Topic

The duties and responsibilities of an insurance agent

Chapter 10 Key Terms

Good Client Practice (C.A wala Example) Example

Possible Questions

Prioritising the needs of the client. Conducting research to prepare a unified financial recommendation Requirements of the client Calculating the amounts that need to be provided for or have not yet been provided for Indentifying suitable products and eliminating the unsuitable ones. Agent remuneration and upfront disclosure methods Remuneration methods Disclosures checking the clients commitment to the needs; outlining the reasons for the recommendation of a particular policy; acceptance or rejection of the recommendation; and churning and product switching Churning When product switching is suitable Benefits of persistency The long-term benefit of retaining policies and avoiding shortterm cancellations (persistency) Building longterm relationships with clients What are the different factors that can affect persistency? Product design Change in client's financial circumstances Role of agents Policy servicing Marriage birth of a child moving house change of job

Recommending suitable policies

Churning and product switching

Chapter 9 The fact-find and financial planning (Doctor wala example)

Topic Key Terms identify a clients financial planning needs quantify them; and priorities them based on the resources available for investment Making the client feel comfortable and relaxed Explanation of the fact-finding process and its purpose The information gathering session A discussion of priorities and the clients personal concerns An agreement, in principle, of the main problems to be addressed by the advisers report personal details family details employment details; financial details; existing insurance and investments monthly income and expenditure analysis; financial planning objectives and considerations; and future changes Need Analysis Presenting recommendations to the client Recommendations: presentation structure Benefit illustration documents Know your customer Example Possible Questions

What is a factfind?

Structured interview

Fact-finding forms

Assessment and analysis Making recommendations

Topic Who is your client?

The typical life stages of a client

Factors that affect the life stages

Client needs: real and perceived

Communication, questioning and listening skills

Chapter 8 Identifying client needs (Nagpur wala example) Key Terms Example Prospective clients Client needs Identifying needs Quantifying needs Prioritising needs Childhood Young unmarried Young married Young married with children Married with older children Pre-retirement Retirement Age Marital status and dependants Employment Health issues Individuals income and expenditure Individuals assets and liabilities Identification of real needs Identification of current and future needs Quantification and prioritisation of needs Financial planning review Communication skills Questioning skills Listening skills Handling objections from clients

Possible Questions

Topic Other financial needs

Types of products, their features and benefits

Riders

Annuities

Pension plans

Chapter 7 Other key financial products () Key Terms Example Need for health insurance Need for insurance riders Need for pension plans Need for pension plans Types of health plan Individual health insurance plan Family floater health insurance plan Group health insurance plan Daily hospitalisation cash benefit plan Accidental death benefit (ADB) rider Term rider Critical illness (CI) rider Waiver of premium (WOP) rider Immediate annuities Deferred annuities Life annuity o Guaranteed period annuity o Joint life, last survivor annuity o Life annuity with return of purchase price o Increasing annuity Accumulation phase Regular annuity phase Commutation

Possible Questions

Topic The need for savings/investment advice Factors that determine the savings needs of an individual Features and benefits of savings products

Chapter 6 Savings products ()Bank Fd wala Key Terms Example Ignorance about the financial planning process Ignorance about the full range of financial products available Individuals with capital Duration of investment Amount of disposable income Capital or income growth Guarantees Lock-in period Penalties Risk Buying and selling mechanisms Life insurance Bank deposits Mutual funds Shares Post office Savings Investment in gold and silver Tax implications Income Tax Act 1961 Section 80C Section 80D Section 80DD Section 80E Section 24(b) Contingency/emergency fund Insurance Assets Retirement Tax planning

