S.

No

Revised syllabus Question Chapter No. Ch 1 Sanjeev is an insurance expert who has rich experience in determining premium levels for product, what is his profile like The Non Government organizations(NGO) helps the insurance industry immensely in

Ans Option 1

Ans Option 2

an actuary

loss adjuster

Ch 1

Promotional activities

Drafting new regulations

Ch 1

Investment by foreign direct investors in to Insurance co's is restricted to

12%

25%

Ch 1

Which market does the Micro Insurance Concentrate on ?

People with large families

People with Low Income

Ch 1

What facility do the insurer use to cover Risk beyond their Limits ? what is the max level under which micro insurance can be done

Re Insurance

Banca assurance

Ch 1

5000

25000

Ch 1

Who is the customer of a Re insurer Insurance company transfers the insurance which cannot bear by them to a policy holder takes two insurance policy and the premium amount is identical and he gets lesser commission in one of contract the reason is likely to be

High Networth Individual Bancassurance

Insurance Companies Reinsurance

Ch 1

Ch 10

one policy has more SA

ONE POLICY has more term Y has brought a single premium product

10

Ch 10

An agent reveals his commission received X has brought from insurance sales to X&Y .Both plans are other limited of same duration . Why is commission of X premium product far higher that that of Y

11

Ch 10

Customer asks the agent to disclose the commission . The agent should

disclose on demand

Not disclose

12

Ch 10

The best way to prove that customer of a ULIP policy is given awareness about the commission paid to the agent is

Ask the insurer to give a policy From the fact endorsement details letter

13

Ch 10

Churning is bad , based on which aspect

Agents earn Lower Commission on churning

Policyholder gets more benefits

14

Ch 10

what over riding criteria an insurance agent consider while proposing a solution

risk

suitability

15

Ch 10

Sales Target is reduced . Churning will

Increase

Decrease

16

Ch 10

Higher persistency to the insurer ensures what ? Persitency =has increased from 82 % in previous year to 86 % this year . That means

More productivity

Higher attrition more attrition

17

Ch 10

more lapsation

18

Ch 11

What is the maximum Time in which The insurer should settle a claim when all documents are submitted

3 days

15 days

19

Ch 11

A missing person is considered to be dead after

5years

8years

20

Ch 11

The delay in settling claim by any insurance co, as per IRDA norms has to pay....% if the present bank interest rate is 5.2%

7%

9%

21

Ch 11

A claim was submitted & in how many days company should ask for additional documents if required

15 days

10days

22

Ch 11

Vivek takes insurance policy and dies after 8 months . If the claim needs to be excluded basis the exclusion cause what could be the cause An advisor while explaining the policy and to sell he accepts to give a part of his Agents commission, what is th limits Consumer Forum at district level will hear complaints up to How much is the rebate allowed by IRDA to client the controller of insurance in india is

suicide

murder

23

Ch 12

10%

20%

24 25

Ch 12 Ch 12

20L Nil

40L 5%

26

Ch 12

IRDA

RBI

27

Ch 12

A insurer advertises through daily news paper . What type of marketing is Investment by NRI(Non Resident Indian) will be MWP- If the policy is endorsed under MWP then the beneficiaries are wife and ?

cross selling

direct selling

28 29

Ch 12 Ch 12

No risk parents

Low risk ex wife

30

Ch 13

Mr.Sunil is doing premium calculation for his company, as per which authority is his profession related to

Council of Actuaries

Insurance council of India

31

Ch 13

basic qualifications of agent

sound mind & graduate

sound mind & good income level Life Insurance Council

32

Ch 13

Which Institution was Constituted by Insurance Act 1938

Insurance Institute of India

33

Ch 13

What is the role of National Insurance Academy?

To regulate

To advise Government

34

Ch 13

According to IRDA act 1999, central governments involve in insurance industry over

Policy matters

complex technical issues Insurance Institute of India

35

Ch 14

Complaint council bodies other than IRDA grievance readdress forum & COPA

Ombudsman

36

Ch 14

What are the ways by which a policy holder can make complaints

email

Toll free No.

37

Ch 14

what are the ways in which IRDA can be contacted . One is thru toll free number and other is A policy holder submits cancellation of his term insurance policy , the insurer accepts the form and fails to give the benefit and the policy holder writes to IRDA post which the settlement should be within

email

Insurance ombudsmen

38

Ch 14

10 days

15 days

39

Ch 14

what is the maximum level of complaint that can be considered and taken action by ombudsmen

20 lac

25 lac

40

Ch 14

What is the period of award passed to the customer decided by ombudsman?

