurable interest then still it would be a valid contract.
  93. Assignment can be the Absolute Assignment or the Conditional Assignment.
  94. Principle of Utmost Good Faith will operate in an existing policy if the policy has lapsed and it has to be revived.
  95. If a policy of 20 years remain in force for 5 years and then policyholder is unable to pay premium their after then this policy would acquire Paid Up Value.
  96. The Statement “The proposal and declaration signed by the proposer form the basis of Contract “This is mentioned in the “Preamble” part of the policy document.

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