Possible Questions

Types of savings products

Tax and inflation implications for savings products

Prioritising savings needs

Topic

Protection needs

Personal factors affecting protection needs Life insurance products

Basic life insurance plans

Taxation and inflation Prioritising protection needs

Chapter 5 Basic life insurance products (R G B) Key Terms Example General protection needs of an individual Income Medical needs Dependants Assets and liabilities Familys maintenance Age Dependants Income Assets and liabilities Basic elements of a life insurance plan Death cover Maturity benefit Term insurance plan Return of premium (ROP) plan Pure endowment plan Endowment insurance plan Whole life insurance plans Convertible insurance plans Joint life insurance plans Annuities Group insurance plans Micro-insurance plans Unit-linked insurance plans (ULIPs) Child plans Money-back policies Salary saving schemes (SSS) Tax implications on insurance products Inflation Why is it necessary to prioritise needs? Why is it necessary to prioritise needs? How to prioritise needs

Possible Questions

Topic

The process of insurance underwriting

Obtaining the required information

Moral and physical hazard

Moral hazard Financial, medical and non-medical underwriting Human life value (HLV) Liens Pricing and calculating the premium

Chapter 4 Insurance underwriting Key Terms Example Collect information about the applicant Analyse the risk associated Estimate the potential exposure Determine the probability of loss Accept (or reject) the proposal Classify and rate into a risk group to calculate the premium Issue the insurance policy Proposal Medical examination report Insurance agent Agents Confidential Report Additional information Report from tax authorities Physical hazard Age Occupation Gender Residence Habits Hobbies Physical characteristics Medical condition Physical handicap Medical history of the family Personal history Fraud and moral hazard Financial underwriting Medical underwriting Non-medical underwriting What is human life value? How much life insurance should one have? Income replacement method Simple method Pricing elements Mortality rates Loading Income from investment of premium Calculate the risk premium Based on the risk premium calculate the level premium Calculate the net premium Compound revisionary bonus Terminal bonus Interim bonus The agent can help the proposer to calculate their human life value (HLV),

Possible Questions

Calculating premiums

Calculating bonuses The agents role in underwriting

Topic How insurance policies are bought and written

Key documents

Policy document

Chapter 3-2 Insurance practices Key Terms Example Source of preliminary information Purpose of buying insurance How life insurance is written Proposal form Quotations Insurance contract Renewals Proposal form Declaration in the proposal form Age proof Premium receipts First premium receipt (FPR) Renewal premium receipt (RPR) Heading Preamble operative clause proviso schedule attestation terms and conditions exclusion endorsements Policy information statement Endorsements Lapse, paid up value and surrender value Lapse Paid up value Surrender value Revival Renewal Nomination Assignment Loans and foreclosure Loans against a policy Foreclosure

Possible Questions

Endorsements, notices and prospectus

Key insurance terms

Nomination and assignment

Topic Essentials of a valid contract of insurance The policy document The role of insurance agents in insurance contracts Insurable interest Utmost good faith

Chapter 3-1 Insurance principles Key Terms Example Offer and acceptance Consideration Capacity to contract Consensus ad idem Legality of object or purpose Capability of performance

Possible Questions

Material facts

Indemnity

Importance of utmost good faith Definition of utmost good faith Duty of disclosure Importance of material facts Consequences of nondisclosure Indisputability clause (section 45) Life insurance: duty of disclosure Indemnity and life insurance

Topic Concept of risk

Components of risk

Insurable risks Risk transfer Pooling of risks Law of large numbers

Chapter 2 Risk and insurance Key Terms Example Definition of risk Attitude to risk Uncertainty Level of risk probability (or frequency) extent (or severity Peril and hazard Financial risks Pure risks Particular risks

Possible Questions

Chapter 1 How the insurance Topic What is insurance? Role of financial services and insurance market operates Key Terms The need for insurance How does insurance work? Investment option Protection of financial Security Tax benefits Planning for life stage needs Higher confidence among policyholders Increase in insurance Penetration Social benefits Employment Generation Increase in profits for the insurance company Phase I Pre-liberalisation Phase II Liberalisation Phase III Post-liberalisation Types of insurance organization Life insurance Non-life insurance Reinsurance Constituents of the insurance market Agents Corporate agents Intermediaries Underwriters Actuaries TPAs Surveyors/ loss adjusters The Regulator Training institutes NGOs Protecting the customers rights Example Possible Questions

Benefits of a professional insurance market

History of insurance Insurance organisations and roles

Roles in the insurance industry