Top Banner
Manish Suryawanshi. Chapter 1 : How Insurance market Operates 1. For assessing the risk under a group health insurance policy the AGE OF THE GROUP is the most critical information that is required. 2. INSURANCE COMPANIES are the clients or Customers of Reinsurance Companies or the re insurers. 3. The concept of indemnity is based on the key principle that policyholders should be prevented from PROFITING FROM INSURANCE. 4. In life insurance risk is determined on the basis of PAST DATA. 5. Insurance Company selling products through newspaper advertisement is called DIRECT SELLING. 6. INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA) WAS CONSTITUTED AS AN INDEPENDENT AND AUTONOMOUS BODY IN 1999 TO REGULATE AND DEVELOP THE INSURANCE INDUSTRY.( This is the responsibility of IRDA.) 7. If a client wants to compare between all financial products then the best person he can approach is the BROKER. 8. If a person is looking for a Term Insurance Plan to protect his family then he is advised to approach LIFE INSURANCE Company. 9. The INTERNET is the direct method of insurance marketing. * 10.The IRDA was formed in the year 1999. 11.AN ACTUARY is a person in insurance who has got rich experience in determining the premium levels of the various insurance products. 12.Life Insurance Company determines the level of risk based on CLAIM EXPERIENCES. 13.In a MONEY BACK POLICY the insured gets survival benefits after fix regular intervals and at maturity he gets rest of the Sum Insured. 14.In Term insurance if Critical Illness Rider claims happens then in the exiting policy that rider I.e. CI RIDER WILL CEASE. 15.Generally Weekly premiums are collected in MICRO INSURANCE.
42
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: sdmnagpur new agent exam english

Manish Suryawanshi….

Chapter 1 : How Insurance market Operates

1. For assessing the risk under a group health insurance policy the AGE OF THE

GROUP is the most critical information that is required.

2. INSURANCE COMPANIES are the clients or Customers of Reinsurance

Companies or the re insurers.

3. The concept of indemnity is based on the key principle that policyholders

should be prevented from PROFITING FROM INSURANCE.

4. In life insurance risk is determined on the basis of PAST DATA.

5. Insurance Company selling products through newspaper advertisement is

called DIRECT SELLING.

6. INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA) WAS

CONSTITUTED AS AN INDEPENDENT AND AUTONOMOUS BODY IN 1999 TO

REGULATE AND DEVELOP THE INSURANCE INDUSTRY.( This is the

responsibility of IRDA.)

7. If a client wants to compare between all financial products then the best

person he can approach is the BROKER.

8. If a person is looking for a Term Insurance Plan to protect his family then he

is advised to approach LIFE INSURANCE Company.

9. The INTERNET is the direct method of insurance marketing. *

10.The IRDA was formed in the year 1999.

11.AN ACTUARY is a person in insurance who has got rich experience in

determining the premium levels of the various insurance products.

12.Life Insurance Company determines the level of risk based on CLAIM

EXPERIENCES.

13.In a MONEY BACK POLICY the insured gets survival benefits after fix regular

intervals and at maturity he gets rest of the Sum Insured.

14.In Term insurance if Critical Illness Rider claims happens then in the exiting

policy that rider I.e. CI RIDER WILL CEASE.

15.Generally Weekly premiums are collected in MICRO INSURANCE.

Manish Suryawanshi...
SDM's Secretariate Nagpur..
Page 2: sdmnagpur new agent exam english

Manish Suryawanshi….

16.In a life insurance business if a person is working in calculating premium

rates of insurance products then he is most likely be a member of INSTITUTE

OF ACTUARIES OF INDIA.

17.IRDA Stands for INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

WHICH WAS INCORPORATED AS AN AUTONOMOUS BODY IN THE YEAR

1999.

18.Insured can contact to seek the resolution of grievances they have against

the insurer to IRDA through a special sight namely “[email protected]

19.The three main types in which insurance can be classified are 1. LIFE

INSURANCE 2. NON LIFE INSURANCE 3. REINSURANCE

20.Bancassurance is the form of insurance selling IN WHICH INSURANCE

POLICIES ARE SOLD THROUGH THE BANKS.

21.Human beings need life insurance because TIMING OF DEATH IS

UNCERTAIN.

22.Insurance market is divided into LIFE AND NON LIFE INSURANCE.

23.A contract comes into existence when ONE PARTY MAKES AN OFFER WHICH

THE OTHER PARTY ACCEPTS UNCONDITIONALLY.

24.Insurance is required for 1.TO COVER RISK OF LIFE 2.TO PLAN FUTURE

GOALS 3.FOR SAVINGS.

25.If for SA of Rs 100000 Bonus is calculated at 5% of SA every year ( Simple

interest ) then for 15 years the total amt of bonus would become 5000*15=

75,000

26.Insurer uses the mean of REINSURANCE to cover risk beyond their exposure

limit.

27.The business of insurance is connected with protection of ECONOMIC VALUE

OF ASSETS.

28.Micro insurance products concentrate PEOPLE WITH LOW INCOME.

29.An insurance agent is an intermediary between CLIENT AND INSURANCE

COMPANY.

30.Benefits of investing in insurance are FAMILY PROTECTION, CHILD

EDUCATION AND CHILD PLANNING, RETIREMENT PLANNING.

Page 3: sdmnagpur new agent exam english

Manish Suryawanshi….

Chapter 2: Risk and Insurance

1. Under Term insurance policies Perils are considered to be the risks that

policyholder will die before a specified date a

2. The functioning of insurance works on the principle of Risk Transfer.

3. If a person stocks crackers in his house then he is supposed to run the

FINANCIAL RISK.

4. The Risk contains in it the Peril and Hazards, the Level & Uncertainty.

5. If two persons are of same health status then if a person is triggered with

medicals then the reason for the same could

6. The loan which can be given under a life insurance policy is generally based

on the Surrender Value of that Policy.

7. Law of Large number helps the insurer in fixing the correct Premium.

8. The main benefit of taking Life insurance policy is protection and not

investment, Tax Saving etc.

9. If a person takes a Term Insurance plan then it would be termed as he has

transferred his risk of death to the insurance

10.Pure risks and financial risks are insurable whereas Speculative and Non

Financial risks are not insurable.

11.If a person is died in a typhoon then insurance company would take this

under the term pure risk.

12.Only Financial and not Non Financial risks are insurable.

13.Retaining of risk is not advisable and possible because life has so many risk.

14.Under No circumstances can insurance companies club or pool the risk of a

Life Insurance company with health insurance co.

15.Health Insurance riders and Critical insurance riders are classified under Life

Insurance only.

16.If a person who happens to be a policyholder usually engaged himself in car

races and disclosed this information, this would

17.In life insurance if a person has got multiple Sum assured from different

companies or from the same company he would be pai

18.A policy can not be cancelled after the free look period of 15 Days.

Page 4: sdmnagpur new agent exam english

Manish Suryawanshi….

19.Hazard refers to the specific event which might cause a loss.

20.Institute of Insurance and risk management along with insurance does

research work.

21.Law of large number is worked out by Pooling of risk.

22.Insurance is the mechanism of Transfer of risk.

23.Pure risks are the instances of those risks in which events are not in the

control of the individual and he can not make pro

24.Ombudsman has to give his decision within 30 days.

25.If Lungs Cancer is a peril then Smoking is a hazard.

26.Law of Large numbers helps insurers in fixing premium.

27.Grouping of similar risks by insurance companies is called Pooling of Risks.

Chapter 3: Principles and Practice of Life Insurance

1. Loan is generally available on Endowment plans and not on Money back,

Term or pension insurance plans.

2. If their two nominees in a policy then there is no fixed % which can be given

to them because there is no specific limit like that.

3. If a persons gets insurance and named his daughter as nominee he has to

appoint an appointee but if he fails to get signature of appointee and died

then the claim amt. would be given to his legal heirs and not to the

appointee or to the nominee.

4. PAN Card or Permanent Account Number Card is considered to be as

standard age proof.

5. If a person instead of drinking alcohol and smoking mentioned in the

proposal form as ticking NO to the relevant columns then it is considered that

he has breached the company by cancelling the facts.

6. If a person has got health insurance from more than one companies say of

Rs 1,00,000 and 2,00,000 then falls sick and make medical expenses of

Rs.50,000, then he would get claim from only one company just because of

the principle of Indemnity.

7. Both the parties to the contract must agree and understand the same thing

in the same sense is known as CONSENSUM AD IDEM.

Page 5: sdmnagpur new agent exam english

Manish Suryawanshi….

8. Any number of nominees can be placed in a policy as there is no fixed and

specific rule regarding it.

9. If two policies are of Equal SA and equal mode for Ex. Qly mode and No. Of

installments paid are also equal and issued on the same date, then still their

can be a difference between the Surrender Value of them just because of the

term of the policy.

10.Assignee can not make a fresh nomination in a policy after the assignment.

11.Insurance Cover starts after the issue of First Premium Receipt.

