Friday, 22 January 2021

LIFE INSURANCE FORMS AND PROCEDURES

 

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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