Life of an Insurance

Policy
Stages of a Life Insurance
Policy
1. Market Identification

2. Product Development

3. Distribution

4. New Business

5. Underwriting

6. Customer Servicing

7. Claims Administration
Market Identification
Market Segmentation is done based on the
target group in the population
Group members can differ by

Age
Sex
Nationality
Location
Lifestyle
Product Needs
Purchasing Habits
Market Identification
Individual

Age

Marital Status

Men Women

Corporate
Market Identification

A good Target Market

Has enough buyers
Can be serviced at a reasonable cost
Fits the objective
Product Development
Benefits to the customer
Premiums to be charged
Commissions to be paid to distributors
Provisions to be made under the policy
Regulatory approvals to be obtained
Business plan to launch the policy
Distribution
Personal Selling
Agents
Third Party Distribution
Financial Institution
Banks
Brokerage Houses
Other Insurance Companies
Direct Response
Mails
Website
Phone
New Business
Duties of a New Business Analyst

Good Order Check

Proper Set-up of policy records

Sends application to Underwriter

Life Insurance
Underwriting
Duties of an Underwriter

Determine Company Risk

Decide whether or not to accept that risk

Determine the appropriate premium rate

to accept that risk

Risk Assessment
1. MEDICAL RISKS
Age, Build, Medical History, Family Medical
History, Tobacco, Alcohol

2. PERSONAL RISKS
Job, Hobbies, Driving, Living country

3. FINANCIAL RISKS
Need for coverage
Affordability of premiums
Basic Risk Classes

PREFERRED CLASS Lower than Average Risk;

Lower than Average Premium

STANDARD CLASS Average Risk;

Average Premium

SUB-STANDARD CLASS Increased Risk;

Higher than Average Premium

DECLINED CLASS Very High Risk;

Cannot be Insured
Insurable Interest
Insurable Interest :-

Genuine loss if Insured person dies

If Insurable Interest not present Policy
not issued
Customer Service
Customer Service Representative
Fulfills Customer Requests
Answers Queries
Sends Renewal / Maturity notice
Ensures optimum policy conservation
Conservation
Conservation of policy

To keep the policy in-force

Early lapses Revenue falls

Claims Administration
Claims Administrator

Paying claims Quickly, Fairly & Accurately

Avoids paying Invalid Claims

Fraudulent Claims
Causes loss to Company, Employees,
Owners & Customers
Claims Administration
Checks on the following:-
Was the policy in force
Who was insured
Does the policy cover the person
Proof of the Insured persons death
Is the cause of death covered
Has the applicant lied in the application
Claims Investigation
Some Claims requires Investigation

Early Claim

Death in a foreign country

Doubtful Claims
Benefit Calculation
Benefit Calculation is done for Settlement of
Claims

Face value of the claim amount

+ Policy Dividends
+ Extra Benefits
(-) Policy Loans
Settlement Options
Normal Settlement

Alternate Settlement Options

Partial Regular payments
Re-Deposit for better returns