Prospectus: A prospectus is a formal legal document used by
Insurance companies that provides details about the product.
The prospectus should contain all facts that are necessary
for a prospectus policyholder to make an informed decision regarding purchase
of a policy.
The prospectus used by a life insurance company should state
the following:
The terms and conditions
Scope of benefits guaranteed and non-guaranteed
The entitlements
The exceptions
Whether the Plan is participative or non-participative
Proposal form: is the form to be filled in for insurance,
furnishing all material (important / essential / relevant) information required
by the insurance company from the insurer.
Agent’s Report: The agent is the underwriter. All material facts
and particulars about the policy holder, relevant to risk assessment, need ot
be revealed in the report. Health, habits, occupation, income and family
details need to be mentioned in the report.
Medical examiner’s report: Details pertaining to physical
features, like height, weight, blood pressure, etc are recorded by the doctor
in a report called the medical examiner’s report. A medical examiners report is
required when the proposal cannot be considered under non-medical underwriting because
the sum proposed or the age of the proposed life is high or for other medical
reasons.
Moral hazard report: In case of the life insurance
contract, the underwriter may ask you to file an application and submit a physical
exam report which is called a moral hazard report.
Age proof: Premium is charged as per age group and therefore
it is necessary to verify the age with proper proof
Valid age proofs may be standard or non-standard:
Standard age proof:
- School
or college certificate
- Birth certificated
(municipality)
- Passport
- PAN
card
- Service
register
- Certified
extract from a family bible if it contains the date of birth
- Identity
card in case of defence personnel
- Marriage
certificate issued by a Roman Catholic Church
Non standard age proof:
In case the standard age proof is not available for any
reason the company may allow submission of non standard age proof.
- Horoscope
- Ration
card
- An affidavit
by way of self-declaration
- Certificate
from village panchayat
Anti money Laundering (AML): Money Laundering is the process
of bringing illegal money into an economy by hiding its illegal origin so that it
appears to be legally acquired. The insures is required to have an AML policy
and file a copy of the same with the government. The AML program should include:-
- Internal
policies, procedures and controls
- Appointment
of a Principal compliance officer
- Recritiment
and training of agents on AML measures
- Internal
audit / control
Know your customer (KYC): process used to verify the identity
of clients. Banks and insurers demand detailed information to prevent identity threat,
fraud and money laundering.
KYC includes
- Photograph
- Age proof
- Proof of
address – driving license, passport, telephone bill, electricity bill, bank
passbook, etc.
- Proof of
identity – driving license, passport, voter ID, PAN card, etc
- Income
proof documents in case of high value transacitons.
Free look period: also known as ‘Cooling Period’. If an individual
purchases a new life Insurance policy and on receiving and examining the document
realizes that eth terms and conditions are not what he / she wanted, he /she
can return the policy and get a refund subject to the following conditions:
- Within
15 days of receiving the policy document
- Communicate
the same in writing to the company.
- Premium
refund will be adjusted for the proportionate risk premium for the period on
cover, expenses incurred by the insurer on medical examination and stamp duty
charges.
The free look period is a privilege available to policy
holder and they can exercise this choice during the 15 day period from receipt
of policy document.
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