2months

3 months

41

Ch 14

An Award is passed by Ombudsman .In how many days it should be honored by Insurance Co

15 days

30 days

42

Ch 14

Karthik written to his insurer about non settlement of a maturity calim,as per regulations,the insurer has to reply to this within how many working days

43

Ch 15

Raju is a certified license holder under what circumstances he needs to hold his certified license with him that is issued by irda

under all circumstances

when he sells term insurance

44

Ch 15

A policy has been rejected by the company under direct intimation to the customer and copy to the Agent, what is the next action of the Agent

he has to inform the customer that the co has broken relationship with the customer

he plans to change the plan

45

Ch 2

lung cancer and smoking .

smoking is lung cancer is peril and lung peril and smoking cancer is is moral hazard hazard

46

Ch 2

The type of risk that can be insured against is Harish takes a life insurance policy for Ramesh. Which of the following statement best describes the principle of Insurable Interest.

Speculative Risk

Pure Risk

47

Ch 3:1

Ramesh declares all his liabilities

Ramesh is elder than Harish

48

Ch 3:1

what is the min age to enter into the contract of insurance

16

18

49

Ch 3:1

In a whole life plan - The policyholider's responsibility to give disclosure

at the beginning of through out the contract the contract

50

Ch 3:2

Types of assignment

Absolute

Term assignment

51

Ch 3:2

why does an insurer insist on age proof document . To assess

SA

Risk assessment

52

Ch 3:2

Mr A submitted the proposal form . When will the risk begins for the company?

Submission of proposal form

FPR issued

53 54

Ch 3:2 Ch 3:2

The obligation of the insurer for the whole life Operative Clause policy is mentioned in The risk commencement date of policy is Asvath is illiterate. He wants to take policy and surya is a friend of his help him is answering questions and answers and also fills proposal . In addition to this requirement is After the U/W process

Preamble Premium receipted asvath thump impression Only

55

Ch 3:2

Asvath photograph

56

Ch 3:2

For Logging a Policy , a person gives Baptism CERTIFICATE & Ration Card . What is this ?

Both are Non Both are Standard standard Age Age Proof Proof

57

Ch 3:2

To be a valid contract ,the declaration is necessary in which document

Policy Document proposal form

58

Ch 3:2

Mr. ABC buying Term insurance policy, insurer should mention Ombudsman address operative clause in which part of policy document?

Preamble

59

Ch 3:2

Zainab takes insurance in the life of Jasmeet. Zainab will be called as

Proposer

Nominee

60

Ch 3:2

Mr.Suresh dies one day before the grace All premiums period without paying the premium, what is th No claims payable paid claim payable Loan is available for a policy in which there is a feature of Appointee's role Fund switch Signature on the proposal Savings Element Medical exams

61 62

Ch 3:2 Ch 3:2

63

Ch 3:2

how many nominees can be attached to a term insurance policy

one

two

64

Ch 3:2

if a policy has two nominee mentioned what should be the Min allocation

Each nominee to get Min 10%

Each Nominee to get Min 25% Age proof was substantially wrong

65

Ch 3:2

a Policy holder takes a insurance contract for 30 years and the SA reduces after 25 years what could be the likely reason

No bonus accumulated

66

Ch 3:2

A life insurance policy can only be made paid up if what particular policy feature exists?

Indexing contribution.

Nomination facility.

67

Ch 3:2

Reasons for surrender of the policy

SA

advisor induced

68

Ch 4

While calculating Human life value (HLV) two components need to be kept in mind , the one is take home salary and other is

Bank Fixed deposit rate

discount rate

69

Ch 4

Annual premium of insurance product is Rs. 32,000, 4% loading on Quarterly mode of payment What is the quarterly premium?

7680

8000

70

Ch 4

why ACR

To calculate Premium

To Calculate the commission due for the agent 10th Year

71

Ch 4

In a 20 year with profit policy,persist ency Bonus is paid at the end of While Underwriting Mr X proposal , its found that there has been CRIMINAL case against him in Fraudulent act .What type of Risk this will be categorized Into ? Mr A wants insurance cover . But he is drinks alcohol frequently . What kind of hazard you may categorize? Who IS the primary underwriter of the customer? Claim was settled however full Sum assured not paid though the policy was in force due to

1st Year

72

Ch 4

Fraudulent Hazard

Occupational Hazard

73

Ch 4

Physical hazard

Moral Hazard

74

Ch 4

Underwriter

Insuranc eCo

75

Ch 4

Lein

Bonus

76

Ch 4

Lien can be considered an alternative of which of the following

Clause

Rejection

77

Ch 4

Who is the primary Underwriter ?

