Shareholic

Friday, January 9, 2015

Insurance examinations - Tips on insurance awareness - Part 003





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




No comments: