Policy Servicing

7/31/2019 Policy Servicing

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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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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.

Documents

Policy Servicing