Actuary

Insurer Doctor

78

Ch 4

what is the special report that is asked by the underwriter from the officer of the insurer

HLV report

Client confidentiality report

79

Ch 4

As per the norms of risk assessment by U/W both the parents of a policy holder died in their early 30s due to Heart disease, what is the risk assessed Hari wants a constant life cover till his 31st birthday. But he cant afford to pay high premiums. The best suited products for him would be

Moral Hazard

Medical Hazard

80

Ch 5

Pure Endowment

Anticipated endowment

81

Ch 5

At the time of maturity , quarter of the SA is paid though the policy was in force

Endowment

Lien

82

Ch 5

Weekly premiums are generally collected for Banca assurance Health plans which type/range of palns Mr A is planning to invest and his needs are :1 Protection for is Income , during his absence 2.children education What tax rate,if any,will be applicable to a life insurance policy holder for the maturity proceeds of a Rs 5000 life insurance policy A policy holder can pay the premium of Rs 5,00,000 and what could be the max tax efficiency he is entitles to Ram has Invested Rs 5000 in PPF & Rs 1 Lakh in Life insurance premium . In which he will get maximum Tax Benefit Mr.Sumesh takes a policy and pays premium of 20000 with a sum assured of 300000, what will be the tax implication on his maturity amount without submitting any form of claim,a life insurance policy holder received payments of survival then what type of policy he is holding what is the special feature of ulip that ensures customer risk profile for long time insurance policies The best way to overcome the problem of investment decision depends mainly on peer influence is Children Plan Retirement Plan

83

Ch 5

84

Ch 5

Nil

10%

85

Ch 5

500000

50000

86

Ch 5

Life Insurance Premium

PPF

87

Ch 5

Fully taxable

10%

88

Ch 5

ULIP

Term

89

Ch 5

fund switching

partial with drawl Seeking professional advise

90

Ch 6

By Canvassing wide peer group

91

Ch 6

A person who has a temporary job Loss , where should he look for Investing other than Debt Funds of MF FD

Govt Securities

92

Ch 6

RBI increased interest rates 2 times then the stock prices A person Wants to invest in a FD for Tax benefit , How many years he has to take the term of the FD ? aditya wants to take home loan and his monthly take home is 80,000 what as a best practice should be the maximum EMI

increase

decrease

93

Ch 6

5 year

4 year

94

Ch 6

20000

24000

95

Ch 6

96

Ch 6

Ramesh has invested in Post office Monthly Decrease Income Scheme. The interest rate was set at Increase gradually gradually 6%. What will be the effect of rate in going years. A person is holding 100 GOLD ETF 10- 20 gms 20- 50 gms certificates . How many grams of GOLD does he Have ? A customer while investing in to Recurring deposit or Cumulative deposit what are the key factors which will matter A person planning to invest in Kisan Vikas Patra will go to As an investment diversification B invested in ETF . Whats the weight of gold in 100units? If a person chooses Cumulative deposit than Recurring deposit ,difference will be in A policy holder pays identical premium amount for ULIP and EPF where he gets max tax efficiency Investing in ULIP plans exempts a maximum up to what limit for Income Tax Suresh wants to transfer his physical gold to gold exchange traded fund,in relation to access,this change will An Investor has invested in Debt mutual fund,he is ideally looking for Omkar Started a pension policy with provider A but ended up in taking the annuity payment from provider B.The result directly reflect the which feature available with this policy what frequencies can one take annuity Taxation frequency of payment

97

Ch 6

98

Ch 6

Insurance Branch

Post Office 50gm/100gm s Tax

99

Ch 6

5gms /10gms frequency of interest calculation in ULIP policy

100

Ch 6

101

Ch 6

in EPF

102

Ch 6

50000

75000

103

Ch 6

not hedge against Decrease his Inflation liquidity Equity return Fixed Income Differed Annuity Option

104

Ch 6

105

Ch 7

Commutation Option

106

Ch 7

fortnightly,qu monthly,quarterly, arterly,monthl half yearly, y,yearly

107

Ch 7

All ULIP pension plans have to give how much percentage as Guaranteed returns

6%

9%

108

Ch 7

Yash wants to take open market option in Pension plan. What is the benefit?