12.Indisputability clause is applicable for 2 years.

13.An agent should suggest the surrender of the policy only if policy has been

mis-sold and do not match with the needs of the customer.

14.If a life insurance policy is issued with a LIEN then it should be mentioned in

the “Schedule” Part of the policy document.

15.Minimum age to enter into a contract is 18 Years.

16.Principle of indemnity is applicable to General Insurance only and not to Life

Insurance.

17.Principle of Indemnity denotes that insurance can not be used to make

profits.

18.If a person takes a loan upon an insurance policy and does not pay the

principle amt. of loan and even interest in installments or so then that policy

would be got surrendered by the insurer.

19.Principle of Utmost good faith is not applicable to facts of common

knowledge, Facts of law and Facts which are not material or important for the

underwriting.

20.The obligation of the insurer in case of a whole Life Policy is mentioned in

“Operative Clause “Part of the policy.

21.The Principle of Utmost good faith applies to both the insurer and the

Proposer.

22.If a person transfer his policy to the another person as a security for the loan

he has taken and with the condition that he would get his policy back after

Page 6: sdmnagpur new agent exam english

Manish Suryawanshi….

giving money to him then this would be the instance of the “ CONDITIONAL

ASSIGNMENT „.

23.A contract exists between the insurer and the proposer only when the

proposal is accepted unconditionally by the insurer.

24.A policyholder can take a loan on Whole Life policy but not on Money Back

Policy.

25.If a person is 34 years of age and is having 2 children then he would be

coming under “HIGH LEVEL” as Risk Appetite Level.

26.Life insurance is although important for every age group but on Pre

Retirement stage or Age Group, it is most important.

27.If a person Buys Life Insurance on the Life of another person then that

person who is buying the policy is known as the Proposer/ Policyholder and

the person on whose name policy is purchased is known as the Life Insured.

28.Nomination does not transfer the title of the policy whereas in assignment

the title is transferred from the assignor to the assignee after the

assignment.

29.The reason of the Surrender of the policy may be the Financial Problems of

the policyholder.

30.If on maturity of the policy only 25% of its value is received by the

policyholder then this instance can be happened because this can be a Paid

Up Policy.

31.Insurers insist upon the Age Proof Document to assess the risk or For Risk

Assessment.

32.Ombudsman‟s Address should be mentioned on the “Information Statement

“Part of the family.

33.Proposal Form is the Basis of Insurance Contract.

34.If Sum Insured is reduced to 25 years from a 30 years policy then it would

be because of the policy might have been made “Paid Up “by the

policyholder.

Page 7: sdmnagpur new agent exam english

Manish Suryawanshi….

35.If a person takes Govt. Securities for a fixed term and wants to take his

money back before the expiry of the term of the securities then he would get

only the “Discounted Value” of that security.

36.If no insurable interest is attached to an insurance policy then insurance

contract would not be valid for most of the cases.

37.In a pension Plan Illustration Guaranteed and Non Guaranteed Par shows the

benefits for an annuitant.

38.Baptism Certificate is preferable to Ration Card as an age proof if an agent

wants to login in a policy.

39.The Principle of utmost good faith is applicable throughout the term of an

Insurance policy. (Whether Term Insurance or any Other Life insurance.)

40.If a person although fills the proposal form but does not submit it to the

insurance company then it would be effecting offer and acceptance part of

the insurance contract.

41.If a person has taken an endowment policy for 20 years and then after 10

years wants to take a loan then he can take loan up to the certain % of the

Surrender value of the policy.

42.The premium is considered to be or deemed to be paid when cheque amt. is

deposited into the insurer‟s account.

43.A Client can reject the policy with 15 days of receiving of it.

44.If a person has taken up policy for 15 years and after 9 years he is not in a

position to continue it then he can make this policy as Paid Up.

45.It is the Life insured whose age impacts the premium and not the

policyholder or Proposer.

46.A person can take insurance on the life of another person only if he suffers

loss in case of the death of another person.

47.At the time of calculating the surrender value SA, No. of years premium Paid

and No. of Years premium to be paid, is all taken into account.

48.If Claim intimation leads to publishing of an advertisement in the newspaper

it would mean that policy might have lost.

Page 8: sdmnagpur new agent exam english

Manish Suryawanshi….

49.If the employer is having insurable interest in the life of an employee then

this would be the case of “Key man‟s Insurance.

50.Payment of Premium and Sum assured are laid down in “Operative Clause

“Part of the policy.

51.The Condition that policyholder should pay premium regularly is mentioned in

Policy Document, Prospectus and also the Proposal Form.

52.In case of a illiterate proposer, the proposal form is filled up by the person

who can understand it and he fills the proposal on behalf of the proposer and

also give a declaration of it. In this type of cases the Thumb impression of

the proposer is also required along with other documents.

53.If Sum Assured is Rs. 5,00,000 and the declared bonus is 5% p.a. then the

bonus for one year would be 25,000 Rs.

54.Brother and Sister is not having insurable interests in the lives of each other

whereas Co-surety and Surety, Employer- Employee and Husband- Wife all

are having insurable interest in the life of each others.

55.A Life insurance policy can be made Paid Up only if Savings Element exists in

that policy.

56.If a policyholder wants to revive his lapsed policy then two most important

things required are Reinstement Fees and Proof of Continued Good Health.

57.The Risk Commencement date of an insurance plan is the date on which

premium is receipted or First Premium Receipt is issued.

58.In case of General Insurance or say in case of Motor Insurance, Insurable

interest exists until a person owns the asset like until he owns the vehicle in

case of Motor Insurance.

59.Changes in the policy can be made by or through endorsements.

60.In case of Life Insurance Insurable Interest exists only at the inception of the

policy whereas in General insurance it needs to be existing at the time of

Claim also.

61.On forecloser, if death claim arises before the payment of Surrender Value

then the claim would be payable to the Legal Heirs of the life assured and not

to the nominee or nominees.

Page 9: sdmnagpur new agent exam english

Manish Suryawanshi….

62.A contract by a person who is less than 18 years is simply invalid.

63.Insurance Contract without insurable interest will Results into a WAGERING

CONTRACT.

64.Cooling Off or Free Look Period begins in an insurance policy when policy is

received by the policyholder.

65.A person is having an Unlimited Insurable Interest in his own life.

66.Declaration in the proposal form is mandatory for a contract of insurance to

be considered as a valid Contract.

67.Non Discloser of Material Facts, Concealment of material facts & fraudulent

misrepresentation of facts all leads to Breach of duty of Utmost Good Faith.

68.Up To 20,00,000 Claim the District Level of Consumer Forum can be

approached by the complainant.

69.A Client can buy a new plan of insurance any time after the surrender of his

existing policy by the agent.

70.In case of life insurance, Insurable Interest should exist only at the inception

of the policy.

71.The additional premium is collected in a life insurance policy in which bonus

is declared by the company. This additional Premium added is known as

Loading.

72.If insurance company found after 1 year that the life insured is suffering from

Surgery then Indisputably Clause would be applicable ( Section 45 )

73.In Marine Insurance the insurable interest should exist only at the time of

claim.

74.The Details of customers or Life insured are available in the Proposal Form.

75.In an insurance Contract Consideration Means “Premium “.

76.If a person surrenders the policy after paying 1st year premium only then he

will get nothing as surrender value is become payable only when premium is

paid for certain minimum number of years.

77.In a life insurance plan the proposer‟s duty of discloser is at the time of

beginning of the contract and at the stage of the revival of the insurance

contract.

Page 10: sdmnagpur new agent exam english

Manish Suryawanshi….

78.In case of an illiterate proposer if he happens to be a male then his Left

hands Thumb impression and the declaration of the person who filled up the

proposal form is required.

79.Pooling of risk means all similar risks are pooled together.

80.Paid Up Value= (SA* No of years premium Paid/No. of years premium to be

paid)+ Vested Bonus till date.

81.An Insurance contract commences when First Premium Receipt is issued.

82.In case of a Joint Life Policy such as Husband & wife taking JLP there is no

need to mention the name of nominee to this policy.

83.Through assignment one policyholder can transfer money to third party

barring nominee.

84.18 years is the minimum age for entering into a contract.

85.To prove one‟s identity as per KYC process the customer needs to submit the

age proof, Identity proof and the address proof. Education proof is not the

required document as per the KYC process.

86.Net Premium is equal to Premium – Interest earning.

87.“Operative Clause “Part of policy lays down mutual obligations of the parties

regarding payment of premium by life assured and payment of sum assured

by the insurer.

88.If a person takes a policy of the life of another person then there is no need

to mention the name of the nominee. Like a father taking policy on the name

of his minor son.

89.The contract is their in place only if the offer of one party is accepted

unconditionally by the other party to the contract.

90.Appointee‟s role is their only when the nominee is minor.

91.If a person takes an insurance policy for 15 years and could not pay premium

after 4 years and wants to revive his policy in the 7thyears then policy may

be renewed on different terms and conditions.

