01. What do you mean by an
insurance agent?
·
Insurance business both life insurance and non
life insurance is procured through individuals called as agents
·
Individuals who want to be insurance agents
should
·
Obtain a license from the controller of insurance
of the IRDA in India
·
After obtaining the license, he should have to enroll
with the insurance company to be authorized to work as an insurance agent
·
A well trained insurance agent can explain the
details of various policies to the clients in detail
02. What do you mean by
corporate agency system?
·
Corporate agency system was introduced in India
during 2003
·
A bank can act as an agent on behalf of an
insurance company
03. Who can become one corporate agent?
·
A firm
·
A company under the companies act
·
A banking company
·
A corresponding new bank
·
A regional rural bank
·
A cooperative society including a cooperative
bank
·
A panchayat
·
A local authority
·
A non government organization
·
A micro lending finance organization
·
A non banking finance company
·
Any other organization that may be approved by
IRDA
04. What do you mean by
insurance broker?
·
Broker is person who helps in the development of
business between one person and another person
·
There are three categories of insurance brokers
namely – direct broker, composite broker and reinsurance broker
05. What are the objectives of
Life Insurance Corporation of India ?
·
Provide life insurance cover to insuring people
in India and outside India
·
To create insurance awareness in rural areas in
India
·
To achieve growth in new insurance business
06. What are the subsidiaries of Life Insurance Corporation of
India?
·
The LIC housing finance Limited
·
LIC Mutual fund
·
LIC (Nepal) Limited
·
LIC(international )EC Bahrain
07. What do you know by the
various public sector Non Life Insurance corporations functioning in our country?
·
General Insurance Corporation of India
·
National Insurance Company Limited
·
The New India assurance company limited
·
The oriental insurance company Limited
·
United India insurance company
·
Employees state insurance corporation
·
Deposit Insurance and credit guarantee
corporation
·
Export credit guarantee corporation of India
·
Agricultural Insurance Company of India Limited
08. What are the different
kinds of export credit insurance policies?
·
Standard policy
·
Small exporters policy
·
Specific policies
·
Guarantee to banks
·
Special schemes
09. What are the different
kinds of guarantees provided by ECGC ?
·
Packing credit guarantee
·
Export production finance guarantee
·
Post shipment export credit guarantee
·
Export finance guarantee
·
Export performance guarantee
·
Export finance (overseas lending) guarantee
10. What are the different types of insurance risks?
·
Pure risk
·
Speculative risk
·
Static risk
·
Dynamic risk
·
Subjective risk
·
Objective risk
·
Financial risk
·
Business risk
·
Personal risk
·
Property risk
·
Liability risk
·
Underwriting risk
·
Credit risk
·
Market risk
·
Liquidity risk
11. How pure risks and
speculative risks can be handled?
·
Risk assessment
·
Risk sharing
·
Risk exploitation
·
Risk monitoring
12. What are the various kinds
of risk management strategies?
·
Risk avoidance
·
Risk retention
·
Risk transfer
·
Risk reduction
·
Risk hedging
·
Risk combination
·
Risk sharing
13. What to you mean by the
risk management processes?
·
Risk identification and exposures to loss
·
Risk evaluation
·
Risk identification and exposures to loss consists of the following:
·
Loss exposure check list method
·
Financial statement analysis
·
Flow charts
·
Contract analysis
·
Physical verification and inspection
·
Statistical analysis of past loss
14. What are the modern risk financing techniques?
·
Alternative risk transfer
·
Catastrophic bonds
15. What do you mean by alternative
risk transfer?
·
Loss sensitive contracts
·
Finite insurance contract
·
Captive insurers
·
Multi line insurance policies
·
Multi trigger insurance policies
·
Contingent financial arrangements
·
Structured debt instruments
16. What are the different types
of CAT bonds as at present?
·
Surety bond
·
Judicial BONDS
·
Public official bonds
·
Fidelity bonds
·
Retirement planning
·
Annuity
17. What do you mean by insurance?
·
Insurance is the
contract between the insurer and policyholder
18. What are the risks faced by any human being?
·
Early death
·
Living too long
·
Disabilities
·
Sickness
·
Unemployment
19. What are the benefits of life
insurance?