To save tax

To switch the underlying fund

109

Ch 7

Commutation option allows the annuity policy holder to with draw commutation is a feature of which type of policy

25%

50%

110

Ch 7

annuity

joint life policy

111

Ch 7

Waiting period in a health insurance policy is Age discrepancy to address

Pre existing illness

112

Ch 7

Under a health insurance policy,if a policy holder needs to avail his no claim bonus, how can that be done

cash encashment

discount in the next premium

113

Ch 7

Danny is married and has two children aged 6 & 10 , His parents are aged 68 &70 . Who all can be included in Family floater option of a health plan

Only Danny

Danny & his Wife

114

Ch 7

Implication of Daily Hospitalisation benefit paln

Fixed amt daily

SA

115

Ch 7

Rupkumar wants to take Commutation option. What is the maximum amount he can withdraw

one sixth

one third

116

Ch 7

Critical illness rider was taken and the rider benefit has been claimed , the rider benefit now gets A person has taken a term insurance of 4 Lac. What is the maximum Critical Illness Rider he can take Mr. Sharma buy term insurance policy along with Accident and Disability benefits rider cost restricted upto the base premium of the policy? Mr.Ramesh invested Rs:50000 in pension policy, what is the percentage he can avail as exemption in Income tax.

Reduced the the base SA

terminated

117

Ch 7

1 Lac

2 Lac

118

Ch 7

20%

30%

119

Ch 7

33%

Pension plan is not eligible for tax exemption till 5 years and continue till annuitant lives

120

Ch 7

In a Guaranteed annuity option of 5 years , the policy holder will get annuity till

entire life term

121

Ch 8

Why do Self Employed Individual have the need to buy Medical Insurance rather than People working in public Sectors

Public sector employees Public Sectors do enjoy Medical not get Sick often Insurance Covers related to Job

122

Ch 8

Mohit has two kinds, one of 6 years and other 8 years.He is the earning member and not having life cover. Before advising him to take health policy, what he should be advised. Manoj a 26 year old is having 7 years old son. What will happen to his monthly disposable income after 15 years of job Samir is married and he has only one partner,with dependant parents and no child,which should be his priority The sole focus during a clients fact-find session was healthcare requirements and estate planning. Which main life stage is he most likely to fall into? A Couple has 7 years old son, What solution would they be looking for An Insurance agent suggests estate planning as a top priority for the customer, what stage of life cycle the customer is in In which of the recognized life stages an individual does not required any protection cover

Health policy for child

Health policy for wife

123

Ch 8

Marginally decrease

Singnifcantly increase inheritance planning Young married with children.

124

Ch 8

income protection

125

Ch 8

Young married couple

126

Ch 8

Retirement

health care young married with children Young Married

127

Ch 8

young married

128

Ch 8

Childhood

129

Ch 9

The commission payable in a ULIP plan to the Advisors is mention in...

Illustration benefit

Premium receipt

130

Ch 9

Benefit Illustration given to a customer quantifies an amount by which investment return is reduced. This reduction reflect the impact of objective of fact finding

Charges

Interest

131

Ch 9

client need analysis

Product Pitching

132

Ch 9

Fact finding sheet allows the agent to

Analyze customer needs

Select the product

133

Ch 9

Fact Find Process helps to

Ensure a sale is achieved

Identify Client need

134

Ch 9

Mr A has been approached by the Agent and Low Risk Taking on fact finding the score is 3 , this represents

High Risk Taking

Ans Option Ans Option 4 3

Correct Ans / option

Learning Objective

Explanation for correct answer

risk manager Linking buyers and sellers

underwriter

Actuaries

Works on statistical data to arrive on mortality , premium table etc NGO spread Awareness as well as In rural on deeper Penetration through Micro Insurance On recommendation of Mahlotra Committee , Under Joint venture , the foreign player can not have more than 26% stake

Linking third party administrators

Constituents of Insurance Market

40%

26%

History of Insurance

Government people living in Employees Metro cities

Micro Insurance is for Low Income Group . Product ranges from 5K to Insurance Industry 50 K .Premium is as low as Rs 15 and can be collected weekly Insurance Organizations and Roles Micro Insurance Reinsurance company is the Insurer for the Insurance Company Micro Insurance guidelines was issued in 2005 by IRDA . Minimum SA is Rs 5000 & Max is Rs 50,000 Reinsurance company is the Insurer for the Insurance Company A re insurance company is the Insurer for Insurance company Agent can receive maximum up to 35% Commission in first year . Maximum commission in ten years horizon cannot be more than 40.%. different products have different commission . Maximum Commission payable in First Year cannot exceed 35% Sec 42 of Insurance act 1938 defines licensing procedure for agents .Agents should disclose their commission to the customer on demand and yet not give any rebate

