Monday, April 22, 2013

Insurance Examinations Tips for Interview for recruitment as administrative officers in Insurance companies







Insurance Examinations
Tips for Interview for recruitment as administrative officers in Insurance companies
e-book
Prepared by:
A. Gauri Sankar,  Chennai 600042


Insurance examinations
Tips for  Interview for recruitment as administrative officers in Insurance Companies
The purpose of interview:
The purpose of any interview is to select a suitable person for the concerned post. The person to be interviewed may be having better qualifications; however, he may not be having better communication ability, leadership quality and lacking in interpersonal relationship. Banking demands people who are willing to work hard by mingling with customers freely and friendly and moving with their colleagues in an amicable manner.
Phases of the interview:
The interview is conducted in four phases namely;
·         the first phase during the course of which questions are asked about the person and his specialization;
·         the second phase wherein questions are asked about the insurance company for whom the interview is conducted;  
·         the third phase wherein questions on insurance and finance and latest developments are asked.
·         The fourth phase is closing the interview
The interview committee:
The interview committee consists of three imminent personalities
·         The first member analyses the body language of the individual
·         The second member studies the answering ability of the individual
·         The third member judges about the capability of the individual for the post
The main purpose of posing the questions is to provoke the candidate emotionally, intellectually thereby pressurizing him to come out with appropriate replies available in his mind.
The interview process:
The interview process consists of the following:
·         Completion of certificate verification and paper work;
·         Waiting for the turn at the waiting hall;
·         Entering interview room after seeking permission of the members;
·         Thanking the interviewer who allowed the candidate inside the cabin;
·         Sitting on the seat offered;
·         Thanking the person who had offered the seat;
·         Shaking the hands of the members if offered;
·         Attending the interview maintaining eye contact with the interviewers;
·         Collecting all certificates and documents after the interview is over;
·         Thanking the interviewers
·         Walking out calmly and closing the door slowly
Dress code:
·         Dress code is more important and a person is judged by the dress he wears.
·         For men: Please wear a neat trouser and full length shirt – preferably white or light shaded; Using “T” shirts will dampen your image and do not opt for “T” shirts. Wear a good quality shoes neatly polished. If possible you can wear a “tie” – this is purely optional and in northern parts of the country persons wearing “tie” is considered to be dynamic and proactive.
·         For girls: Under any circumstances do not wear provoking dress namely; “T” shirts; jeans pants; trousers and shirts with messages and blouses with low cuts. A neat chudithar is considered to be the best and wearing sarees improves the image of the individual.

Questions during the first phase:
·         Initially the candidates are invited to tell about themselves, their family members, their ambitions, their qualifications, their achievements in studies, sports, music and other extra curricular activities;
·         The second question is about the place to which  the candidate belongs. In case the candidate belongs to Kanchipuram, he will be asked to tell about Kanchipuram and the positive points, if any,  about the place. Necessarily the candidate should have a thorough knowledge about the place from which he is hailing;
·         The interviewers will pose “ice breaking questions” in order to shift the focus of the candidate. This is for the purpose of finding out the reaction of the candidate during such “focus change”. (Insurance Companies demand people who are able to meet any challenges);
·         During the first two to three minutes, more than 80 percent of the questions will be on the personal biodata and information  about the candidate. It has to be remembered that – “ The first impression is the best impression”.
Sample questions during the first phase:
·         Tell something about yourself (You should inform about yourself, your family, your qualification, achievements etc. in a crisp manner. Unnecessary explanation should be avoided)
·         I see – you are from Tiruchirapally – please tell me about Tiruchirapally: Tell about Tiruchi – the river Kaveri; Rock temple; Sri Rangam, Samayapuram and many more;
·         You had studied in Presidency college. Why you preferred this college. How was your life in the college?
·         You had studied “EEE”  - why you chose the course?
·         You had mentioned your surname as “Kavirayar” – what is the reason?
·         You are in Chennai for the past one year. What is your opinion about Chennai?
