III IC-24 flashcards
III IC-24 · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Mortality rate qx
- The probability that a person aged exactly x dies before reaching age x+1. It is derived from the mortality table as dx divided by lx, and drives life insurance premium calculations.
- Net single premium
- The present value of expected future death benefits under a policy, calculated using the valuation mortality table and interest rate, with no allowance for expenses or profit.
- Gross premium
- The premium actually charged to the policyholder. It equals the net or risk premium plus loadings for expenses, contingency margins, and profit, and must be certified by the appointed actuary.
- Non-medical limit
- The maximum sum assured an insurer will accept without requiring a medical examination. It varies by age band and is set in the insurer's underwriting rules.
- Moral hazard
- The risk that the proposer's character, financial position, or intent creates a loss possibility beyond ordinary mortality. Over-insurance and non-disclosure are typical indicators.
- Lien in underwriting
- A counter-offer where the insurer issues the policy but deducts a stated percentage of the sum assured from claims arising in early years, reflecting substandard health.
- Term assurance
- Pure protection cover that pays the sum assured only if the life assured dies within the chosen term. There is normally no maturity payment, so premiums are the lowest.
- Endowment assurance
- A policy that pays the sum assured on death within the term or on survival to maturity. It combines protection with savings, so premiums exceed those for term cover.
- Money-back policy
- A policy that pays a fixed percentage of the sum assured at stated intervals during the term, with the full sum assured payable on death, subject to policy terms.
- ULIP structure
- A unit-linked policy where premiums are split into risk cover and investment. Units are allotted at the net asset value, and disclosed charges are deducted for allocation, administration, and mortality.
- Deferred annuity
- A pension product where premiums are paid during the accumulation phase and the annuity starts at a chosen future date. Options may include return of purchase price.
- Waiver of premium rider
- A rider that waives future premiums if the life assured becomes totally and permanently disabled or suffers a specified critical illness, while the base policy continues in force.
- Free-look period
- A period, commonly 15 or 30 days from receipt of the policy, during which the policyholder may return the policy and receive a refund of premium less proportionate risk charges.
- Policy revival
- Restoration of a lapsed policy on payment of arrears with interest and evidence of insurability, normally within five years of the first unpaid premium.
- Net premium reserve
- The present value of future benefits minus the present value of future net premiums, calculated on a prescribed valuation basis. It represents the insurer's liability to policyholders.
- Zillmer method
- A modified reserve method that recognizes initial acquisition expenses by reducing the first-year reserve, subject to a maximum Zillmer adjustment, producing lower early reserves.
- Surplus in life insurance
- The excess of admissible assets over liabilities and reserves. It arises from favorable mortality, interest above the valuation rate, expense savings, and lapses or surrenders.
- Reversionary bonus
- A share of surplus declared annually on with-profit policies and added to the sum assured. It may be simple, on the original sum assured, or compound, on the accumulated sum.
- Terminal bonus
- An additional bonus declared on with-profit policies and paid only when the claim arises on death or maturity, reflecting surplus not yet distributed as reversionary bonus.
- Asset share
- The accumulated value of premiums actually received on a policy, less expenses and mortality costs, with investment returns credited. It is compared with surrender values for fairness.
- Solvency ratio
- The ratio of an insurer's available solvency margin to the required solvency margin. IRDAI prescribes the minimum control level that a life insurer must maintain.
- Appointed actuary
- A Fellow of the Institute of Actuaries of India appointed by an insurer to certify premium rates, valuation of liabilities, and solvency, and to file the actuarial report with IRDAI.
- IRDAI registration
- The licence granted by IRDAI to an insurer to carry on life insurance business, subject to minimum paid-up capital, solvency, deposit, and investment compliance.
- Bancassurance
- Distribution of insurance products through bank branches under a corporate agency or referral arrangement, with the bank registered or licensed by IRDAI for the activity.
- Insurance Ombudsman
- A quasi-judicial authority that hears policyholder grievances against insurers within its territorial jurisdiction, subject to monetary limits and the prescribed complaint procedure.
- Benefit illustration
- A disclosure document showing premiums, charges, and projected benefits under a policy, mandatory at the proposal stage so the prospect can compare products and costs.
- Section 45 Insurance Act
- After three years from issuance or revival, a life policy cannot be called in question on the ground of misstatement unless the insurer proves fraud; within three years, misstatement permits repudiation.
- Early death claim
- A death claim arising within a defined period from commencement or revival, commonly three years. It is investigated for non-disclosure and for the suicide exclusion clause.
- Nomination
- The right of the policyholder to name a person to receive the policy money on death. The nominee holds the proceeds for the legal heirs, unless a beneficial nominee is validly appointed.
- Absolute assignment
- A transfer of all rights in a policy to the assignee, with no condition of reversion. The assignee becomes the owner and may deal with the policy freely.
- Conditional assignment
- A transfer of policy rights that reverts to the assignor or their estate on the happening of a specified event, such as the assignee's death before the assignor.
- Surrender value
- The amount payable when a policy with sufficient duration is voluntarily terminated. It is calculated on the guaranteed surrender value basis and compared with the asset share.