92.If in a life insurance policy later it comes to the picture that the proposer is

not having the insurable interest then still it would be a valid contract.

93.Assignment can be the Absolute Assignment or the Conditional Assignment.

Page 11: sdmnagpur new agent exam english

Manish Suryawanshi….

94.Principle of Utmost Good Faith will operate in an existing policy if the policy

has lapsed and it has to be revived.

95.If a policy of 20 years remain in force for 5 years and then policyholder is

unable to pay premium their after then this policy would acquire Paid Up

Value.

96.The Statement “The proposal and declaration signed by the proposer form

the basis of Contract “This is mentioned in the “Preamble” part of the policy

document.

Chapter 4: Insurance Underwriting

1. If as per the norms of risk assessment by the Underwriter (U/W) both the

parents of a policyholder died in early 30‟s due to heart disease then this risk

assessed is known as PHYSICAL HAZARD.

2. If a person works in a mine company he is exposed to PHYSICAL HAZARD

3. In a with profit policy until otherwise provided the PERSISTENCY BONUS is

paid at the end of the policy term or at the time of maturity.

4. If the Sum Assured is too high then the underwriter should ask questions

beyond Agent‟s confidential report.

5. If the person on whose life proposer wants to take insurance is suffering from

cancer or any other critical illness then his proposal would be rejected by the

insurer on the ground of LEGALITY OF THE OBJECT OR PURPOSE.

6. Drinking Alcohol or smoking is considered as physical hazards.

7. While calculating Human Life Value the future income of the person, No. of

years of work, expected increment in income or salary and DISCOUNT RATE

are the factors which are considered by the financial consultant.

8. Persistency bonus is given by the insurer as an incentive to the insured for

long term.

9. Insurance companies charges same amt. throughout the policy term which is

known as LEVEL PREMIUM.

10.When interim bonus is paid under with profit policy it represents that the

bonus is covering the period of previous valuation date to claim date.

Page 12: sdmnagpur new agent exam english

Manish Suryawanshi….

11.At proposal stage insurance companies take information regarding the life

assured from the Proposal form, Insurance agent, Medical examination report

etc. At this stage information from the neighbor of proposer is not taken.

12.ACR i.e. Agents Confidential report is required to help the underwriter to

assess the risk.

13.The underwriter can get the required information about the proposer in

PROPOSAL FORM.

14.An agent‟s commission needs to be disclosed to the customer in the BENEFIT

ILLUSTRATION OF A UNIT LINKED PRODUCT.

15.If a contract is signed by a person who is less than 18 years of age then it

would be an INVALID CONTRACT.

16.If two persons wants to retire at the same age say at 65 years then if a

person pays more premium than the other it can be due to the fact that HE

IS OLDER THAN THE OTHER ONE.

17.If the two persons are of the same age then if there is a difference in their

premium then it can be due to the HEALTH DETERIORATION OF THE ONE.

18.Age Proof of certificate of Village panchayat is not a Standard Age proof but

is accepted by insurance companies as Non Standard age proof.

19.If two person take the same insurance policy then their can be difference of

premium because of AGE, SA and MEDICAL CONDITIONS.

20.The responsibility of classification and analysis of the proposal form lies with

UNDERWRITER.

21.If the proposal for insurance is for a huge amt. say for 4 crores then the

insurance company would accept or reject the proposal only after confirming

from the INSURANCE INVESTIGATION AGENCIES.

22.Micro Insurance is made specifically for people from LOW INCOME.

23.Interim bonus is valid TILL THE NEXT DECLARATION OF BONUS.

24.Law of Large number helps the insurer to ASCERTAIN THE DEATH RATIO.

25.Level premium is calculated based on the RISK PREMIUM.

Page 13: sdmnagpur new agent exam english

Manish Suryawanshi….

26.While calculating Human Life Value two main components that need to be

considered are the 1.Take Home salary or Income and 2. Estimate working

Life expectancy.

27.The main source of information for an insurance company regarding the

proposal/Life assured is the PROPOSAL FORM.

28.Lien is imposed on a policy when underwriter feels that THE RISK

ASSOCIATED WOULD DECREASE.

29.Investment by NRI i.e. Non Resident Indian will be HIGH RISK.

30.If a person is detected with Lungs cancer then he can not take the insurance

because of health reasons.

31.As per IRDA regulations IGMS i.e. Integrated Grievance Management

System, should be a mandatory set up by ALL THE INSURANCE COMPANIES.

32.Proposal Decision of the insurer should be communicated to the Proposer

within 15 Days of the proposal.

33.If a person who is an earning member for his family did not propose his life

for assurance instead propose for the life insurance of his son who is a

student, then it can be the instance of MORAL HAZARD.

34.If two persons applies for a health insurance plan and one out of the two is

asked for Medical then it can be due to the fact that the one who is asked for

the medical is older than the other one.

35.If the annual premium for a policy is Rs. 32,000 and for Qly premium loading

is 4% then the exact Qly Premium would be 8,320 Rs

36.If a person proposes his life for insurance for a large Sun Assured say for 1

Crore and wishes to made his nephew as his nominee despite his wife living

then it can be termed as an instance of MORAL HAZARD, AS COVERAGE IS

HIGH AND BROTHER‟S SON IS THE NOMINEE.

37.Actuaries are the professionals who decide the amt. of the premium in

insurance products.

38.When Nominee is not a dependent, the underwriter can consider the proposal

as having MORAL HAZARD.

Page 14: sdmnagpur new agent exam english

Manish Suryawanshi….

39.If the underwriter felt that the risk associated with the person to be insured

is likely to decrease then he would accept the case with “LIEN “.

40.If a person is doing the job of premium calculation for his company then he

might be having this authority in his profession by COUNCIL OF ACTUARIES.

41.If a policyholder wants to change his existing address to a new one then this

change can be made effective in policy document through “ ENDORSEMENT “

42.Smoking and Drinking both being Physical hazards invites for Extra Premium.

43.Mortality Table contains the DETAILS OF ACTUARIAL CALCULATION OF

DEATH.

44.The insurance act 1938 created the TARIFF ADVISORY COMMITTEE.

45.Moral Hazards reflect the intention and attitude of the Proposer.

46.There is a special report which is asked by the underwriter from the officer of

the insurer which is known as CLIENT CONFIDENTIALITY REPORT.

47.If the insurable interest is not their in the beginning in case of the life

insurance then that contract would be held INVALID.

48.If the proposer is a criminal and case against him for fraudulent activities is

pending then the underwriter would suspect MORAL HAZARD in this case.

49.In underwriting the economic value of a person is determined by HUMAN

LIFE VALUE.

50.Income Replacement method equates Human Life Value to PRESENT VALUE

OF FUTURE EARNINGS.

51.A human being is AN ECONOMIC ASSET, HAS THE CAPACITY TO GENERATE

INCOME, and HAS FINITE LIFE SPAN.

52.MPL stands for Maximum Possible Loss

53.If the claim is not settled in full although the policy was in force then this can

be due to the “LIEN “attached to the policy which was in force.

54.The impact of Low Persistence is that IT WOULD IMPACT THE COMMISSION

EARNING OF THE AGENT.

55.If the proposer while filling the proposal form hides the fact that he practices

mountaineering and died while mountaineering his claim would be rejected

because of NON DISCLOSER.

Page 15: sdmnagpur new agent exam english

Manish Suryawanshi….

56.Life insurance policy is a value contract and principle of indemnity is not

applicable for Life insurance contracts.

57.First Premium Receipt Contains the information such as METHOD AND

FREQUENCY OF PREMIUM PAYMENT, DATE OF THE LAST PREMIUM PAID,

DATE OF MATURITY OF THE PLAN but not the DATE OF COMMENCEMENT OF

1ST PREMIUM.

58.A working person can be given insurance AS PER HIS HUMAN LIFE VALUE.

Chapter 5 Basic Life Insurance Products

1. In an endowment policy of life insurance, we give the policy holder at

maturity the SA i.e. Sum Assured & Bonus-Any outstanding premium.

2. On attestation of policy signature of authorized officer of insurer is required.

3. Frequent switching is not allowed in a ULIP Plan because it increases

investment risk.

4. If the full Sum Assured is not paid at the time of maturity and it happens to

be an endowment plan then the reason for the same is that, that plan is a

MONEY BACK PLAN.

5. Term Insurance plan is best suited for the Home Loan Cases.

6. If a person who is running a multi chain company and wants to take

insurance then the best option available for him is that HE CAN TAKE

KEYMANS INSURANCE.

7. If a couple has a kid of say 7 years then the best life insurance plan for them

would be the CHILD INSURANCE PLAN WHICH CAN BE TAKEN OUT IN THE

FORM OF ENDOWMENT PLANS, MONEY BACK PLANS OR ULIP‟s

8. If a life insurance agent has given two policies to different persons but of the

same term then their can be a difference of commission that, that agent

would receive just of the simple reason that BOTH HAVE CHOOSEN

DIFFERENT KIND OF POLICIES.