·         You are having “EEE” in engineering and why do you prefer Insurance Business? (Your reply should be – In fact by working in Insurance Companies, I can develop my relationship with customers, improve my knowledge and serve many people)
·         What are your strengths and weaknesses? – Your answer: I am always willing to work hard under all circumstances;  I have good communication ability and I shall surely develop friendship with colleagues, clients and others  in a fast manner so that I can work better.
·         You are highly qualified having MBA and engineering degree what is the guarantee that you will be in our organisation for many years? (The reply should not be: On account of unemployment problem I am joining your Insurance Company; Your reply should be – even though I have good qualifications, I wish to work in the Insurance Company because I can have better opportunities to serve the society than any other institutions)
(The candidate should do a home work – he should analyse his strength, weaknesses and positive points; during the course of the interview he should avoid negative reply or angry reply under any circumstances; when provoked or tempted the candidate should remain calm and smile pleasingly during such occasions)
The following question may provoke the candidate –
·         You had dressed like Surya – do you think that you are Surya?
(Your reply should be– In fact I am his fan and I used to see many of his films since his films contain good messages which are useful for life)
Second phase of the interview process:
During this phase, questions will be asked about the Insurance Company for which the candidate is appearing for the interview and the following are some sample questions:
·         Do you know – where is the head office of Life Insurance Corporation of India ?
·         Who is the present chairman of the LIC of India?
·         How many zonal offices LIC is having as on date?
·         Can you tell me about the total business of LIC of India?
·         What is the difference between life insurance and general insurance?
·         Can you tell me about some insurance schemes available in LIC?
·         What do you know about the logo of LIC of India?
·         What is the punchline of Life Insurance Corporation of India?
Third phase of the interview:
During this phase, questions will be asked about insurance practices as follows:
·         Have you visited any branch of LIC of India ? What is your experience ?
·         What is the business of any Insurance Company?
·         What are the kinds of policies available in any Life insurance business?
·         What are the risks covered under general insurance?
·         What do you know by KYC guidelines?
·         You are working as an officer. The customer complains about the irritating behavior of the clerk who is working under you. What you will do in this situation?
·         Your manager delegates some work and you are failing in doing the work within the allotted time and your manager is not happy with your performance. How you will convince your manager?
·         Today there is a news about monetary credit policy. What do you know by that?
·         What do you know by principles of insurance?
·         What is called as inflation?
·         What is rupee convertibility?
·         What do you know by gross domestic product?
·         What do you know by ASBA?
·         What do you know by Sensex?
·         What do you know by a convertible debenture?
·         What is initial public offer?
·         What do you know by facebook – whether it is good for any individual and what is your opinion?
(The above questions are illustrative and not exhaustive and the candidate should know fairly well about many insurance procedure)
The fourth phase of the interview:
Like the initial phase or first phase – this fourth phase is also important wherein tricky questions will be asked as mentioned below:
·         You are hailing from Tiruchirapalli. In case you are posted to Chennai whether you will be willing to work in Chennai. (Your answer: If I am posted at Tiruchirapalli, I can do justice to the bank as well as the family members who are dependant on me)
·         Suddenly on account of computer crash, you have to sit late – whether you will be willing to sit late and finish the job or leave early without informing your superiors? (Definitely I will never mind in sitting late and I will always cooperate with my manager in finishing the day to day functions of the branch)
·         What are you willing to tell about you? ( If I am selected, I shall work hard and I shall discharge my duties to the entire satisfaction of my superiors. I will do always the best from my side)




 QUESTION BANK – PART 001


01. What do you mean by insurance? – According to the dictionary of business and finance insurance has been defined as a form of contract or agreement under which one party agrees in return for a consideration to pay an agreed amount of money to another party in order to make good for a loss, damage or injury to something of value in which the insurance has a pecuniary interest as a result of some uncertain events.
