Workbook Developed by: GROWMORE Content Development Team©

Workbook Developed by: GROWMORE Content Development Team©

1000 Families Rs.300 Rs. 3, 00,000/- +

Policy Holder/ Life Assured Premium Policy (Life) Fund

Claim

Human being is an income generating asset (as per its physical and mental capabilities) but it carries risk of untimely death or disability, which effects or ends the income generating capacity of this asset. By buying insurance, we transfer this risk looms on our income generating capacity in form of death or disability, to the insurance company in lieu of a sum, we pay as consideration (premium) to the insurance company.So, primary use of life insurance products is to provide economic protection to a Person’s family in case of any untoward incidents such as death or disability occurs, so the family can sustain its normal expenses for required time. Life Insurance is a contract, through which Insured and Insurer agrees on following:•Insurer will allow economic risk on the life of insured due to death or disability, transferred to it, up-to the extent of Sum Assured agreed upon, and will get a sum in lieu of such risk in the form of premium. •Policy holder/ Insured will pay a sum (premium) in lieu of a promise by insurer of paying the economic value of asset in accordance of sum assured in case of its economic value ceases due to insured event happens. •Another major responsibility of the insurer is SELECTION of risk, as insurer is trustee of the funds pooled by the policy holder and bad selection can lead to excessive claim thus losses, which will make group of policy holder at disadvantage. This training is to give you overall view of the business of insurance i.e. introduction of the business and its history, how it operates, laws governing this business, it’s importance to the individual/ society/ country, how its been marketed etc.

Insurer (Insurance Company )

Interest

Expenses

Bonus

Why this workbook?

While going through the new IC 33 courseware, we have reached onfollowing conclusion:• This course is pretty much contemporary and useful for the agents, even beyond the licensing exam.• Those aspirant agents, who comes from non commerce back ground, this course is pretty difficult, they need to self study the subject, beyond the stipulated 50 hrs of training.

This has inspired us create this work-book, which can help the individual, who are aspiring to become an life insurance agent, for self study and understand the whole syllabus easily.

How to use this workbook

This workbook is a sure shot way to pass the exam. Through self study, with this workbook & textbook, for just two hours a day for ten days ( One or two chapter a day, looking at the chapter) you can prepare yourself for success in IRDA exam. You have to do following:

• Just read the main topic given in workbook.• Read the chapter in the text-book for the detail.• Write the point in the text book in brief.• Solve the selected questions given in the text book.• Check the answers( given in the last) and see your understanding.

Even then if you face difficulty, then join our 2 day PRE-RECRUITMENT REFRESHER. Our Pre- recruitment refresher course, which is very popular among the LIC development officers all across, in which we had maintained Pass % of more then 90%. In this refresher, we explain the chapter in the simple language, so that one can easily understand the subject, on day 1 and solve the quarries on the day 2 . We guarantee that if a candidate goes through the online training and complete 15hrs of our refresher, then he/she will not fail in IRDA exam, Hundreds of Agents, who have attended our refresher and passed are proof of same..

2 Day (Full Time) Pre Recruitment Refresher

2 Day (Part Time) refresher course covers entire IC33 syllabus along with basics of agency, such as prospecting, role of an agent and how to open a sales call.. We guarantee that if a candidate go through the training and complete 15 hrs of refresher, then he/she will not fail in IRDA exam, Hundreds of Agents, who have attended and passed are proof of same. We have Pass % of more then 90%.

• Brief All Chapters of IC33• Read Summery of Chapters.• Attempting the important Questions..• Impotents tips and do’s & don’ts in exam.

Training Dates: Day 1 Each SundayDay 2 Each Thursday

Program Fees: 1)Rs. 750/- per candidate, subject to minimum 5 Candidates to start a batch.

2) For outstation: Rs 4500/- as Trainer Charges ( 2 day) / Traveling & Work Book cost extra

Workbook Developed by: GROWMORE Content Development Team © Chapter-1

Chapter -1 (Understand, how Insurance Markets Operates)

Key Terms Insurance Life Insurance E- Sales Direct Marketing Risk Transfer Non-life Insurance Individual Agent Non-Direct Marketing Risk Retention Re-insurance Bancassurance Underwriters Liberalisation Insurance Intermediaries Insurance Broker Actuaries Third-Party Administrator( TPA) The Regulator Term Insurance Endowment Insurance Money-back Insurance Unit-Linked Insurance Plan(ULIP) Pension Plans What is Insurance? How does Insurance works? Risk Retention: Risk Transfer:

Need of Insurance Need of insurance can be categories in three categories i.e. individual, society and country. For Individual: Sr.# Benefit Explanation

1 Investment Option

2 Protection of Financial Security

3 Tax Benefit

4 Planning for Life-stage needs

5 Developing Saving Habit

6 Insurance is an asset

Other then this, business organizations has to set aside good amount of funds for various risks and if those risks are covered by insurance company, then those fund and management consultation on those risks releases, thus helps company grow faster, by utilizing those engaged recourses productively.


For Society: For Country:

Benefits of professional Insurance Market: Need Base Selling: Sr.# Benefits Explanations

1 Higher Confidence among policyholders

2 Increase-in insurance

penetration 3 Social Benefits 4 Employment

Generation 5 Increase profitability

for insurers

History of Insurance: Phase -I (Pre Liberalisation) Year Milestone Activity Explanation

1818-1829

First Insurance Company (Oriental Life Insurance Co)

1870 British Insurance Act 1870 1912 Indian Life Insurance

Companies Act 1912 1928 Indian Insurance Companies

Act 1928 1938 The Indian Insurance Act

1938 1950 Nationalization of insurance

sector 1957 General Insurance Council 1972 The General Insurance

Business(Notification) Act Phase II (Liberalisation) Year Milestone Activity Explanation

1993-1934

Malhotra Committee 1999 Formation of IRDA


Phase III (Post-Liberalisation) Year Milestone Activity Explanation

2000 Opening up the sector for private and foreign investment

2003 The General Insurance Business(Notification) Act 2003

Recent Developments in the Insurance Industry

5th largest in the world Sr.# Milestone Activity Explanation

1 Growing importance of Information Technology

2 Bancassurance 3 Online Sales 4 Micro Insurance 5 Grievance Redressal

( Insurance Ombudsman)

Insurance Organizations and roles Type of Insurance Organizations: Sr.# Type of Organization Explanation

Individual Insurance: 1 Life Insurance Group Insurance: Fire: Marine:

2 Non Life Insurance

Miscellaneous: 3 Re-insurance

Roles in the Insurance Organization: Sr.# Roles Explanation

1 Agents 2 Corporate

Agent 3 Intermediaries 4 Underwriters 5 Actuaries 6 TPAs


7 Surveyors/ Loss Adjusters

8 The Regulator (IRDA)

9 Training Institutes

10 NGO/ Consumer Right Organizations

Insurance Distribution

Direct Marketing Channels: Sr.# Channel Explanation

1 Direct Sales Teams

2 E-Sales

Indirect Marketing Channels: Sr.# Channel Explanation

1 Individual Agent

2 Corporate Agents

3 Insurance Brokers

4 Bancassurance 5 Composite

Brokers 6 Comparison

websites

Insurance Products Main Non Life Insurance Products: Sr.# Product Explanation

1 Fire 2 Marine Motor: Property: Liability: Health:

3 Miscellaneous

Travel :


Main Life Insurance Products: Sr.# Product Explanation

1 Term Assurance Plan

2 Endowment Assurance Plan

3 Whole Life Plans

4 Pension & Saving Plans

5 Unit Linked Insurance Plan (ULIP)

6 Group Insurance Plan

Role of an Agent

Sr.# Product Explanation Educational : Age : Miscellaneous

1 Qualification

Training : Need Analysis: Soliciting of Insurance: Knowledge of various Investment options: Help in Buying Process:

2 Miscellaneous

Servicing : 3 Code of

Conduct Self Test Questions No of Question to be asked in Examination—3) 1 The Concept of insurance involves transfer of A} Liability B} Need C} Ownership D} Risk 2 The amount of insurance depends on A}The Peril B}The Risk C}Neither the peril nor the risk D}Both the peril and

the risk 3 One can manage risk by keeping with itself or transferring it to the ………………….. A}Surveyor B} Protection C} Insurer D}Insured 4 Insurance benefits replace A} All monetary losses but only to the extent of assured sum

B}All physical losses, partially

C}All monetary losses, in full

D} All physical losses, in full

5 A human being’s value is measured by A}The income that he generates

B}The value of the goods he produces

C}His academic qualification

D}All of the above

6 The insurance reduces burden on


A}The Society B}Individual families C}Business Houses D}All of the above 7 Rakesh has just bought the health insurance and a personal accident policy. What important section(s) of

the insurance market, do these products normally fall into A} Life Insurance in both cases

B} Life for health & Non life for personal Accident

C} Non Life Insurance in both cases

D} Non Life for health & life for personal accident

8 Benefits of the professional insurance market is A} Higher confidence among policy holders

B}Increase in insurance penetration

C}Both the above statement are correct

D}Both the above statement are incorrect

9 Insurance companies are regulated from A}Insurance Act 1938 B}Companies Act 1956 C}IRDA Act D}All of the above 10 The first Insurance company started operating in India was A}The Oriental Insurance Company in Calcutta

B}The Madras Equitable C}Bombay Mutual D}Empire of India

11 The General Insurance Business (Nationalization) Act (GIBNA) was passed in A}1950 B}1957 C}1972 D}2003 12 Major event happened post liberation in insurance industry is A}Passing of IRDA Act

B} Malhotra Committee Report

C}Nationalization of Insurance industry

D}Passing of General Insurance Business(Nationalization ) Amendment At 2003

13 The constituent of the insurance market includes A}The Individual Agent B}Underwriters C}The Actuaries D}All the above 14 The main role of an underwriter in a insurance company , is normally to A} Assess the acceptability of a particular risk

B} Certify a loss, when a claim is submitted

C} Design the structure of a policy to be marketed

D} Negotiate with the industry regulator

15 The recent development in the insurance industry is A}Formation of Insurance Ombudsman

B}Introduction of AML guidelines

C}Micro Insurance D}All the above

16 Types of Insurance organization are A}Life & Non Life B}Life & Reinsurance C}Life, Non Life & Reinsurance D}Non Life &

Reinsurance 17 Which one is a non life insurance product? A}Marine B}Term Insurance C}Whole Life plan D}Pension Plan 18 Which one is a life insurance product? A}Personal Accident Policy B} Whole life Plan C} Travel Insurance D} Medi-claim Policy 19 In a group Insurance policy, the minimum size of the group should be? A} 10 B}25 C}20 D}15 20 Pension Plan covers the risk of A}Living too long B}Dieing too early C}Against liabilities D}Accidents 21 Direct Marketing Channel consists of A}Individual Agent B}Corporate Agent C}E- Sales D}Composite Broker 22 Indirect Marketing Channel consists of A}Agent B}Bancassurance C}Corporate Agent D}All the three above 23 The role of regulator (IRDA) is A}Granting the License to Insurance Companies

B} Insuring fair business practices applied

C}Protecting the interest of the policy holders

D}All the above three

24 The role of an Actuary in an insurance organization is to A}Selling the policies B}Dealing with the C}Looking after claims D}Calculating the standard


regulator premium of policies 25 Whole life Insurance plan is A}A term plan of unlimited term B}Endowment plan C}Money Back Plan D}Pension Plan 26 Which one statement is correct? A}Insurance can prevent the insured event

B}Insurance can’t prevent the insured event

C}Both the above statement are right

D} Both the above statement are incorrect

27 The issuance of a policy is decided by A}Agent B} The Under writer C}Loss Assessors D} Actuary 28 The amount of bonus in a policy is decided by A} Underwriter B}Sales Manager C}Managing Director D}Actuary 29 Insurance provides, to an individual A} Protection of Financial Security

B} Planning for Life-stage needs

C} Developing Saving Habit

D}All the above three

30 Role of an agent consists of A} Soliciting of Insurance to customers

B} Help in Buying Process C}Both the above statement are right


31 The minimum age of an insurance agent should be A} 16 B}18 C}21 D}25 32 Which one statement is correct? A}An agent of a rural should be at least 10th class pass

B}The agent should have passed the pre recruitment exam

C}Both the above statement are right



Chapter -2 (Risk & Insurances)

Key Terms Risk Component of Risk Uncertainty Hazards Peril Homogenous Risk Accidental Risk Insurable Risk Financial Risk Pure Risk Risk Transfer Pooling of Risk

Concept of risk Definition of Risk:

• Risk is the chance of damage or loss • Risk is doubt concerning the outcome of a situation. • Risk is something or someone considered to be a potential hazard

Common risks, an individual is exposed to: Sr.# Risk Explanation

1 Dying too early

2 Living too long 3 Illness 4 Accidents 5 Unemployment

Attitude towards Risk:

• Risk Retention: • Risk Transfer:

Components of Risk Here given various component of risk: Sr.# Risk Explanation

1 Uncertainty Probability Extent

2 Level of risk

frequency Peril

Physical 3

Hazard Moral

High Risk Profiles: Sr.# Risk Explanation

1 Risky job profiles

2 Existing medical conditions


3 Lifestyle 4 Age group 5 Attitude

towards Risks

Insurable Risk

• Financial Risk • Pure Risk • Particular Risk

Financial Risk: Sr.# Risk Explanations

1 Loss of Life 2 Decease/

Disability 3 Saving

Accumulation 4 Retirement

Pure Risk: Particular Risk: Transfer of Risk Pooling of Risk Law of Large Numbers

Self Test Questions No of Question to be asked in Examination—3) 1 The Risk is A} chance of damage or loss

B} something or someone considered to be a potential hazard

C} Both the above statements are right

D} Both the above statements are incorrect

2 In insurance terms, the risk of suffering a disability is best described as what type of Risk A}Financial B}Fundamental C}Homogenous D}Speculative 3 Who can retain risk? A}An individual B}Large corporations C} Small scale businesses D}Medium scale businesses


4 Out of these, which is not a risk on human life? A}Failing in exam B} Premature death C} Unemployment D}Disability 5 How are PERILS and HAZARD normally distinguished under term insurance policies? A} Perils are medical factors which influence the risk of dying and hazards are lifestyle activities which influence the risk of dying.

