CSC-VLE TRAINING

Insurance Documents
Understanding Insurance Documents

Student Corner

NEED FOR INSURANCE

DOCUMENTATION

Documents are necessary to evidence the existence

of a contract.
The documents stand as a proof of the
contract between the insurer and the insured.
The major documents in vogue in life
insurance are premium receipt, insurance
policy, endorsements etc.
Life insurance is a legally enforceable contract
between two parties both of whom are legally
qualified to contract.
It is therefore, necessary that the terms and
conditions of the agreement must be suitably
documented in a manner that would make it clear
that both parties to the contract are Adidem i.e.,
of the same mind.
INSURANCE DOCUMENTS CSC-VLE TRAINING

Insurance is also a contract of utmost good

faith and enforced only in the distant future.

It is therefore necessary that the declarations

made by both the parties should be put in
black and white for future reference. Any
suppression, willful and material shall make
the contract void.

The insured, therefore, has a duty to declare

all that he knows about himself, his health, his
financial status in answering questions
contained in the proposal form and other
ancillary documents which may be required by
the insurer.

Documents necessary at the stage of proposal.

Proposal form is filled in by the proposer who wants to take an insurance

policy. A proposal form has three portions

1 Personal data (1) Name, address, occupation,

(2) Details about the type of Term of insurance
(3) The risk cover required
(4) Name of the nominee
2 Previous Insurance Details of the insurance policy that the proposer already
particulars possesses,
Health data Health reports of the proposer
Family health details
3 Female Proposer Certain additional questions
4 Declaration by Proposer affirms the veracity of the statements made in the
proposer proposal and conforms that the data submitted in the proposal
are complete and correct and there is no suppression of data.
The insurer collects the following documents while considering a proposal
 Age proof
 Income certificate
 Health Medical reports
 Deformity certificate in case of deformed proposers.

 The insurer on acceptance of the proposal issues the first premium receipt
 Issue of First Premium Receipt indicates that the contract is concluded.
 In case of certain deformity, the risk of accident can be excluded.

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Documents required for Policy document is a detailed document

considering a Proposal and it is the Evidence of the insurance
Age proof contract which mentions all the terms
and conditions of the insurance.
Age is an important factor in deciding
the quantum of premium against a
policy. The „Policy Bond‟ is issued b y
the insurer
Standard age proof -
1) Certified extract from municipal The policy schedule, which is the main
records, recorded at the time of part of the policy document, identifies the
birth.  Office of issue of the policy.
2) Certificate of baptism or extract  Name of the policyholder,
from Family Bible  Date of commencement of the
3) Extract from school or college policy,
records.  Nominees‟ name
4) Extract from service register in  Address.
case of employees -
5) Marriage certificates issued by The policy document is stamped as per
Roman Catholic Church. the provision of the Stamp Act to make it
6) Domicile certificate. a completely legally enforceable
7) Passport. document.
Non-standard age proofs
1) Horoscope,
2) Elders Declaration,
3) Self Declaration,
4) Driving License,
5) Certificate issued by village
panchayat,
6) Electoral role,
7) Ration card.

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Other important documents

Renewal Premium Receipts
1) The insurer sends a „premium Notice‟ to
the policyholder.
2) The insured pays the renewal premium on the
due date.
3) The insurer, on receiving the premium issues a
renewal premium receipt (RPR)
4) RPR is an important document and is a
documentary proof of payment of premiums.

Nomination
Nomination:
1. Nomination is made at the time of taking a policy.
2. In some cases nomination is done after the policy is
issued, by an endorsement on the policy.
3. It is possible to change a nomination after the
policy is issued by an endorsement.

Assignment
Assignment
1. An assignment of a policy in favour of another
person or institution can be effected by an
endorsement on the policy.
2. Re-assignment can also be done by a
subsequent endorsement on the same policy.
3. As a nomination is automatically cancelled
due to an assignment, after re-assignment, it is
necessary to make a fresh nomination.

Notice to the Customer

1) Premium Renewal Notice is usually sent before the due date of the premium.
2) Premium Default Notice: This notice is sent within 3 months after the due date reminding the
policyholder to pay the premium to prevent the policy-lapses.
3) Issue of Final Lapse Notice: If the premium is not paid within six months of the due date, and the
policy is allowed to lapse, this notice is issued to the policyholder requesting him to revive the
policy to restore the full insurance cover.