NGO

RBI

50000 Licenced Insurance Agents TPAs

1 lac Non Government Organisation Actuaries One of the policy has higher Premium

Types of Insurance Organization Types of Insurance Organization

one policy is a single premium

Agent

X is married

Y is Single

Agent

Should call up the Insurer

Should avoid the topic

Agent role & responsibility

From signed From ticked copy of column of benefit proposal form illustration Policyholder s suffer due Insurance to surrender companies get charges and good branding benefits

As per IRDA regulations , agents are supposed to disclose their Agents Upfront COMMISSION when asked by the disclosure Methods customer . However Rebates are prohibited

Repeatedly encouraging clients to Churning & Product switch policies / Investments from switching one another is called churning

Flexibility

Cost

Duties & Responsibilities of agents Persist ency

Agent is an intermediary between Insurer and the Client Repeatedly encouraging customers to switch policies or investment from one to another is called Churning Higher Persistency helps Insurer to get Higher revenue thereby increasing profitability Higher Persistency helps Insurer to get Higher revenue thereby increasing profitability According to IRDA Regulation 2002 , a claim under a life insurance policy will have to be paid or be disputed with giving relevant information within 30 days from the date of receipt of all necessary documents & clarifications Sec 107 & 108 of indian evidence act 1872 deals with presumption of death , Waiting period of 7 years is seen in case of person missing As per IRDA Regulations , when there is a delay by the insurer for settling of a claim , then they need to pay 2% more than the financial years saving account rate of interest IRDA Guidelines on claim settlement instruct the insurer to complete any additional documents /information collection not in a piece meal basis within 15 days from the time of receiving the claim intimation

Will not affect Higher Profits less lapsation

Partially

Higher S.A

Persist ency

No profits

Persist ency

30 days

10 days

Claims

12 years

7years

Claims

7%

8%

Claims

20 days

30 days

Claims

Death was due to Body not found Accident He cannot He can offer up offer any to 50% commission 1Cr 10% 10L 35% Insurance ombusdmen

Valid Claims

Suicide clause exclude claim settlements if it happens within One year of the policy commencement Sec 41 (1) of insurance act 1938 prohibits all agents to give rebates District Court upto 20 L Sec40(1) of Insurance act 1938 prohibits agents from giving rebates IRDA 1999 , was passed in parliament establishing it as a corporate Body IRDA regulations on advertisements include all printed and published materials from Insurer as well as Agents

Code of conduct

1 1

Grievance cells Insurance act 1938

SEBI

IRDA 1999 IRDA Regulations on Advertisement and Disclosures KYC MWPA

Solicitation of Policy Medium risk children

Brand building

High risk mother

4 3

Beneficiaries under MWPA can be Wife , Children , Wife & Children , Adopted Child IAI (Institute of actuaries in India ). Actuary is an expert who applies statistical & mathematical methods to asses risk and calculate premium tables For License , a person should be Major , Of sound mind , graduate , no criminal records ,attended training , passed III exam Life Insurance council was constituted under Sec 64 of Insurance ACT 1938. Its the face of Life Insurance Industry NAI , Pune , was set up by Govt in 1980 with support from LI Council , GI council & 4 psu GI. Main Objective is to design , implement & operate on Insurance Training

Insurance institiute of India

IRDA

Actuaries

His contacts in Age and the market to income level solicit Insurance Insurance Broker Association To undertake training activities Promotional activities General Insurance Council To Advertise globally on Indian Insurance Licensing of Insurance companies

Agent Licensing

Insurance Regulation Bodies

Key regulatory Body

Insurance Association

FERA

Power of Govt to supersede IRDA is unable to discharge its Function or duties Integrated Grievance management system (IGMS) also Governing Body of makes the complaints to be Insurance Council regsitered through E mail complaints@irda.gov.in or Toll free number 155255 Power of Central Govt over IRDA