B} Perils are risks that policy-holder will die before a specified date and hazards are factors which could influence that risk.

C} Perils are factors which affect the risk being insured and hazards are size of the risk being insured.

D} Perils are factors which could influence an insured event occurring ands hazard are the actual event which will trigger a payout.

6 Which of these is a risk to the human life? A}Premature death B}Illness C}Both the above D}None of the above 7 In terms of life insurance, Risk A} Can be compensated up to an extent

B} Can not be prevented

C} Can be saved through medical science

D} Can be saved through eating habits

8 In the term insurance, insurance company keeps the collected premium in A} Liquid Assets B} Pension Fund C} Risk pool D}Protection pool 9 Component of risks are A}Uncertainty, Level of risk, Peril & Hazard

B}Extensive damage C}Probable damage in future D}None of the above

10 Insurance provides protection against which of these losses? A} Natural Disasters B} Man made disasters C}Third party losses D} Al of the above 11 Ram is a cautious person, in insurance terms, he will be described as A}More then average insurable risk

B}Lower then average insurable risk

C}More need of Insurance Protection

D}More need of reinsurance

12 An insurance company, by collecting premium from many to insured them A}Against similar risks B} Against different risks C} Both the above D}None of the above 13 Mortality rate means A}Rate of premium to be charged

B} Chances of dyeing at a specified age

C}Natural Disaster D}Uncertainty of death

14 As a bread earner of your family, you need to protect against following financial risks A} All mentioned below B} Meeting household expenses C} Child Education D}Future requirements 15 The level of risk is normally assessed in terms of the A}Probability or Frequency B}Extent or severity C}None of the above D}Both the above 16 Which one is a peril? A}Smoking & Drinking habit B}Cancer C}Poor packaging D}Habit of Rash driving 17 Which one is not a Hazard ? A} High Blood pressure B}Risky job profile C}Cancer D}}Smoking & Drinking habit 18 Living too long is a A} Blessing B}Curse C}Risk D}None of the above 19 Insurance companies applies the law of large numbers to determine A} Total number of policy holders

B}Cost of total annual claims

C}None of the above D}Both the above

20 Which of these risks can be insured? A}Risks, where there is no possibility of making profit

B}Risks, which are local or personal in the nature

C} Risks, which can be measured in financial terms

D}All the above

21 Peril is A}Event causing financial losses

B} Speculation C}Any event D} All the above


22 The asset, which is human being, perishes when A} He dies B}He become disabled to

work C} He retires from work D} In all the above

conditions 23 Risk, which can be measured in monetary terms, is called A}Pure Risk B} Financial risk C}Particular Risk D}None of the above 24 Risk, which can be insured are? A} Financial risk B} Pure Risk C}Particular Risk D} All the above 25 Who does the calculation of probability of deaths of a particular age group A}The Underwriter B}The Loss Surveyor C}The Agent D}The Actuary


Chapter -3 (Part: 1 Insurance Principle)

Key Terms Offer & Acceptance Consideration Consensus ad idem Insurable Interest Key Person Insurance Utmost Good Faith Duty of Disclosure Material Facts Void Ab intio Indisputability Clause Indemnity Capacity to Contract Principle of Indemnity Value Contracts

Definition of Valid Contract: A contract is an agreement between two or more parties to do or to abstain from doing an act. It is intended to create a legally binding relationship.

Essentials of a valid Contract

Sr.# Feature Explanation 1 Offer &

acceptance 2 Consideration 3 Capacity to

contract 4 Consensus ad

idem 5 Legality of

purpose 6 Capability of

performance

The Policy Document

Role of Agent in Insurance Contract

Insurable Interest Definition: Insurable interest means that the proposer could suffer a financial loss if the subject insured is physically harmed in any way.

• Only financial interest can be insured.


• The proposer must be in a relationship with the subject of insurance whereby he/she benefits

from its safety and well being.

• Creation of Insurable interest happens through Through Common law Through Contract Through Statute

Relevance of Insurable Interest: Circumstances in which insurable interest exists: Sr.# Relation Explanation

1 Spouse 2 Children 3 Assets 4 Creditors 5 Business

Partners 6 Employer-

Employee 7 Surety or

Guarantor 8 Key Man

Utmost Good Faith

Importance of Utmost Good Faith: • In insurance, most of the important facts about personal history, health, family history are

known only to the proposer. • Any attempt by the proposer to hide these facts may lead to ‘unfair selection’. • Hence the contract of insurance is based on trust or the ‘Principle of utmost good faith’ or

Uberimma Fides. • The law imposes a positive duty on the proposer to make a full disclosure of material facts on

the proposal form. • In the event of failure to disclose material facts the contract can be held to be void ab initio

Definitions of Utmost Good Faith: “A positive duty, voluntary to disclose, accurately and fully, all facts material to the risk being proposed, whether requested or not.”


Possible breach of the duty of utmost good faith by Insured: Sr.# Reason Explanations

1 Non disclosure 2 Concealment of

Material Fact 3 Fraudulent

misrepresentation 4 Innocent

misrepresentation Possible breach of the duty of utmost good faith by Insurer: Sr.# Reason Explanations

1 Untrue statements by the agent

2 Loans 3 Bonus rate 4 Withholding

information Duty of Disclosure:

• By Insured: The proposer has the duty to disclose till risk commences. Circumstances which arise after the risk has commenced need not be disclosed unless the contract requires ‘Continuous Disclosure’. Full disclosure has to be done at the time of revival of a lapsed policy or at the time of reinstatement of a surrendered policy, as per the terms and conditions of revival or reinstatement

• By Insurer: As per the principle of utmost good faith, the duty of full disclosure rests on the insurer also.

Material Facts

A fact which would influence the decision of whether to accept a risk for insurance and on what terms. Following are the example of same:

• Age • Medical history • Occupation • Smoking/Drinking habits

Importance of material facts:


Consequences of non-disclosure: Indisputability Clause (Section 45):

Indemnity To indemnify is to bring to the same position as he was before a specified incident. The principle of indemnity implies that the mechanism of insurance cannot be used to make a profit. The claim amount paid cannot exceed the amount of loss incurred. Sr.# Application Explanation

1 Indemnity in Non Life Insurance

2 Indemnity in Life Insurance

Chapter -3 (Part: 2 Insurance Practices)

Key Terms Assignment Cancellation Lapse Premium Receipt Assigner Cooling of Period Nomination Policy Document Assignee Conditional Agreement Notices Prospectus Absolute Assignment Exclusions Paid-up Value Revival Appointee Endorsements Proposal Form Surrender Value

How insurance policies are bought & written

5th largest in the world Sr.# Activity Explanation

1 Source of preliminary information

2 Purpose of Buying insurance

3 How life insurance is written

4 Proposal Form


5 Quotations 6 Insurance

Contract

7 Renewals

Key Documents Sr.# Particular Explanation

Name & contact details : Occupation & nature of job: Plan & payment details: Body built life style: Medical history: Details previous Insurance: Family history:

1 Proposal Form

Nomination & appointee details:

2 Declaration on Proposal Form

Standard age proof: 3 Age Proof Non-standard age proof: Photo id proof: Address proof: Recent photo: Financial & Medical Details (if require):

4 Other Documents

First Premium receipt: 5 Premium

receipts Renewal premium receipt:

6 Free Look/ Cooling of Period

Heading: Preamble: Operative Clause: Proviso: Schedule:

Attestation: Terms & Condition:

7 Policy Document

Endorsement: 7.1 Policy information

Statement


Endorsements: Notices:

8 Endorsements, notices and prospectus Prospectus:

9 Documents required at the time of claim

Key Insurance Terms

Sr.# Particular Explanation Lapse :

Paid up Value:

1 Non Forfeiture Options Section 113 of Insurance Act 1938 Surrender Value:

Meaning : Process:

2 Revival of Policy

Impact on Contract: 3 Renewal

4 Nomination

Meaning : Type of Assignment:

5 Assignment (Section 38 of Insurance Act) Impact on Contract:

6 Loans 7 Foreclosure

Relevance of premium payment and valid cover

Self Test Questions No of Question to be asked in Examination—9) 1 Which one of the following statement is correct? A} A life insurance policy is a contract enforceable in the court of law

B} A Life insurance policy is not required to be stamped

C} Both the above statement are correct


2 For a household insurance policy, insurable interest need only exists at outset and at what point A} The date when the cancellation period expires

B} The Date claim occurs

C} The date policy document is received

D} The termination date

3 Which one of the following statement is correct?


A}The principle of utmost good faith applies only to the life insurance

B} The principle of utmost good faith applies only to the non medical cases

C} The principle of utmost good faith is operative only for two year

D}All the above statement are incorrect

4 Prakash is employed by Pradip, in respect of this employment, Prakash automatically has insurable interest in Pradip’s life up to what limit, if any?

A} Prakash’s monthly salary

B}Prakash’s pension fund value

C} Pradip’s annual profit D} There is no limit

5 Insurable interest is defined in A} The Insurance Act B} The Companies Act C} IRDA Act D} Non of the above 6 Creation of insurable interest happens through A} Common law

B} Contract C} Statute

D}All of the above

7 The principle of utmost good faith will operate in an existing policy A} Every time, when premium is paid

B} If the policy has lapsed and it has to be revived

C} If the insured person fall sick and is admitted to hospital

D} If the insured person changes his job

8 Because of the principle of indemnity A} There will be difficulty in settling claims in general Insurance

B}There will be frequent disputes at the time of settling the claim

C}There may be attempt to exaggerate the claims

D}All the above three may happen

9 The responsibility to comply with the principle of utmost good faith rests with A}The Agent B}The proposer C}The life to be insured D}All three above 10 The concept of indemnity is based on the key principle that policyholders should be prevented from A} Insuring existing losses B} Making false insurance

claims A} Insuring existing losses

B} Making false insurance claims

11 Which one of he following statement is correct? A}The policy is the basis of the insurance contract

B}The proposal is the basis of the insurance contract


D} Both the above statement is incorrect

12 Which one of the following statement is correct? A}The declaration in the proposal makes the principle of good faith operational

B} The declaration in the proposal establishes the insurable interest

C} Both the statement above are right

D} Both the statement above are incorrect

13 Which of the following are confidential and will not be given to the proposer? A}The medical report B} The agent’s confidential report C} The medical

referee’s advice D}Al of the above

14 The proposal form and the personal statement contain information relevant to determine A} Level of risk B} Moral Hazard C} Insurable interest D} All the above 15 Which one of the following statement is correct? A}The FPR is proof of commencement of risk

B}Risk does not commence till the policy is signed

C} Both the statement above are correct


16 Which one of the following statement is correct? A}The schedule of the policy will be changed when there is change in plan

B}Change in terms will be made by endorsement



17 Which one of the following statement is correct? A} In the event of dispute, the policy document will be referred to

B} In the event of dispute, the underwriting decision in the file will be referred to




18 Which one of the following statement is correct? A} Clauses modify the conditions in the policy

B}Endorsements modify the condition in the policy



19 The schedule of a policy states A} The premium to be paid B} Maturity date of the policy C}Sum Assured D}All of the above 20 Most recent amendment made in IRDA( Protection of Policy holders’ interest) Regulation in the year A}September’ 2007 B}April’ 2000 C} Oct’2002 D}Sept’2005 21 If the age proof submitted with the proposal is later found to be false, the insurer A}May declare the policy null and void ab initio

B} May revise the premium on the basis of the actual age from the commencement

C}May revise the premium and other terms of the contract

D} May do any of the three suggested above

22 Policy information statement contains A} Available method and frequency of the premium payment

B} The person or office need to be contacted for service requirements

C} Information of Grievance Redressal system

D}All the above three, mentioned

23 Which of the following statement is correct? A}When a policy lapses, policy holder losses everything

B} Once the policy lapses, some benefits are protected



24 Which of the following statement is correct? A} If death occurs in the grace period, the premium due is waived

B} The date of payment of premium is the date on which the cheque is cleared



25 Which of the following statement is correct? A}Surrender value factor increases with the duration elapsed

B} When a policy lapses, all vested bonuses are forfeited.



26 Which of the following is not a non forfeiture option? A} Policy becomes paid up B} Grace period C}Automatic advance of

premium D} Payment of surrender value

27 Which of the following statement is correct? A}Paid up option is effective from the date of first unpaid premium

B} Paid-up option is effective from policy anniversary after unpaid premium



28 Which of the following statement is correct? A} A revival is as important as new proposal for insurance

B}A revival is done only on evidence of continued good health



29 In a term insurance policy, cooling off period will be ………….,days after receiving the policy A} 5 days B} 10 days C} 15 days D}20 days 30 Which of the following statement is correct? A} When a nomination is made, the rights of the policy are transferred

B}the assignee immediately becomes the policy holder



31 Which of the following statement is correct? A} An assignment can be cancelled at any time by the assigner

B}An assignee is the absolute owner of the policy




32 Which of the following statement is correct? A} An assignment can be cancelled at any time by the assignor

B} A nomination can be cancelled at any time by the life Insured



33 A policy which has assigned , will revert back to the assignor A}If the assignor survives till maturity

B}Whenever the assignor demands it

C}When the condition specified in a conditional assignment happen

D}On maturity of the policy

34 Which of the following statement is correct? A} The claim amount, when paid, belongs to the nominee

B} The claim amount belongs to the heirs of the deceased



35 Notices for premium dues, bonuses etc sent by the insurer are A}only for information and to remind policyholder about due dates etc.

B}It is the obligation of the insurer to send such notices for getting its dues



36 Which of the following statement is correct? A}Foreclosure action is taken when interest is outstanding for to years

B}Foreclosure action is taken when loan plus interest equals the surrender value



37 Which of the following statement is correct? A} The insurance Act does not protect those, who try to cheat the insurer

B} Section 45 does not apply if the policy had been revived with in a year



38 Under MWPA act policy, the beneficiaries A}Must be specified at the commencement of the policy

B}Can be specified at any time during the course of the policy

C}May be specified even after the claim has arisen

D}Are determined by law

39 Which of the following statement is correct? A}A change of job after commencement of policy affects the terms of policy

B}The life insured can change the job only after the consent of insurer



40 Which of the following statement is correct? A} On maturity, nomination automatically become ineffective

B} The nominee can collect the maturity proceed, if the policy holder dies



41 Which of the following statement is correct? Statement -I: One can buy insurance on the life of the person, whom he had given loan. Statement-II: A wife can buy a policy on her husband’s life.

A} Only statement I B} Only statement II C}Both the statement D}None of them 42 An insurer issues a quotation for 14 days on 10th February and which was accepted by applicant on ninth day. Insurer

can reject the risk, if A}Applicant asks for another quotation

B}Insurer increases the agreed premium

C}Capital market collapses D}Change in material facts

43 Which one is not a part of an insurance contract? A} Utmost good faith B} Suppression of fact C}Wrong statement D}Protection 44 Loans are available on A}Term Plans B}Endowment Plans C}Money Back Plans D}Pension Plans 45 Sum Assured – 20, 000, 00/ Premium Paid – 5 Yrs/ Premium Payable 20 Yrs./ Accrued Bonus-5,00,000

Paid up value of this policy will be A}10,00,000 B} 4,50,000 C} 7,50,000 D}5,00,000


Chapter-4 (Insurance Underwriting)

Key Terms Underwriter Gross premium Moral hazard Non medical underwriting Human life value(HLV) Loading Physical hazards Risk premium Bonuses Financial underwriting Medical underwriting Liens Adverse selection Risk groups Level premium Time value of money

The process of Insurance underwriting

1 Collect information about applicant

2 Analyse the risk associated

3 Estimate the potential exposure

4 Determine the probability of loss

5 Accept ( or reject) the proposal

6 Classify and rate into a risk group to calculate the premium

7 Issue the insurance policy

Obtaining the required information

Personal Information: Medical Information: Agent’s Report:

1 Proposal form

Financial Information:

2 Medical examination report


4 Additional information

5 Report from tax authorities

Physical & Moral Hazard

Age : Occupation: Gender: Address: Habits: Hobbies : Physical characteristics: Medical Condition: Physical Handicap: Medical History of the family:

1 Physical Hazard

Personal History : Attitude towards health: Previous history of dishonesty: Previous dubious claim history: Request for large mount of Sum Assured: Proposer with no dependent: Policy asked for non earning member of family : No insurable interest between nominee & proposer: Medical check at different place from residence :

Moral Hazard

Large praportation of income committed for premium:

2

Fraud & Moral Hazard:

.

Financial, medical & non medical underwriting

1 Financial underwriting

2 Medical

underwriting

3 Non medical underwriting

Human Life Value (HLV)


1 Income replacement method

2 Simple Method

Liens

1 Diminishing 2 Constant

Pricing & Calculating the premium

Mortality Rates: Loading: Income from investment of premium: Benefits promised

1 Pricing Element

Premium Plan being taken : • Single premium plan: • Level premium plan: • Flexible premium plan :

Risk premium: Level premium: Deduct the interest(net premium) Loading:

2 Calculating premium

Gross/ office premium

Calculating bonus

1 Simple revisionary Bonus

2 Compounded revisionary bonus

3 Terminal bonus

4 Interim bonus


Agents role in underwriting

Self Test Questions No of Question to be asked in Examination—4) 1 Underwriting is A) Assessing the risk, each new applicant bring to the pool

B}Decision on acceptance or rejection

C}Calculating a suitable premium

D}All the above

2 Right to accept or reject a proposal lies with A}Agent B}Policy Holder C}Underwriter D}Sales Manager 3 Fall out of adverse selections could be A} More than anticipated claims B} Loss to the company C} Low bonus D} All the above 4 The Underwriting standards are determined A} By Insurance Act B} The IRDA Act C} By Life Insurance Council D}On prevailing practice 5 What is a proposal? A}A request for an insurance cover

B}An offer to enter in to a contract

C}Both a request and an offer to enter in an insurance contract

D}None of the above

6 Which of the following statement is correct? A}Underwriter determines the premium to be charged

B}Underwriter is an employee of the insurer



7 Which of the following statement is correct? A} An underwriter acts in the interest of the policy holders as a whole

B} An underwriter acts in the interest of the insurance company



8 Which of the following statement is correct? A} A Physical hazard effects the probability of death

B} Body measurement may indicate physical hazards



9 Moral hazard can be suspected in cases where A}The life to be insured is old

B}The insurance is for a very large amount

C}In both the above cases D}In neither of the above cases

10 The main reason, why a insurance proposal form often asks for the proposer’s height is to enable a reasonable comparison with the proposer’s

A} Age B} Gender C} Occupation D} Weight 11 Which of the following statement is correct? A}A medical referee is an underwriter

B}The medical examination at the stage of proposal is done by a medical referee



12 Which of the following statement is correct? A}A ‘Lien‘ operates for a specific period

B} A ‘Clause’ excludes specific risks



13 Which of the following statement is correct? A}Underwriting is done only when there is medical examination

B} Medical examination is necessary before a policy is issued



14 The system of Non-Medical underwriting is introduced because A} Medical examiners are not available in al areas

B} Most of the cases are found to be standard lives acceptable as OR

C} Of both the above reasons

D} Of some other reason

15 Which of the following statement is correct?


A}Underwriters are more cautious while considering cases on female lives

B}Underwriter are more cautious while considering cases of educated woman



16 Which of the following statement is correct? A}By writing the truthful report, the agent is helping the insurer

B} By writing the truthful report, the agent is helping the life to be insured



17 What normally happens to sum insured under a life insurance policy once the period of lien expires? A} It reduces B} It increases C} It temporarily suspended D} It is replaced by a newly

underwritten sum assured 18 Which of the following statement is correct? A}Smoking is a hazard inviting additional premium

B} Drinking is a hazard inviting additional premium



19 Which of the following statement is correct? A} Underwriting standards are changing

B}The underwriting standard of all the insurer are same



20 Which of the following statement is correct? A}’Standard life’, ‘normal life’ ’average life’, all means the same thing

B}The underwriter can definitely detect all attempts at adverse



21 The amount paid out by the insurer under a 30 yr life insurance policy exceeded the sum assured plus the revisionary bonus. The excess is likely to result from?

A} Charges refund B} A frequency loading C} A tax rebate D} A terminal bonus 22 Where annually increasing flexible premiums operate under a life insurance policy, what rate of increase will

generally apply? A} 2.5% B} 3.0% C} 5.0% 7.5% 23 Which of the following statement is correct? A}Premium is the price paid by the policy holder to secure insurance

B}The amount of the premium varies according to the insurance plan I



24 What does a premium depends upon A} Age of the person to be insured

B} Family history of the person to be insured

C}Medical history of the person to be insured

D} All of the above

25 Which of the following statement is correct? A}The premium collected in early years is less then what is require

B} The premium collected in early years is more then what is require

C}The premium collected in any year is exactly what is required

D}All the above statement are correct

26 The pure premium will be A} Less then the office premium

B} More then the official premium

C}Either more or less then the office premium

D} Neither more or less then the office premium

27 Hen the interest rates falls, the Tabular premium rates are likely to A}Increases B} Decreases C}Remain the same D}Neither increase nor decreases 28 The premium is loaded because of A} Interest likely to be earned B}Likely expanses C} Likely claim D} Age of the insured person 29 In the business of life insurance, valuation means A} An actuarial exercise to determine adequacy of funds

B} An attempt to determine the correctness of the value of the asset

C} Estimating the value of the movable property.

D}All of the above

30 Bonus becomes possible because A} Actual experience is better than expectations

B}The assumption made in constructing the premium were conservative

C} There is loading for bonus in the premium

D}Off all the above reason


Chapter-5 (Basic Life Insurance Product)

Key Terms Protection need Factors effecting protection

needs Death cover Survival benefit

Term insurance plan Pure endowment plan Endowment assurance plan

Whole life insurance

Convertible insurance plan

Single life insurance plan Joint life insurance plan Group insurance plan

Micro insurance plan ULIPs With profit policy Taxation Inflation Prioritizing needs Child plan Money back plan

Protection needs

Income: Medical needs : Dependents : Asset & Liabilities :

1 General protection needs of an individual

Family maintenance: Age: Income: Dependents:

2 Personal factors affecting protection needs

Asset/ Liabilities :

Life insurance products

Death Cover: Maturity benefit:

1 Basic elements of a life insurance plan

Tern Insurance plan

2 Basic Life Insurance plan

3 Return of

Premium Plan 4 Pure endowment

plan Death Cover: Saving element: Goal based investment :

5 Endowment insurance plan


6 Whole life

insurance plan 7 Convertible

insurance plan 8 Joint life

insurance plan Immediate Annuity :

9 Annuities

Deferred Annuity: Minimum Size: Type of group: Cover :

10 Group Insurance plan Policy holder :

11 Micro insurance plan

Choice of investment : Flexibility : Liquidity : Death & maturity benefit :

12 Unit linked insurance plan

Settlement option: Policy holder/insured : Lien : Deferment period & vesting date: Protection for payer :

13 Child plan

Type of insurance offered: 14 Money back

policy 15 Salary savings

scheme (SSS)

Taxation & inflation

Investment stage: Section 80C Section 80D Maturity stage:

1 Tax implication on insurance products

2 Inflation implication on insurance products

.


Prioritizing protection needs Why Prioritizing needs is necessary?

How to priorities needs?

1 Protection of future income

2 Medical/health protection for self & family

3 Planning for child’s education

4 Planning for child’s marriage

5 Protection against home/car loan

6 Planning for retirement

Execution process

1 Prioritizing the needs

2 Start with smaller investment

3 Postpone low priority for some time

Self Test Questions No of Question to be asked in Examination—2) 1 The main protection need of a 19 yr old is most likely to be A} Self protection B} Home loan protection C} Protection of dependent D} Protection of

children’s future. 2 Which out these is, protection need of an individual A}Income protection B}Asset & Liabilities C}Family maintenance D}All of the above 3 Which one of the following statement is correct? A}Every plan of insurance is a combination of two basic plans

B}The name given to the plan indicates the benefit available under the plan




4 Which one of the following statement is correct? A} Plans of insurance can be compared by reading the name given to the plan

B} plans of insurance can be compared by comparing the premium rates



5 Which one of the following statement is correct? A}A marriage insurance policy insures the father and daughter together

B}A Tern insurance plan can be for a long period



6 Which one of the following statement is correct? A}The sum assure under some policies increase every year

B}The sum assure under some policies decreases every year



7 Which one of the following statement is correct? A} The SA payable on death can be more than SA payable at maturity

B} The SA payable on maturity can be more than SA payable at death



8 Which one of the following statement is correct? A} There is no difference between a term insurance plan and a whole life plan

B} A whole life plan is a term insurance plan with an indefinite term



9 Which one of the following statement is correct? A}In a limited payment policy, the premium is paid as long as the policy is in force

B}In a limited payment policy, the premium stops before the end of the term



10 Which one of the following statement is correct? A} Only participating policies are entitled to the benefit of bonus

B} A bonus is the return of additional premium paid by a participating policy



11 Which one of the following statement is correct? A}In a convertible plan, the insurer can refuse the conversion on medical ground

B}In a convertible plan, the conversion is done on the request of the policy holder



12 Which one of the following statement is correct? A}A conversion becomes effective, when the policy holder exercise the option

B} A conversion option is subject to the insured person being in good health



13 Which one of the following statement is correct with regard to the joint life policies? A} The premium is the total of the premiums for insuring the two persons separately

B} The premium will be less than the cost for insuring the two persons separately



14 Which one of the following statement is correct with regard to the Children’s policies? A}The insured child becomes the owner of the policy on vesting age

B}The insured child becomes the holder of the policy only when it is assigned



15 Which one of the following statement is correct? A} Industrial assurance is meant only for industrial

B}Industrial assurance is meant for people with low


D}Both the above statement are


worker income incorrect 16 Which one of the following statement is correct? A}A SSS policy is an industrial assurance plan

B} A SSS policy can be taken for a SA of Rs. 10 Lakh



17 Which one of the following statement is correct? A} In industrial assurance plan, the premium is deducted from the pay roll

B}In SSS policy, premium is deducted from the pay roll



18 Rajat recently arranged a life insurance policy under which he is classed as the master policy holder. This addresses his role as

A} A creditor B} A debtor C} An employee D} An employer 19 State which one of the following statement is correct? A} A bank can take out a group policy for its account holders

B}A Finance company can take out a group policy for those who have taken loan from it



20 In which ways does group insurance differs from SSS ? A}Ownership of the policy B}Mode of payment of premium C} Parties to the

contract D}In all the above three aspects

21 State which one of the following statement is correct? A}Group gratuity policies requires that trustee be appointed

B} Group superannuation policies require that trustee to be appointed



22 Umesh had bought a 20 Yrs Marriage Endowment plan for her daughter, He will get tax exemption under which section of Income Tax Act 1962

A} Section 80C B} Section 80CCC C} Section 80D Section 80E 23 An average 5% inflation will make following impact on insurance cover required by Sunil A}His required insurance coverage will increase

B} His required insurance coverage will decrease

C}His required coverage will remain constant

D}None of the above

24 Prioritising needs helps a person in A}Helps in allocating limited savings in to priority needs

B}Increases returns on saving

C}Entices to buy more life insurance

D} None of the above

25 A general saving need includes A}Making a Contingency fund

B}Planning for child’s education

C}Planning for child’s marriage

D}All of the above


Chapter-6 (Savings Product)

Key Terms Asset Management Company(AMC)

Compounding Gratuity Traditional deposits

Bank deposits Disposable income Lock-in-period Saving needs Bonds Financial planning analysis

process Investors convenience Shares

Child plans Post office savings Mutual Fund Speed of transactions Cumulative deposit Fund managers Interest rates Taxation & tax planning

The need for savings/ investment advice

1 Ignorance about the financial planning process

2 Ignorance about the full range of financial products available

Factors that determining the saving needs of an individual

Individual without capital: Individual with capital:

1 General Saving needs

Duration of investment: Amount of disposable income: Existing assets and liabilities:

2 Factors that determine the saving needs of a particular person

Feature and benefits of saving products 1 Capital or

income growth 2 Guarantees 3 Lock in period 4 Penalties .5 Risk

6 Buying & selling mechanism


.7 Flexibility

Type of saving products

1 Life insurance Traditional: Cumulative:

2 Bank deposits

Recurring: Regular Income: Capital appreciation:

3 Mutual Funds

SIP: Dividend Income: Bonus shares:

4 Shares

Capital appreciation: Corporate Bonds: Government Bonds Commercial papers:

5 Bonds

Treasury bills: NSC/KVP : PPF : Term/ Recurring deposit: POMIS:

6 Post office savings

SCSS: Good returns: Portfolio diversion: Hedge against inflation:

7 Gold and silver

Insurance against uncertainties:

Tax inflation implication for savings products 1 Tax

implications Sec 80C Sec 80D Sec 80DD Sec 80E

2 Income Tax Act 1961

Sec 24(b)

3 Inflation implications


Implication of interest rates on savings products 1 Increase in

interest rates 2 Decrease in

interest rates

Prioritizing saving needs 1 Contingency

Fund 2 The need for

insurance 3 The need to

purchase assets

4 The need to save for retirement

5 The need for tax

planning Short term needs: Medium term needs:

6 Short, medium and long term needs Long term needs:

Self Test Questions No of Question to be asked in Examination—5) 1 The need for investment advice from an insurance agent normally results form what overriding factor? A} Absence of any long term goals

B} Inability to priorities future financial needs

C} Lack of market knowledge D} Shortage of available funds

2 An agent needs to guide its prospect regarding savings A}For Increment in Returns B}For tax savings C}For purposeful need based

investments D}None of the above

3 State which one of the following statement is correct? A}Every individual has unique saving needs

B}Usually people saves in planned manner

C}People having enough capital does not needs to save


4 Purpose of savings depends upon A} On income and dependents of an individual

B}On the assets, liabilities and investment returns

C} Tenure of investments D}All of the above

5 When undertaking financial planning for individual without capital, what savings needs is likely to be addressed in every single case?

A} Emergency funds B} Funds for children’s savings

C} Funds for educational cost D} House purchase fund

6 Professional consultant can help individuals in A}Help individual in assessing their need future financial planning

B}In preparing an investment portfolio, which could provide safe & better return

C}Selecting investment products based on need

D}All the mentioned above

7 Which one of the following are general saving needs? A} Buying a house B} Retirement planning & saving C} both of them D} None of them 8 Need of a person with capital are


A}Increase the existing capital B} Legacy for children C}Comfortable life after retirement

D}All the above

9 State which one of the following statement is correct? A}Some saving products improves income

B}Some saving products increases capital

C}Other provide both D}All the above

10 Out of which main reason , a person needs an insurance consultant A} Absence of long term goals

B} Inability in determine future need & Priortisation

C}Lack of financial market knowledge

D}lack of available options

11 For his variable income, Nikhil is looking for the saving options with taxation benefit. He is looking on Equity Linked Saving schemes, National Saving Certificated and an Endowment plan. Which of his investment will be entitled for tax exemption under section 80C of Income tax Act?

A}Only on NSC Investment

B}Only on ELSS & NSC investment

C} Only on NSC & Endowment Insurance

D}On all the three investments

12 Naveen is addressing his income needs by investing directly in corporate bonds. In what form, will he receives this income as

A} Annuity installment B} Dividend payment C} Interest payments D} Rental payments 13 An Investor has vast Equity portfolio and if RBI announces good hike n interest rates, prices of these shares will A}Fluctuate B} Reduce C} Increase D}Stagnant 14 Lock in period in a saving instrument is A}A lock given to investor

B}Invested amount can be redeemed only in the given period

C} Invested amount can not be redeemed in the given period

D}None of the stated above is right

15 Penalties are related to A}Redemption before lock in period

B}Reduced Exit load in the lock in period in ELSS



16 State which one of the following statement is correct? A}ULIPs offers flexibility

B} ULIP does not fund switches

C}Premium holiday and partial withdrawal can increase maturity period

D}All the statement above are right

17 State which one of the following statement is correct? A} Many life insurance products provide savings with protection

B}In ULIPS, insurance company bears the risk

C}Insurance policies are not suitable for long term

D} All the statement above are right

18 On which type of deposits, banks provide regular interest A} On traditional deposits B}On Fixed deposits C} On recurring deposits D}On all the above 19 State which one of the following statement is correct? A}Tenure doesn’t effect maturity

B}More investment in shorter term will result in more savings

C}You will save more, while investing less in longer tenure

D} None of the stated above is right

20 Surplus is A}Gross income of a person

B}Surplus income of a person

C}Spare amount left after meeting all monthly expenses

D} All the statement above are right

21 Saving products provides A}Regular Income B} Capital Increment C} Combination of both D} All the statement above are right 22 On what basis saving products should be chosen? A}Guaranteed return B} Fluctuating return C} Combination of both On the basis of Individual’s risk

profile 23 How many types of returns mutual funds provides? A}Regular Income B}Capital Appreciation C} Both the above statement

are correct D}Both the above statement are incorrect

24 Which one of these provides partial retirement income? A}Money back plan B} Pension Plan C}Fixed Deposit D} Endowment Plan 25 State which one of the following statement is correct? A}Whole plan is a term plan of unlimited term

B}Money back is pure endowment plan




26 Which section of IT Act provides tax rebate on the heath insurance on self, spouse and dependent children A} Section 80D B}Section 80C C}Section 80E D} Section 80F 27 Two important Stock markets in India are National Stock Exchange & Bombay Stock Exchange A} True B} False C} Doesn’t know D}Neither A nor B 28 Select right answer- If shares were bought at high price and sold on low prices due to bad performance of company,

then this loss will be termed as ‘Capital Loss’ A}False B}True C} Doesn’t know D}Neither A nor B 29 Medium term needs are of between 5 to 15 yrs and requires savings for kids education and marriage A}False B}True C} Doesn’t know D}Neither A nor B 30 Which one is a long term need? A} Child education B}Child marriage C} Buying a house D} All of the above 31 Income tax Act was passed in 1961 and became effective from April 1’1962 A}False B}True C} Doesn’t know D}Neither A nor B 32 Difference between two prices is known as profit or capital gain A}False B}True C} Doesn’t know D}Neither A nor B 33 Any investor needs to invest in India in A}Corporate Bonds B} Government securities C}Commercial papers &

Treasury Bills D}In all the three above

34 If a newly wed with a small child have sufficient life insurance cover, then they need to invest in A}Child Education Plan B}Saving or Pension plan C}Both A & B D} Neither A nor B 35 What are the benefits in investing Mutual funds? A}Regular savings B}Risk coverage C}Investment D}Risk diversification 36 State which one of the following statement is correct? A}Stocks are traded in stock exchanges

B}One can buy stocks directly from stock exchanges



37 State which one of the following statement is correct? A}Bond is kind of loan, given by investor to bond issuer

B}Investor are lender, who receives interest on their given loan



38 State which one of the following statement is correct? A}Gold ETF are like mutual fund

B} One can buy stocks directly from stock exchanges



39 Section 80D of IT Act allows rebates from taxable income on A}Paid life insurance premium

B}Investment in Infrastructure bonds

C} On investment in NSC D}On investment in health insurance

40 Insurance Premium should not be more then 20% of sum assured except single premium for IT rebate A}False B}True C} Doesn’t know D}Neither A nor B 41 Which needs, people without capital, will consider while investing A}Child Education needs B} Child marriage needs C}Contingency needs D}Buying of a car 42 RBI had declared series of significant interest rates hike. What effect it will make? A}Reduction in demand for bank loan

B}Increment in demand for bank loan

C} Nothing will happen Difficult to imagine

43 Mutual fund is a fund, which brings people with common objective together A}False B}True C} Doesn’t know D}Neither A nor B 44 Check out the tenure of the various needs A}Short term (0-5 Yrs) B} Medium Term(5-15 Yrs) C}Long Term (15 & above) D} All the above are right


Chapter-7 (Other key financial Product)

Key Terms Health Insurance Insurance riders Pension Plan Cashless facility No-claim bonus Accumulation phase Commutation Individual health

insurance plan Family floater Daily hospitalizations cash

benefit plan Accidental death benefit rider

Critical illness rider

Term rider Waiver of premium rider Life annuity Guaranteed period annuity Increasing annuity Prioritising needs

Other Financial needs

1 Need for health insurance

2 Need for insurance riders

3 Need for pension plan

Type of products, their features and benefits

Individual health insurance: Family floater health insurance: Group Health insurance plan:

1 Types of health plan

Daily hospital cash benefit plan: Pricing: Cash-less facility: Medical examination: Pre-existing illness: No claim bonus: Permanent exclusions: Immediate care:

2 Features and benefits of health plan

No need for saving or loan for medical emergencies: ADB: Term Rider: Critical Illness(CI):

Waiver of premium:

3 Riders

Surgical Benefit rider:


Hospital cash benefit rider: Guaranteed insurability rider: Additional Cover: Nominal cost: Customization: Flexibility:

Features and benefit of riders

Tax benefit:

4

Sum assured: Premium:

5 IRDA regulations for riders

Immediate annuity: Deferred annuity: Life annuity : Joint life, last survivor annuity: Guaranteed period annuity: Life annuity with return of purchase price:

6 Annuities

Increasing annuity: Accumulation phase: Regular annuity phase: Commutation: Payment frequency: Insurance cover: Tax implication: Frequency of payment: Traditional/ Unit linked:

7 Pension plans

Type of payout:

Tax and inflation implication for financial products

Health insurance plans: Riders: Pension plans:

1 Tax implication for financial products

2 Inflation implication for financial products


Prioritising needs

Self Test Questions No of Question to be asked in Examination—4) 1 Risk of living too long cab be cared of A} by investing in Endowment Plan

B}By Term Insurance C} By Health Insurance D} By investing in Pension Plan

2 The change in a health care costs over recent years has had what general impact on healthcare insurance A} A fall in average premium

B} A reduction in underwriting requirements

C} A rise in the need for cover

D} A strengthening of the insurable interest rules

3 Yash pays health insurance premiums for himself, his wife and his two children aged 13 and 8. Premiums for which of these individuals will qualify as deductible from Yash’s taxable income?

A} Yash only B} Yash and his wife only

C} Yash, his wife and his oldest child

D}ash, his wife and both of his child

4 Health insurance is needed 0A}because it is better then the traditional insurance product

B}It is sold by insurance companies

C} It is good investment

D}It is a good way of managing rising medical cost and contingencies

5 Individual health insurance is important A}For retired people B}For young married and

bachelors C}with family and dependents

D}None of these

6 Which one is financial need of a person A}Need of health insurance

B}Need of insurance riders

C}Need of pension plans D}All of the above

7 Which way health insurance plans helps the insured A}Saves family from hospitalization expanses

B}Saves from doctors fees hospital room rent and other medical expenses

C}Provide cash less treatment at network hospitals

D} All of the above

8 Family floater health insurance is important for A}Retired persons B}Young Unmarried C}Married with child and

dependent parents D}People with short term carrier and high income

9 Health insurance provides A}A definite sum in case of hospitalization

B}ICU payment on daily basis

C}Additional Lump sum amount once for critical illness and surgery

D}All the above

10 Family floater health insurance covers A}An individual B} His dependent parents C}His spouse D}All the above 11 State which one of the following statement is correct? A}In life insurance B}In life insurance, the word C}Both the above D}Both the above


‘rider’ means the person taking part in a horse race

‘rider’ refers to additional clauses

statement are correct statements are incorrect

12 State which one of the following statement is correct? A}A rider modifies an existing condition in the policy

B}A rider supplements or adds to an existing condition in the policy


D}Both the above statements are incorrect

13 State which one of the following statement is correct? A}Riders provides supplementary benefits to the basic plan

B} Some riders are allowed only after the underwriters approval



14 State which one of the following statement is correct? A} A premium waiver option is allowed as rider

B}The premium on all riders depend on the age of insured person



15 State which one of the following statement is correct? A}The premium on the riders various according to the basic plan

B}The premium on the riders can not exceed specified limits of the basic premium



16 Rider is an additional clause or benefit, which is A}Optional with normal charges

B} Essential with minimum charges

C}Free D}Restricts guaranteed benefits

17 What price persons has to pay riders and how they benefit from them A}Persons has to pay double the amount of basic premium and it doubles the benefit

B}People have to nominal cost for riders and they get additional benefits



18 The main purpose of Guaranteed Insurability rider is to provide what, to a policyholder? A}Canceling the medical exclusions after the after the cooling period

B}Including parents in the policy

C}Increasing the coverage after a particular event in life

D} Keep coverage after the fall in investment. returns

19 When the amount of critical illness rider is paid? A} Insured dies due to the covered illness.

B}Daily hospital cash benefit , when insured is hospitalized

C}On policy maturity D}On the diagnosis of covered critical illness

20 In which condition, benefits of critical illness rider ceases? A}If the insured is not claiming the rider benefit

B}If insured buys new policy with critical illness rider

C}If insured is buying a health insurance plan

D}If insured reaches at age 60

21 In which condition, term rider will be available? A}On minimum sum assured of 50000

B}On the insured was 10 yrs old at the time of entry

C}When the insured is 58 at the time of entry

D}All of them

22 Premium waiver rider provides A}Free insurance coverage

B}Gives discount in premium

C}Gives premium waiver in case of death/disability of proposer in children’s plan

D) None of the above

23 Accidental Benefit rider provides A}Additional sum assured to insured in case of accidental wounds

B} An additional sum assured if insured dies after 12 months of accidents

C} An additional sum assured if insured dies with in 180 days of accident.



24 A Term rider provides A} Additional sum assured on maturity

B}Additional sum assured if insured dies before attaining age 60, during the policy term

C}Hospital cash benefit in case of insured hospitalized in policy tenure

D}Additional sum assured on disability

25 State which one of the following statement is correct? A}There is no death risk cover in an annuity

B}Though called an annuity, but the payment can be provided monthly also



26 State which one of the following statement is correct? A}An annuity is paid only to the person who takes out the annuity policy

B}An annuity is paid only till the death of the person taking out the annuity policy



27 State which one of the following statement is correct? A}An annuity policy guarantees a pension

B} An annuity policy is issued only after a medical examination



28 State which one of the following statement is correct? A}Under an annuity certain policy, the annuity stops after a certain period

B}Under a deferred annuity policy , the annuity commence immediately



29 State which one of the following statement is correct? A}An annuity can be taken only on a single life

B}In life annuity, risk of death is covered



30 State which one of the following statement is correct? A}In a deferred annuity policy, premium has to be paid in lump sum

B}Annuities purchased during different years may all commence on the same date



31 State which one of the following statement is correct? A} Physically handicapped person can be given annuity at normal rates

B}The amount of annuity depends on the age at which annuity commence



32 State which one of the following statement is correct? A}Annuities are reverse of endowment insurance plans

B} Annuities are reverse of health insurance plans



33 Which plans helps a person in maintaining the same life style, which they use to enjoy before retirement A}Pension plans B}Children’s plans C}Health Insurance D}Whole life plans 34 The amount allowed for withdrawal in commutation in pension plans is A}One third of accumulated fund

B}One fourth of accumulated fund

C} Half of the accumulated fund

D}None of the above

35 Annuities provides A}A regular series of payment, till the policy annuitant survives

B}Lump sum amount to the annuitant

C}Life insurance coverage D}Health insurance coverage


Chapter-8 (Identifying client needs)

Key Terms Assets Life cycle Prioritization of needs Communication skills Listening skills Questioning skills Quantifying skills Long term needs Real needs Income Medium term needs Short term needs Perceived needs Liabilities Surplus funds

Who is your client

Building a contingency fund:: Income protection: : Saving for child education: Saving for retirement:

1 Prospective clients

Protection against loans: Identifying needs: Quantifying needs: Prioritising needs:

2 Client needs

3 Existing arrangements of client

The typical life stage of a client

1 Childhood With dependents: 2 Young unmarried No dependents: Double income family: 3 Young married Single income family: Double income family: Young married

with children Single income family: 4

5

Young married with older children

6 Pre retirement

7 Retirement


Factors that effect the life stages

1 Age 2 Marital status and

dependents Public sector employee: Private sector employee: Self employed: People with short career: Unemployed:

3 Employment

4 Health issue 5 Individual’s income

and expenditures 6 Divorce, separation

and bereavement

Client needs: real and perceived

1 Identification of real need

2 Identification of current and future needs

3 Quantification and prioritization of needs

4 Financial planning review

Communication, questioning and listening skills


1 Communication skills

Questioning skills

Open ended: Close ended:

Different types of questions

Seek information: Explore and collect additional information: Understanding the question: Confirm agreed points:

2

Classification by purpose

Commitment for action: 3 Phrasing of

question 4 Listening skills No need: Competition offers better: No money:

5 Handling objections from the client

Gathering client information including family information

1 Personal details 2 Family details 3 Medical details 4 Professional details

5 Cash flow and existing investments

Understanding priorities- a summery

1 Life cycle


2 Existing insurance

policies 3 Surplus funds

available

Confirming assumptions and agreeing objectives

Self Test Questions No of Question to be asked in Examination—3) 1 The sole focus during a client’s fact finding session was healthcare requirements and estate planning A} Young married B} Young married with children C} Pre retirement D} Retirement 2 A best prospective customer would be? A}Young Employed B}Having financial need C}Old and retired D}Having dependents 3 Your prospective customer is A} Person buying insurance B}Person with financial needs C}Both of them D}None of them 4 Prashant was asked about his age, marital status, income and dependents by an Insurance agent., it will

be termed as A}Creation of needs B}Prioritization of needs C} Determining of

priorities D}Determining the quantum of priorities

5 A working person needs maximum income protection, when A}Young ,Married from double income family

B} Young ,Married from single income family

C} Both D}None

5 Fact finding helps an agent in understanding A}Understanding financial needs and quantifying them

B}Prioritising the client’s needs and helping them in investing according to their available surplus income



7 Fact finding shows A}Current financial status of a person

B}Past financial status of a person

C}Future financial statues of a person

D}Current, past and future financial status

8 Apart from the salary level, what other key feature of Alok’s salary likely to have a major impact on the level of his pension, life insurance and health insurance needs?

A} Whether the job is office or field base

B} The normal retirement age in relation to the job

C} Whether the job is in public or private sector

D} Whether the job is manual or non manual

9 Life stages of a client would be A}Childhood & Bachelor

B}Married with or without children

C}Married with older children

D}All of them

10 One can understands the financial needs of person by A}By good Questioning techniques

B}By asking about client in locality

C}Both of them D}None of them

11 In the context of financial planning, how is the difference between the real needs or perceived needs best described?


A} Real needs are financial needs and perceived needs are non financial needs.

B} Real needs arte actual needs and perceived needs are based on a client’s thoughts and desire.

C} Real needs identified by the insurance agent and the perceived needs are identified by the client

D} Real needs are needs which satisfy an objective and perceived need s are needs which do not satisfy an objective.

12 For the analysis of findings of clients needs, an agent should have A}Communication skill B}Listening skills C} Questioning skills D}All of the above 13 State which of the following statement is correct? A}Questioning skills is important at call opening

B}Questioning skills is important at call closing



14 State which of the following statement is correct? A}Agent should ask the customer to invest in insurance only

B}Agent should ask the client to invest beyond his capacity



15 State which of the following statement is correct? A}Agent should ask the customer to invest in equities only

B}Agent should ask the client to invest his surplus income in planned manner



16 Usually risk is A}Same at all the stages of life

B} Increase with age C}Decrease with age D}Maximum at the time of retirement

17 Which reason doesn’t effect the life stages of a client A} Assets and liabilities B}Capacity of his

networking skills C}Marital status and dependents

D}Health issues

18 Fact finding process requires understanding following facts of customers A}Profile B}Profile and status C}Profile, status and

financials D}Profile, status , financials and future aspirations

19 Fact finding techniques and financial analysis is used to determine A}Real and perceived needs of a client

B} Real needs of a client C} Perceived needs of a client

D}None of them

20 Real financial and protection needs are not dependent on A}Person’s Hobbies B}Person’s life cycle C} His current insurances D}Investible surplus 21 Which investment is suitable for a High risk profile client A}Endowment plan B} Bank Deposit C}Equity ULIPS D}Whole life

insurance 22 During fact finding session, a client had shown interest in saving for future and good investment options A}Client is young married

B} Client is young, marries with younger children

C} Client is at pre retirement stage

Client is at post retirement stage

23 Open ended questions are? A} How many kids do you have?

B} Are you married? C}Where do you work D} Why you think, retirement is your prime need?

24 Close ended questions are? A}What you have thought about your kids education

B} What is your retirement planning?

C} When you are planning to have a house?

D} You would like to pay initial premium by cheque or cash?

25 As an agent, what would you suggest a client, who is at pre retirement stage? A}Investing for pension and B}Reviewing the health C}Investing for Legacy D}All the above


investment protection plan 26 State which of the following statement is correct? A}Any person that an insurance agent meets, who has a financial needs is a prospective client

B} Any person that an insurance agent meets a prospective client



27 State which of the following statement is correct? A}Perceived needs are those needs, which drive out of fact finding

B}Perceived needs those imagined as important by the client



28 State which of the following statement is correct? A} Open ended questions encouraged the clients to talk freely.

B}It is important to make client feel comfortable during a fact finding session



29 State which of the following statement is correct? A}If a GAP is discovered in financial analysis, then it should be protected through insurance

B} If a GAP is discovered in financial analysis, then the client should immediately invest to bridge the gap



30 State which of the following statement is correct? A} An insurance agent must be careful in handling objection

B}An effective need analysis product selection reduces the chances of objection




Chapter-9 (The fact finding and financial planning)

Key Terms Fact finding Cash flows Structured interview Pension details Family details Employment details Financial details Assets Liabilities Assessment Analysis Making recommendations Needs Priorities Benefit illustration Guaranteed benefit Non guaranteed benefits Know your customer(KYC)

What is fact finding

Identify needs: Gathering client’s data: Analyzing client’s cash flow:

1 Objective of fact finding

Provide for anticipated changes:

Using a fact-find

Making client feel comfortable: Explanation of process: Gathering information: Discussion on priorities:

1 Structured interview

An agreement in principle: Personal details:

Family details

Employment details:

Financial details:

Existing insurance and investments:

Monthly income and expenditure:

Objective of financial planning

Future details:

2 Fact Finding Forms

Next review session:


Assessment and analysis

1 Assessment

3 Analysis

Client needs: real and perceived

1 Identification of real need

2 Identification of current and future needs

3 Quantification and prioritization of needs

4 Financial planning review

Applying product features and benefit to a client situation

Prioritization: Research information: Calculation of amount Draft a report and presentation: Prepare quotations:

1 Product short listing process

Product identification:

2 Product short Listing of needs:


Selection of products:

Analysis of chosen products:

listing for each needs

Choosing the most suitable product:

Making recommendations

1 Presentation of recommendations to the client

Need check: Outline concept behind recommendation: Satisfying each needs: Seek authority for proceeding:

2 Structure of presentation of recommendation

Documentation: 3 Presenting benefit

illustration Photograph: Proof of identity:

4 Know your customer (KYC)

Address proof:

Self Test Questions No of Question to be asked in Examination—2) 1 State which of the following statement is correct? A}Fact Finding is a process, enables agent to identify a client’s financial needs

B} Fact finding is a process that enables an underwriter to identify a client’s insurability



2 State which of the following statement is correct? A} Fact Finding is a process, that enables agent to identify a client’s financial needs and quantify those needs

B} Fact finding is a process that enables a surveyor to identify losses in a claim



3 State which of the following statement is correct? A}Good fact finding is a key for successful financial planning

B}Fact Finding helps a client in choosing right investment product for him



4 State which of the following statement is correct? A} Good fact finding not only revels client’s practical needs, but it also looks in to emotional consideration

B}Through fact finding, an agent can find client’s cash flow and Investible surplus



5 State which of the following statement is correct? A}Fact finding also needs to uncover anticipated changes in client’s circumstances, which can effect their financial position

B}The primary objective of fact finding should be to understand client’s financial needs




6 State which of the following statement is correct? A}First step of fact finding process should be making the customer feel comfortable

B}Second, explanation of the process and its purpose



7 State which of the following statement is correct? A} Fact finding form should have columns for personal history, family history etc.

B} fact finding forms should have columns for client’s friend’s network



8 State which of the following statement is correct? A}The liability section of Fact finding should lists the amounts of all the client’s debts

B} The assets section of Fact finding should lists the amounts of all assets and investments.



9 State which of the following statement is correct? A} The objective and consideration section should focus on which insurance product customer should buy

B} The another purpose of fact finding is to enable client’s its income and expenditure and where they can best reduce them



10 State which of the following statement is correct? A}The product short listing process is to identify suitable product and their tax implications

B} The product short listing process is to check on other external sources available to meet the identified needs



11 In order to fulfill the “know your customer” procedure, at what stage in the financial planning process is the insurance agent most likely to request a copy of the customer’s photograph?

A} At the end of the fact finding meeting

B} At the end of the presentation meeting

C} As soon as the application is accepted by the insurer

D} As soon as the insurer is ready to issue the policy document.

12 An agent has recommended an investment product with non guaranteed benefits. The benefit illustration passed to his client will therefore use assumed annual growth rates of

A}5% & 8 % 5% & 10 % C} 6% & 8 % D}6% & 10 % 13 Product short listing and selection is dependent on A}Agents wish B} Customers needs C} Company’s wish D}Market condition 14 Fact Finding is a process, enables agent in A} Understanding client’s needs

B} Understanding client’s cash flow



15 Which are the main role and responsibilities of an insurance agent? A}Identifying client’s needs

B}Advising most suitable product options to the client

C}Avoid adverse selection

D}All of the above

16 The benefit illustration should distinguish A}Guaranteed benefit B}Non guaranteed benefit C}Both of them D}None of them 17 Disclosing benefit in benefit Illustration includes A}Guaranteed & Non guaranteed benefits

B}With profit & with profit

C}Current & Future benefits

D}All the above

18 In the occupation section of Fact Finding process


A}It is not necessary to consider bonus, an employee gets from employer

B} It is necessary to consider bonus, an employee gets from employer



19 Current investments and insurance should be consider in a fact finding process A}Because it reduces the requirements of resource needed for the goals found in financial needs

B} Because it increase the requirements of resource needed for the goals found in financial needs



20 A customer argued with an agent that competition is offering better product benefit, in such case an agent needs to

A}Raise appropriate question to understand the real reason

B}Present a comparison C}Discuss the benefits the offered product offers

D}All of them


Chapter-10 (Good client practice)

Key Terms Agent’s duties and responsibilities.

Client requirements Agent remuneration Disclosure

Recommendations Application and rejection of a policy

Churning Switching

Persistency Policy servicing Client rights Long term relationship Disclosure methods Priortisation of needs Suitable products Benefit illustration

documents

Duties and responsibilities of an insurance agent

Requirements of the clients

1 Prioritising the needs of the client

2 Conducting a research to prepare unified recommendation

3 Finding the gap in the planning

4 Identifying the suitable product

Agent remuneration and upfront disclosure method

First year commission: Limits of FYC: Renewal Commission:

1 Remuneration method

Limits of RYC: 2 Disclosure

Recommending a suitable product


1 Checking the client’s commitment

2 Outlining the reason of recommendation

Agree with recommendation but wants time: Does not agree with recommendation: Client accept few but not all recommendation:

3 Acceptance or rejection of the recommendation

4 Churning and product

switching

The long term benefits of retaining the policies and avoiding short-term cancellation (persistency)

Helps clients in achieving goals: Increase revenues: Reduction in costs:

1 Benefits of persistency

Insure client satisfaction: Product design: Role of an agent: Change in clients financial circumstances:

2 Different factors that can effect persistency

Policy servicing: Flexibility in premium payment: Constant reminder of due dates: Continuous contact with client:

3 Different methods for maintaining high persistency

Policy servicing:

Client’s rights and complaint procedures

Building long term relationship with client

1 Marriage 2 Moving house 3 Birth of a child 4 Change of job


Self Test Questions No of Question to be asked in Examination—4) 1 State which of the following statement is correct? A}An agent acts as an intermediary between client and the company

B}An agent has to work in the best interest of the both, client and company



2 State which of the following statement is correct? A}An agents role is to help underwriter in assessing the risk presented by the proposer

B} An agents role is to help the client in buying process



3 State which of the following statement is correct? A} An agents role is to conduct research to prepare a unified financial recommendation

B}An agents role is to land money to the client to pay the premium



4 State which of the following statement is correct? A}An agent can receive maximum 35% commission on first year premium

B} An agent can receive maximum 7.5% renewal commission in second & third year premium

C} An agent can receive maximum 5% renewal commission on fourth years onwards.

D} All the above statement are incorrect

5 State which of the following statement is correct? A}The benefit illustration document should show assumed growth rate of 6% & 10% on policies

B}The benefit illustration should disclose commission payable to agents in ULIP policy



6 State which of the following statement is correct? A}While presenting a recommendation to a client, agent must outline the reason of recommendation of particular policy

B}The agent must respect the client’s right to decline a recommendation



7 State which of the following statement is correct? A} An agent needs to address the client’s apprehensions, as and when they arise.

B} An agent should refuse to act for the client, if client rejects the agent’s recommendations..



8 State which of the following statement is correct? A}An agent should encourage a client to surrender an existing policy and start new one for higher first year commission

B}An agent should advice surrender of a policy and switch to another policy, only when it is in the best interest of the client



9 State which of the following statement is correct? A} Policy Lapses are in the interest of insurer.

B} Policy Lapses are in no once interest, be it. insurer, agent or client



10 State which of the following statement is correct? A}Flexibility in premium payment helps in policy persistency

B}Constant reminder of due premium dates helps in policy persistency

C}Proper fact finding helps in the policy persistency

D} All the above statement are incorrect

11 The main purpose of including commission details in the documentation to the client is to increase: A} Competitiveness B} Efficiency C} Flexibility D} Transparency


12 A client has been recommended a low risk investment by his insurance agent, but client insists the agent arranges for the money to be invested in the high risk product. What action should the agent take?

A} Carryout these instruction , but document that this contradicts the recommendation

B} Conduct a new fact-find

C} Invest a reduced amount of money in this product

D} Refuse to act for the client.

13 An insurance agent has advised a client to surrender an existing policy and start a new investment policy. What key indicator should be used to determine whether this advice was ethical?

A} The best interest of the client

B} The difference in potential income and capital growth between two products

C} The flexibility of the new product to the old one

D} The views expressed by the client.

14 What key impact will low persistency levels have on insurance policy holders? A} An enhancement in investment choice

B} An improvement in investment performance

C} An increase in insurance cover

D} A reduction in benefit.

15 An agent is remunerated by A}Salary B}Commission C} Daily wages D}None of the above 16 Agents commission are controlled by A}Indian Insurance Act 1938 B} Insurance Act 1956 C}IRDA Act 1997 D}None of the above 17 The purpose of disclosing the agent’s commission is to bring A}Increased competition B}Increased efficiency C}Flexibility D}Increase Transparency 18 What will be the effect of low persistency on a policyholder? A}Better product choice B}Improvement in investment C}Increase in insurance

coverage D}Lower benefits

19 What could the reason, if an agents recommendations is rejected by a client? A}Disagreement by the client on recommendations

B}Disagreement by he client on fact finding

C}Client feels that the offered product doesn’t suits to his requirements

D}All of the above

20 If a client wants to act opposite to the recommendation then and agent should A}Not to take immediate action on the client’s suggestion

B}Ready to accept the client’s choice, even if it was not recommended

C}Refuses to act on the client’s choice and leaves the place

D} Consult with other agent.

21 State which of the following statement is correct? A}An agent should constantly encourage the client for financial review

B} An agent should constantly encourage the client for financial review for more sale

C} An agent should encourage the client for financial review if it is in the best interest of the client.

D} Agent should encourage the client to surrender his old policy to buy a new policy for more commission

22 Persistency helps to A}Insurer B} Customer C} Agent D} All the above 23 A suspended agent is entitled for renewal commission, if A}He was suspended in fourth year

B}He had worked more then five year with the insurer

C}He has worked more then five years with the insurer and his policies, more the 50000 SA are in force after the termination

D} He has worked more then five years with the insurer and his policies more the 50000 SA are in force before the termination

24 State which of the following statement is correct? A} Benefit illustration is required to be shown only in traditional policies

B} Benefit illustration is required to be shown only in ULIPs




Chapter-11 (Claims)

Key Terms Claims Maturity claims Survival benefit payments Death claims Valid claims Policy not in force Breach in policy condition Fraudulent claims Claim documents Early death claims Presumption of death Void claim Void-able contracts Indisputable contract Claimant’s statement Rider benefit Return of premium Terminal bonus

Requirement of a valid claim

What is claim?

Survival benefit payment: Paid-up value: Discounted claim: Commutation of installments: Annuity payment at the time of vesting:

1 Maturity claims

2 Death claims ADB: Critical illness:

3 Rider benefit claim

Hospital care: 4 Valid claim

Why a claim may be invalid

1 Policy not in force

2 Excluded

conditions apply 3 Fraudulent claim

Duties after death and documentary evidence

Documents at the first hand, required :


1 Early death claim

Settling claims

Claim guidelines should be given with the policy documents: Receiving claims: Decision on claim:: Claim investigation: Delay in payment

1

IRDA guidelines

Role in disputes within claimants: Submission of original documents: Identity of the claimant: Discharge form: Age proof: No Premium dues:

2 Maturity claims

No assignment: 3 Survival benefit

claim 4 Death claim

Fraudulent claims

Consequences of fraud from insurer: Consequences of fraud from insured: Consequences of fraud from claimants:

1 Consequences of fraud

2 Caution points at the time of handling death claim

3 Presumption of death

Void and void-able contracts


1 Mistake 2 Illegitimate / un-

lawful circumstances 3 Lack of insurable

interest Breach of good faith : Breach of warranty:

4 Indisputable contract ( Section 45)

Self Test Questions No of Question to be asked in Examination—4) 1 What is meant by a claim under an insurance policy? A} Any demand made by the policy holder on the insurer.

B}A demand to fulfill to fulfill the policy holder’s obligation

C} A demand to fulfill the insurer’s obligation

D}All the three above

2 Where does a claim arise under an insurance policy? A} Whenever a policy holder feels the need for money.

B}When the insured event happens

C}When a premium is not paid

D}Whenever any of the three things mentioned above happen

3 The insurer will not pay a claim unless A}The event insured against, happens

B}Policy holders himself makes a demand

C}The nominee makes a demand

D}Whenever any of the three things mentioned above happen

4 Which one of the following statement is correct? A}A request for loan be considered as claim

B}A request for surrender of policy is considered a claim



5 Which one of the following statement is correct? A}A claim will be paid as soon as the death of the insured is confirmed

B}A insurer makes enquiries to establish that the death took place



6 Which one of the following statement is correct? A}An insurer makes enquiries to establish the fact of death

B}The insurer makes to check facts stated in the proposal



7 Which one of the following statement is correct? A}The insurer makes enquires only in the case of early death claim

B}The insurer makes he enquiry in the maturity claims also



8 Which one of the following statement is correct? A}A death claim within two years of commencement is treated a early death claim

B} A death claim within two years of revival is treated a early death claim



9 Which one of the following statement is correct? A}Maturity claims are paid to policy holder

B}Maturity claims are paid to assignee





A}Maturity claims cheque are paid to trustee in the case of MWPA policy

B} Maturity claims cheque are paid to beneficiary in the case of MWPA policy



11 Which one of the following statement is correct? A}No claim is paid unless the original policy is produced

B}Claim can be paid even with out original policy, if it is lost



12 Which one of the following statement is correct? A}If a person is missing for seven years, the claim is called death claim

B} claim can be admitted if the life insured is not heard for seven years



13 Which one of the following statement is correct? A}Claims may be paid on the basis on the indemnity, if title is not cleared

B} Claims may be paid on the basis on the indemnity, if the original policy is lost



14 Before paying a claim, which of the following have to be verified? A}Premium paid till date B}Balance of loan, if

any C}Title of claimant All the three above mentioned

15 Which one of the following statement is correct? A}Action is initiated by the insurer ell before the date of maturity

B}The rightful claimant in the case of maturities is the policy holder or assignee



16 Which one of the following statement is correct? A}A survival benefit is settled like a maturity claim

B}A survival benefit is paid to the nominee if the policy holder dies



17 Raju died 5 yrs before the end of his 30 year old endowment insurance policy. What factor most likely caused the insurer to investigate the claim using early death claim procedure?

A} He paid the most recent premium in period of grace.

B} His cover was originally accepted with a premium loading on medical grounds

C} This death resulted from a recently acquired illness

D} The policy had lapsed and was revived shortly before he died.

18 A claim under a term insurance policy is submitted by an individual who has substantially understated his age. As an alternative to paying out the full claim the insurer most likely to take which action?

A} Deduct the underpaid premium from the sum insured

B} Make the policy paid up.

C}Pay out the surrender value

D} Reject the claim on the ground of misrepresentation.

19 On the maturity of an endowment policy, a reduced sum insured is paid out. What is the most likely reason for this?

A} The installments were commuted by the policyholder

B} The policyholder’s health seriously deteriorated during the policy term.

C} The policy was made paid-up during the policy term.

D} The policy was subject to a lien.

20 What key event is most likely to prevent insurers from ensuring that each insured person bring a fair premium to the pool of risk presented?

A} A fraudulent claim B} A policy assignment C} A steep rise in interest rates D} A sudden illness 21 In which of the following cases, is the maximum documents asked for? A}Death Claim B} Maturity Claim C}Survival benefit claim D} Annuity claim 22 In which of the following cases, will the help of agent be most useful? A}Death Claim B} Maturity Claim C}Survival benefit claim D} Annuity claim


23 Why are enquires made in the case of early claims? A}To confirm that the underwriting decision was not incorrect

B}To confirm the validity of the mortality table used

C}To check, whether the underwriting policies need change

D} To ensure that there is no suppression of material facts

24 Which one of the following statement is correct? A}frauds are most likely in death claim cases then in the maturity cases

B}If life had died before one month of maturity date, it is a death claim



25 Which of these is not enough to claim policy monies? A}Succession certificate B}Probate of will C}A court decree D} An agreement between the heirs 26 If an insured person in a town hit by typhoon and floods is missing thereafter A}Presumption of death can be done after seven year

B}Insurer may act upon certificates from local authorities

C}Death claims will not be considered till the court decree otherwise

D} Policy will be treated as paid up from the next premium due date

27 Which one of the following statement is correct? A} Rival claimants of policy money should resolve the dispute themselves.

B} The insurer need not examine the validity of rival claims to policy moneys



28 If a claim is made in January 2012 under a policy, which commenced in May 2009, stating that the life insured had died in June 2010

A}The policy can not be called into question because of sec 45 of Insurance act

B}The claim can not be treated as early death claim

C}The scrutiny and requirement should be stricter then usual

D} Many requirements will have to be ignored because of difficulty in getting them

29 When an investigation is being made in respect of early claim A}It should be completed in 45 days

B} It should be completed in 60 days

C} It should be completed in 6 months

D}There should be no time limit

30 Which one of the following statement is correct? A}In an annuity policy, one can make a lump sum withdrawal

B} An individual is allowed to withdrawal 1/3 of the accumulated as commutation



31 Which one of the following statement is correct? A}When policy is not in force then insurer can decline a claim

B}When there is an excluded condition applied, then a claim can be denied

C}If the claim is a fraudulent claim, then a claim can be denied

D}All the above

32 A person made a maturity claim under a policy, in which he had declared his age less then real. What action an insurer can take

A}He can reduce the deficit premium from the claim amount and make payment

B}Policy should be paid

C} Insurer should pay the surrender value

D) Insurer could reject the claim, due to breach of utmost good faith.

33 Section 45 is applicable A}Two year from the date of commencement of risk

B}Two years from the date of revival of the policy



34 An insurer can reject a claim, if A}When insured event happened, that time policy was not in force

B} Only one condition was applicable

C}Claim was fraudulent D} All the above

35 Which one of the following statement is correct? A}Claims from insurance are treated as tax free under Section 10(10D) of Income Tax Act

B} Claims from insurance are treated as tax free under Section 80C of Income Tax Act




Chapter-12 (Legislation and client advice)

Key Terms Remuneration Prohibition of rebates Licensing of insurance

agent Beneficiary

Solvency Money laundering Financial intelligence unit (FIU)

High and low risk customers

Trust Trustor Trustee Know your customer (KYC)

Insurance act 1938

Section 41(1) Prohibition of rebate:

Section 42 Licensing of agents:

1 Provision with specific relevance to agents

Section 44- Prohibition of cessation of payment of commission:

Indian Life Assurance Companies Act 1912

Life Insurance Corporation Act 1956

Insurance Regulatory and Development Authority

(IRDA) Act 1999


Prevention of Money Laundering Act(PMLA) 2002

1 Placement 2 Layering 3 Integration 4 IRDA guidelines to

insurer’s 5 Know your

customer (KYC) 6 Risk profile of the

customers 7 Source of funds

8 Threshold for payment of premium in cash

Married Woman’s Property Act(MWPA) 1874

1 Issuance 2 Alterations 3 Claims

Other key legislations

1 Redressal of Public Grievances Rues 1998

Advertisement by Insurance Agents:

2 IRDA( Insurance Advertisement and Disclosure) Regulations 2000


3 IRDA( Manner of Receipt of Premium) Regulations 2002

4 RDA( Licensing of Corporate Agents) Regulations 2002

5 Foreign Exchange Management (Insurance) Regulations 2000

Issue of policy and collection of payment: Claim Settlement: Commission to overseas agents:

6 Foreign Exchange Management (Insurance) Regulations 2000- life insurance memorandum

7 Consumer Protection

Act (COPA)1986

Self Test Questions No of Question to be asked in Examination—1) 1 An insurance agent served an insurer continually and exclusively for 20 years, after which he retired from

the work. In accordance with section 44 of the insurance Act 1938, renewal commission due to him after the termination of his agency can only be withhold if

A} He ceased to remain a resident of India for tax purposes

B} He survives beyond the age 75

C} There has been a change in regulator

D} There is fraud involve

2 Section 40(1) of the Insurance Act 1938 states A}Prohibit any form of remuneration to any one to sell or canvass insurance, other then licensed person

B}Prohibit any form of rebate to prospective client



3 Section 41(1) of the Insurance Act 1938 states A} Prohibit any form of rebate to prospective client

B} Prohibit any form of remuneration to any one to sell or canvass insurance, other then licensed person



4 Section 42 of the Insurance Act 1938 deals with A}Remuneration of Insurance agent

B} Licensing of Insurance agent

C}Prohibition of rebate D}None of the above

5 Which one of the following statement is correct? A}Indian Life Insurance Companies Act 1912’ stipulates that premium rates tables and periodic valuation of funds had to be certified by an actuary

B}LIC Act’1956, was passed to nationalized the life insurance business in India



6 IRDA as a corporate body formed to A}protect the interest of the policy holders

B}regulate the insurance industry t

C}Insure orderly growth of the insurance industry

D}All o the above



A}Compliance with the PMLA is applicable to all financial institutions regulated by RBI

B} AML guidelines for Insurance companies were issued on 1st March’2006



8 The low risk customers includes A}Money Changers B} Film personalities C}personals dealing with real estate D} Salaried employees9 Which one of the following statement is correct? A}If a customer pays substantial amount as premium, then insurance agent need to obtain suitable document to establish the source of funds

B} Payment of premium by cash must not exceed Rs. 50000.



10 Which one of the following statement is correct? A}Section 6 of MWPA Act provides that a marries person can buy insurance on his life for the benefit of his wife & children

B}Such policy shall be deemed to be trust and will be outside of the control of the life insured



11 Redressal of Public Grievance Rules 1998, contains provisions regarding A}the appointment and the office terms of insurance ombudsman

B}stipulation in terms of staffing and administration of the Ombudsman center

C}the power of Ombudsman

D}All of the above

12 Which one of the following statement is correct? A}IRDA ( Insurance Advertisement and Disclosure ) Regulations came in to effect from 2000

B} IRDA ( Manner of Receipt of Premium) Regulations came in to effect from 2002



13 Foreign Exchange Management (Insurance ) Regulation 2000, Life Insurance Memorandum regulates A} Foreign exchange related issues to policy issuance and collection of premiums from the resident/ non resident Indians

B} Foreign exchange related issues to claim settlement from the resident/ non resident Indians



14 Which one of the following statement is correct? A} Consumer Protection Act (COPA) applies to Insurance industry as well

B}Consumer Dispute Redressal Forums are there in all the districts



15 Limits of Consumer Forum at the state level can hear A}Complaints up to 2500000 B} Complaints up to

5000000 C} Complaints up to 7500000

D} Complaints up to 10000000


Chapter-13 (Regulation and client advice)

Key Terms and concepts Insurance Regulatory and Development Authority (IRDA)

Foreign direct investment Life insurance council (LI Council)

Institute of Actuaries of India ( IAI)

Insurance Brokers Association of India (IBAI)

Insurance Institute of India (III)

Tariff Advisory Committee (TAC)

De-tarrification

IRDA ( Licensing of Insurance Agents) Regulations 2000

Cancellation of license Practical training Issue of license

Code of conduct Duplicate license

The role of Government

1 Power of the central government to supersede the IRDA

2 Relationship of central government with the IRDA

Foreign direct investment (FDI): Income tax incentives:

3 Role of the government in the growth of the industry

Key Indian and international insurance bodies

1 Insurance Regulatory & Development Authority (IRDA)

2 Life insurance council (LI Council)

3 General Insurance council (GI Council)

4 Insurance Brokers Association of India (IBAI)


5 Institute of Actuaries of India ( IAI)

6 Tariff Advisory Committee (TAC)

7 Insurance Institute of India (III)

8 National Insurance Academy (NIA), Pune

9 Chartered Insurance Institute( CII)

10 Institute of Insurance and Risk Management( IIRM), Hyadarabad

Duties, powers and functions of the IRDA and other regulators

Licensing of insurers: Licensing of Intermediaries: Functioning of insurers: Functioning of intermediaries: Guardian of best business practices: Framing of regulations and guidelines for smooth functioning of the business: Code of conduct for other stake holders: Promotion of industry:

1 IRDA

Other: 2 Reserve Bank of

India( RBI)

3 Securities and Exchange Board of India ( SEBI)

IRDA ( Licensing of Insurance Agents) Regulations 2000

1 Becoming an agent Regulation 3 : 2 Application Regulation 7 : Regulation 4 : 3 Qualification

4 Practical training Regulation 5 : 5 Examination Regulation 6 :


6 Issue of licensed 7 Renewal of license 8 Cancellation of license 9 Issue of duplicate

licensed 10 Operating without

license 11 Agent code of conduct

Self Test Questions No of Question to be asked in Examination—2) 1 Legislation gives which body, the power to specify a code of conduct for surveyors and loss assessors? A} Institute of Insurance and Risk Management

B} Insurance Regulatory and Development Authority

C} Life Insurance Council

D} Securities and Exchange Board of India

2 Which one of the following was established under section 64A of Insurance act 1938? A}IRDA B}Insurance Brokers

Association of India C}Life Insurance Council

D}Tariff Advisory Committee

3 Which one of the following was established under sections of Insurance Act 1938? A}Institute of Actuaries of India(IAI) & National Insurance Academy Pune (NIA)

B}Institute of Insurance & Risk Management, (IIRM) Hyadarabad

C}Lief Insurance Council & Tariff Advisory Committee

D}Chartered Insurance Institute (CII)

4 Which one of the following statement is correct? A}Government allows 26% FDI in insurance sector

B} Government allows various tax rebates to promote investment in insurance sector



5 Which one of the following statement is correct? A} Purpose of Institute of Actuaries of India(IAI), is to develop insurance industry in India

B}IRDA was formed as independent body to regulate and develop the insurance industry in India



6 Which organization is authorized by Law to frame guidelines for Surveyors & Loss assessors A}Indian Institute of Insurance & Risk Management

B}Insurance Regulatory & Development Authority ( IRDA)

C}Life Insurance (LI) Council D}Securities & Exchange Boards of India (SEBI)

7 What legacy is left by Tariff Advisory Committee A}Central Contingency Fund

B}Customer classification system

C} Detailed Tariff rates D} Standard Policy wordings

8 IRDA was formed in the year A} 1999 B} 1956 C}1971 D}2011 9 Requirements to become an Insurance agent are A}Minimum Educational B}Received Professional Training C}Adult with D}All the above


qualification (10/12) pass and passed the pre licensing exam sound mind 10 What key legacy has been left with Tariff Advisory Committee A} A central compensation fund

B} Customer classification status

Illustrative projection rates

D} Standard policy wording

11 Which one of the following isn’t comes under the purview of life Insurance (LI) Council? A}Create positive image of the insurance industry

B}Provide facilities and guidelines to the Underwriting exams

C}Organizing structured and proactive discussions with the government, regulator & law makers

D}Conducting research in the life insurance sector and contributing to the development of the sector

12 Which one isn’t job of IRDA? A}Regulating the securities market and protecting investor’s interest

B}Framing code of conduct to the surveyors, loss assessors and agents

C}Regulating the investments and Insurance Funds of insurers

D}adjudicate in disputes between insurers and intermediaries

13 SEBI was established on 12th .April 1992, in accordance with provisions of A}Reserve Bank of India Act 1992

B}Insurance ( Amendment) Act 1947

C} Securities & Exchange Board of India 1992

D}None of the above

14 Job of Life Insurance(LI) Council is A} Create positive image of the insurance industry

B} Organizing structured and proactive discussions with the government, regulator & law makers

C} Conducting research in the life insurance sector and contributing to the development of the sector

D} All the above

15 Job of General Insurance(GI) Council is A}Represent the collective interest of non life insurance companies in India

B}participates in the discussions related to the policy formations for Non Life Insurance

C} Advocate for the high standards of customer services in the industry

D} All the above


Chapter-14 (Customer Protection)

Key Terms and ideas Customer protection Prospectus Proposal to insurance Grievance Redressal

procedure Claim procedure Policyholder servicing Insurance ombudsman Settlement Award Recommendation Typical complaints Grievance management

system Grievance Redressal cell of the IRDA

Key features documents Consumer affaires department

Renewal of license

The importance of consumer protection

IRDA (Protection of Policyholders Interest) Regulation 2002

Prospectus: Material Information: Recommendations by agent:

1 Point of sale

Declaration: Policy document: Language: Oral record : Encourage for nomination:

2 Proposal of insurance

Proposal processing time limit:

3 Grievance Redressal procedure

Plan terms and conditions: Details of bonus: Details of benefits including riders : Commencement and maturity dates: Premium payment and grace period details : Requirements : Provisions and exclusions: Special clause and conditions : Procedures such as claims etc:

Matters to be stated in a life insurance policy

Age: Regulation 6 (1)

4

Regulation 6 (2)


5 Claim procedure 6 Servicing the

policyholders

7 What does it mean for Life Insurance agents

Typical complaints

Claim related complaints :

Policy servicing related complaints :

1 Complaints against Insurance companies

Policy lapse related complaints :

Regarding policy charges : Premium paying tenure told less then actual: Product not matching requirement:

2 Complaints against agents

Pros and cons not explained properly:

Handling customer complaints effectively

1 Consumer affair department

2 Integrated grievance management system (IGMS

Grievance Redressal mechanism: Grievance Redressal officer:

3

Internal grievance Redressal cell of insurers

Key feature document: Need analysis or suitability:

4 Other initiative by the IRDA to protect policyholders Guidelines for direct marketing:

Insurance Ombudsman

Claim related complaints :

1 The Insurance Ombudsman’s objective

2 Territorial


jurisdiction of Ombudsman

3 Function of Ombudsman

4 Manner of lodging a complaint

Withdrawal:/ Settlement : Recommendation : Award: Non acceptable/ not maintainable complaints:

5 Complain resolution process

Grievance Redressal Cell of the IRDA

A typical complaint process

1 Claim submitted 2 Life insurance

company

3

Life insurance company’s internal grievance Redressal Cell

4 Insurance company’s nodal officer

5 The insurance Ombudsman

6 Out come


Renewal of License

Self Test Questions No of Question to be asked in Examination—2) 1 Apart from conducting a comprehensive fact-find, the other main action that an agent can take at outset

to minimize the risk subsequently receiving a customer complaint is to A} Ask for referral B} Offer commission

rebate C} Provide detailed disclosure

D} Register with the insurance Ombudsman.

