1 Field UNDERWRITNG & Insurance of Female lives AFTAB AHMAD MANAGER FMD-ABBOTTABAD

2 Definition of underwriting It is the process of assessment and selection of risk regarding the proposed life. The person who decides whether a person is insurable or not and if insurable then on what conditions, is called underwriter.

3 WHAT IS FIELD UNDERWRITING Field underwriting means the scrutiny done by SR, SO,SM and AM regarding the proposal form and proponent. Field underwriting means the scrutiny done by SR, SO,SM and AM regarding the proposal form and proponent. This process involves whether the proposal is complete or not and proponent is insurable or not. This process involves whether the proposal is complete or not and proponent is insurable or not.

4 TWO ASPECTS OF UNDERWRITING Underwriting has two aspects while making decision for selection of risk; Underwriting has two aspects while making decision for selection of risk; one is financial aspect of the life proposed one is financial aspect of the life proposed and the other is the health aspect and the other is the health aspect

5 Why underwriting is necessary? The concept of insurance is based on sharing the risk between a large numbers of people. In other words, loss occurring due to death or disability is shared by the policyholders in the form of mortality expense. Now, it is according to principle of justice that a person who has greater risk to his life should pay premium more than those who has lesser risk to their lives.

6 Health aspect in underwriting The personal statement of health given in the proposal form determines whether one is insurable or not by declaring the person a standard risk, sub-standard risk or not an insurable risk. These categories are based on the health conditions of the proposed determined through the questions asked in proposal form or on the basis of medical reports sought by the underwriter

7 Financial aspect of underwriting The underwriter decides the sufficiency of sum assured on the basis of proponent’s earning capacity. Financial status of the life proposed decides whether he/she is under insured or over insured i.e. very small sum insured as compared to income of Insured is under insurance and very large sum assured as compared to income is over insurance. The under insurance makes the benefits of insurance unattractive and results in discontinuation of policy while over insurance exposes the life proposed to greater death risk because of very high death benefits as compared to his income during his life.

8 WHAT A FIELD UNDERWRITERS DOES? Checks whether a Proposal is complete in all aspects or not Checks whether a Proposal is complete in all aspects or not All the questions are answered honestly All the questions are answered honestly Height & weight are recoded correctly Height & weight are recoded correctly Age is calculated correctly so that premium is correct Age is calculated correctly so that premium is correct Underwriting requirement’s table is checked before submission of proposal form or not Underwriting requirement’s table is checked before submission of proposal form or not Sum assured is proportionate to income of policy holder or not Sum assured is proportionate to income of policy holder or not

9 INSURANCE OF FEMALE LIVES Female lives for the purpose of underwriting are divided into three categories. Female lives for the purpose of underwriting are divided into three categories. Category A Category A Category B Category B Category C Category C

10 CATEGORY A Those females who have independent and self earned income from employment in government departments, school, college, universities, multi-national companies, banks, well established private firms or by practicing as a qualified lawyer, medical practitioner, accountant or owner of business (if actively managed) will be treated at par with males.

11 CATEGORY B Those females who are with independent earned income from business as sleeping business partners, from land, investments, shares, or service in private un-regulated, non-recognized small organizations. Those females who are with independent earned income from business as sleeping business partners, from land, investments, shares, or service in private un-regulated, non-recognized small organizations. No restrictions on plan of insurance, supplementary contracts and sum assured will apply. However, qualifications must be substantiated with proof of source of income. No restrictions on plan of insurance, supplementary contracts and sum assured will apply. However, qualifications must be substantiated with proof of source of income. Full medical and other tests shall apply beyond two lacs sum at risk. Full medical and other tests shall apply beyond two lacs sum at risk.

12 CATEGORY C House wives with no independent earned income, ladies having unsteady income from vocations like tailoring,milk selling, handicrafts, animals and birds breeding, tutoring, etc, fall under this category. House wives with no independent earned income, ladies having unsteady income from vocations like tailoring,milk selling, handicrafts, animals and birds breeding, tutoring, etc, fall under this category. The sum at risk will be restricted to Rs. 500,000- without any rider. The sum at risk will be restricted to Rs. 500,000- without any rider. Full medical report and other tests, Sales Manager, Area Manager’s report shall be required Full medical report and other tests, Sales Manager, Area Manager’s report shall be required