Friday, January 9, 2015

Insurance examinations - Tips on insurance awareness - Part 002

01. What do you mean by Unit Linked Insurance Policy?
·         It is called as ULIP
·         It provides a combination of risk cover and investment
·         The dynamics of the capital market have a direct bearing on the performance of the ULIPs
·         The investment risk is generally borne by the investor
·         A wide range of funds are offered to suit one’s investment objectives, risk profile and time horizons
·         Different funds have different risk profiles
·         The potential for returns also varies from fund to fund

02. What are the common types of funds available under ULIP?
·         The common types of funds available under ULIP are – equity funds; income, fixed interest and bond funds; cash funds and balanced funds

·         Equity funds – primarily invested in company stocks with the general aim of capital appreciation
·         The risk category in the case of equity funds is found to be medium to high
·         Income, fixed interest and bond funds – invested in corporate bonds, government securities and other fixed income instruments and the risk category is found to be medium
·         Cash funds – Sometimes known as money market funds; amount is invested in cash, bank deposits and money market instruments. The risk category is found to be low
·         Balanced funds – Combination of equity investment with fixed interest instruments. The risk category is found to be medium

03. What are different kinds of non life insurance products?
·         Personal accident insurance
·         Workmen compensation insurance
·         Fire Insurance
·         Marine insurance
·         Motor insurance (Vehicle insurance)
·         Group Insurance
·         Health insurance

04. What are the different kinds of general insurance products?
·         Fire insurance
·         Marine (cargo) insurance
·         Marine (hull) insurance
·         Motor insurance
·         Aviation insurance
·         Engineering insurance
·         Miscellaneous insurance

05. What are the different kinds of marine insurance policies?
·         Hull insurance
·         Cargo insurance
·         Freight insurance
·         Liability insurance

06. What are the various classes of marine insurance policies?
·         Voyage policies
·         Time policies
·         Mixed policies
·         Valued policies
·         Unvalued policies
·         Floating policies
·         Named policies
·         Single vessel and float policies
·         Currency policies

07. What are various classes of fire insurance policies?

·         Valued policy
·         Valuable policy
·         Specific policy
·         Floating policy
·         Average policy
·         Excess policy
·         Declaration policy
·         Adaptable policy
·         Maximum value with dissent policy
·         Reinstatement policy
·         Comprehensive policy
·         Consequential loss policy
·         Sprinkler leakage policy

08. Paid up value:
·         Paid up value = (Number of years premium paid/policy term) x sum assured + (bonus/1000) x sum assured

09. Surrender value:
·         Surrender value = (surrender value factor x paid up value)/100

10. What do you mean by group insurance?

·         It is a plan of insurance which provides life cover to a number of persons under single policy called as master policy
·         The premium is found to be cheaper on account of low administration cost
·         A number of group insurance schemes have been designed for various groups
·         The groups include employer-employee groups; associations of professionals (such as doctors, lawyers, chartered accountants etc); members of cooperative banks; welfare funds; credit societies and weaker sections of the society
·         Individual lives are not assessed. A person will be covered so long as he remains eligible to be the member of the group
·         Double accident benefit is available – payment of double the sum assured on death due to accident – without permanent disability benefit – by payment of extra premium

11. What are different kinds of reinsurance?
·         The different types of reinsurance are:
·         Proportional form of reinsurance
·         Non proportional form of reinsurance
·         Proportional form of reinsurance are:
·         Quota method
·         Share surplus form
·         Non proportional form of reinsurance are:
·         Excess of loss method
·         Excess of loss ratio method
·         Pools method of reinsurance
·         Treaty method of reinsurance

12. What do you mean by DICGC and its objectives?
·         The objectives of DICGC are:
·         Provide insurance against the loss or part of bank deposits by participating banks and other financial institutions
·         Provide guarantee support to small scale borrowers by participating banks and other financial institutions
·         Provide credit guarantee support to the priority sectors – agriculture, retain trade, small business, professional and self employed persons and education
·         DICGC provides two types of functions  - deposit insurance function and credit guarantee function
·         When it comes to deposit insurance function, DICGC provides compensation upto a maximum amount of Rs. 1.00 lakhs per depositor per bank in the case of insolvency of the bank

13. What are the important credit guarantee schemes operated by DICGC?
·         Small loans guarantee scheme – 1971
·         Small loans (financial corporation) guarantee scheme – 1971
·         Service Cooperative Societies guarantee scheme – 1971
·         Small loans (small scale industries) guarantee scheme – 1981
·         Small loans (cooperative banks) guarantee scheme 1984
·         Credit guarantee schemes for small borrowers
·         Credit guarantee scheme for small scale industries

14. What are the  objectives of insurance legislations?
·         To fostering a sound, competitive and progressive insurance business
·         To monitor the activities of the insurance industry
·         To protect the interests of the policy holders by ensuring the insurers, intermediaries and surveyors abide the rules and regulations
·         To promote and preserve high standards of professionalism in the conduct of insurance business
·         To provide regulatory and fiscal infrastructure conducive to the development of insurance industry in the country
·         To coordinate investment and other activities of the insurers with the objectives of the national economic policies
·         To provide the best treatments to policy holders of various insurance policies
·         To provide the best solutions to the insuring public