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OBJECTIVE TYPE QUESTIONS

1. Which one of the following statements is correct?
a. The policy is the basis of the insurance contract.
b. The proposal is the basis of the insurance contract.
a. A is correct
b. B is correct
c. Both (a) and (b) statements are correct.
d. Both (a) and (b) statements are wrong.

2. Which one of the following statements is correct?

a. The proposal must be written by the proposer himself/ herself.
b. The proposal can be written by the Agent.
a. A is correct
b. B is correct
c. Both (a) and (b) statements are correct.
d. Both (a) and (b) statements are wrong.
3. Which one of the following statements is correct?
a. The information in the proposal form is used for underwriting.
b. Wrong information in the proposal form can nullify the insurance contract.

a. A is correct
b. B is correct
c. Both (a) and (b) statements are correct.
d. Both (a) and (b) statements are wrong.
4. Which of the following are confidential and will not be given to the proposer?
a. The medical report.
b. The agent‟s confidential report to the insurer.
c. The medical referee‟s advice.
d. All the above.

a) A is correct
b) B is correct
c) Both (a) and (b) statements are correct.
d) All statements are correct.

5. Which one of the following statements is correct?

a. FPR is the evidence of the insurance contract.
b. The medical report is the basis of the insurance contract.

a) A is correct
b) B is correct
c) Both (a) and (b) statements are correct.
d) All statements are correct.

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6. Which one of the following statements is correct?

a. The FPR is proof of commencement of risk.
b. Risk does not commence till the policy is signed.
a) A is correct
b) B is correct
c) Both (a) and (b) statements are correct.
d) All statements are correct.
7. If a policyholder applies for cancellation of policy soon after he receives the FPR
a. The full premium will be refunded.
b. The full premium after some small deduction will be refunded.
c. The policy will be treated as lapsed from the next premium due date.
d. He will be debarred from taking any further insurance policies.
a) A is correct
b) B is correct
c) Both (a) and (b) statements are correct.
d) All statements are correct.
8. Which one of the following statements is correct?
a. FPR is cash receipt.
b. Renewal Premium cannot be paid without the renewal notice.

a) A is correct
b) B is correct
c) Both (a) and (b) statements are correct.
d) All statements are correct.
9. Which one of the following statements is correct?
a. IRDA has prescribed proposal forms for all insurers.
b. Renewal premium cannot be paid without the renewal notice.

a) A is correct
b) B is correct
c) Both (a) and (b) statements are wrong.
d) All statements are correct.
10. Which one of the following statements is correct?
a. If policy document is lost the insurance contract becomes void.
b. The family history appears in the personal statement.
a) A is correct
b) B is correct
c) Both (a) and (b) statements are correct.
d) All statements are correct.

1 2 3 4 5
B A C D A
6 7 8 9 10
A B A C A

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It's about risk...

Like all insurance, life insurance is calculated on risk
factors and the higher your risk because of lifestyle, age
and medical history, the more you will pay per month.

As a healthy young person you are likely to be

considered low risk and the cost of your policy will
reflect that.

You can apply for a life insurance policy if you

are between the ages of 17 and 64.

At 17 you may not have any dependents but if you do

have a family or are thinking of starting one then you
may wish to think about getting yourself covered so that
some financial provision will be made for them should
the worst happen.

Getting a life insurance policy may provide you and your

Glossary
Proposal form is the basic form which is filled in by the proposer who wishes to take an
insurance policy.

First Premium Receipt is the confirmation of a concluded insurance contract.

Policy document is the evidence of the insurance contract and is a detailed document which
mentions all the terms and conditions of the insurance

Duplicate Policy If a policy is irrevocably lost; a duplicate policy can be issued, after following a
certain procedure. The insurer satisfies itself of the circumstances leading to loss. Being so satisfied the
insurer insists upon an advertisement in a news paper, production of an indemnity bond and payment
of policy preparation charges and there after a duplicate policy is issued. The duplicate policy is
stamped “Duplicate Policy”.

Assignment - An assignment of a policy in favour of another person or institution can be effected by an

endorsement on the policy.

Re-assignment can also be done by a subsequent endorsement on the same policy.