9. If a person has proposed or taken a joint life policy in the name of himself

and his wife then HE i.e. THE HUSBAND WOULD BE RESPONCIBLE TO PAY

THE PREMIUM UNDER THE POLICY.

Page 16: sdmnagpur new agent exam english

Manish Suryawanshi….

10.If a policyholder wants to make a complaint through Consumer Protection Act

(COPA) then the time within which he can file the complaint is TWO YEARS.

11.In case of a pure endowment policy the amt. of Sum Assured would be

payable only when he survives to the full term of the policy. (For exp. If the

policy is of 30 years he should survive for 30 years to get the amt. of Sum

assured.

12.Term insurance plans gives only DEATH BENEFITS.

13.The Maximum premium up to which income tax exemption can be availed by

the policyholder is Rs. 1,00,000.

14.Low risk products give LOW RETURN.

15.If a person wants save funds for his son‟s education and is risk averse then

ENDOWMENT PLAN WOULD BE BEST FOR HIM.

16.If a group of people are insured in one single policy then they might be the

EMPLOYEES of one employer.

17.Policyholder can take loan under ENDOWMENT type of policies.

18.LIEN is considered as a substitute to charging a high premium for a high risk.

19.In case of a Pure Endowment policy NO DEATH BENEFIT IS PAID as Pure

Endowment policy gives only Maturity benefit.

20.If IRDA is unable to discharge his functions or duties then the Central govt. is

having the POWER TO SUPERSEDE THE IRDA BY ISSUING NOTIFICATION.

21.Investment or Payment is Kisan Vikas Patra under Post Office Scheme is

done LUMP SUM FOR A FIXED PERIOD OF TIME.

22.Joint Life Insurance Plan offers insurance coverage for two persons under one

policy, wherein each life is underwritten separately. Along with Husband and

Wife it can cover the partners of a business but CAN NOT COVER BROTHER

AND SISTER.

23.The two basic elements of most Life Insurance Plans are DEATH BENEFITS

AND MATUIRITY BENEFITS.

24.Adverse Selection occurs when a group of individuals try to COVER ONLY

PARTICULAR MEMBERS OF THE GROUP.

Page 17: sdmnagpur new agent exam english

Manish Suryawanshi….

25.While deciding policy for a child the INFLATION factor must be taken into

account.

26.Section 80 (C) of Income tax act, 1961 provides income tax exemptions for

NATIONAL SAVING CERTIFICATES, EQUITY LINKED SAVING SCHEMES, and

PRINCIPLE COMPONENT OF HOME LOAN but not for PREMIUM PAID ON

HEALTH INSURANCE POLICIES in which exemption is given under section

80(d).

27.Rating in Fact finding indicates the RISK APPETITE OF THE CLIENT.

28.In micro insurance minimum cover is 5000 and maximum cover is 50000.

29.If a claim arises after 2 years in a life insurance policy then it is considered

as a NON EARLY CLAIM and before two years if claims occur, then it would be

considered as EARLY CLAIM.

30.SSS i.e. Salary Saving Scheme is not a specific plan rather it is a measure to

pay the premium directly through the salary of an employee.

31.If a person has recently joined a job in which right now he is not fully settled

in terms of money but in the future he would be in a healthy financial

condition, then he should go for a CONVERTIBLE TERM INSURANCE PLAN.

32.Fund Switching is the special feature of ULIP‟s that ensures customer‟s risk

profile, for a long time insurance policies.

33.TERM INSURANCE plan would suits if a person is looking for protection of the

family.

34.If a person is the only earning member of his family and his wife, children

and parents are dependents on him then he should go for TERM INSURANCE

which is the immediate need in his case.

35.Agent‟s Principal Loyalty should be for the insurance company and the

policyholder or if it is a Joint Life policy of husband and wife then towards

Husband, Wife along with the insurance company.

36.MDRT Stands for Million Dollar Round Table.

37.If a customer is not satisfied with the insurance company or the plan of the

insurance company then he can send back the policy within 15 days of

Page 18: sdmnagpur new agent exam english

Manish Suryawanshi….

receipt of this policy. This is called Free Look or Cooling off, cancelation of

policy.

38.In case of presumption of death, it is necessary to pay the premium until the

court decree.

39.The income of an individual can be protected with the help of a TERM LIFE

POLICY.

40.Micro Insurance can be transacted by both the Life and Non Life insurers.*

41.If a person wants a life cover for 20 years and also wants to have a modest

amt. if he survive those 20 years then he should buy an ENDOWMENT PLAN.

42.Long Term protection need of a couple can be met through a TERM

INSURANCE.

43.Flexibilities like partial withdrawal and premium holidays are possible with

UNIT LINKED INSURANCE PLANS.

44.Riders can be attached to a ULIP Policy. *

45.The Maturity proceeds of a life insurance company are exempted from tax

liability.

46.If two persons takes same policy for same policy term then one would be

paying more, the reason for this is he is HIGHER in age than the other one.

47.In a joint Life policy the Persons responsible for the contract are INSURER

AND BOTH THE LIFE INSURED.

48.In ULIP for a Single Premium Policy the Minimum Sum Assured would be

1.25 Times of single premium. For exp. For 50000 premium policy the Min.

SA would be 50000*1.25=62500

49.Where annually increasing flexible premium operates under a life insurance

policy then 5 % of increase would generally apply.

50.In Group Insurance Plans the parties to the contract are Master Policyholder

and the insurer.

51.If a person has taken a home or house loan then the best insurance plan for

him would be the TERM PLAN.

52.If a customer has mentioned that he is a drinker then the insurer can

mention this information in “ENDORSEMENT “Part of the policy document.

Page 19: sdmnagpur new agent exam english

Manish Suryawanshi….

53.If a person wants a constant life cover and can not afford to pay high

premiums then the best suited product for him would be a TERM PLAN.

54.The Primary Underwriter for the client is the AGENT.

55.If a person wants to accumulate a lump sum for say 20 years but does not

require life cover then the PURE ENDOWMENT POLICY will be suitable.

Chapter 6: Savings Products

1. The frequency of interest in Cumulative Deposit account is QUARTERLY.

2. If a person pays premium for health insurance then he can get deduction

under section 80D of the IT Act, 1961.

3. With increase in interest rate the prices of shares would go down and with

decrease in interest rates it would increase.

4. The biggest advantage of converting Gold into ETFs is that it would increase

LIQUIDITY.

5. If a person wants to invest in Kisan Vikas Patra, he would go to the POST

OFFICE.

6. Actual return decrease on account of inflation For Exp. If the return on FD is

6% its actual return is deemed as 4%.

7. Employee Gratuity Fund is not an allowable deduction under Section 80C of

IT Act, 1961.

8. If a person has got small children then his last priority would be RETIREMENT

PLAN among Life, Health, Retirement and Child investment policy.

9. If a person wants to save tax more than what has been normally provided in

Sec-80C of IT Act, which is 1, 00,000 at present he should invest in

INFRASTRUCTURE BONDS.

10.Recurring deposit and Cumulative deposit both provides GUARANTEE of

return to its holders.

11.If RBI Increase the interest rates then stocks or share prices would decrease

or would go down.

12.An insurance agent can offer assistance to his client by MATCHING THE

PRODUCTS WITH HIS FINANCIAL NEED.

Page 20: sdmnagpur new agent exam english

Manish Suryawanshi….

13.If a person is to be jobless for some time then ideal investment for him along

with bank FD is the DEBT FUNDS OF MUTUAL FUNDS.

14.The main difference between Cumulative and Recurring Deposit is

FREQUENCY OF INTERSET PAYMENT.

15.After the lapse of time for say 15 years the disposable income of a person

would SIGNIFICENTLY INCREASE if he has got children etc.

16.If a person deposits in a BANK then Tenure, Interest payment mode and

interest rate is clearly mentioned to him in advance.

17.If a person wants policy for Risk Cover and also wants some return at the

end of the policy term then he should purchase RETURN OF PREMIUM PLAN. (

ROI )

18.A person should spend maximum 40 % of his income on House Loan EMI.

19.If RBI Increase the interest Rates then stock prices would come down and

Shares would be less attractive.

20.If a person changes his physical Gold into EFTs then his liquidity would

increase.

21.INTERNET is the easier way for a person to take saving products than call

centers and agents.

22.Kisan Vikas Patra gets cleared at POST OFFICE.

23.If a person invests in a Post Office Monthly Income Scheme then whatever is

the interest rate it would remain CONSTANT till maturity.

24.The main purpose of investing in debt mutual fund is LIQUIDITY.

25.If a person wants to maintain the emergency fund then the best option is

either Bank or FD.

26.Primary saving need among all saving needs is CONTINGENCY EMERGENCY

FUND.

27.A person should spend maximum 40 % of his income on House Loan

Installment.

28.Deduction for health Premium under Section 80 D is higher for the people

who are of 65 years of age or above.