02. What are the roles played by insurance companies towards economic development in the country? – The following are some activities undertaken by insurance companies towards economic development in the country:
·         Insurance sector mobilizes savings
·         Insurance sector acts as a financial intermediary
·         It acts as a promoter of investment
·         It acts as stabilizer of financial market
·         It acts as risk manager
·         It ensures efficient allocation of capital resources
·         It prevents the losses to the firms by encouraging loss preventive measures
·         It facilitates trade and commerce
·         It substitutes for government’s social security programmes
·         It assists individuals and companies on efficient management of risk
03. What do you know by KYC guidelines? – KYC means Know your customer guidelines. According to KYC, the bank demands address proof and identity proof from the public when they open accounts with the bank or obtain a new insurance policy. For address proof, copes of ration card, voter ID card, AATHAAR card, telephone bill etc. are obtained. For identity proof, copies of identity card issued by the employers, voter ID card, driving licence, AATHAAR card etc. are obtained by the bankers.
04. What are the benefits of Life Insurance? – The following are the benefits of life insurance:
·         Protection against untimely death
·         Saving for old age
·         Encourage savings amongst the public
·         Initiates investment
·         Loans can be raised against insurance policies in case of necessity
·         It provides social security
·         Tax benefits are available

05. How far insurance policy protects against untimely death? – It provides protection to the dependents of the life insured and the family of the assured in case of his untimely death, the dependants or family members get a fixed sum of money in case of death of the assured.
06. How insurance policy helps as a tool for saving for old age? – The earning capacity of a person will be reduced after retirement. During such circumstances the insurance policy enables a person to enjoy peace of mind a sense of security in his/her old age.
07. How savings can be encouraged through life insurance policy? – It encourages people to save money. When life policy is taken, the assured has to pay premiums regularly to keep the policy in force and he cannot get back the premiums regularly to keep the policy in force and when he is not able to get back the premiums back, he can surrender value for the policy from the insurance company. In the case of surrender of policy, the policy holder gets surrender value only after the expiry of duration of the policy.
08. How insurance policy initiates investment? – Life Insurance Corporation encourages and mobilizes the public savings and channelizes the same in various investments for the economic development of the country. Life Insurance is important tool for the mobilization and investment of small savings.
09. How insurance policy is helpful as a social security measure? – Life Insurance is important for security as a whole. It enables a person to provide for education and marriage of children and for construction of house. It helps a person to make financial base for the future.
10. What are the aims of life insurance advisor as a financial planner?– The aims of life insurance advisor as a financial planner will be essentially on:
·         Accumulate wealth without any increase in earnings
·         Use the inflation to take advantage
·         Make best advantage of tax provisions
·         Make money work had for him
·         Maximize returns and minimize risk
·         Become financially independent
11. What do you mean by the tax concessions available for investment in insurance policies ? – A policyholder of life insurance policy can easily invest upto Rs. 1.00 lakh as premium under life insurance policies and enjoy tax exemptions under section 80C, 80CC of Income Tax act.
12. Is it necessary that wealth tax has to be paid for investment in insurance policies? – Life Insurance policies are not included under the term of assets and they are not subjected to wealth tax
13. What are the primary purposes of any insurance policy? – The primary purpose of life insurance for people is to protect their beneficiary’s standard of living in the event of an untimely death of a wage earner. The specific needs that to be provided for meeting the educational expenses of children to extinguishing a mortgage or providing an income for beneficiaries. Life Insurance is a financial service that promises a better tomorrow to those who value the idea of a saving today for the needs of future.
14. What are the objectives of nationalization of insurance companies? – The following are the objectives of nationalization:
·         To ensure general insurance business to the best advantage to the community
·         To promote competition in the economy
·         To prevent monopoly growth and concentration of wealth
·         To spread the activities over geographical frontiers
·         To innovate new products to suit the requirements of the different sections of the population
·         To meet the social objectives by formulating policies for weaker sections.
15. How about the life insurance industry as at present? At present there are two types of insurance industries – life insurance and general insurance. Life Insurance corporation of India is the public sector organization monitoring life insurance business in the country and there are many private insurance players in the insurance market.
