KNOW YOUR CUSTOMER (KYC)

It is the process used by a business to verify the identity of their clients.

Agents should ensure that proposers submit the proposal form along with the following as part of the KYC Procedure:

·         Photographs

·         Age Proof

·         Proof of address-driving license, passport ,telephone bill, electricity bill, bank passbook etc.

·         Proof of identity- driving license, passport, voter ID card, PAN card etc.

·         Income proof documents in case of high-value transactions

Anti Money Laundering(AML)

1. Money Laundering is the process of bringing illegal money into the financial system by hiding its illegal origin so that it appears to be legally acquired.
2. Money Laundering is the term used to describe the process of turning dirty money into clean money.
3. This act came into effect from 1st July 2005 to control money laundering.
4. The AML program should include :

• Internal Policies, Procedures and controls
• Appointment of a principal compliance officer
• Recruitment and training of agents on AML measures.
• Internal Audit/Control

Medical Examiner's Report

Details Pertaining to physical features like height, weight, blood pressure, cardiac status etc are recorded and mentioned by the doctor in his report is call the Medical Examiner's Report

Moral Hazard Report

It is the likelihood that a client's behavior might change as a result of purchasing a life insurance policy and such a change would increase  the chance of loss. The company may require a moral hazard report from an official of the insurance company.

Valid Age Proof

• Standard Age Proof
• School or college certificate
• Passport 
• PAN Card
• Service register
• Certificate of baptism
• Certified extract from a family bible if it contains the date of birth
• Identity card in case of defence personnel
• Marriage certificate issued by a Roman Catholic Church

Documentation - Proposal Stage

Prospectus

It is a formal legal document used by insurance accompanied that provides details about the product

Prospectus explains the below:

• Terms and Conditions
• Scope of benefits - Guaranteed and non - guaranteed
• Entitlements
• Exceptions
• Whether the plan is participative or non participative

Proposal Form

The insurance policy is a legal contract between insurer and the policy holder. As is required for any contract, it has a proposal and its acceptance. The  application document used for making the proposal is commonly known as the 'proposal form'

Agent's Report

The Agent is the primary underwriter. All material facts and particulars about the policy holder relevant to risk assessment need to be revealed by the agent in his/her report,

Unit Linked Insurance Policies(ULIP)

• Sustainable to people prepared to undertake some investment risk
• Contain fewer guarantees
• They are much more flexible
• In a ULIP the insure has a variety of funds to choose from like equity funds, debt funds, balanced funds and money market funds etc for their investments.
•  ULIPs give the insured the option to participate in the growth of the capital markets

• On the death of the insured the sum indured or the market value of the investment (fund value), whichever is higher, is paid
• On maturity of the plan the fund value is payable
• Settlement option: instead of taking a lump sum amount, some plans provide the policyholder eith the option to receive the maturity benefit amount as a structured payout(periodic installments) over a period of time ( say, 5 years or any time up to 5 years) after maturity

In traditional Plan like Endowment, the insured decides the amount of Sum Assured to be purchased. Whereas in ULIP, the insured decided the amount of Premium ; Sum Assured is a multiple of the premium paid (ex: 10 times the annual premium)