lets take a journey... Part II

While you fill the proposal forms - you will be furnishing , your legal name, legal heirs details, communication address, (now IRDA seeks identity also), your qualification, occupation, annual income, previous insurance details, familay members details, if any member died then cause of death, your health record such as smoking habits, hospitalization information etc. also you will be mentioning the sum assured ,the term and mode of premium payment.

Pleae note: the inforation you provide here forms the basis for test of law in case of any disputes!!

Based on the information provided by you, the insurance company scrutinizes your suitability for insurance. This is the job of an Underwriting department. There are international standards for underwriting. Each underwriter will have some upper limt upto which if sum assured lies, he can underwrite the risk. The higher the sum assured, the more scientific the underwriting becomes. The insurance company can call for specific medical reports if need there be. In general, the cost of these reports is born by the insurance company only.

Upon underwriting, the insurance company may reject your proposal, accept it with some conditions or accept unconditioanlly. You may have choice to pay the first premium as a deposit along with your proposal or pay it after the confirmation. This may vary from company to company.

Once your insurance is accepted, on making required payments, you will be given a policy bond or a policy certificate. Please keep this safe. There exists a provision for issue of duplicate in case of loss of this certificate. But, the procedure may be irritating as you have to establish the cuase of loss and all. check if all the details are correctly recorded in the bond. Else, you may face problem at the end of the day.

lets take a journey... part I

In many sites you will find insurance glossary and definitions about policies and other related matters. when you read each and every term separately, the full picture may not be clear.... lets take a journey from your intention to take a policy to maturity of your policy... this shall give you a good understanding about the insurance company operations as well.

In life insurance business, the primary channel for business procurement is 'tied agents'. Not only in India, across the world, tied agents paly an important role in procuring insurance business. They are the agents whom you come across when you want to take a policy. Atleast in Indian scenario, each agent is supposed to canvas products of only one company. Apart from the tied agents, now there are alternate channels of business procurement i.e through banks (popularly know as bankassurance) , insurance brokers. Details about insurance business procurment can be found in a separate article with title " The nitty grities of life insurance agent system"

when ur agent approaches, you start listening many new words and things may seem to be complex. In the ideal situation, you should be clear about the following:

• your insurance need - safety? investment? children? pension? all of the above etc
• your ability to pay - insurance is a long term contract, how much you can pay in future?
• Your human life value - please see a description of this term give here below.

human life value is a concept which says that we should know how much we should put in life insurance, so that, the family can live the same standard of life, even after demise of the earning member, or after the earning member retires. You may not be able make provision immediately to meet this, but, one can keep this as a target and start your insurance portfolio.

When you decide to take an insurance, the agent may inform you to sign the proposal forms. Its a common practice that the agent takes down the details like date of birth, approximate salary, family details and then takes a signature in the proposal form and he fills your details later. Please remember, insurance is a contract and its worth you fill the proposal form on your own. These forms have a legal basis and whatever your signing in the form will come into picture in case of any claim. It takes only 5 mins to fill the form. Next time when your agent comes with proposal form, insist that the same be filled by you or atleast before you. Infact, IRDA insists that the agent should give a copy of the proposal form which he has submitted in the company to the customer.. which is now under a court case. continued in Part II