2. Contents
1. LIFE INSURANCE CONTRACT
2. UNDERWRITING FACTORS
3. TYPES OF UNDERWRITING
4. POLICY TERMS AND CONDITIONS
5. CLAIM PAYMENTS
6. RELAXATIONS
7. REASONS FOR NON-PAYMENT
8. STATISTICS
3. LIFE INSURANCE CONTRACT
• Life Insurance is replacement of earning
capacity.
• Insurance is a contract between proponent and
insurer where insurer depends upon the details
given by the proponent. Therefore, it is a
contract of utmost good faith.
• Insurance on the life of another person
(unrelated) person cannot be granted.Even in
case of relations there are some requirements.
4. UNDERWRITING FACTORS
• Income, health, insurance needs, kind of
occupation, etc of the proponent.
• Insurance depends upon kind of plan, risk
involved, age, health, duration of the
policy, financial position, occupation, life
style, etc.
5. TYPES OF UNDERWRITING
• For convenience of the larger population,
insurance is granted without medical check up
also.
• If there is a medical, some special reports may
also be required.
• Based on the reports, life may be treated as
standard or sub-standard and in some cases
risk may even be denied.
• Certain plans have restrictions on entry age,
sum assured and duration of policy.
6. POLICY TERMS AND
CONDITIONS
• Some of the major terms and conditions
are :
-- Correct age
-- Continuation of the policy till the
contingency
-- Deferment period
-- Accident and Disability clauses.
7. CLAIM PAYMENTS
• It is a medico actuarial research which divides
claims into two categories, i.e., within 2 years
and after 3 years. Insurance Act also permits
investigations in case of death claim within 2
years.
• As insurance is accepted based on the details
provided by the proponent, if death takes place,
the cause of death, duration of death, etc are
looked into.
• Normally, if death occurs after 3 years, claim is
paid without any investigation.
8. RELAXATIONS
• In some of the cases even if claim is not
falling under payable category, claim is paid
by Insurer (LIC) depending upon various
factors.
• In case of natural calamities viz., flood,
earthquake, etc. some of the requirements
are waived by LIC of INDIA .
9. REASONS FOR NON-PAYMENT
• If death occurs within one year due to suicide,
claim is not paid.
• Accident should take place in public like road
accident, drowning in a river, etc. Sometimes the
tendency is to show death at residence by
burning or consuming poison, etc as accident.
• Claim not paid under unconcluded contract
where death occurs before fulfillment of the
requirements.
• Claim not paid for reasons viz., unclear legal
title, wrong disclosure of health, income, age,
earlier policy details, impersonation.
10. Contd….
• The claimants plea that LIC’s Medical Examiner
has examined the party and hence he is supposed
to know the party’s illness, is not tenable. Some of
the illnesses, if not disclosed by the party cannot
be found out by the doctors since certain diseases
can be controlled by taking medicines.
• Non-payment of premium to office. (But claimed to
be paid to a representative like an employee or
agent is not acceptable)
• Information was communicated to the agent but he
had not written in the proposal form.
11. Contd….
• Sometimes proposals are submitted at different
places or away from residence. This creates
doubts about the genuineness of the individual.
• Nominee should be close relative and not a
stranger.
• Accident claim may be denied if it has occurred
due to breach of law or in a private place and
authentic evidences are not provided to prove it.
• Disability claim is withheld if it does not fall within
the policy terms and conditions.
• Female life insurance in certain categories is
subject to the insurance of the husband if she is
not having income.
12. STATISTICS
Claims Review Committees:- At Zonal Office and Central Office one
of the members is from judiciary
• Approx. 4 lakh claims received per year of which repudiation is
between 9000 – 10,000 only. Appeals received in 1/3rd of the cases.
In 20% of the cases, claim is paid on ex-gratia basis and in balance
cases repudiation is confirmed.
Ombudsmen : Out of 5000 cases, Ombudsman decisions are as follows
:
Withdrawal/settlement --- 2160
Dismissed --- 900
Repudiation confirmed --- 390
Awards in favour of claimant --- 1806
* Cases which come to Ombudsmen are not only death claims but
relating to other service matters also.