Page 21: sdmnagpur new agent exam english

Manish Suryawanshi….

29.If the banks reduce its interest rates then the Price of their bonds are likely

to Decrease.

30.The advantages and disadvantages within cumulative and fixed traditional

deposits pertain to the RETURNS.

31.If a person switches off from direct holding of shares to equity based mutual

funds then the impact of the risk would be that it would be more diversified

now.

32.If a person wants to invest in FD and also wants deduction from income tax

then this FD should be for at least 5 years.

33.ULIPs give more tax benefits in comparison with NSC because the interest of

NSC is taxable whereas returns on ULIPs are non taxable.

34.If a customer opts for the settlement option then he has the option to receive

his maturity claim in installments up to 5 years.

35.If a person has got very less time to get back his money say 9 months then

he should always go for FIXED DEPOSIT IN BANK Instead of Insurance,

Mutual Fund or Shares.

36.ASSET MANAGEMENT COMPANIES maintains mutual Fund schemes.

37.Time Deposit Account is issued by POST OFFICES.

38.The key factor is the INTEREST RATEs which are considered by the investor

while investing in Recurring Deposit or Cumulative Deposit.

39.In TRADITIONAL DEPOSITS banks pays the interest on the deposit fund on

Monthly/Qly/Half Yearly/Yearly Basis.

40.ULIP and NSC both give tax benefits. Although ULIP gives more benefits.

41.There is no fixed proportion in a FAMILY FLOATER PLAN of health insurance.

42.If a person is holding 100 Units of Gold ETF Certificates then he has got 50 or

100 Grams of Gold.

43.BOMBAY STOCK EXCHANGE acts as an intermediary by offering a traditional

platform for buying and selling of shares.

44.For getting income tax benefit under postal scheme a client has to invest for

at least 5 Years

Page 22: sdmnagpur new agent exam english

Manish Suryawanshi….

Chapter 7: Other Key Financial Products

1. Total of Rs. 100000 that is exempted under IT Act, 1961 includes premium

paid towards Pension Fund policy or Annuity policy also and the tax

exemption in income tax would depend on person‟s income slab.

2. In an annuity certain policy if the policyholder or annuity holder survives the

term then the pension or annuity would be continued to be payable to him till

he dies.

3. A person can opt for the riders under a policy but the SA of rider should not

exceed the SA of the basic plan.

4. An insurance broker represents the buyer of the insurance policy but is

remunerated by the insurer/Insurance Company.

5. In case of Critical Illness rider the insurance company would pay the claim on

the Diagnosis of the Critical illness of the policyholder. Critical Illness Rider is

not paid in case the policyholder dies of Critical Illness.

6. Health Plans of insurance covers Disease expenses, Covers hospitalization

cost and helps in tax benefits.

7. Open Market Option Feature of Pension Plans states that a policyholder or

annuity holder can get pension from the different company than the company

in which he had paid the premiums under his pension policy.

8. In cumulative deposits banks pays the principal and total interest at the end

of the term.

9. Saving Needs of a particular individual is majorly determined by DURATION

OF INVESTMENTS.

10.WOP or Waiver of Premium is a rider which provides waiver of future

premium in the event of disability or death of the policyholder so that policy

is not lapsed due to death or disability. In WOP full SA is payable but this

rider can not be attached to every policy as this is specifically mentioned in

each policy whether we can attach the WOP with a particular policy or not.

11.Hospitalization Care Rider pays for the treatment costs in the event of

hospitalization of the insured person.

Page 23: sdmnagpur new agent exam english

Manish Suryawanshi….

12.If a person is Self Employed and wants to buy a pension plan for retirement

then while calculating he would ignore the Gaps.

13.Commutation is the feature of an ANNUITY POLICY.

14.To avail income tax benefit at the investment stage premium should be

maximum 20% of the SA.

15.If a person has children say 2 and a wife and he wanted to buy a health

insurance plan then we should suggest Family Floater to him instead of

individual plans if he wishes to cover his Wife or Children.

16.At Accumulation Phase of annuity plans, Customers has to pay the amt. in

regular intervals to create purchase price or pension fund.

17.If the benefits of annuity starts at the same day when annuity is purchased

then it is known as IMMEDIATE ANNUITY.

18.Annuity can be taken in Monthly, Quarterly, Half Yearly and Yearly.

19.Under Surgical Care rider Treatment cost of surgery subject to terms and

conditions.

20.If some amt. is invested in the Senior Citizen‟s scheme then the tax benefit

available would be the whole amt. would be deducted from the total income

up to Rs. 100000.

21.No Maturity Benefits are provided under riders.

22.In a pension plan 1/3 of the corpus money can be taken by the

policyholder/annuity holder free of tax. This is called the commutation.

23.In Micro Insurance Plans Weekly premiums are accepted.

24.The importance of health insurance plans is that it meet any type of medical

emergencies, major hospital and treatment expenses and also meet

expenses post hospitalization due to loss of income.

25.Under Health insurance plans there is no Maturity Benefit.

26.The health plans which give coverage for family members also are known as

FAMILY FLOATER HEALTH INSURANCE PLANS.

27.If a person bought a share for some amt. says 110 and sold for say 630. It is

called Capital Appreciation

28.Pension Plan is the suitable savings Plan for the Senior citizens.

Page 24: sdmnagpur new agent exam english

Manish Suryawanshi….

29.If a person invests in Senior Citizen‟s Saving Scheme then his investments

would be deducted from taxable income.

30.Brain Surgery is not covered under Critical Illness Rider.

31.Waiting Period provision is provided in the health insurance plans to prevent

PRE-EXISTING DISEASES.

32.The benefit of taking Open Market Option in Pension Plan is that the annuity

holder can improve the Annuity Rate.

33.ULIP Funds needs to be selected to receive 4.5% guarantee on pension.

34.Riders will help the customer in life insurance by allowing policyholders to

customize their insurance cover with additional benefits.

35.In Term Insurance rider or Disability rider or any other rider apart from

Critical Illness or health rider, the total premium of the riders should not be

more than 30% of the base premium and for CI or Health rider it can be

100% of the base premium.

36.If an agent told the policyholder to surrender his existing policy and take out

a fresh one from him then this is called CHURNING.

37.The Claim amt. received from CI Rider can be spend for UNSPECIFIED

REASONS.

38.If a person is involved in frequent traveling then he should go for Accidental

Rider along with saving insurance plan.

39.A low persistence ratio for the insurance company means that a large

number of policies have lapsed or surrendered resulting in loss of profit.

40.Life expectancy in India is constantly improving which also brings challenges

but through Health Insurance Plans these challenges can be covered.

41.The guaranteed return in ULIP‟s pension plan can be max. 4.5% 0r 0.045

42.After Critical Rider is claimed by a policyholder then it is terminated from the

policy although policy can be in forced.

43.Under Family Floater Health plan the proposer, his wife and certain fixed

maximum say 2 children can be covered.

44.If any amt. Say 30000 is invested in the insurance to get the tax benefit then

investor have to wait for at least 5 Years.

Page 25: sdmnagpur new agent exam english

Manish Suryawanshi….

45.No Claim Bonus can be given into a health insurance policy by, Increasing

the SA for free.

46.While calculating Pension figures required at the time of retirement Taxation

and the inflation are the two factors which should be taken into account while

planning.

47.While calculating expected returns from investments and savings, an

individual should make provision for Taxation & Inflation both.

48.In a Money Back Policy a customer gets periodic benefits without any claim

and when he died during the policy his nominees get Sum Insured.

49.To identify suitable product, their main features and tax treatment, is the

role of an Agent.

50.The Concept of Risk Diversification is applicable in the MUTUAL FUND.

51.In Daily Hospitalization cash benefit scheme the daily amt. is fixed and will

never be more or less than the actual cost of treatment.

52.It is always advisable to purchase Life or Health insurance plan at the early

ages because with the increase in age the premium amt. also increases.

53.If a person wants to take a life insurance policy and wants to take a health

insurance policy then one best option available for him is TAKING LIFE

INSURANCE PLAN WITH CRITICAL ILLNESS RIDER.

54.If insurance company is paying fixed amt. on daily basis under a health

policy then is certainly a DAILY HOSPITALIZATION CASH BENEFIT PLAN.

55.If a person brought a pension or annuity plan for some years say 20 years

then it is called a DEFERRED ANNUITY Plan.

56.E -sales refers to insurance products sales through INTERNET.

57.If an individual need lump Sum amt. at the age of retirement, then the amt.

he needs to invest annually for the goal would depend upon DEFERMENT

PERIOD, AMT. WHICH IS REQUIRED & INVESTMENT TOOL USED FOR THE

INVESTMENT.

58.In rising life expectancy the need for pension policy is increasing as

retirement planning is MORE NECESSARY.

Page 26: sdmnagpur new agent exam english

Manish Suryawanshi….

59.In guaranteed annuity option the annuity holder/policyholder would get

annuity till no. of Years guaranteed and continued till annuitant lives.

60.If the amt. of premium is less than or equal to the 20% of the SA then the

whole maturity proceed of that policy would ne fully exempted from tax.

61.Certificate from village panchayat is considered as a Non Standard Age Proof.

62.If a person is retiring within some months or say within a year then he

should go for IMMEDIATE ANNUITY.

Chapter 8: Identifying Client’s Needs

1. The two primary needs of any customer in any or at any point of time in his life

are INVESTMENT AND PROTECTION.

2. If during the fact finding session the sole focus is on health care requirement

and estate planning then the customer whose fact finding is being done, might

be on RETIREMENT STAGE.

3. In case of dispute a person can approach the CONSUMER FORUM.

4. If during fact finding it is shown that customer has got various needs like Term

Insurance for family‟s income protection, Family health plan to cover medical

needs, children‟s plan to cover education expenses and Endowment policy for

daughter‟s marriage then the first priority would be always the TERM

INSURANCE.

5. If customer‟s needs are to take policy for Marriage of child, saving for family,

Education for children and Protection for family, the least priority would be

MARRIAGE.

6. The timing of death is uncertain therefore one should take life insurance AT AN

EARLY AGE.

7. Real Needs are actual needs whereas perceived needs are based on client‟s

thoughts and desires.

8. Returns from equity form of investments are categorized as HIGH RISK.

9. At the retirement stage an individual does not require any protection cover.

Page 27: sdmnagpur new agent exam english

Manish Suryawanshi….

10.With Profit policies can be given to individuals but not Surety, Key man or

Partner‟s insurance.

11.After the marriage of children when they are got set in their lives then it is

considered that the person i.e. the father is in PRE RETIREMENT STAGE.

12.If a person is married and has parents dependent on him even if he has not got

any child, his first priority should be INCOME PROTECTION.

13.If a widow received some amount on her husband‟s death her prima facie focus

would be on INVESTMENT MANAGEMENT.

14.The disposable income means THE SURPLUS AMT. THAT CAN BE INVESTED by a

person.

15.To think of buying an expensive car is a PERCEIVED NEED and not a REAL

NEED.

16.The younger the age of an individual, the HIGHER their liabilities would be.

17.Need Analysis involve identifying FINANCIAL PROVISION TO MEET PREDICTABLE

AND UNPREDICTABLE NEEDS.

18.In Case of Private Sector Employees there is no defined retirement age.

19.A professional insurance market carries need based selling.

20.The concept of Need Based Selling involves SELLING WHAT CUSTOMER

REQUIREMENT IS.

21.If a customer is concentrating more on health plan and retirement plan then he

is at Pre Retirement Stage.

22.If a person wishes to protect his income and wants that if he does not die he

would also get some amt. then he should opt for RETURN OF PREMIUM.

23.Perceived needs are those which are imagined to be important by the Client.

24.Double Income Family is a family in which both the Life Partners are the earning

members of the family.

25.If a family consists of Husband, Wife and Children say 2 then although most

important is the Income Protection but Child plan and Saving Plans are also

important.

26.If a married person has a child then after income protection his priority would be

to take a CHILD PLAN.

Page 28: sdmnagpur new agent exam english

Manish Suryawanshi….

27.If in a health plan the cashless treatment facility is not available then

policyholder needs to spend the treatment cost and then get claim from the

insurer.

28.Fact Finding enables the insurance advisor to identify the CUSTOMER‟S

FINANCIAL NEEDS.

29.It is essential for an advisor to carry out the financial planning exercise with the

prospective client because INDIVIDUALS DO NOT UNDERSTAND THEIR REAL

NEEDS AND CAN NOT PRIORITIZED THEM.

30.While taking first policy customer‟s PERSONAL DETAILS, EMPLOYMENT DETAILS

AND FAMILY DETAILS is taken from the Customer.

31.If a person is in early 20‟s and has just started earning then his Risk appetite is

expected to be LOW.

32.In General the main protection need of a 19 year old person would be his Self

Protection instead of Home Loan Protection, Dependent‟s Protection or

Protection of Children‟s future.

33.If a person is the sole bread winner for his family then his First Priority would be

the FINANCIAL SECURITY of his family although he has got enough amt. in his

bank account.

34.Every Individual‟s Expenditure Pattern is different and not the same. An

individual should keep in mind his income while planning his expenditure

because an individual‟s income and expenditure has got relation with each other.

35.Self Employed people have to buy medical insurance than that of persons

employed with Public Sector Company because, Public Sector Company

employees enjoy medical covers related to their Job.

Chapter 9: The Fact find and Financial Planning

1. Benefit illustration given to the customers quantifies the amt. by which

investment return is reduced and this reduction reflects the impact of CHARGES.

2. If a young couple wanted to invest for their daughter whose income is likely

to increase in the future then they should go for a Flexible Plan.

Page 29: sdmnagpur new agent exam english

Manish Suryawanshi….

3. If a couple has young son then they might be looking for Child Education

Policy.

4. If an agent is to explain to his customer the guaranteed benefits of the

product then he has to use the Benefit Illustration document.

5. If a person has dependent parents then his preference would be to Get Life

Insurance.

6. Benefit Illustration Document distinguishes between Guaranteed and Non

Guaranteed benefits.

7. An agent should do fact finding in order to understand the mental State of

client in respect to his investments in saving products.

8. While recommending solution to the client the advisor should establish the

link between Client‟s needs and Product‟s features.

9. An Agent should suggest a plan based on needs of the client.

10. Transfer of Risk is the Best option to manage the risk.

11. If a person is 25 years of age, having Govt. job and a bachelor, he can be

given a long term plan as per his goals.

12. If the client is seeking solution for health care and inheritance planning then

most probably he is at the RETIREMENT STAGE.

13. Fact Finding Process helps to IDENTIFY CLIENT‟S NEEDS.

14. While doing a fact finding session an agent should go by the process of

IDENTIFYING, QUANTIFY AND PRIORITIZE CUSTOMER‟S NEEDS.

15. If an agent wants to do a thorough Fact Finding for his client who is a

businessman then CLIENT‟S PROFITS AND WITHDRAWLS FROM THE BUSINESS

would be helpful to him to know about the earning and expenses of that

Businessman.

16. If a person is unmarried and employed in a good company with good salary

and is not having any liability then he should go for a ULIP Product.

17. During the recommendation stage the advisor needs to RECOMMEND THE

PRODUCT THAT BEST MEETS THE CLIENT‟S NEEDS.

18. If customer needs are different then although they are of same age and

profession, recommending the same plan is not the desirable.

Page 30: sdmnagpur new agent exam english

Manish Suryawanshi….

19. In a Family Floater Health Insurance plan THE INSURANCE COVER IS

SHARED AMONGEST THE FAMILY MEMBERS IN NO FIXED PROPORTION.

20. LIFE INSURANCE COUNCIL is the authority which is concerned with sharing

of assumed annual growth to be shared in the benefit Illustration.

21. If after the Fact Finding Process the needs analyzed were Income

Replacement and Child Education but the Customer insists only on Child Plan for

the time being then agent should give A CHILD PLAN AND REVISIT THE CLIEN

ON LATER DATE.

22. The Commission Payable in ULIP Plan to the advisor is mentioned in Benefit

Illustration.

23. A widow with children with a huge legacy that is left behind by her husband

is concerned with Estate Planning as her Top Priority.

24. Objectives of Fact Finding do not include SURRENDERING THE EXSITING

POLICIES FOR SELLING NEW ONES.

25. In a Fact Finding if the couple discovered their needs to be the Estate

Planning then they would be on the Retirement Stage.

26. During the Fact Finding Process after Identifying Client‟s Needs the Next step

is to QUANTIFY THE CLIENT‟S NEEDS.

27. Open Ended Questions are very useful to gather information from the Client.

28. The Benefit Illustration Passed to the Client uses the assumed rate of growth

of 6% and 10 %.

29. Insurance Protects the FINANCIAL GOALS OF THE INSURED.

30. A person needs to do Estate Planning When HE IS ABOUT TO GET RETIRED.

Chapter 10: Good Client Practice

1. The key aspect of advisors or agents to do for better persistency IS SELLING

LIFE INSURANCE PRODUCTS AS PER NEED AND POLICY SERVICING.

2. The agent should disclose the Commission he will get, if demanded by the

customer.

Page 31: sdmnagpur new agent exam english

Manish Suryawanshi….

3. If the client does not wish to proceed with the recommendations right at the

moment then agent should ASK FOR REASONS FOR NOT GOING WITH THE

RECOMMENDATION.

4. Increasing of persistency from say 82 to 86 means LESS LAPSATION.

5. Higher persistency to the insurer ensures HIGHER PROFITS.

6. If the commission received by an agent on one policy is more than the

commission received by him on the another policy though the policy being of same

duration then the reason for this can be that second mention policy is a SINGLE

PREMIUM PAYMENT POLICY.

7. The factors that can influence persistency are ROLE OF THE AGENT,

PRODUCT DESIGN AND POLICY SERVICING.

8. If sales targets gets reduced then churning would certainly DECREASE.

9. The best way to prove that customers of ULIP policy are given awareness

about the commission paid to the agent is to get a signed copy of benefit

illustration from the customer / policyholder.

10. An agent should disclose the commission if customer ask for it.

11. If the agent or the advisor is finding it difficult to explain the ULIP or other

plan to the customer then he or she should refer to the product brochure.

12. If an advisor or agent sell the insurance product as per the needs of the

customer then this may result in the OPPORTUNITY OF NEW BUSINESS FOR THE

ADVISOR.

13. A married man who has a daughter of say 3 years the best he can do is to

take TERM & CHILDREN PLAN.

14. An agent who is licensed intermediary is actually a LEGAL PERSON TO ACT

ON BEHALF OF THE INSURER.

15. An advisor does churning to EARN EXTRA COMMISSION.

16. When client declines the recommendations by the insurance advisor even

after resolving the concerns then the advisor should ask for reference of people

who might be interested in the financial planning.

Page 32: sdmnagpur new agent exam english

Manish Suryawanshi….

17. Persistency helps the clients in achieving their financial goals, increase client

satisfaction and reduces the costs. It also increase (and not decrease) the

revenue.

18. A satisfied client leads to WORD OF MOUTH PUBLICITY FOR THE AGENT,

CHANCES OF UPSELLING AND MORE REFERENCE GENERATION FOR THE AGENT.

19. The stipulated time frame within which an insurer is supposed to respond

after receiving any communication from its policyholder is 10 Days.

20. Churning is considered bad for the customer because of its impact of charges

on the customer‟s fund.

21. In case of particular risks, the consequences of these risks will affect specific

individuals or Local communities.

22. If the advisor motivates the client to surrender the existing Endowment Plan

and to buy new Whole Life policy, to earn higher commission then this is known as

CHURNING.

23. Churning is bad because policyholder suffers loss of profit due to surrender

charges of the policy.

24. The reason why an advisor is getting more commission then 35% of the first

year commission is that he might be in ALTERNATE CHANNEL.

25. A person as an insurance advisor should not recommend to his client about

that he should surrender all the policies not sold to that customer by that

particular advisor.

26. An agent can receive maximum of 35% of the premium as first year

commission.

27. According to insurance broker association of India the most appropriate

relation between insurer and a Broker is that INSURANCE BROKER REPRESENTS

THE CLIENT AND THE INSURER REMUENRATE THE BROKER.

28. Insurance Act, 1938 prescribes the maximum remuneration that can be

given to an insurance agent.

29. Dispatching Discharge Vouchers to the customers does not help in

Persistency.

Page 33: sdmnagpur new agent exam english

Manish Suryawanshi….

30. If after taking financial planning exercise the prospective client said that he

does not have funds to investments then to resolve this quarry the agent should

use OBJECTION HANDLING SKILLS.

Chapter 11 : Claims

1. Pure Risk is classified under INSURABLE RISK.

2. If a person is absconding then after 7 years he will be considered as

dead and SA would be paid to the nominee.

3. The delay in settling claim by an insurance co. as per IRDA norms has

to pay 7.2% if the present Bank interest is 5.2%.

4. Family Floater health insurance plan covers ALL THE MEMBERS OF A

FAMILY.

5. Misrepresentation falls under the term Voidable Contract.

6. Under Indian Evidence Act, 1872 after 7 Years presumption clause

would apply, if the person is not heard of living.

7. If a person wants to take SA of Rs. 100000 then to take the benefit of

Deduction of Income tax his premium should be 20000 or below 20000.

8. If a person is not able to continue his policy then along with Surrender

of policy he has got another option i.e. discounting of Policy.

9. If a person has got a term plan of Rs. 1000000 SA and also has a

Critical Illness Rider of 100000 SA and he being hospitalized for Critical

illness but died after 3 days then he would be paid the claim for both CI

Rider as well as Term Rider.

10. If a policyholder is getting the amt. of SA or % of SA back before

maturity of the policy then this policy would be a Money Back Policy.

11. If a person is died in a Road Accident then CORONER‟s Report,

POLICE‟s First Information Report and Post Mortem Report is required but

ADVISOR‟S CONFIDENTIAL REPORT IS not required.

12. In case of Maturity Claims the Insurance Company itself initiates the

maturity claim process.

Page 34: sdmnagpur new agent exam english

Manish Suryawanshi….

13. If a person thinks that he does not need the insurance for the

protection of his family because he has enough money in bank and got

income from rent etc. then we will say that he wants to retain the risk with

him rather transferring it to the insurance Company.

14. In Case of confirmed Accidental death the insurance Benefit is paid in

the form of LUMSUM SA PLUS ACCIDENTAL SA.

15. If all the documents relating to a claim are submitted to the insurance

Company then the Company Should settles the claim within 30 Days.

16. Under Hospital Care Rider the insurance company pays the treatment

costs in the event of hospitalization of the insured. It is subject to terms and

conditions of the rider.

17. Along with IRDA‟s Customer Grievance Cell, Ombudsman, A customer

can approach the CONSUMER FORUM.

18. After all the necessary documents regarding death claim are received

by the company then with 30 Days the claim is required to be paid.

19. When a policy is lost insurance company take utmost care while

settling Maturity claims because the Policy may have been pledged.

20. Detailed investigation is triggered in case of Early Death Claims.

21. If a person is missing for 7 years then insurance Company can pay

claim to the nominees by considering the missing person as dead.

22. If a person took a Money Back Policy for 20 years and take a loan on it

and died before 2 years of Maturity then he will get FULL SA + VESTED

BONUS – ANY OUTSTANDING LOAN /PREMIUM & INTEREST.

23. If with in 2 years a claim occur and it is found in investigation that

insured person was suffering from cancer then that claim would not be

payable and would be rejected.

24. If a person dies when his policy was not in force if death claim occurs

it would not be paid.

25. A demand to fulfill the insurer‟s obligation is known as Claim under an

Insurance policy.

Page 35: sdmnagpur new agent exam english

Manish Suryawanshi….

26. If a person has got a number of Life Insurance policies then his family

would be paid death claim for all the policies.

27. In claim if the policyholder gets more than what is the SA of the policy

then this can be because of the nature of payment of that policy.

28. In the process of settling maturity claim the process is initiated by the

company well in advance of the maturity date.

29. If a person has taken a term plan and an accidental rider then in the

event of his death by accident his nominee would get both the claims.

30. If the policy documents are sent by the company but not received by

the policyholder and Life insured died then Full amt. of SA is payable.

31. Insurer would not pay the claim unless the event insured against

happens.

32. If a policyholder has taken a loan upon a policy then the amt. of the

loan would be deducted from his claim.

33. If client died on 89th day and claim is not payable then this might be a

case of Suicide because in case of an suicide claim is not payable for 1 year.

34. If a person dies before the expiry of the grace period then full SA –

any outstanding premium would be payable to his nominees.

35. If the policy was not in force in a term plan then in that case claim

would not be payable.

36. If there is an advertisement in a newspaper regarding any claim under

a policy then that would be a case in which policy might have lost.

37. Claim within 2 years of issuance or revival of the policy is known as

Early Claim and detailed investigation is done by the company before paying

them.

38. Insurance Company makes enquiry only in death claim cases and not

in Maturity Claim cases.

39. The agent‟s duties and responsibilities end when claim is settled.

40. Because of Indisputability clause if there is a breach on the part of the

policyholder then insurance Company can retain the premium of the

policyholder.

Page 36: sdmnagpur new agent exam english

Manish Suryawanshi….

41. If the indemnity bond was signed in a policy when the claim was paid,

this indicates that policy is lost.

Chapter 12: Legislation & Client Advice

1. IRDA is the Controller of insurance in India.

2. In case of the death of the Agent, the commission would be payable to

his Legal Heirs.

3. If a person clears IRDA exam in a certain year say in 2010 and got

license then if he does not work he can not apply for another license for

three year. In given case he can apply in the year 2013.

4. Photograph, Proof of Identity and Proof of Address are the part of KYC

Norms whereas Lapsed Policy Details are not the part of KYC Norms.

5. Section 42 of Insurance Act, 1938 Deals with the provision regarding

Licensing of Agents.

6. Insurance Act, 1938 regulates the Licensing of Agents.

7. If a policy is endorsed under MWP Act then the beneficiaries are wife

and Children.

8. Under the Married Women Property Act, 1874, the Policyholder is the

Trustee.

9. License of a Candidate Passing Insurance Exam is Valid for 3 Years.

10. 50000 is the Thresh Hold Limit of Premium in cash as per the

Monetary Policy.

11. If a case is already before the Consumer Forum, then the Ombudsman

should dismiss the Case.

12. IRDA gives the Guidelines for Annual Assumed Growth Rate.

13. If a person is looking after a protection Plan with the Minimum

Premium then TERM INSURANCE is the best option.

