INSURANCE EXAMINATIONS - TIPS FOR INTERVIEW – PART: 002
01. What are the specific principles of
insurance? The following are the specific principles of
insurance:
·
Uberrima Fide – utmost good faith
·
Insurable interest
·
Indemnity
·
Proximate clause
·
Subrogation
02. What do you know by actuary? The
actuary is a technical expert who combines an understanding of the risks
involved in insurance and the mathematical techniques to develop insurance
products to manage these risks. He advises on pricing the insurance products
and calculates the reserves to be held for meeting the financial risks of the
insurance products. Insurance Regulatory Development Authority has made it
compulsory for any life insurance company to appoint an actuary without which
they cannot carry on their life insurance business
03. What do you know by Unit Linked
Insurance Policy? ULIP is an abbreviation for United Linked
Insurance policy. It is a life insurance policy which provides a combination of
risk cover and investment. The dynamics of the capital market have a direct
bearing on the performance of the ULIPs. In a unit linked policy, the
investment risk is generally borne by the investor. Most insurers offer a wide
range of funds 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.
04. What do you mean equity funds?
The amount collected through premium is invested in equity funds and it is an
investment in company stocks with the general aim of capital appreciation and
the risk category is medium to high
05. What do you mean by Income, fixed
interest and bond funds? In the case of income, fixed interest
and bond funds, they are invested in corporate bonds, government securities and
other fixed income instruments and the risk is medium
06. What do you mean by cash funds?
Cash funds is also called as money market funds and they are invested in cash,
bank deposits and money market instruments and the risk is found to be low in
this type of investments
07. What do you mean by balanced funds?
Balanced funds denote the combination of equity investment with fixed interest
instruments and the risk is found to be medium
08. What do you mean by group insurance ?Group
insurance is plan of insurance which provides life cover to a number of persons
under single policy called as master policy. The premium is comparatively
cheaper because of the low administrative handling only one policy instead of
many policies.
09. What are the features of group
insurance? The features of group insurance are as detailed below:
·
The premium is very low
·
A number of group insurance schemes have
been designed for various groups. These 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 society.
·
Individual lives are not assessed. A person
will be covered so long he remains eligible to be the member of the group
·
Double accident benefit: i.e. payment of
double the sum assured on death due to accident (without permanent disability
benefit) may be allowed under group insurance schemes for an extra premium
10. What do you know by General Insurance
Corporation? General Insurance Corporation is a sole reinsurer
in the domestic reinsurance market providing reinsurance to the direct general
insurance companies in India. General Insurance Corporation of India receives
statutory cession of 20 per cent on each and every policy subject to certain
limits and leads domestic companies treaty programmes and facultative
placements. The corporation’s reinsurance programme has been designed to meet
the objectives of optimizing the retention within the country ensuring adequate
coverage for exposures and developing adequate capacities within the dome.
11. What do you know by Insurance
Ombudsman?
·
The institution of Insurance Ombudsman was
created by Government of India
·
Notification dated 11.11.1998 with the
purpose of quick disposal of the grievances of the insured customers and to
mitigate their problems involved in redressal of those grievances
·
Insurance Ombudsman is of great importance
and relevance for the protection of interests of policy holders and also in
building their confidence in the system. The institution has helped to generate
and sustain the faith and confidence amongst the consumers and insurers
·
Ombudsmen are arbitrators for insurance
related disputes to be resolved quickly and at a very low cost
·
There are twelve offices of insurance
ombudsmen across the county
·
Any insurance related complaint can be
filed
·
Complaints upto Rs. 20 lakhs for life or
non life policies can be filed with the ombudsmen
·
Insurance Ombudsman has two types of
functions to perform :1) conciliation; 2) award making. The Insurance Ombudsman
is empowered to receive and consider complaints in respect of personal lines of
insurance from any person who has any grievance against an insurer.
·
The complaint may relate to any grievance
against the insurer. i.e. i) any partial of total repudiation of claims by the
insurance companies; ii) dispute with regard to premium paid or payable in
terms of the policy; iii) dispute on the legal construction of the policy
wordings in case such dispute relates to claims; iv) delay in settlement of
claims and e) non issuance of any insurance document to customers after receipt
of premium.
·
The insurance companies are required to
honour the awards passed by an Insurance Ombudsman within three months
12. What do you mean by micro insurance?
Micro insurance is the term used to refer to insurance to the low income people
and is different from insurance in general as it is a low value product
(involving modest premium and benefit package) which requires different design
and distribution strategies such as premium based on community risk rating (as
opposed to individual risk rating), active involvement of an intermediate
agency representing the target community and so forth.
13. What do you mean by nominee in the
case of one insurance policy? Nomination assumes great
importance in life insurance policies and in the case of death of the life
assured, claim money is to be paid to the nominee and it facilitates the
insurer in paying the claim amount.
14. What do you mean surrender value?
The cash value payable by Life Insurance Corporation of India on termination of
the policy contract at the desire of the policyholder but before the expiry of
term is known as surrender value. A policy can be surrendered, provided the
policy is kept in force for at least three years. The bonus will be added provided
the policy was in force for at least three years. i.e. premium should have been
paid for three years and also three years should have been completed from the
date of commencement. This condition is not applicable in respect of claims by
death.
15. What do you mean by certificate of
insurance? Certificate of insurance is issued by the insurer
either by the Life Insurance Corporation or private life insurers as the case
may be and it contains the essential features of the insurance contract like
date of the policy, date of expiry of the policy, insurance amount, risk cover,
subject matter and also the name and address of the assured.
16. What do you mean by assignment?
An assignment of a life insurance policy may be made only by an endorsement
upon the policy itself or by a separate instrument signed by the transferor or
assignor or authorized agent. The assignment is effective if only an attested
copy of the endorsement should be sent to the insurer. The insurer has to give
a written acknowledgment of the receipt of assignment notice. The assignment
may be of two types viz., absolute assignment and conditional assignment.
17. What do you mean by foreclosure?
Foreclosure means closure or witting off the insurance policy before its
maturity date. The life assured has options to pay interest or allow it to
accumulate from the policy money which is payable when the claim arises if a
loan is granted on the policy. In the case of paid up policies, the surrender
value will not grow fast as compared to accumulated interest. Sometimes, the
principal loan amount and interest accumulated will be more than the surrender
value and the foreclosure is necessary in such situations. If the foreclosure
is planned, a notice may be issued to the policyholder calling for the payment
of arrears of loan interest. In case interest is not paid, the policy is said
to be foreclosed; i.e. surrendered to loan amount. The balance surrender value
will be paid to the policy holder is any after adjusting the principal loan
amount outstanding interest.
18. What are the steps in selling life
insurance? There are four important steps in selling life
insurance which are as detailed below:
·
Knowledge and understanding of the
prospect’s problems
·
The sale of the objective, the result of
the problem, rather than the problem to be solved
·
The development of possible solutions of
which the key factor is determination of the prospects major objective
·
The application of all facts and figures as
they relate to the salesman’s proposal and their direct relationship to the
prospect’s specific problem.
19. What are the selling techniques of a
salesman? A salesman should follow AIDAS formula. A for
attention, I for interest, D for desire, A for action, S for satisfaction/
·
The products must attract to the customers,
salesman should create interest in the minds of the customers by sales
demonstration. He should develop the desire to buy the products
·
Physical qualities: The physical appearance
is the biggest asset of a sales person – free from physical defects –
sufficient care for his appearance, appropriate dress – cheerful smile in his
face – a good natural smile is most important
·
Social qualities – such as ability to make
himself socially acceptable – mingle with groups
·
Mental qualities – good power of memory and
observation-able to recognize customers, their characteristics, buying motives
– absentminded person cannot be a good salesman. He must be resourceful, self
confidence – proper management of time and systematic attitude such as creating
a goodwill and name for fair and honest dealings – loyal to both to his
employer and to his customers.
20. What are the characteristics and
traits of salesman? The following are the characteristics and
traits of salesmen
·
Trustworthiness
·
Enthusiasm
·
Empathy
·
Persistence
·
Patience
·
Desire for self improvement
·
Motivation
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