About Life Insurance

WHAT IS LIFE INSURANCE

 

The History of Insurance in Ancient India: Lord Krishna says in the ‘The Geeta’ – the Celestial Song that one should not grieve for what is inevitable and unavoidable. That means there are events that may or may not occur paying the way for uncertanity in life. Whenever there is uncertainity, there is an involvement of Risk. The instinct for security is universal. As a sequel to this quest for security, the concept of insurance has been born. The urge to provide a protection against the loss of life. The term “Yogakshema” implies the idea of a welfare state that care for the welfare of its subject that include the wellbeing, prosperity and happiness of masses. The LIC of India has also derived the words “YOGAKSHEMA VAHAMAYAHAM” in its logo means: “YOUR SECURITY, MY RESPONSIBILITY”.  

 

What is insurance:

Insurance means a contract between an insurance company and the person insured that a specified amount will be paid in case of happening of a specified contingency, in consideration of an amount, named as premium. Thus premium paid by the insured person in the consideration amount for the contract. The assured amount paid to the nominee as the indemnification of the loss of human life is impossible.

Why need for Insurance: 

Every person has two estates in his life time. One is an Acquired Estate and the other is a Potential Estate. Potential Estate is developed by a person himself by education, training, job and experience, if the person mis-happening, the 100% loss of the potential estate occurs.

How does insurance work: 

Through Risk Avoidance, Risk Control, Risk Avoidance, Risk Control, Risk Retention & Risk Transfer. Insurable Risks: A. Financial Risks, Pure Risks, Particular Risk. Compensate the Human Life Value.

 

Life Insurance Based Upon Age: 

(i) Childhood (0-18), Young Unmarried (19-25), Young Married (25-28), Young Married with Kids (29-35), Married with Children (35-45), Married with Older Children (45-55), Pre-Retirement (55-60), Retired Life (60->).

Why Life Insurance Needs: 

A. Protection of the Potential Estate, B. Medical Needs, C. Protection of Physical Assets, D. Children Education, E. Children Marriages, F. Old Age Provisions.

Life Insurance Products: 

A. Term Insurance, B. Return of Premium (ROP) , C. Pure Endowment Plan, D. Endowment Insurance Plans, E. Whole Life Plans, F. Convertible Insurance Plans, G. Joint Life Insurance Plans, H. Annuities, H. Health Plan & Cancer Plan, I. Group Insurance Plans. J. Micro Insurance, K. Unit Linked Insurance Plans, L. Children Plans, M. Money Back Policies.

 

Documentation – Proposal Stage: 

1. Prospectus, 2. Proposal Form, 3. Agent’s Confidential Report (ACR), 4. Medical Examiner’s Report, 5. Mortal Hazard Report (MHR), 6. Anti-Money Laundering, 7. Know Your Customers (KYC) Required documents : 

·  Age Proof (any one): School Leaving Certificate, Passport, Pan Card, Driving License, Birth Certificate, Aadhar card.

·Address Proof(any one): Passport, Voter's/Election Card, Aadhar card, Utility Bills (like Mobile, Electricity, Water, Gas, Credit Card Bill, Ration Card Bill), Rental Agreement, Bank passbook, Driving License (Self Attested) 

·  Photo Identity Proof (anyone): Passport, Pan Card, Driving License, Voter's/Election/Aadhar Card, etc. (Self Attested)

·   Income Proof: Form 16, Income Tax Returns, Salary Slip (If Total Premium exceeds Rs. One Lakh)

·    Highest Qualification Certificate.  

·    One payment & cancelled cheque (name printed) for ECS Mode, otherwise Passbook Copy of First & Last Page.

·    For Child Policy(age 5 to 17)(any one): School I card, Current Year School fee Receipt, Progress card, Birth Certificate 

Two Passports sized Photographs, in child insurance Parents & Child both Photos required.

Documentation – Policy Conditions–I : 

1. First Premium Receipts (FPR), 2. Renewals, 3. Free Look-In Period, 4. The Policy Document/Bond, 5. Endorsements, 6. Notices- Premium Reminder, Bonus, Revive, Lapsation, Survive Benefit, Maturity Benefit, Statement in respect of ULIP etc.    

Documentation – Policy Conditions–II : 

1. Grace Period, 2. Revival, 3. Non-Forfeiture Provisions, 4. Paid-Up Value, 5. Surrender Value, 6. Policy Loans, 7. Automatic Premium Advance Loan, 8. Nomination, 9. Assignment, 10. Foreclosure, 11. Duplicate Policy, 12. Alteration:- Change Policy Term, Reduction in the sum assured, Change the Mode of Premium, Change the date of commencement of policy, Splitting up two or more policies, Removal of extra premium or restrictive clause, change from without profits to with profits plan, Correction in name.

 

The Process of Life Insurance Underwriting: 

A. Obtaining the Required Information: 

1. Proposal Form, 2. Medical Reports, 3. Agent’s Confidential Report (ACR), 4. Mortal Hazard Report (MHR), 5. Additional Questionnaire, 6. Income Tax Assessments: Salaary Slip, Form-16, Income Tax Return (In Term Insurance 3 year ITR or Form-16 must). 

B. Assessments of Risk to be undertaken: 

I. Hazards:

Physical & Moral Hazards, 

II. Medical Underwriting: a. Family History: 

Heredity, Average Longevity of the family, Family environment, b. Personal History: i. Cardiovascular Diseases, Excessive production and reproduction of cells, Ailments of the renal system, Impairments of the endocrine system, Digestive system disease, 

C. Personal Characteristics : 

i. Build, ii. Blood Pressure, Urine.

Payments under a Life Insurance Policy:

Death Claims on Riders: Accidental Death Benefit Rider (ADB), Critical Illness Rider (CI), Payor’s Benefit Rider, Premium Waiver Benefit Rider (PWB), Term Rider, Double Term Rider.              

The Process of Settlement of Death Claims: 

1. Claim Intimation, 2, Claim Booking, 3. Claim Process:- 1. Non early Death Claims, 2. Early Death Claims

Maturity Benefits Claim: 

Survival Benefits, Paid-up Value, Discounted Value, Payment of Annuity, Commutation of Installments, Reduced Sum Assured, Settlement Options.  

For more details, Pooja Manoj Gupta, www.giia26.com
Email: pmgiia26.com Mobile 8882286639