The Authority is in receipt of feedback from various life insurers that the situation arising in the wake of COVID outbreak has impacted the traditional manner of canvassing life insurance policies by agents and intermediaries. In particular, the filling-in of the physical proposal forms, obtaining wet signatures on them and subsequent movement of such physical papers, etc.
In this backdrop, the life insurers have represented to the Authority to allow the option of authenticating the proposals for life insurance through electronic means, in place of physical signature, for the sales made by insurance agents and intermediaries, in addition to the methods presently allowed. Further, the insurer shall not accept any payment of moneys towards proposal deposit till the receipt of consent of the proposer.
Ensuring the suitability of the product being purchased;. Carrying out pre-issuance verification calls in respect of all such proposals. The above facilitation is allowed on an experimental basis with immediate effect till 31st December, , and is limited to pure risk products, i. Dismemberment benefit is paid if the insured dies or loses his limbs or sight in the accident.
Description: In an event of death, the insured person gets the additional amount mentioned under these benefits in the insurance policy. These are the supplementary.
Risk assessment, also called underwriting, is the methodology used by insurers for evaluating and assessing the risks associated with an insurance policy.
The same helps in calculation of the correct premium for an insured. Description: There are different kinds of risks associated with insurance like changes in mortality rates, morbidity rates, catastrophic risk, etc.
This assessment is impleme. Under a settlement option, the maturity amount entitled to a life insurance policyholder is paid in structured periodic installments up to a certain stipulated period of time post maturity instead of a 'lump-sum' payout. Such a payout needs to be intimated to the insurer in advance by the insured.
The primary objective of settlement option is to generate regular streams of income for the insured. Adverse selection is a phenomenon wherein the insurer is confronted with the probability of loss due to risk not factored in at the time of sale. This occurs in the event of an asymmetrical flow of information between the insurer and the insured. Description: Adverse selection occurs when the insured deliberately hides certain pertinent information from the insurer.
The information may be of crit. When an insurance company enters into a reinsurance contract with another insurance company, then the same is called treaty reinsurance.
Description: In the case of treaty reinsurance, the company that sells the insurance policies to another insurance company is called ceding company. Reinsurance frees up the capital of the ceding company and helps augment the solvency margin. It also enables. First time default on premium payments by a policy holder is termed as First Unpaid Premium. Description: With each premium payment a receipt is issued which indicates the next due date of premium payment.
If the premium is not paid, this date becomes the date of first unpaid premium. Embedded value is the sum of the net asset value and present value of future profits of a life insurance company. Description: This measure considers future profits from existing business only, and ignores the possibility of introduction of new policies and hence profits from those are not taken into account. Indemnity means making compensation payments to one party by the other for the loss occurred.
Description: Indemnity is based on a mutual contract between two parties one insured and the other insurer where one promises the other to compensate for the loss against payment of premiums. English Business Examples. Sign up for free and get access to exclusive content:. Free word lists and quizzes from Cambridge.
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