16. What about the general insurance industry as at present? In the case of general insurance, there are four public sector players namely – Oriental Insurance Company, National Insurance Company, New India Assurance Company and United India Insurance Company. There are many private sector players who are looking after general insurance business in the country.
17. What are the advantages of privatization ? – There are several advantages on account of privatization of insurance companies as detailed below:
·         Financial security for the individuals insured with the increase in the number of insurance companies
·         Rise in the employment opportunities directly and indirectly for the educated youths
·         Financial services sector has got excellent source of long term investment
·         Customers have wider choice to select competitive insurance products
·         Awareness of risk management among the general public has been risen
·         Efficiency and productivity in the insurance sector promotes economic growth
·         Insurance sector contributes to the gross domestic product
·         Insurance sector helps infrastructure and construction industries
·         Innovation of new insurance products facilitates the insuring people to pick up the best policies suiting their income and premium paying capacity
·         Risk sharing and life protection enthuse change the life style of the insuring masses
18. What are the disadvantages of privatizing insurance companies ? – There are certain disadvantages in privatizing the insurance companies as detailed below:
·         There appears to be a war of pricing of insurance premium to attract a large number of customers
·         The cartel among private insurers to fix high premium is a worried matter
·         Share of foreign insurers in India grows substantially using funds from the insured public for other business entities
·         Non fulfillment of social obligations in the rural sector
·         Urban orientation of private insurers and business focus targeting only middle income and high net worth individuals
·         Private insurers do insurance business based on target basis of insurance selling
·         Privatisation for competition has no relevance because it will resort unethical practices as experienced before nationalization of insurance sector
·         The funds mobilized by the insurers are misused due to time lag between collection of premiums and settlement of claims and these funds can be utilized for other business
·         High broking commission exists particularly in life insurance business

19. How far insurance is safe for any individual? By means of any life insurance policy, the life risk of an individual is protected so that the dependents are able to meet out the loss on account of any sudden demise of the individual. Similarly, by insuring the physical properties, risk coverage is available for loss on account of burglary, theft, fire, floods etc.
20. What is a contract of insurance ? – A contract of insurance is a contract between two parties whereby the party is called as insurer who agrees to pay to other party a certain sum of money on the happening of a specified contingency, agrees to indemnify the other party from losses arising from certain specified wants. The other party to the contract is called as the insured or assured pays an agreed sum of money called premium as consideration.
21. What do you mean by subrogation? – Subrogation is a form of substitution. In marine and fire insurance contracts after the policy holder is indemnified in full, the insurer becomes entitled to the remnants of the property insured and all rights and claims which the policy holder may have against third parties. The insurer is subrogated to the position of the insured. The principle of subrogation applies only on p0ayment of the whole loss. In the case of partial loss this principle does not apply and in some cases where the contract of insurance is not a contract of indemnity.
22. What do you mean by double insurance? Double insurance is insured with two or more insurers and the total sum insured exceeds the actual value of the subject matter. In other words, the subject matter of double insurance must be insured with different insurers. If the actual value of the subject matter is more than the total sum insured, double insurance can be shown profitable because the insured can get full policy money under all policies.
23. What do you mean by reinsurance? Reinsurance means the transfer of a part of the risk by the insurer. Suppose a ship has been insured for Rs. 5 crores, the insurer may feel that the risk is too heavy to be borne by him alone and if so, he can transfer a part of the risk to another insurer.
24. What do you mean by an insurance policy? An insurance policy is a formal document contains the terms of insurance contract between the parties. It is a stamped document signed and issued by the insurance company. The policy is a documentary evidence of a contract of insurance issued by the insurance company and bears its seal and is signed by an authorized officer of the company.
