IC-33 Chapter 4

Chapter 4

  1. If as per the norms of risk assessment by the Underwriter (U/W) both the parents of a policyholder died in early 30’s due to heart disease then this risk assessed is known as PHYSICAL HAZARD.
  2. If a person works in a mine company he is exposed to PHYSICAL HAZARD
  3. In a with profit policy until otherwise provided the PERSISTENCY BONUS is paid at the end of the policy term or at the time of maturity.
  4. If the Sum Assured is too high then the underwriter should ask questions beyond Agent’s confidential report.
  5. If the person on whose life proposer wants to take insurance is suffering from cancer or any other critical illness then his proposal would be rejected by the insurer on the ground of LEGALITY OF THE OBJECT OR PURPOSE.
  6. Drinking Alcohol or smoking is considered as physical hazards.
  7. While calculating Human Life Value the future income of the person, No. of years of work, expected increment in income or salary and DISCOUNT RATE are the factors which are considered by the financial consultant.
  8. Persistency bonus is given by the insurer as an incentive to the insured for long term.
  9. Insurance companies charges same amt. throughout the policy term which is known as LEVEL PREMIUM.
  10. When interim bonus is paid under with profit policy it represents that the bonus is covering the period of previous valuation date to claim date.
  11. At proposal stage insurance companies take information regarding the life assured from the Proposal form, Insurance agent, Medical examination report etc. At this stage information from the neighbor of proposer is not taken.
  12. ACR i.e. Agents Confidential report is required to help the underwriter to assess the risk.
  13. The underwriter can get the required information about the proposer in PROPOSAL FORM.
  14. An agent’s commission needs to be disclosed to the customer in the BENEFIT ILLUSTRATION OF A UNIT LINKED PRODUCT.
  15. If a contract is signed by a person who is less than 18 years of age then it would be an INVALID CONTRACT.
  16. If two persons wants to retire at the same age say at 65 years then if a person pays more premium than the other it can be due to the fact that HE IS OLDER THAN THE OTHER ONE.
  17. If the two persons are of the same age then if there is a difference in their premium then it can be due to the HEALTH DETERIORATION OF THE ONE.
  18. Age Proof of certificate of Village panchayat is not a Standard Age proof but is accepted by insurance companies as Non Standard age proof.
  19. If two person take the same insurance policy then their can be difference of premium because of AGE, SA and MEDICAL CONDITIONS.
  20. The responsibility of classification and analysis of the proposal form lies with UNDERWRITER.
  21. If the proposal for insurance is for a huge amt. say for 4 crores then the insurance company would accept or reject the proposal only after confirming from the INSURANCE INVESTIGATION AGENCIES.
  22. Micro Insurance is made specifically for people from LOW INCOME.
  23. Interim bonus is valid TILL THE NEXT DECLARATION OF BONUS.
  24. Law of Large number helps the insurer to ASCERTAIN THE DEATH RATIO.
  25. Level premium is calculated based on the RISK PREMIUM.
  26. While calculating Human Life Value two main components that need to be considered are the 1.Take Home salary or Income and 2. Estimate working Life expectancy.
  27. The main source of information for an insurance company regarding the proposal/Life assured is the PROPOSAL FORM.
  28. Lien is imposed on a policy when underwriter feels that THE RISK ASSOCIATED WOULD DECREASE.
  29. Investment by NRI i.e. Non Resident Indian will be HIGH RISK.
  30. If a person is detected with Lungs cancer then he can not take the insurance because of health reasons.
  31. As per IRDA regulations IGMS i.e. Integrated Grievance Management System, should be a mandatory set up by ALL THE INSURANCE COMPANIES.
  32. Proposal Decision of the insurer should be communicated to the Proposer within 15 Days of the proposal.
  33. If a person who is an earning member for his family did not propose his life for assurance instead propose for the life insurance of his son who is a student, then it can be the instance of MORAL HAZARD.
  34. If two persons applies for a health insurance plan and one out of the two is asked for Medical then it can be due to the fact that the one who is asked for the medical is older than the other one.
  35. If the annual premium for a policy is Rs. 32,000 and for Qly premium loading is 4% then the exact Qly Premium would be 8,320 Rs
  36. If a person proposes his life for insurance for a large Sun Assured say for 1 Crore and wishes to made his nephew as his nominee despite his wife living then it can be termed as an instance of MORAL HAZARD, AS COVERAGE IS HIGH AND BROTHER’S SON IS THE NOMINEE.
  37. Actuaries are the professionals who decide the amt. of the premium in insurance products.
  38. When Nominee is not a dependent, the underwriter can consider the proposal as having MORAL HAZARD.
  39. If the underwriter felt that the risk associated with the person to be insured is likely to decrease then he would accept the case with “LIEN “.
  40. If a person is doing the job of premium calculation for his company then he might be having this authority in his profession by COUNCIL OF ACTUARIES.
  41. If a policyholder wants to change his existing address to a new one then this change can be made effective in policy document through “ ENDORSEMENT “
  42. Smoking and Drinking both being Physical hazards invites for Extra Premium.
  43. Mortality Table contains the DETAILS OF ACTUARIAL CALCULATION OF DEATH.
  44. The insurance act 1938 created the TARIFF ADVISORY COMMITTEE.
  45. Moral Hazards reflect the intention and attitude of the Proposer.
  46. There is a special report which is asked by the underwriter from the officer of the insurer which is known as CLIENT CONFIDENTIALITY REPORT.
  47. If the insurable interest is not their in the beginning in case of the life insurance then that contract would be held INVALID.
  48. If the proposer is a criminal and case against him for fraudulent activities is pending then the underwriter would suspect MORAL HAZARD in this case.
  49. In underwriting the economic value of a person is determined by HUMAN LIFE VALUE.
  50. Income Replacement method equates Human Life Value to PRESENT VALUE OF FUTURE EARNINGS.
  52. MPL stands for Maximum Possible Loss
  53. If the claim is not settled in full although the policy was in force then this can be due to the “LIEN “attached to the policy which was in force.
  54. The impact of Low Persistence is that IT WOULD IMPACT THE COMMISSION EARNING OF THE AGENT.
  55. If the proposer while filling the proposal form hides the fact that he practices mountaineering and died while mountaineering his claim would be rejected because of NON DISCLOSER.
  56. Life insurance policy is a value contract and principle of indemnity is not applicable for Life insurance contracts.
  58. A working person can be given insurance AS PER HIS HUMAN LIFE VALUE.

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