Life Insurance Products and Underwriting
What the domain tests
This domain tests product structures, premium factors, and underwriting decisions for life and health-related life products. Expect term, whole life, endowment, money-back, ULIP, annuity, and group products, plus medical and financial underwriting.
Core rules and concepts
- Premium reflects mortality, interest, expenses, and margin. Age, health, occupation, income, and sum assured affect the rate.
- Term insurance pays only on death during the term. Whole life covers the whole lifetime. Endowment pays on maturity or earlier death. ULIP combines insurance with market-linked investments, so investment risk is borne by the policyholder.
- Underwriting classifies risk as standard, substandard with loading or exclusions, declined, or postponed. Financial underwriting checks whether the sum assured is proportionate to income and need.
- Key policy features include nomination, assignment, grace period, revival, free-look period, and suicide exclusion. IRDAI rules govern product filing and customer disclosures.
Worked example
A 35-year-old smoker seeks a ₹1 crore term plan. The underwriter notes elevated blood pressure and a hazardous occupation. The proposal may be accepted with an extra mortality loading, a hypertension exclusion, or a reduced sum assured. The reasoning is that mortality is higher than standard, so the pool needs an adjusted premium; declining outright is not automatic if the risk can be priced.
Traps that cost marks
Do not say ULIP guarantees the fund value. Do not treat nomination as ownership. Do not ignore the free-look period. Do not assume a suicide exclusion lasts for the whole policy term. Do not confuse revival with a new policy; revival restores an existing contract on terms.