15. What do you mean by consumer protection and redressel agencies in India?

·         The consumer protection redressal agencies were established by the consumer protection act in India
·         Consumer Disputes Redressal forum functions under three capacities namely; District consumer forum, state consumer forum and national consumer forum

16. What do you mean District consumer forum ?
·         It is set up by state governments in all districts in India.
·         Each district forum is headed by a district judge with two other members
·         These forums have jurisdiction to entertain complaints and compensation claim does not exceed Rs. 5 lakhs

17. What do you mean by unfair trade practices?
·         Falsely represent that the goods are of a particular standard, quality or grade
·         Falsely represent that the services are of a particular standard, quality or grade
·         Falsely represent any rebuilt, second hand, renovated, reconditioned or old goods as new goods
·         Represent that the seller or supplier has sponsorship or approval which they do not have
·         Making a false representation about the usefulness of any good or service
·         Giving public any warranty or guarantee of the performance efficacy or length of life of product or any goods that is not based on adequate proper test

18. What do you mean by State consumer forum?
·         It shall have the jurisdiction to entertain complaints where the value of goods an services and compensation if any claim exceeds Rs. 5 lakhs
·         It shall have the administrative control over all district forums within its jurisdiction in all matters

19. What do you mean by National consumer forum?
·         It shall be headed by a judge of supreme court of India
·         Consists of four other members
·         Has the jurisdiction to hear complaints where value of goods and services and compensations if any claimed exceeds Rs. 2 lakhs and shall hear appeals against the orders of state commissions.

20. What are the features of  motor vehicles act?
·         Vehicle must be a motor vehicle
·         Use must be in a public place
·         Insurance policy should be in force
·         Statutory contract between insurer and driver
·         Rights of third parties
·         Limitations of the third party’s rights

21. What are the different kinds of fire insurance policies?
·         Loss and profit policy
·         Industrial all risk policy and fire reinstatement
·         Declaration and floating policy

22. What are the different kinds of Marine (cargo) insurance policies?

·         Inland transit policy
·         Import and export marine policy
·         Special declaration policy
·         Annual open policy
·         Special storage policy
·         Sellers contingency insurance

23. What are the different kinds of Marine (Hull) insurance policies?
·         Fishing vessels policy
·         Major fleets policy
·         Inland vessels policy
·         Country crafts/motorized boats policies
·         Builders risk ship policy
·         Ship breakage risks policies
·         Major/Sunday hulls
·         Vessels under erection cover

24. What are various classes of aviation insurance policies?
·         Aircraft comprehensive insurance
·         Legal liability for passengers
·         Legal liability of crews
·         Loss of licence
·         Flight coupon (personal accident insurance)
·         Third party liability for crews

25. What are various kinds of engineering insurance policies?
·         Machine cum erection and storage policy
·         Machinery breakdown
·         Contractors all risks
·         Contracts plant and machinery
·         Advanced loss of profit
·         Electronic equipment insurance

26. What are the different kinds of miscellaneous insurance policies?
·         Agricultural pumpsets
·         Householders comprehensive insurance
·         Shopkeepers comprehensive insurance
·         Baggage insurance NTV
·         Coffee plantation insurance
·         Neon signs insurance
·         Personal accident individual and group insurance
·         School children’s personal accident insurance
·         Fidelity guarantee – individual
·         Employees liability insurance
·         Medical practitioners professional indemnity insurance,
·         Burglary insurance (business premise)
·         Cash insurance
·         Product liability insurance
·         Bankers blanket insurance
·         Personal accident social scheme and hut insurance
·         Medical claim individual and group insurance
·         Overseas medical claim
·         Boat and shipbuilders insurance
·         Bhavishya arogya

27. What are the requisite qualifications for a person to become one insurance sales person?
·         Personal selling of insurance is a selling process and assisting a prospective buyer to buy a product
·         The requisite qualifications for a person to become a sales person  are:
·         Should have the ability to persuade people to buy products of their choice
·         Should have good communication ability
·         Should possess knowledge about customers and their wants and desire and the products offered to satisfy them or not
·         Should know the socio psychological factors of customers
·         Influence the buying behavior
·         Should understand various customers, their attitudes and behaviours
·         Should have ability to recognize and handle them for successful salesmanship
·         Should follow AIDAS formula
·         AIDAS means – A for attention; I for interest; D for desire; A for action and S for satisfaction

28. What are the qualities of one sales person?
·         Physical qualities
·         Social qualities
·         Mental qualities

29. What are the skills of a salesman?
·         Interpersonal skills
·         Communication skills
·         Organization skills

30. What are the characteristics and traits of salesman ?
·         Trustworthiness
·         Enthusiasm
·         Empathy
·         Persistence
·         Patience
·         Desire for self improvement
·         Motivation

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