Newpaper

Email or Toll free Number

Integrated Grievance management system (IGMS) also Governing Body of makes the complaints to be Insurance Council regsitered through E mail complaints@irda.gov.in or Toll free number 155255 Grievance Redress Cell of IRDA Toll Free Number :155255 & Email

visiting regional office

Through Agents

20 days

30 days

Complaints related to cancellation Handling customer of Policy & premium paid in complaints excess for additional cover , effectively Response TAT has to be within 10 Days from the date of complaint Ombudsman role is to resolve complaints related to claims , disputes with regard to premium / policy, non issue policy documents , all in a cost effective manner Ombudsman role is to resolve complaints related to claims , disputes with regard to premium / policy, non issue policy documents , all in a cost effective manner The award is binding on the insurer if acceptable by the Claimant , Ombudsman will have to give the award within 3 months from the receipt of the complain

30 lac

50 lac

Ombudsman

5 months

6 months

Ombudsman

60 days

90 days

Ombudsman

10

Under Protection of policyholders Regulation of IRDA , the insurer Servicing of Policy has to respond back within 10 Holders days for any written communication by thepolicyholder Under IRDA regulations , an agent should carry is license all the time and on demand , should show it to the customers

when he represents when he sells pension himself as policies another insurer He has to explain the He takes up reasons for with the higher rejection to authorities the customer Death is certain Is occupational hazard

Ethics & Code of Conduct

Ethics & Code of Conduct

The role & responsibility of the agent is important to have a good relation with the customers Peril refers to a specific event which might cause a Loss /Damage .A hazard is a condition that may Increase the chance of perils to happen

Peril & Hazard

Pure & Speculative risk

Non Financial Risk

Types of Risk

The types of risk that could be insured against are , financial risk , pure Risk & Particular risk Creditor has Insurable Interest on the Life of Debtor to the extend of the MONEY lent to the debtor Person entering contract should be competent enough . A person is competent when he is a Major ( above 18 years ) , sound mind ,not disqualified

Harish suffers Ramesh financial loss owes money incase of death form Harish of Ramesh

Insurable Interest

20

21

Insurance Contracts

Revival stage

beginning of renewal

The proposer knows all the material facts about himself and has to disclose all information Utmost Good Faith voluntarily at the time of completing the proposal form and submitting the documents Assignment Sec 38 of Insurance Act 1938 Defines Assignment and its types AGE is a factor for determining the Risk Profile of the Proposer , thus allowing the underwriters to calculate the premium required for the plan FPR is an Important document which is also an evidence that Risk has begun The operative clause lays down the Mutual obligation of the parties . FPR is an evidence that the Contract has begun The proposal form and the proposer's Signature is the basis of the contract .

Conditional

Absolute & Conditional

Identity verification

Financial assessment

Insurance Documents

Policy issued Proviso

Agent accepts money Endorsement

Insurance Documents Insurance Documents Key Documents

1 4

Policy is Issuing of FPR dispatched Left thumb policy Impressionof document Asvath along need to be with a registered declaration of his friend Baptism Baptism Certificate is Certificate is Standard & Non Standard Ration Card & Ration card is Non is Standard Standard Age Proof Age Proof

Key Documents

Key Documents

Age proof are standard and non standard

FPR

RPR

Key Insurance Documents

The proposal form and the signature of the proposer will form the basis of Insurance contract .

Information statement

schedule

Key Insurance Documents

Policy Information statement includes :facility available for frequency and method of premium payment ,contact for service and inquiry related to policy ,Ombudsman location and contact

Appointee

Trust

The person seeking insurance is a Proposer . Proposer & Life Key terminologies assured could be the same or different A grace period normaly is of One month , not more than 30 days for YEARLY , HALF , Qtrly mode of premium payment . loan is given as a certain %age of Surrender value An appointee has to be appointed in case the Nominee is a Minor Any number of nominations can be attested on the policy . However No % age of share can be mentioned per nominee No specific Shares in Multiple Nominations however can be done for successive nominations

Sum assured Partial withdrawal insurable interest

Sum Assured less the latest premium Surrender when Nominee is Minor

Lapse

2 4

Loans & Foreclosure Nomination

three

many

Nomination

the first nominee should have more than second Policy has become paid up

No such conditions

Nomination & Assignments

Its a Ulip Plan

Paid Up & Lapse

Lapsed policy will be made Paid Up and the SA reduced to an amount based on Premiums Paid Policy which have A value , ie endowment and having saving component can be made paid up in case it lapses during the term after completion of 3 policy years Also known as Cash Value . The Option for the policy holder to close the Plan during the Term .due to either Personal Financial problems or policy being mis sold and benefits not up to the clients needs HLV assumes if the event happens Today how much money one should have in the BANK to get the monthly expenses of the family to continue .