25. What do you mean by Life Insurance? Human life is insured against death (other than death caused by accident) or other contingencies dependent on the human life. It is the insurance business covers the losses and risks of human life. Life Insurance business is carried out by the Life Insurance Corporation of India and private life insurers. The life insurance includes insurance that pays benefits on the person’s death, which is usually called as life insurance. Life insurance is a long term insurance where a person is insured for a term of 10 years, 15 years, 20 years etc.
26. What do you mean by non insurance? Insurance companies selling insurance to protect the property is known as non life insurance. It is a short term insurance where the term is only for a year after that the insured can select to renew for another year or can stop paying in which the insurance company is not liable for any claim. Non life insurance can be categorized according to uncertainties and events covered by the respective policies.
27. What are the examples for non insurance? The examples of non life insurance policies are householders insurance, fire insurance etc. The personal accident insurance is linked to human life and hence it would not strictly fall in the category of non life insurance due to the characterization of uncertainty which is manifested even in personal accident and medical insurance policies respectively.
28. What are the three kinds of non insurance? The three kinds of non life insurance business are – fire insurance business, marine insurance business and miscellaneous insurance business.
29. What do you mean by fire insurance business? It is the insurance business which covers the losses and risks of property which may be caused by fire. In this case, the property of the person is insured against the loss caused by fire or loss incidental fire.
30. What do you mean by marine insurance business? It is the insurance business which covers the losses and risks of ships cargoes etc. which may be caused by perils of sea. The vessels (ships), cargoes (goods loaded in the ship) of a person are insured against the loss caused by perils of sea.
31. What do you mean by miscellaneous insurance business? It means all kinds of insurance business other than life, fire and marine insurance such as personal accident insurance, property insurance, motor vehicle insurance and fidelity insurance. The non life category of insurance is referred to as property/casualty insurance which includes the insurance to cover the following namely – property loss, liability loss and health insurance.
32. What do you mean by retail insurance? The insurance purchased by individuals is called as retail insurance
33. What do you mean corporate insurance? The insurance which is  purchased by business organizations or any other organizations is called as corporate insurance.
34. What do you mean by coinsurance? Coinsurance implies for various types of insurance differently. In health insurance, the coinsurance clause functions like a straight deductible expressed as percentage. In health insurance is to make the insured bear a portion say twenty percent of very loss because through experiences that without such as control the charges for doctors and other medical services tend to increase therefore increasing the premium. Coinsurance clause is a device to make the insured bear a portion of every loss only when underinsured in the case of property insurance.
35. What do you mean by endowment? Endowment provides death benefits for a specified period. It has cash value and the policy holder is paid the contract’s face amount at the end of the protection period if the period is still alive.
36. What do you mean by direct insurance? Direct insurance is insurance sold to public by commercial enterprises. Insurers are selling the insurance both life and non life and in retail and corporate lines are called as primary insurers and the attendant premiums are termed as direct written premiums.
37. What do you mean by doctrine of reinstatement? Reinstatement means the replacement of assets which is damaged due to happening of an event by a similar or identical asset having similar or identical functions. Therefore reinstatement is replacement of an asset and which is lost and is a part of concept of indemnity. The doctrine of reinstatement includes the replacement and repairs of damaged assets of the insured asset. Once the clause of reinstatement or replacement or repair is available in the document, the other party cannot turn the other way when the insurer has opted to utilize the benefits under the clause. The reinstatement is the best option in most of the motor vehicle insurance and fire insurance contracts.
38. What are the different types of life insurance policies? Life insurance policies can be grouped into the following categories namely – term insurance, whole life policy, endowment life policy, health insurance schemes, joint life policy, with profit and without profit policy, double accident benefit policy, annuity policy, policies for women, pension insurance, postal life insurance etc.
39. What is a term insurance? Term insurance is the cheapest form of life insurance in the insurance contract. It provides basic death risk cover alone for a certain period of time and the policy money is payable on death during the term of the policy. The policy holder will not receive any benefit on survival at the end of the stipulated term but he will get protection for death occurring during the policy period. The term insurance policy can be secured by paying a single premium at the beginning or by an annual premium covering the risk for one year. This type of policy does not have surrender values.
