A person’s capacity to
pay is one of the every very important factors in granting life insurance to him. Unless there is a
financial loss due to the death of the person, insurance cover cannot be granted. It is the insurable
interest which is the under lying criterion
to decide the extent of life cover. Based on his capacity to pay
premium, the insurer decides the amount
to be given as the sum assured. This is financial underwriting. PROOF OF
INCOME; In financial underwriting proof
of income plays a very crucial part. The following documents can be this is a considered
as proof of income. 1. Salary
certificate, 2. Chartered
accountant’s certificate, 3. Income tax returns with computations of
income statement of income tax
orders. 4. Bank
statements passbook as a supporting
financial evidence in case evidence in case other documents are not clear. 5. Land revenue record and certificate from tahsildar wherever the source of income
is shown as agriculture. Normally, the
insurer considered is a cover of 20 times the annual income average of the last
3 years. up to the age of 30, 15 times
up to age of 40, 12 times up to the age
of 50, and 10 times from age of 51 and above.
AGE PROOF: The following proofs of age are considered as standard for the purpose of age admission for insurance. 1. Certificate extract from municipal or other records made in the
at the time of birth 4. certified extract
from service register in case of the employees of government and
quasi-government institutions and certificates from commercial institutions
and industrial undertakings provided evidence of the age was produced at the time of recruitment of
the employees. 5. identity cards issued
by the defense departments., 6.
identify cards having date of birth
issued by the government quasi-governmnent and commercial and industrial
undertaking to their employees. 7.
marriage certificates issued by the Roman Catholic churches in the case of
Roman Catholics. 8. domicile
certificates in which the date of birth stated was proved on the basis of
school birth certificate. 9. Passport, even in the case of the illiterate
proponents may be accepted as standard age proof.
NONSTANDARD
AGE PROOF: When a standard age
proof is not available a nonstandard age
proof can be accepted but with caution. As a matter of fact, the circumstance ,
particularly the status of the proponent the place he is hailing from etc.,
should be verified before accepting the nonstandard age proof. The following
could be nonstandard age
proof. 1. driving license issued by
RTO, 2. Permanent Account Number (PAN),
issued by income tax authorities., 3. Voter identity , provided
the date if issue of the card is available , 4. ESIS card,
5. marriage certificate in case of Muslims, 6. service record where the age is not
verified at the time of the entry into
service only year of the birth is mentioned.
7. horoscope other than that maintained by the Hindu family of family
horoscope book., 8. elder’s declaration
, 9. self-declaration, 10. ration
card, 11. certificate issued by village
panchayat. , 12 any other proof not classified as standard. However a few precautions should be taken by the insurer while
accepting nonstandard age proofs such as:
1. age proof extra will bear charges,. 2. normal risk bearing
plans., 3. some restrictions for
age at entry maximum premium paying
term, maximum age at maturity etc., In
the self-declaration if only month is
given , it is taken as 15th of the month. If only year is stated, it is taken
as 1st July of the year. For widows
falling under female category of not
having any income , only standard age proof
can be accepted.
UNDERWRITING OF PHYSICALLY HANDICAPPED LIVES:’ 1.
Physical impairments as a result of accident,
2. Physical impairments due to cerebral palsy, 3. Physical impairments due to polio , 4.
Physical impairments due to muscular dystrophy., 5. Physical impairments due to congenital
defect., 6. Physical impairments as a result of underlying diseases. In all the these cases, the medical
examiner should give full details of the deformity in his medical reports.
Normally these lives are a considered only if the they are gainfully employed
having adequate, income of his/her own
and are capable of taking sufficient
precautions to avoid accidents