14. Remuneration of an agent includes First Year Commission and Renewal

Commission.

Page 37: sdmnagpur new agent exam english

Manish Suryawanshi….

15. IRDA is a regulatory Body of Money Laundering in Insurance Sector.

16. Indisputability Clause Can be enforced by Insurance Company during

the First Two Years of The Policy.

17. Designated Person has the authority in insurance Company to Issue/

Cancel the Agent‟s License.

18. Consumer Forum at District Level will hear Complaints up to 2000000.

19. Pricing Element is done by the Respective Insurance Company.

20. Layering is the 2nd Stage in Money Laundering.

21. MWPA 1874 provides that a Life Insurance Policy can be taken up by a

Married Man for the Benefit of his Wife and Children.

22. Analyzing Needs of the Customer is the reason for Conducting Fact

Finding Exercise.

23. In case License of an Agent is lost or misplaced and his agency also

expires then he needs to complete 25 hours Practical Training and required

to Pay Rs. 50 for the issuance of Duplicate License.

Chapter 13: Regulation & Client Advice

1. Issuance of License to a person has been stipulated in Section 42 of the

Insurance Act, 1938.

2. Among the various financial needs the Income Protection for the family is the

1st Financial Need that is most important.

3. The Insurance Institute of India was formed in the Year 1955.

4. A person can take ADB i.e. Accidental Death Benefit Rider Up to the Basis

Insurance Cover he has opted for.

5. Basic Qualification to become an Agent is that He / She should be of Sound

Mind and should be 10+2/10th by Qualification.

6. If there is No Claim in a year then the Customer gets Benefit in the Form of

Reduction in Next Year‟s premium as No Claim Bonus.

7. If a Valid Claim Is delayed by the Insurer then after the Lapse of 30

Days from the admission of the Claim, insurance company has to pay the

interest.

Page 38: sdmnagpur new agent exam english

Manish Suryawanshi….

8. If it is proved that an agent is offering Rebates to its Customers to get

insurance Policies then that agent can be terminated.

9. Board of Insurance Is related to IRDA.

10. Tariff Advisory Committee Controls and Regulates the Rates, Advantages,

Terms and Conditions that may be offered by the Insurer in respect of

General Insurance Business.

11. Investment by Foreign Direct Investors in Insurance Companies is restricted

to 26% or 0.26

12. Ombudsman Passes an Award within 1 Month.

13. The Face of Life Insurance Industry in India is Life Insurance Council.

14. IRDA has created a Call Center for logging of a complaint.

15. Representatives of all Insurance Companies Represents the Members of GBIC

i.e. Governing Body of Insurance Council.

16. The Eligible Age to Become a Life Insurance Agent is 18 Years.

17. Life Insurance Council Focuses on creating a positive image of the insurance

industry and would also like to enhance the Consumer‟s Confidence on the

same.

18. Insurance Institute of India i.e. III is the Training Institute for providing

Training to insurance agents.

19. If an agent shares information that he has collected while doing Fact Finding

Activity with a client then his License can be cancelled.

20. The Role of National Insurance Academy is to Undertake Training Activities.

Customer Protection

Chapter 14

1. Free look time available after receiving policy documents is 15 days.

2. The charges were not fully disclosed to the customer is a common

complaint against Agents.

3. Kartik written to his insurer about non settlement of maturity claim, as

per the regulation insurer has to reply to this within 10 working days.

Page 39: sdmnagpur new agent exam english

Manish Suryawanshi….

4. Ombudsman is created in 1998.

5. Complaint council body other than IRDA grievance redressal forum &

COPA would be Ombudsman.

6. Total 12 Ombudsman offices located in India.

7. Mr. A is working as a Nodal Officer in Insurance company dealing with

handling complaints.

8. De-tarrification is a process by which insurance can price their product

on their self past experience.

9. Consumer Affairs Department (CAD) is established by IRDA to deal

with customer complaints.

10. Ombudsman has to give his decision within 30 days.

11. Customer can contact to forum at state level in case of any dispute for

a claim more than 20 Lakh.

12. Ombudsman is a complaint council body other than IRDA Grievance

redress and COPA to get his grievances against the insurance company.

13. Stipulated time frame within which an insurance company supposed to

respond after receiving communication from its policyholder is 10 days.

14. Life insurance policyholder is entitled to refer complaint to insurance

ombudsman referral is made in maximum period of one year from response

by insurer.

15. Group insurance can be taken in employer-Employer relationship.

16. As per IRDA regulations setting up IGMS would help in effectively

handling Grievance of the customers.

17. Insurance Ombudsman has bee appointed to protect the interest of

policyholders.

18. When the insured disagree with any of the term & conditions of the

policy is issued, they have the option to return the policy

19. On submission of complaint against an insurer to the Ombudsman

decision is made in favour of the policy holder within 15 days.

Page 40: sdmnagpur new agent exam english

Manish Suryawanshi….

20. “Policy holders protect regulation” insist that all insurance companies

should provide the information about the insurance Ombudsman of that

region while sending the policy documents.

21. Insurance companies are required to honor the award passed by

insurance ombudsman within 15 days.

22. If the complainant is disagree with the decision of the company on the

claim then he can approached to Ombudsman in 1 month.

23. Pooling of risk apply to all type of Insurance.

24. Life insurance policyholder is entitled to refer complaint to Insurance

Ombudsman referral is made in Max period of 1 year from response by

Insurer.

25. AML program of every insurer to include Inspection by Auditor General

apart from procedure training & audit.

26. If any consumer is dissatisfied with the customer care cell of any

Insurance company then he can escalate their grievances to Nodal Officer.

27. Policyholder can make complaints either via E-mail

([email protected]) or Toll free number 155255.

28. Consumer can call Toll free No. for any Grievance or he can also

contact consumer affair department of IRDA, Insurance Ombudsman &

Insurance company.

29. 5000/ is the Minimum Sum Assured allowed for Micro Insurance.

30. Grievances can be taken up to the Ombudsman like Partial or Total

repudiation of Claims by the insurer, Dispute with regard to premium paid or

payable & delay in settlement of claims.

31. As per regulation for protection of policyholder‟s interest 2002(IRDA)

that All insurer will have a grievance redressal system.

32. Insurance contract of value not exceeding Rs. 20 Lakhs is the limit of

Ombudsman claim settlement.

33. If a policy holder buys a policy from the advisor and lodges a

complaint, it should be treated as same for all policies sold by advisor.

Page 41: sdmnagpur new agent exam english

Manish Suryawanshi….

34. Regulation issued by IRDA required that the decision on the proposal

must be conveyed to the proposer within 15 days.

35. To ensure that the customer complaints are handled effectively, IRDA

has established “Integrated Grievance Management System”.

Ethics and Code of conduct.

Chapter 15

1. Mr. Sharma is newly recruited insurance advisor. To meet his monthly

target he explains only the good points of newly launched plan to his

customer. Here Mr. Sharma‟s behavior is unethical.

2. If there is a significant reduction in the proportion of an insurance

policies which are returned during free look period, this tend to indicate that

ethical practices by the company have improved.

3. An advisor while explaining the policy and to sell he accept to give a

part of his agents commission. This is wrong practice and he cannot offer any

commission.

4. Shankar an advisor sold a term insurance policy & unit linked policy

(ULIP) to Amar, the client who is unmarried and has no dependent.

Consequently Shankar‟s action can be termed as Overselling of Insurance

policies.

5. When insufficient emphasis is placed on the long term nature of life

insurance policies during selling process, this will often be apparent by

nothing the impact on persistency ratio.

6. Pankaj being a License insurance advisor has to follow the code of

conduct provided by IRDA.

7. Rahul is a licensed insurance agent. As insurance agent he must carry

out his role in accordance with IRDA regulations code of conduct.

8. Explaining all detail of the policy to customer is not unethical behavior.

9. Ethics can be defined as :

Page 42: sdmnagpur new agent exam english

Manish Suryawanshi….

1. Those values we commonly hold to be “good or right”.

2. Behavior that is based upon the moral judgment of an individual.

3. A study what makes one‟s own actions right or wrong?

4. Raju is certified License holder under all circumstances he needs to

hold his certified license with him issued by IRDA.

5. IRDA has laid down the code of conduct for all agents.

6. After doing need analysis of the client, the agent advised the client to

opt for TERM product but the client refused. According to ethical business

practices agent should inquire about the refusal from the client.

7. If the sales target of an insurance agent significantly reduced, this

should normally have more likely impact on the activity of churning.

8. Under the hospital care rider the payout made is “specified amount

multiplied by the number of days the policyholder is hospitalized”.

9. A policy has been rejected by the company under direct intimation to

the customer and copy to the agent. The next action of the agent is to

explain the reason for rejection to the customer.

10. For an insurance advisor CHURNING is a bad practice.

Manish Suryawanshi...
SDM's Secretariate Nagpur..