Rider benefits.

Savings element.

Paid Up policies

no Has Financial commission Problems

Surrender value

Estimated life expectancy

Estimated amount at retirement

Human Life Value

8320

8500

Premium Calculations

Adjustment to take into account of Expenses & profits of the insurer is called loading Agent Confidentiality Report is mandatory as It helps the Underwriters to have additional Information about the Proposer as the agent is in better position having met / known the client Persist ency or terminal bonus is given at maturity of the policy Moral Hazard relates to attitude or Intentions & conduct

To verify the To help the Plan underwriter to proposed asses the Risk

Primary Underwriter

15th Year

20th Year

Types of Bonus

Physical Hazard

Moral Hazard

Types of Hazards

financial risk

Pure risk

Underwiting

Physical Hazard refers to the physical characteristic of the risk associated with the proposer Agents are in direct contact with the Customer and have an important role to play in assessing the risk Lien is a clause where the underwriter feels the risk will wear out in time LIENS are clauses which Underwriters apply to the proposal where they feel the RISK will wear off after certain time duration l Agents are in direct contact with the customers and are in better position to give their opinion on the hazards Special reports from senior officials or agents are taken by underwriters sometimes if the risk on the policy solicited is high . Informations on Occupation, habits , lifestyle , income would be asked through this Under Physical hazard , the Underwriter looks into medical history of the family of the proposer to asses the risk due to heredity Term product is the simplest and the cheapest Insurance plan which gives Life cover

Agent

Actuary

Underwiting

Surrender

Accidental death

Underwiting

Acceptance

Time barred

Underwriting

Underwriter of the Branch

Agent

Underwriting

moral hazard report

medical report

Underwriting

Occupationa l Hazard

Physical Hazard

Underwriting

term plan

ULIP

Insurance products

Money back

Surrender

Micro Insurance Ulip Plan

Term Insurance Term Insurance

In money back plan , payouts are given at fixed intervals called Insurance Products survival benefits . Usually 25% of SA is paid in equal interval of the term Micro Insurance is for Low Income Micro Insurance Group . Product ranges from 5K to 50 K Term Insurance will help in Protection Needs protecting the future loss of Income Tax & Inflation The Proceeds of Life Insurance are exempted under Sec 10 (10D) Under Sec 80 C , the max Amount under Tax deduction through Life Insurance premium will be Rs 1 Lk Under Sec 80 C , the maximum deductible Income from tax in a given year is Rs 1 Lk . The premium should be 20% or less than 20% of the SA to avail the tax benefit of Sec 10 10 d Partial Survival Benefits are paid at fixed intervals without any formalities to be completed by the Policyholders Ulip offers protection with Investment and flexibilities to manage the Investment to the customers A agent is a Professional and gives Need based Solutions Investment for emergency funds should be invested in saving products that offer easy liquidity and can be converted to Cash without much loss in value

20%

30%

100000

300000 95% on Life Insurance Premium & 5% on PPF Tax fully exempted

Tax & Inflation

50% on each

Tax Implications

20%

Tax Implications

Money Back

Health

Types of Plans

premium holiday

riders

Ulip

Go for a low Postponement investment of investment tranchee decision

Benefits of Professional Advise

Equities

Gold

Emergency funds

volatile

same

3 Year

2 Year

Implication of Increase in Interest rates will bring Interest on saving the stock price down products To avail Sec 80 C of IT 1961 , the Income Tax 1961 FD duration has to be 5 or 10 Years Prioritizing Saving Needs Care should taken that the EMI do not exceed 40% of monthly take home salary

28000

32000

Remain Constant

Change as per market fluctuation 10 gms

Saving Products

Investment is made in Lump Sum and the Interest rate is Fixed at the time of Inception 1 unit in ETF represents One Gram or Half Gram of Gold Three types of deposits :cumulative , recurring & traditional . Rate of interest varies . NSC . Kisan Vikas Patra , PPF etc can be brought from Post office One Unit in ETF will be 1 Gm or 0.5 Gm of Gold In cumulative Deposits , Interest is calculated quarterly Life Insurance gives 80C Tax Benefit on Premium and 10 10 D on Claims Under Sec 80 C , the maximum deductible Income from tax in a given year is Rs 1 Lk . Good returns , Portfolio diversification ,hedging against Inflation are the other reasons for ETF Debt instruments caters to Saving and secure income Open market option allows the Annuitant to get the best scenario by taking his/ her annuity from other companies Most of the people choose Monthly Mode though As epr IRDA regulation post 1st Sept 2010 , The minimum Guaranteed returns in a pension plan has to be 4.5% . The insurer will have to invest very prudently to get this %age return Open Market Option allows the Annuitant to look at the best Rates in the market from other Insurance companies before taking the pension payouts