·
Life insurance is not
only the best possible way for family protection
·
Insurance is the only
way to safeguard against the unpredictable risks of the future. It is
unavoidable
·
The terms of life are
hard. The terms of insurance are easy
·
The value of human life
is far greater than the value of property. Only insurance can preserve it
·
Life insurance is not
surpassed by any other savings or investment instrument, in terms of security,
marketability, stability of value or liquidity
·
Insurance, including
life insurance, is essential for the conservation of many businesses, just as
it is in the preservation of homes
·
Life insurance enhances
the existing standards of living
·
Life insurance helps
people live financially solvent lives
·
Life insurance
perpetuates life, liberty and the pursuit of happiness
·
Life insurance is a way
of life
20. In what ways the risks can be managed?
·
Prevention of avoidance
·
Retention
·
Transfer
21.
Who can be insured?
·
Individual adults
·
Children (minors)
·
Two or more persons
jointly under one policy
22.
What can be the sum
assured?
·
Some plans stipulate a
minimum sum assured.
·
There can be maximum
limits also for sum assured as well as certain benefits, like accident benefits
23.
In what contingency would
the sum assured be payable?
·
In the case of death
·
On survival
24.
When would the sum assured
be payable?
·
On the contingency of
happening
·
Some other dates
25.
How would the sum assured
be payable?
·
Could be in one lump
sum
·
In instalments
26.
What would be the term
(duration) of the policy?
·
This determines the
period during which the specified event should occur for the sum assured to be
payable.
·
Some plans provide for
benefits even beyond the term
27.
When would the premium be
payable?
·
Variations are in the
frequency of payment (monthly, quarterly, half yearly or yearly) as well as the
period during which it is payable.
·
Some plans provide for
premiums to be paid for a period less than the return
28.
Does the sum assured
increases?
·
This can happen because
of participation in surpluses and bonus additions
·
Or because of
guaranteed increases in sum assured
29.
Does the sum assured
reduce?
·
This can also happen,
if the plan is to meet reducing liabilities under a mortgage
30.
Are there additional
benefits?
·
These are also called
supplementary benefits and may be provided by way of riders, in addition to the
basic covers
31.
What is a without profit
policy and with profit policy?
·
Without profit or non
participating policies are not entitled to bonuses, which are declared after
actuarial valuations.
·
With profit or
participating policies pay a slightly higher premium for the right to
participate in the progress of the insurer.
·
With profit policies
are popular because the bonuses are expected to be more than the extra premium
paid.
·
With profit policies,
where the premium is payable for a limited period, will continue to participate
even after the premiums have ceased
32.
What do you mean by joint
life policies?
·
Two or more lives can
be covered under one policy and such policies usually cover married couples or
parents.
·
The sum assured is paid
on the death of any of the insured persons during the term or at the end of the
term.
·
Some plans also provide
payment of sum assured on the death of one life and the policy is continued to
cover the second life till maturity, without payment of further premium
33.
What are the requirements
in the case of joint life insurances?
·
A joint life
declaration is necessary to create a joint interest in the policy
·
In the case of
partnership insurance, the partnership deed will be examined to ascertain the
nature of financial interest of each partner
·
Each life will be
underwritten separately
·
Bonuses will accrue on
the single basic sum assured only
34. What do you mean by a proposal?
·
A proposal is an
application for an insurance cover.
·
When a proposal is
received, the insurer will not grant the cover automatically.
·
The insurer will make a
decision as to the admissibility of the proposer to the pool of policyholders.
35.
What do you mean by
hazard?
·
The factors affecting
the risk on the life of an individual are called as hazards and they can be
physical; occupational and moral.
36. What do you mean by physical hazards?
·
Physical hazards are –
age, sex, build, physical condition, physical impairments, personal history,
family history, increasing extra risk, occupational hazards and moral hazard
37. Explain the hazard related to age:
·
As age increases, the
probability of death increases and these probabilities are built into the
mortality tables and thereby into the premium rates
·
The underwriter looks
into the factor of aged mainly because of its relationship with other factors.