2 It is the duty of an insurer that he should provide copy of the underwritten proposal form to the policyholder

A}Within 25 days from the acceptance of the proposal

B} Within 7 days from the acceptance of the proposal

C} Within 10 days from the acceptance of the proposal

D} Within 30 days from the acceptance of the proposal

3 An Life insurance policy will clearly state A}Profession of Insured

B}Income of Insured C} Qualification of Insured

D}Name and Terms & condition of insurance policy

4 Which behavior can termed as Ethical behavior? A} Suggesting insurance plan after proper need analysis and prioritization

B}Selling a regular premium policy as single premium policy

C} Not disclosing true and complete feature of insurance policy

D}Not obtaining complete information of prospective client

5 Meaning of ETHICS in insurance is A}Selling maximum policies

B}Making hefty profits by selling more and more policies

C}Achieving business targets by less or more sales

D}Following those ethics, through which we became good

6 Ravi, an insurance agent meets Vijay, a prospective client on a pre sales meting. Which of his behavior will be termed as ethical?

A}Ravi suggests Vijay to surrender an existing policy and buy a new policy from him, so that he can earn commission

B}He only discloses profits and hides charges and terms & conditions

C}Ravi sells such plan to Vijay, which gives him maximum commission, but doesn’t suits to Vijay’s needs

D}Ravi suggests an insurance plan to Vijay looking at his priorities and Investible surplus

7 A policy becomes lapse or cancelled, because A}Customer’s inability in paying the premium

B} Dissatisfied with agent or company’s services

C}Unethical behavior by agent

D}All the above

8 A licensed agent has to follow code of conduct prescribed by A} Insurance Act 1938 B}IRDA(Agent Licensing)

Amendment Rules-2000 C}Internal rules of the company

D} All the above

9 What else an agent can do to reduce customer grievances, other then proper fact finding A}Enquiry about related people

B} Rebate from commission

C}Complete disclosure of policy features and terms & conditions

D}Register with Insurance Ombudsman


10 During the application process, a customer discloses to insurance agent that he had minor heart attack, which hadn’t disclosed in proposal form. According to the code of conduct of IRDA, agent should act on this information

A}Should ask the family physician of proposer to send the details to the underwriter

B}Should bring into the insurer’s notice

C}Should refuse to act on this matter for the client

D}Should not disclose this secrete with any one

11 An award made by the insurance Ombudsman will only be binding on the insurer if the A} Complainant accept the decision

B} Consumer forum is involved in the case

C} Insurer signs a disclaimer D} Value of the award is less than 2 lakh.

12 If an insurance company strictly follows the regulations, then A}It’ll not be able to achieve its sales targets

B} It will suffer losses C} It’ll loose customers D}will develop positive image among customer

13 An insurance company, which follows principled behavior, will b helpful to A}sell need based products to the customers

B}Insuring timely payment of premium

C}Insuring timely claim settlement

D}All the above

14 Which one of the following statement is correct? A}IRDA is on the verge of implementing the Integrated Grievance Management System(IGMS)

B}IGMS will have the ability to classify different complaint types based on pre defined rules



15 Which one of the following statement is correct? A}The office of the Insurance Ombudsman are located in 12 cities

B} The office of the Insurance Ombudsman are located in all the state capitals




Chapter-15 (Ethics and code of conduct)

Key Terms and concepts Ethics Churning Discipline Unethical behavior Delay in claim settlement

Ethical codes Underpinning professional responsibilities

Overselling of insurance concept

Positive image Evaluation and monitoring Underselling of insurance politics

Embedding ethics

What do we mean by ethics?

Definition: Objective:

Typical unethical behavior

The overselling of insurance policies: The underselling of insurance policies : Churning : Delay in refusal to make a claim payment:

1 Dangers of unethical behavior

The business benefits of ethics

Positive image : Goodwill : Protection by both sides : Model for others:

1 The importance of ethics for individual and the insurance company

Typical ethical behaviour

1 Suitable recommendation


2 Full disclosure of features

3

In-adequate riders recommendation

4 Payment recommendations

5 Disclosure of terms and condition

Ethical frameworks including ethical codes

1 Ethical codes 2 Embedding ethics

Underpinning professional responsibilities

1 Objectives of the IRDA

2 Objective of the Life Insurance Council

Evaluation, monitoring and discipline

Lapses/ cancellations / free look-in-period : Complaint volumes : Analysis of product being offered:

1 Evaluation and monitoring

Revamping internal system and procedures: Disciplinary action against the offender:

2 Discipline


Code of conduct prescribed by the IRDA

1 Every agent shall

2 No insurance agent shall

3 insurance agent shall

need

4 Non adherence of the code of conduct

Self Test Questions No of Question to be asked in Examination—2) 1 Which one of the following statement is correct? A}Those values we commonly hold to be good and right are called ethics

B}Behavior that is based on a moral judgment of an individual is called ethics



2 A policyholder asked his insurance agent for guidance on submitting a claim for the maturity benefit under his life insurance policy. Due to pressure of work, the agent declined to assist. Consequently, this action is deemed to be breach of the

A} General Insurance Council’s guidelines

B} Insurance Regulatory & Development Authority’s code of conduct

C} Insurance Ombudsman’s protocol

D} Insurance Brokers Associations of India’s membership rules

3 Which one of the following statement is correct? A}The overselling of insurance policies can lead to lapse

B}In case of underselling consequences of insufficient cover will have to be born by the family in case of untimely death of insured



4 Churning( canceling an existing policy and buying new one) is allowed A}To enable agent make more commission

B}To close those policies which doesn’t suits to his financial priorities

C} To make Insurer enable to sell more policies

D}None of the above

5 Which one of the following statement is correct? A}Ethical standards will help to increase business for the company

B}Ethical behavior will bring good reputation to the individual agent




6 Cooling Off period is A}Cooling off period is 15 days from the date of receiving of policy document

B} Cooling off period is 30 days from the date of receiving of policy document

A}Cooling off period is 15 days from the date of signing of proposal

B} Cooling off period is 15 days from the date of commencement of policy

7 Which one of the following statement is correct? A} Projecting exorbitant benefits under a plan will be termed as ethical behavior

B} Recommending an adequate sum insured will be termed as ethical behavior



8 Ethical codes are important for an insurance company A}To establish accountability among employees

B} Ensure best business practices

C}Improves the goodwill of the company

D}All the above

9 Which one of the following statement is correct? A}Objective of IRDA is to promote, regulate and ensure orderly growth of Insurance industry

B}Objective of IRDA is to ensure maximum sales to insurance companies



10 During the process of applying for life insurance, the customer disclosed confidentially to the insurance agent that he had a mild stroke four months ago, however this was NOT mentioned in the application form. In accordance with the IRDA’s code of conduct, how should the insurance agent deal with this information?

A} Ask the policyholder’s doctor to send details to the insurer.

B} Notify the insurer of this matter.

C} Refuse to act for the customer in this case.

D} Respect this confidentiality by not disclosing it with anyone else.

11 Objective of Life Insurance (LI) Council is to A} Interact with government and other bodies on policy matters

B}Take steps to develop education and research in insurance sector



12 Evaluation and monitoring if lapses, cancellations and free look cancellations are important A}To protect policyholders against the unethical agents

B}Prevent financial losses to the insurer

C}Improve the positive image of the company

D}All the above

13 Which one of the following statement is correct? A}An insurer needs to circulate Do’s and Don’ts among agents and employees

B} Insurer needs to take punitive actions against the unethical behaviors of Agents and employees



14 Every agent shall A}Disclose license to the prospect on demand

B} Disclose scales of commission he receives

C}Timely inform the acceptance or rejection of insurance policy to the client

D}All the above

15 Which one of the following statement is correct? A}An agent should not induce the prospect to omit any material information from the client

B} An agent could remain a director of an insurance company



Answer Chapter -1 1 D 2 D 3 C 4 A 5 D 6 D 7 C 8 D 9 C 10 A 11 C 12 D 13 D 14 A 15 D 16 C 17 A 18 B 19 B 20 A 21 C 22 D 23 D 24 D 25 A 26 B 27 B 28 D 29 D 30 C 31 B 32 C Chapter -2 1 C 2 A 3 B 4 A 5 C 6 C 7 A 8 C 9 A 10 D 11 C 12 A 13 B 14 A 15 D 16 B 17 C 18 C 19 B 20 D 21 A 22 D 23 B 24 D 25 D Chapter -3 1 A 2 B 3 D 4 A 5 D 6 D 7 B 8 D 9 B 10 D 11 B 12 A 13 D 14 D 15 A 16 B 17 A 18 C 19 D 20 C 21 D 22 D 23 B 24 D 25 A 26 B 27 A 28 A 29 C 30 B 31 B 32 B 33 C 34 B 35 A 36 B 37 C 38 A 39 D 40 A 41 C 42 D 43 A 44 B 45 A Chapter -4 1 D 2 C 3 D 4 D 5 C 6 C 7 C 8 C 9 C 10 D 11 D 12 C 13 D 14 C 15 A 16 C 17 B 18 C 19 A 20 A 21 D 22 C 23 C 24 D 25 B 26 A 27 A 28 B 29 A 30 D Chapter -5 1 A 2 D 3 A 4 D 5 B 6 C 7 C 8 B 9 B 10 A 11 B 12 A 13 B 14 A 15 B 16 B 17 B 18 D 19 C 20 D 21 C 22 A 23 A 24 A 25 D Chapter -6 1 C 2 C 3 A 4 A 5 A 6 D 7 D 8 C 9 D 10 C 11 D 12 C 13 B 14 C 15 C 16 A 17 A 18 D 19 C 20 C 21 D 22 D 23 C 24 A 25 A 26 A 27 A 28 B 29 A 30 D 31 A 32 A 33 D 34 D 35 A 36 D 37 C 38 A 39 D 40 B 41 C 42 A 43 B 44 D Chapter -7 1 D 2 C 3 D 4 D 5 C 6 D 7 D 8 C 9 D 10 D 11 B 12 B 13 C 14 A 25 B 16 A 17 B 18 C 19 D 20 D 21 A 22 C 23 C 24 B 25 C 26 D 27 A 28 D 29 D 30 B 31 C 32 A 33 A 34 A 35 A Chapter -8 1 D 2 B 3 B 4 C 5 B 6 D 7 D 8 C 9 D 10 A 11 B 12 D 13 C 14 D 15 B 16 C 17 B 18 D 19 B 20 A 21 C 22 C 23 D 24 D 25 D 26 A 27 B 28 C 29 A 30 A

Chapter -9 1 A 2 A 3 C 4 C 5 C 6 C 7 C 8 A 9 B 10 C 11 B 12 D 13 B 14 C 15 D 16 C 17 D 18 B 19 A 20 D Chapter -10 1 C 2 C 3 A 4 D 5 C 6 C 7 A 8 B 9 B 10 D 11 D 12 A 13 A 14 D 15 B 16 A 17 D 18 D 19 D 20 A 21 C 22 D 23 C 24 B 25 D Chapter -11 1 C 2 B 3 B 4 D 5 D 6 B 7 A 8 C 9 C 10 A 11 B 12 C 13 C 14 D 15 C 16 A 17 D 18 D 19 C 20 A 21 A 22 A 23 D 24 C 25 D 26 B 27 C 28 C 29 C 30 B 31 D 32 A 33 C 34 D 35 A Chapter 12 1 D 2 A 3 A 4 B 5 C 6 D 7 C 8 D 9 C 10 C 11 D 12 C 13 C 14 C 15 D Chapter -13 1 B 2 C 3 C 4 C 5 D 6 B 7 D 8 A 9 D 10 D 11 B 12 A 13 C 14 D 15 D Chapter -14 1 C 2 D 3 D 4 A 5 D 6 D 7 C 8 D 9 C 10 B 11 A 12 D 13 D 14 C 15 A Chapter -15 1 C 2 B 3 C 4 B 5 C 6 A 7 B 8 D 9 A 10 B 11 C 12 D 13 C 14 D 15 A

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