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Care to be taken while completing Proposal Papers

A contract of insurance is a contract of utmost faith technically known as uberrima fides. The principle of disclosing all material facts is embodied in this important concept which applies to all forms of insurance. The proposer, who is one of the parties to the insurance contract, has means of knowledge which are not accessible to the insurer viz. the Corporation which is the other party to the contract. Therefore, it becomes the duty of the proposer to inform the insurer of everything likely to affect the judgement of the insurance, however unimportant it may seem to him / her (the proposer), Hence, the proposer should ensure that all questions in the proposal form are correctly answered. It may be noted that in the 'Proposal' along with other related papers and the representation, made for the grant of insurance the proposer declares that he is furnishing full and correct information. Any misrepresentation, non-disclosure of facts/ information which are material to acceptance of risk or fraudulent information in any document leading to, the acceptance of the risk will render the insurance contract null an void. In such an event, there is the possibility of the contract becoming invalid. Hence it is in the interest of the Policyholder and his dependent to give the correct and full information to ensure the precious benefits of the Insurance policy for his near and dear.

Importance of Age Admission

The rate of premium payable on a life insurance policy generally varies with age, which is one of the most important factors in determining the rate of premium payable in an individual case. Granting of some plans and for consideration of proposals under Non Medical Schemes etc. depends on age. Hence prior age admission is must. In order of preference, the following are accepted as evidence of age :

(a.) Certified Extract from Municipal or Local Body's records made at the time birth. (b.) Certificate of Baptism or Certified Extract form Family Bible if it contains age of date of birth. (c.) Certified Extract from School or College records if age or date of birth is stated therein. (d.) Certified Extract from Service Register in the case of Government employees and employees of Quasi- Government institutions or (e.) Passport issued by the Passport Authorities in India. It is advisable to submit standard age proof to avoid inconvenience in future.

Mode of Payment of Premium and days of Grace

Premiums other than single premiums may be paid by the policyholder to LIC in yearly, half-yearly, quarterly or monthly installments. Policyholders are required to pay the premiums to the Corporation on the due dates. A grace period of one month but not less than thirty days is allowed for payment of yearly, half-yearly and quarterly premiums, and fifteen days for payment of monthly premiums. When the days of grace expire on a Sunday or a holiday observed by the Office of the Corporation, where premiums are payable, the premium may be paid on the following working day to keep the policy in force.

Revival Of Lapsed Policy

When the premium is not paid within the days of grace, the policy lapses. It can however, be revived during the life-time of the assured but before date of maturity, if applicable. The Corporation offers three convenient schemes of revival viz. the Ordinary Revival Scheme, the Special Revival Scheme and the Installment Revival Scheme for the convenience of the policyholders.

It is also possible to revive a policy by raising a loan under the policy provided that the policy is eligible for loan and has required adequate loan value to pay the arrears of premiums with interest. Requests for revival may be made to the Branch Office servicing the policy. The facility of revival is to be utilised in extreme cases. For securing benefits of policy smoothly, it will be appropriate to pay premiums in time.

Change of Address And Transfer of Policy Records

As and when a policyholder desires a change of his address in the Corporation's record, intimation of such change should be given to the Branch Office servicing his policy. Policy records can be transferred from the Branch Office, which services the policy to any other Branch Office nearest to the policyholder's place of residence. Correct address facilitates better service and quicker settlement of claims. Details like mobile number, telephone number, E-mail address may be intimated to the Office for easy accessibility.

Care of Document and Loss of Policy

The policy document (policy bond ) is an evidence of the contract between the insurer and the insured. the policyholder should preserve the policy bond carefully till the contracted amount under it is settled, as it is required to be submitted to Corporation at the time of claims. Loss of the policy document, should be immediately intimated to the Branch Office of the Corporation where it is serviced. The office will then quote the requirements for a duplicate policy. It may, however, be noted that the loss of the policy bond does not extinguish the rights of the policyholder in the policy.

Loan

At present loans are granted on unencumbered policies up to 90 percent of the Surrender value under policies which are in force the full sum assured and up to 85 percent of the Surrender Value on policies which are paid-up for a reduced sum assured. The minimum amount for which a loan can now be granted under a policy is Rs 150/-. The rate of interest charged at present varies from 10.5 percent to 12 percent per annum payable half-yearly depending upon the plan. Loan are not normally granted for period shorted than six months. However, if granted, interest for a minimum period of six months in charged. Production of policy document is must for availing of the loan. The Branch Office servicing the policy will quote the loan value on request from the policyholder. Certain type of policies such as money back type and policies on the lives of minors during their minority are, however, without loan facility. The terms and conditions printed on the policy bond reveal whether a particular policy is with or without loan facility.

Relief to Policyholders

The Corporation generally allows concessions on payment of premiums, settlement of claims, issue of duplicate policies etc., when the policyholder are affected by natural calamities such as droughts, cyclones, floods, earthquakes etc.,

Nomination / Assignment of Policy

When the policy money becomes due for payment on the death of policyholder, it can be paid only to that person who is legally entitled to give a valid and effective discharge to the Corporation. This is to ensure that policy money is paid to the person to whom it was intended. As such the importance of nomination / assignment need not be over-emphasized. If the policy bears nomination, the claim is settled in favour of the nominee. Similarly, if the policy is assigned, the assignee receives the claim amount. In maturity claims, the payment is made to the life assured, subject to the policy being free from encumbrances. For quick settlement of claims, policyholders are strongly advised to effect either a nomination or an assignment in respect of their policy. It should be noted that an assignment of a policy automatically cancels the existing nomination. Hence when such a policy is reassigned in favour of the policyholder, it is necessary to make a fresh nomination to avoid delay in payment of the claim. Parents / proposers of minor Life Assured should take care to effect nomination after the Life Assured becomes major.