·
Certain risks increase
with age.
·
Certain other risks
decrease with age.
·
For example, being
overweight is a positive or favorable factor among children, while it may not
be so among older persons.
·
Young persons who are
underweight need closer scrutiny than elders who are underweight
38. Explain the hazard related to sex:
·
Mortality of female
lives is seen to be higher than male lives at younger ages, among the poorer
and uneducated sections.
·
One reason could be the
lack of adequate care in maternity cases.
·
Underwriting
considerations are also different in female cases.
39. What do you mean by the hazard related to physical condition?
·
The medical examination
of reflexes, blood pressure, pulse rates, urine etc. provides data with regard
to the condition of important systems of the body
40. What do you mean by physical impairments?
·
Blindness, deafness etc
and other conditions which are not illnesses; however, degenerative e hazards affecting the
probabilities of death
·
Personal history – This
is important as pointers to the health as well as the life style of the person
41.
What do you mean by family
history?
·
This is looked to see
whether there are factors that make the person susceptible to hereditary
illnesses.
·
Family history of early
deaths of cardiac illnesses or diabetes, could be significant
·
Increasing extra risk
is related to certain impairments or ailments like blood pressure or diabetes
or cancer, which are expected to get worse as days go by.
·
They do not have to, as
modern medicine has ways of containing them. Similarly, some impairments are
expected to wear off as days go by.
·
These are called
decreasing extra risks
42. What are occupational hazards arising out of one’s job?
·
The nature of the job
or the place in which the job is done have effects on the worker.
·
Contact with and
installation of fumes, excessive temperatures, etc affect health and life
spans.
·
Those on flight duties
on aircrafts run a greater risk of death by accident.
·
Those working in
chemical factories are likely victims of various respiratory diseases.
·
Those working with high
voltage electricity are susceptible to electrocution and burns.
·
The safety factor is
important in heavy engineering factories, working at heights, working with high
speed machines, adventure sports and so on
43. What do you mean by moral hazard?
·
Moral hazard refers to
the intentions of the proposer.
·
If the proposal is
being made because there is a genuine need for insurance, there is no moral
hazard.
·
If the intention is to
seek undue advantage through the use of insurance policy, there is some moral
hazard.
44. What do you mean by the policy document?
·
It is the document
given to the insured once the contract is completed between the insured and
insurer
45. What are the contents of the policy document?
·
The policy document
contains the following:number of the policy, date of the policy, age admitted,
name of the policy holder, the address of the policyholder, premium amount, mode of premium amount, plan
number, term in years, date of commencement of the policy, date of maturity,
name of the nominee, relationship with the policyholder
46. Which documents are accepted as proof of age?
·
Certified extract from
the municipal records
·
Certified of baptism
·
Certified extract from
family bible if it contains of date of birth
·
Certified extract from
school or college records
·
Certified extract from
service register or employer
·
Passport
·
Identify cards issued
by defence department in case of defence personnel
·
Marriage certificates
issued by a Roman’s Catholic Church
47.
What do you mean by days
of grace?
·
The policy stipulates
that the premium has to be paid in the insurer’s office on the dates specified
therein.
·
These dates are called
as due dates
48.
How premium can be paid?
·
It can be paid by cash,
cheque, demand draft, postal order, money order, banker’s cheque.
·
Nowadays electronic
means of payment as well credit cards and debit cards are also acceptable.
49.
What is a grace period?
·
Premiums are to be paid
on the due dates mentioned in the policy and insurers, however, allow a grace
period for payment of premium.
·
Payment within the
grace period is considered to be payment on time.
·
The grace period would
be one month, but not less than 30 days for yearly, half yearly or quarterly
modes of premium and 15 days for monthly modes of premium.
·
Some insurers allow 30
days grace period for monthly modes also
50.
What is salary savings
scheme?
·
In the case of salary
savings scheme, the premium amount is deducted by the employer from out of the
salaries payable to the employee.
·
When there is delay in
remitting the same to the office of the insurer, the delay is usually condoned.
·
If the delays happen
frequently, the salary savings scheme arrangement may be terminated
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