Latest Insurance Interview Questions and Answers
What does ‘Indemnity’ term means?
‘Indemnity’ term in theinsurance is used to cover the loss or damage claimed by another person. For example, the owner of the gym has indemnity insurance to compensate it customers in case of injury or accident and to avoid the financial loss due to a lawsuit.
What is Personal Accident cover? Does it cover anywhere in the world?
Personal Accident Insurance is for your personal vehicle and covers any fatal accidents to you or your family excluding driver. Most of the insurance companies gives coverage anywhere in the world.
What do you mean by ‘insurance coverage’?
The term ‘insurance coverage’ means, when an individual takes an insurance policy the insured will be covered by insurance company for a specific amount for themselves or the things that he had taken the insurance policy, for which he would be paying premiums to the insurance company. The insurance company will pay the insured in case of damage or claims made by the insured according to their ‘insurance coverage’.
What is Paid Value?
The paid value is something, when the insured stops paying the premium but do not withdraw the amount. The sum assured by the insurance company is reduced proportionally depending when insured has stopped paying the premium. You will get the amount at the end of the term.
What do you mean by term ‘Double Indemnity’?
‘Double Indemnity’ is a provision provided by certain insurance companies, where according to their policy they are liable to pay double the face amount in case of death by accidental means or murder. This type of policy does not cover suicide, and death caused by gross negligence of the insured person. For example, a person who dies due to natural causes including heart disease or cancer, Murder or conspiracy by beneficiary, or death due to an injury from sheer negligence.
In what all Instances you cannot claim your Personal Accident Insurance?
1) If your injuries are a result of sickness or disease
2) If your injuries are self-inflicted or attempt to suicide
3) Stress fractures, sprains and strains
4) Injury occurred while committing crime
5) Deliberately cause an car accident
What is a premium’?
It is the amount to be paid for a contract of insurance to the insurance company. It is the sum that a person pays monthly, quarterly or annually according to their plan, in return of the coverage he/she has taken from the insurance company.
Is it advisable to replace the policy with another policy?
If it is not a long duration that you have bought the policy, then you can replace the policy. But in other case it is not advisable as you will lose all the benefits of the previous policy also the premium will go high as you go older. Also, the two-year period of contestability will also begin again.
What is subrogation?
‘Subrogation’ is referred as the process of seeking reimbursement from the responsible party for a claim that they had already paid. For example, you have an accident where your car gets damaged,and you have car insurance, the insurance company will pay you the money. But the insurance company comes to know that the accident occur due to other party fault, now they will claim themoney from the other party this is known as ‘subrogation’.
What is ‘gap insurance’?
‘GAP insurance’ is also known as Guaranteed Auto Protection. It covers the difference between the actual cash value of the vehicle and the balance still owed on financing like loan. GAP insurance amount is generally paid up front.
What do you mean by term ‘Insurer’ and ‘Insured’?
Insured is the one who holds the policy and Insurer is the company that covers the insured.
How to claim the policy?
In order to claim the policy, you have to fill up the claim form and contact your financial advisor from whom you have bought the policy. You have to supplement all the required documents like original payment receipt to your insurance company. If everything is ok, you will be paid within seven days of the policy claimed.
What do you mean by term ‘cash value’?
‘Cash Value’ is the cash amount offered to the policy holder while cancelling the policy, where a portion of thepremium paid goes into saving plan. It is also referred as surrender value. This term is normally used for life Insurance contract.
What is the difference between the ‘single limit liability’ coverage and ‘split liability coverage’?
‘Single limit liability coverage’ covers asingle person for bodily injury and property damage, for instance, in case of accident only single person will be covered no matter how many persons were injured. While, in ‘split liability coverage’each person is covered separately.
Who is the beneficiary?
Beneficiary is the one whom you have nominated for the insured amount in case of your death.
What happens if you fail to make required premium payments?
Usually, Insurance Company gives a grace period of 10-15 days to the insured if they fail to pay the premium before the due date. Further, if you fail to pay a premium, then your policy will lapse. You can revive your policy by paying the outstanding premium along with the interest, counted from the date the policy got lapsed. Different Insurance Company has a different norm for reviving the policy.
However, if your policy is in force for alonger period like say more than2-3 years,and if you fail to pay a premium, then insurance company will deduct the premium amount from your accumulated funds, especially in permanent life insurance. This will continue till there is an available fund after which your policy will be terminated.
What happens to the cash value after the policy is fully paid up?
After the policy is fully paid up, the company plans to use the cash value to pay your premium until you die. If you take the cash value out, the insurer will require you to pay the premium or reduce the amount of the death benefit so the remaining cash value will support.
What is ‘collision coverage’ and ‘comprehensive coverage’ in Auto insurance?
Collision coverage covers when you have a collision with any other object or vehicle while comprehensive coverage covers your vehicle other than collision, when your car is not in use.
What is the contestable period’ in insurance policy?
‘Contestable period’ is usually 1 or 2 years, during which the insurance company holds all the right to investigate the policy and decide whether to pay or not to pay to the insured.
Is it safe to pay the premium through Insurance Agent?
It is safe to pay the premium through your agent as far as you are making the payment through cheques on the name of Insurance Company and receiving all the receipts for the payments.