Claim by Maturity / Instalment payment

The Corporation strives to settle maturity claims on or before the due date itself. The Branch office which services the policy sends an intimation regarding the payment along with the necessary Discharge Voucher for execution by the assured, approximately two months before the due date of such payment. In case the policyholder does not hear from Branch office concerned in this connection, he / she may contact them, quoting the policy number.

Survival Benefit Payment up to Rs. 25000/- under Money Back Plans barring few exceptions, are released calling for original policy document and Discharge Voucher.

Death Claim

In the event of the death of the policyholder, the claimant (the nominee, assignee or next of kin) should immediately intimate the fact of such death to the Branch Office, where the policy is serviced, along with the following particulars to help the Corporation to consider the claim promptly.

(a.) policy number/s, (b.) name of the assured, (c.) date of death and (d.) claimant's relationship with the assured.

Soon after the receipt of the intimation of death. the Branch office concerned will send the necessary claim forms for completion along with instructions regarding the procedure to be followed by the claimant.

The claim is usually payable to the nominee / assignee or the legal successor, as the case may be. However, if the deceased policyholder has not nominated / assigned the policy or if he / she has not made a suitable provision regarding the policy moneys by way of Will, the claim is payable to the holder of a Succession Certificate or some such evidence of title from a Court of Law.

The Corporation, however, may consider settlement of claims under such policies without insisting on legal evidence of title in favour of the natural heirs of the deceased subject to certain terms and conditions, to take care to see that claim is paid to the correct persons.

The Corporation grants claims concessions whereby payment of full sum assured is made, subject to the deduction of unpaid premiums with interest, and premiums falling due before the next anniversary of the policy, in the event of the death of the life assured within a period of six months or one year from the date of the first unpaid premium, provided premiums have been paid at least for three years or five years respectively.

The Corporation also provides relief to the claimants under certain plans where, subsequent to the payment of premiums for two full years but less than 3 years, death takes place after the days of grace but within one year from the date of first unpaid premium.

Claims Review Committee

The Corporation settles a large number of death claims every year. Only in case of fraudulent suppression of material information, is the liability repudiated. This is to ensure that claims in not paid to fraudulent person at the cost of honest policyholders. The number of death claims repudiated is , however, very small. Even in these cases, an opportunity is given to the claimant to make a representation for consideration by the Review Committees as the zonal Office and the Central office. As a result of such review, depending on the merits of each case, appropriate decisions are taken. The Claims Review Committees at the Central and Zonal Office has among its members, a retired High Court / District Judge. This has helped providing transparency to our operations and has resulted in greater satisfaction among claimants, policyholders and public.

Grievance Redressal Machinery

Policyholders' Grievance Redressal Cells exist in all the Officers of the Offices of the Corporation, headed by Senior Officers who can be approached by policyholders to get their grievances redressed, on any day out but particularly on every Monday between 2.30 p.m. to 4.30p.m. without prior appointment.

All Branch Offices - Sr. / Branch Manager
All Divisional Offices - Marketing Manager
All Zonal Offices - Regional Manager (Marketing)
Central Office - Executive Director (Mktg. CS)

The policyholder can avail himself / herself of the facility of toll-free telephone systems in Delhi and Mumbai or contact through LIC Website www. licindia.com LIC's website is reach in information on products/ services.

Customer Relationship Management

Corporation has appointed a Customer Relationship Manager at Divisional Offices to give information about products and services and also for redressal of grievances in relation to policy servicing. Policyholders can contact him/ her if required.

Scheme Of Ombudsman

The Grievance Redressal Machinery has been further expanded with the appointment by the Government of India of the Insurance Ombudsman at different Centres. Complaints of the following types come within the preview of the Ombudsman's consideration.

Repudiation of liability under claims.
Delay in settlement of claims.
Any dispute regarding premiums paid or payable in respect of the policy.
Any dispute on the legal construction of the policies in relation to a claim and
Non- issue of insurance document to customer after receipt of premium.

Tips to Policyholders

Make use of various services available with the help of Information Technology initiatives elaborated hereinafter.
Check the nomination status under the policy and intimate changes, if any for speedy settlement of claims especially in case of policies on the lives of minors and in case of death of existing nominee.
Pay the premium in time. (wherever possible, availing facility to Metro / Wide Area Network/ Internet / Online payment).
Revive the policy, in case it is lapsed - so that the valuable insurance cover is not lost.
Review periodically the insurance needs of self and the family so that adequate insurance protection is ensured. Enquire with your agent about new innovative plans devised by LIC.
Intimate us your E-mail address, Telephone and fax Number for faster communication.
Register with designated banks/ service provides for payment of terms, online / through Internet.
Accident benefit is now available up to 25 lakhs S.A. Check whether you have availed of this benefit upto maximum ceiling
In case of children's policy check whether on becoming major accident benefit is availed of.

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