50-100 gms

Saving Products

interest rates

tenure

Saving Products

Internet

Mutual Fund Office 10gms/20gms

Saving Products

15/20gms

Saving Products

Interest tax same efficiency for both 100000

Tenure Both do not give tax benefits 200000

Saving Products

Tax & Inflation

Tax Implications

Reduce his Insurance encasement against for next six Uncertainties months Stable Savings income income Guaranteed period option fortnightly,m onthly ,half yearly, yearly Open Market option

Types of Saving Products Types of Saving Products

Annuities

Yearly Only

Annuities

5%

10%

Annuities

For To continue life improved cover annuity rate

Annuities

40%

33%

Annuities

One third of the Corpus can be withdrawn on vesting date Tax Free Commutation allows the Annuitant to withdraw 1/3rd of the corpus amount Tax Free at vesting date Most Insurer have waiting Period in the health Plans for covering any pre existing illnesses No claim bonus is a feature of health plans in which if no claims are made in a policy year , the insurer will give some discount on the next renewal premium Family members can be covered under One Umbrella . However some Insurance Companies will have specified the number of members one can take under Family floater Fixed amount is paid on hospitalization on a daily basis

pure policy of endowemen another person t policy

Annuities

risk

premium

Health plans

increase in the cover level

certain policy exclusions

Health plans

Danny , His Danny's family wife ,His and his parents children On the expenses incurred daily due to critical illness 15%

Health Plans

Amt for particular diseases daily

Health products

25%

Pension Plans

Under Sec 10 10 A , Commutation , you can withdraw 1/3rd of the Corpus Tax Free Lump Sum SA of the rider benefit is paid on diagnosis of the critical illness as per the Rider Feature and subsequent claims under it will not be paid as the rider terminates Benefits arising of the Riders cannot exceed the Base Plan SA According to IRDA regulations Premium of all riders taken together should not exceed 30% of the base policy premium Under Commutation , person can take 1/3rd of the corpus amount Tax Free at vesting date under Sec 10 10 a Pension Payout is fixed for certain period guaranteed like 5,10,15,20 and then till Life of the annuitant

New critical Illness Rider continues as has to be it is added to base Policy 3 Lac 4 Lac

Riders

Riders

40%

50%

Riders

100%

20%

Tax Implications

annuity only premium for 5 years payment term

Types of Annuity Payment

Self Loans are Employed available faster people do for Public not have sector Sick Leave EMPLOYEES

factors affecting Life stages

Public sector makes provision for PPF , health

Life insurance policy for wife less than after 15 years investment efficiency

Life Insurance policy for himself

Life stages

Protection of Asset is the most factor The Income earning capacity keeps going up there by allowing the disposable income to increase as the time goes. Single Income family , Insurance protection is very important The clinet needs @ Retirement age is Investment to get regular income , estate planning and revisiting the health insurance plans to see their adequacies Along with Life cover , child education planning is important stage

will remain same long term savings

Life stages

Life stages

Preretirement.

Retirement

Life stages

child education

life cover

Life stages

retirement

Pre Retirement

Life stages & Client All clients have two primary needs Needs -Protection & Investment Life stages of Clients Children normally do not have their own Income source Electronic benefit illustration will show benefits of the plans at 6% & 10% rate of return scenario ,It will have commission , charges , Bonus etc also shown The Electronic benefit Illustration gives all information of Returns , Charges fact finding process helps in identifying the clients financial needs, to quantify them & to prioritize them , Fact finding as a process is to identify the clients needs , quantify them and prioritize them

Pre Retirement

Retirement

Product Brouchure

Proposal Form

EBI

Inflation

Taxation

Fact finding

for completing ACR

Finding out Moral hazards

Fact Finding

Proof

Reference

Fact finding

Create an Provide audit trail for regulatory body future about agents complaints data base Moderate Risk Taking Zero risk Taking

Fact Finding Tool

Fact Finding is the First step in financial planning process The grading is in 0 -5 rating , O denotes No risk taking ability and 5 denotes High risk taking ability of the client

Financial Planning objective

Remark

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