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7/31/2019 Policy Servicing
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POLICY SERVICING
7/31/2019 Policy Servicing
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NOMINATION A person is merely named to collect the amount of policy on
the death of the assured.
Holder of LIC may nominate the person to whom he wants topay the money.
The nomination is provided in the proposal for which is usedfor taking an insurance policy.
If nominee is a minor it is lawful to the policy holder to appoint
in the prescribed manner any person to receive the moneysecured by the policy in the event of his death during theminority of the nominee.
Nomination may be done any time but before the policymatures
Nomination may be changed.
Should be given in writing in proper format
In LIC an outsider cannot be considered as nominee
If policyholder survives till maturity then no question ofnomination.
There can be 1 or more nominees
Minor can be a nominee but another person should be
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ASSIGNMENT
Assignment of a policy means transferring the rights of the
assured in respect of the policy holder to the other party
known as assignee. Assignment of a policy of life insurance can be made with or
without consideration upon the policy itself or by a separate
instrument signed by the assigner.
The instrument of assignment should be attested by atleastone witness.
On request of the policy holder and on payment of a fee the
insurer can grant an acknowledgement .
The written acknowledgment is the conclusive evidenceagainst the insurer that he has duly received the notice to
which such acknowledgement relates.
After the assignment the assignee shall be subject to all
liabilities and equities to which the assigner was subject to at
the date of assignment .
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Continued
The assignee may institute any proceedings in
relation to the policy without obtaining consent ofthe assignor.
Assignment is required at the time of obtaining loan
from the bank or financial institution against the
insurance policy. Treatment of secured loan.
The policy holder as well as bank will request insurer
to assign or transfer the policy rights to the bank.
The insurance company will write specific legal
words at the end of the policy and it is signed by the
insurer.
The policy document will remain with the bank till the
loan amount is refunded fully.
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Continued.
After cancelling the assignment the policy document
will be handed over to the policy holder.
If the loan is not paid by the policy holder the amount
of the policy at the maturity will be handed over to
the bank and not to the policy holder.
However if there is a surplus it will go to the
policyholder.
It acts a security.
Assignment is generally applicable to life insurance. Nomination is automatically cancelled on assignment
of the policy.
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GENERAL ELEMENTS PRESENT IN ANY
CONTRACT
TWO PARTIES
PROPOSAL
ACCEPTANCE
CONTRACTUAL CAPACITY
FREE CONSENT
CONSIDERATION
LEGALITY OF OBJECT
SPECIAL ELEMENTS: UTMOST GOOD FAITH
INSURABLE INTEREST
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PROCEDURE OF EFFECTING LIFE
INSURANCE POLICY
1. SELECTION OF INSURER
2. FILLING UP THE PROPOSAL FORM
3. DECLARATION BY THE PROPONENT
4. ATTACHMENT OF PROOF OF AGE
5. PRESENTATION OF PROPOSAL TO THEAGENT
6. MEDICAL EXAMINATION
In the following cases medical examination is not
required:
Where the age of the male proposer is below 30
years, educated and remained in employment for
atleast 1 year. Its sum assured is below Rs40000.
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Continued
Where the proposer is a woman leading a first life
category and passed high school or equivalent ageis below 30 years and employed at least a period of
1 year. The sum assured is below Rs. 40000
An adult member below the age of 40 years and the
sum assured is below Rs. 15000. In the case of reinsurance of reinsurance of a
person who has already insured.
7. REPORT BY THE AGENT
8. SCRUTINY OF PROPOSAL BY THE BRANCH
OFFICE
Name and address of the proposer
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7/31/2019 Policy Servicing
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Continued
9. SENDING THE PROPOSAL TO APPROPRIATEDEPARTMENT
10.TAKING FINAL DECISION ON THE PROPOSAL
11.ISSUE OF ACCEPTANCE OR REQUESTLETTER ( Acceptance or regret)
12. ISSUE OF INSURANCE POLICY
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PROCEDURE OF ISSUE OF POLICYOF
GENERAL INSURANCE
1. SELECTION OF INSURER
2. PRESENTATION OF PROPOSAL
3. EVIDENCE OF GOODWILL
4. RECOMMENDATION OF AGENT
5. SURVEY OF THE SUBJECT MATTER
6. REPORT BY THE SURVEYORS
7. DETERMINING THE PREMIUM8. ACCEPTANCE OF THE PROPOSAL
9. DEPOSITING PREMIUM
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Recording change of address
Noting of new nomination or change of nominationunder policy
Noting an assignment on the policy
Providing information on the current status of apolicy such as accrued bonus, surrender value and
loan value.
Processing papers and disbursal of a loan on
security of policy. Issuance of duplicate policy in case of loss of
original policy.
Issuance of an endorsement under the policy noting
a change of interest or sum assured or perils
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Continued
10. ISSUING A COVER NOTE OR A TEMPORARY
POLICY11. ISSUING OF INSURANCE POLICY
V V
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SURRENDER VALUE AND PAID UP VALUE OF
POLICY
The money paid by an insurance company to a policyholder
who is canceling an annuity or cash-value life insurance policy.
Cash value accumulates when premiums and interest on any
previous cash value exceed the cost of insurance. Generally,
the cash value a policyholder receives upon cancellation is not
taxable unless it exceeds the sum of the premiums paid. Alsocalled surrender value.
It's a portion of the money that accumulates tax-deferred in
your cash value account during the period you pay premiums
on the policy, minus fees and expenses.
Paid up value of the policy is the amount you will get at the
maturity
Paid up value is the value of a lapsed policy to be paid at the
time of maturity . Surrender value is the amount payable on
surrender.