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IC38 Chapter 12 Notes

CHAPTER – 12

DOCUMENTATION – PROPOSAL STAGE

A) Proposal stage documentation:

i) Prospectus – it is a formal legal document used by insurer that provides details about the product. It states the terms and conditions scope of benefits- guaranteed- non-guaranteed; entitlements; exception.

ii) Proposal form – it is a form to be filled by the proposer for giving all material required by insurer in order to decide catheter the risk of the proposer to be accepted or rejected.

iii) Agent report – agent is primary under writer. All material facts and particulars about the proposer such as health, habits, occupation, income, family etc.

iv) Medical examiners report – the medical examiner‟s report is required typically when the proposal cannot be considered under normal condition i.e. Sum proposed is high or age is high or there are certain characteristics which call for examination and report by medical examiner.

v) Moral hazard report – it is the likelihood that a client‟s behaviour might change as report of purchasing a life insurance policy and such a change would increase the chance of loss.

vii) Anti-money laundering (AML) – the prevention of money laundering is the process of bringing illegal money into economy by hiding its origin. The act to curtail was paned in 2002 and person found guilty is perishable for 3-7 years imprisonment and fine upto 5 lakhs.

viii) Know Your Customer (KYC) – It is the process used to verify the identity of their clients. The objective is to prevent financial institutions from being used by criminal elements for money laundering activities.

KYC procedure:

  1. Photographs
  2. Age proof – School or college certificate, passport, pan card, service register, certificate of baptism, certified extract from a family bible if it contains the date of birth, identity card in case of defence personell, marriage certificate issued by a roman catholic church.

iii. Proof of address – driving license, passport, telephone bill, electricity bill, bank passbook etc.

Proof of identity – driving license, passport, voter ID card, PAN card, etc.

v) Income proof documents in case of high-value transactions

  1. ix) Free-look period (or) Cooling off period – suppose a person has purchased a new life insurance policy and received the policy document and if the policy holder is not satisfied with the terms and conditions of the policy then he can take his decision to continue stop such policy within 15days from receipt of policy document / bond.

Thus free-look period of 15 days is available as privilege to policy holder in order to take decision to be continued or not.

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