Mohd safrie bin Abdullah
2008405696
Life insurance (INS535)

TUTORIAL 2 INS 535


1) Apart from the proposal form and doct...
a. Utmost of good faith. It is the positive duties to enclose the relevant information by
insured to the insurer that the ...
key employee. It is a term insurance, covering the life of the employee within the term of
the policy. If the employee sur...
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Tutorial Insurance hayat

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Tutorial Insurance hayat

  1. 1. Mohd safrie bin Abdullah 2008405696 Life insurance (INS535) TUTORIAL 2 INS 535 1) Apart from the proposal form and doctor's report, what other information is available to an insurer in the assessment of risk in respect of a proposal for life insurance? (4 marks) 2) An insurance policy is a contract, and it must, therefore, conform to the general rules of contract law. State six (6) characteristics that underlie the distinctive judicial interpretations according to insurance contracts. (12 marks) 3) Describe the following life insurance policies: i) whole life policy (4 marks) ii) key-man insurance (4 marks) Answer 1) a. Industrial that related with insurance. The parties who provides such information regards to other insurance company databases such as Persatuan Insurans Am Malaysia, (PIAM). This will indicate the insured that take more than one insurance cover. b. Laboratories test report. The insurer will find the more information related with their insured in this reports such as blood and urine test. This information will help underwriting process whether to accept or decline the proposal form. 2)
  2. 2. a. Utmost of good faith. It is the positive duties to enclose the relevant information by insured to the insurer that the information may be influence the decision of acceptance, rates, and terms. If utmost of good faith will be broken, the proposal form will be treats as voidable. Example, insured must disclose whether he or she is a smoker or not. b. Contribution. It can be defines as the amount which each insurer has to contribute to cost of a loss is covered by two and more insurers. According to the principle of contribution, an insurer who has indemnified the insured, may call upon the other insurers who are similarly liable for the loss to contribute toward the payment of indemnity. This principle avoids the insured recovering more than actual loss. c. subrogation. It can be define as taking the rights belonging to an insured by the insurer after the latter has indemnified the insured. Those rights will against the third parties who are liable for the loss that is the subject of the claim and the right of the insured in the salvage. d. Proximate cause. This principle provides that the loss affected the insured must causes by insured perils in order to make sure that insurer will pays for the loss. e. Insurable interest. It is defined as the right to insure arising out of legally recognized financial interests that a person has in the subject matter of insurance. Example, everyone has insurable interest in his own wife. 3) a. Whole life policy is provides for the payment of sum insured upon the death of the life insured or upon reaching a certain ages such as 85, 90, or 100. premiums are normally paid through out of life. However, there are policies that have limited premium payment period. Some features are protection of life, fixed premium, and growing cash value. b. Key-man insurance is insurance policy whereby an employer buys an insurance policy against loss of profits arising from the death, unemployment, and sickness or injury of a
  3. 3. key employee. It is a term insurance, covering the life of the employee within the term of the policy. If the employee survives during the term, the policy will expired. The purpose of taking out the insurance is to compensate the employer for the loss of trading income that may result from the loss of the service of the key employee in case of death, sickness or injury.

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