40. What do you mean by whole life policy? Whole life policy is a permanent type of policy as an important saving instrument for future. It is a policy under which premiums are payable throughout life, that is why it is called as whole life policy. The sum is assured payable on death of the assured whenever it occurs. Premiums are payable throughout the life of the assured or until retirement of the assured at the age of 60 or 65 years. The policy remains in force and would provide the benefits for the dependents on the death of the policy holder.
41. What are the risks covered under whole life policy? In this plan, the risk is covered throughout the lifetime of the policyholder. The bonus rates are higher than the endowment type of plans while the premium rates are low. It is very suitable for persons who do not require policy proceeds during their lifetime. This policy runs for the whole life of the assured. The sum assured becomes payable to the legal heirs only after the death of the assured
42. What are the three types of whole life policy? The whole life policy is of three types as detailed below:
·         Ordinary whole life policy – Premium is payable periodically throughout the life of the assured
·         Limited payment whole life policy – Premium is payable for a specified period (say twenty years or twentyfive years) only
·         Single premium whole life policy – The entire premium is payable in one single payment.
43. What do you mean by endowment life policy? In this policy the insurer agrees to pay the assured or his nominees a specified sum of money on his death or on the maturity of the policy whichever is earlier. The premium for endowment policy is comparatively higher than that of whole life policy. The premium is payable till the maturity of the policy or until the death of the assured whichever is earlier. It provides protection to the family against the untimely death of the assured. In this plan, risk coverage with maturity in lifetime depending upon the choice of policy holders. These schemes fulfill the financial needs of higher education for children, marriage, retirement provisions, cash flow needs etc.
44. What do you mean by health insurance scheme? Modern lifestyle diseases such as heart, cancer, neurotic and pollution based etc. are on increase. Medical insurance is helpful in reducing the financial burden. An individual is subject to uncertainty regarding his health. He may suffer from ailments, diseases, disability caused by stroke or accident etc. For serious cases the person may be visiting a hospital and can be hospitalized and intensive medical care has to be provided which can be very expensive also. In this plan certain cash benefits are made available in case of major health problem to the policy holders.
45. What do you mean joint life policy? This policy is taken on the lives of two or more persons simultaneously. Under this policy, the sum assured becomes payable on the death of anyone of those who have taken the joint life policy. The sum assured will be paid to the survivors. For example, a joint life policy may be taken on the lives of husband and wife, sum assured will be payable to the survivor on the death of the spouse.
46. What do you mean with profit and without profit policy? Under with profit policy the assured is paid a share in the profits of the insurer in the form of bonus in addition to the sum assured. Without profit policy is a policy under which the assured does not get any share of profits earned by the insurer and gets only the sum assured on the maturity of the policy. With profit and without profit polices are known as participating and non participating policies respectively.
47. What do you mean by double accident benefit policy? This policy provides that if the insured person meets any accident, his beneficiaries will get double amount of the sum assured.
48. What do you mean by annuity policy? Under this policy, the sum assured is payable not in one lump sum payment but in monthly, quarterly and half yearly instalments after the assured attains certain age. This policy is useful to those who want to have a regular income after the expiry of a certain period. Annuity is paid so long as the assured survives. In annuity policy medical check up is not required.
49. What do you know about nationalizing life insurance companies? Insurance sector in India grew at a faster pace after independence. In 1956, Government of India brought together 245 Indian and foreign life insurers and provident societies under one nationalized monopoly corporation and formed Life Insurance Corporation (LIC) by an act of Parliament viz., LIC act, 1956 with a capital contribution of Rs. 5 crore
50. What do you know by nationalization of non life insurance? The non life insurance business/general insurance remained with the private sector till 1972. There were 107 private companies involved in the business of general operations and their operations were restricted to organized trade and industry large cities. The general insurance business (nationalization) act, 1972 nationalised the general insurance business in India with effect from January 1, 1973


Wishing you all the best

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