STATE LIFE UNDERWRITING GUIDELINE 2019
1-WHAT IS SELECTION
Selection is the term used to describe the consideration
given to an application proposal for insurance to determine whether the life proposed
is insurable or not. If
insurable what terms are offered?
The assumption based on mortality and other factors used in setting the premium rates and the sales objectives of the Corporation require that the lives proposed for the insurance be properly screened so that mortality ratio remainswithin the anticipated limits and at the same time sales objectives are met.
2-SUB STANDARD RISKS
The selection process is necessary under the principle that every assured should contribute his/her fair share towards risk involved – only those who are exposed to comparable degree of risk should be placed in the same premium class Those subject to a higher than normal mortality are said to be “Sub- standard” a “impaired” risks as their chances of surviving from year to year are impaired. Such lives are either accepted only with extra premium or with some restrictions, or postponed or declined as the merit of individual case warrants.
Insurable interest is defined as one’s financial interest in the subject matter of insurance. In life insurance, subject matter of insurance is one’s life. Accordingly a creditor has an insurable interest in the debtor’s life to the extent of his debt. A partner has an insurable interest in the life of other partner(s) to the extent of his stake in the business. The proposers in such cases shall be beneficiaries. Unless the beneficiary stands to lose rather than gain by the death of the assured, the insurance contract without adequate insurable interest and insurance without insurable interest is a “mere wager/gamble” prohibited by law.
A person has an unlimited insurable interest in his / her own life but there should be proper relationship between the amount of assurance, probable loss and proposer’s capacity to pay the premiums.
4-CHARACTERISTICS OF INSURABILITY
i. There should exist a possibility of financial loss on the death or disability
of the life proposed.
ii. The proposer / life proposed would not like the loss to occur and me
sentiment or good intentions is bound to do everything possible
avoid and avert the loss.
iii. The quantum of loss is measurable and is well in excess of the proposed cover
iv. The proposer has the capacity to bear the cost of desired cover easily.
v. There is a sufficient number of broadly similar lives, seeking insurance, so as to
allow the law of large numbers to operate.
Absence of first two factors signifies moral hazard which is just un-insurable. The third and fourth factors depend upon the nature and extent of income and financial status of the life proposed as well as of the proposer. They are meant to ensure that in case of a possible claim, no one benefits beyond the insurance cover which partly compensates / replaces the income and / or financial loss.
Reinsurance market insists that financial underwriting is at least as important, if not more, as the medical underwriting. The Federal Ombudsman (Wafaqi Mohtasib) has also taken very serious view of some lapses on this account and on a number of occasions, has directed “greater scrutiny” and checking of the financial status, which should commensurate with the desired insurance.
Hence, while handling proposals with extra ordinary features and / or higher sums at risk, reliable information and evidences be sought to establish income and financial status justifying the desired cover. The Reports submitted by the field personnel must also be first hand reports and not be in retrospect.
The fifth factor refers to the limitation within which an insurer has to operate. There may exist some risk and genuine needs, which may not be insurable just because insurer does not have sufficiently large portfolio of similar risks, insuring one or two uncommon risks in isolation is more akin to gambling rather than insurance.
5-FACTORS INFLUENCING INSURABILITY
i. PROPOSAL FORM
c) Marital status
d) Occupation – Accident & Health Hazards associated with poor environment,
which is usually dependent on occupation.
f) Amount of insurance
h) Avocation / past time
i) Place of residence
ii. MEDICAL EXAMINATION AND DECLARATION
a) Identification of the person to be examined
b) Height, Built, weight and its distribution
c) Family history – the influence of inherited characteristics and
environmental factors contagious infection.
d) Physical conditions or characteristics such as pulse rate, heart sound
blood pressure, condition of lungs and other organs
e) Personal history of illness, ailments / surgeries, accident and resultante
III-REPORT OF MARKETING EXECUTIVES[Including confidential reports of S.M/AM to SH(s) & ZH(s)]
a) Verification of financial worth to prevent speculation.
b) Evidence of Insurability / medical aspects.
c) Moral hazards and anti-selection.
The underwriter must evaluate the proposal form, Medical examination / declaration and agent’s report to determine the “PURPOSE” of insurance and assess the amount of insurance including that already in-force or applied for.
Since the proposal form together with personal statement of health, forms the basis of contract between the proposer and the Corporation where in case of any incorrect or misleading answer(s) no claim would be payable if the policy was issued on the basis of untrue statements(s).
6-OVERWRITTEN AND BLANK COLUMN(S) IN PROPOSAL
To help in underwriting (for fair assessment of the risk) each and every question in proposal form must be clearly answered. Column(s) left blank or marked with dashes, over-writing, erasing, or use of white fluid in any column of the proposal forms are not acceptable. These will entail fresh requirements(s) thereby delaying the process of the proposal and causing inconvenience to the office, field personnel and the proposer. However, any correction made in any column of the proposal form after cutting the original writing under full signatures of the proposer shall be acceptable.
7-DUTY OF MARKETING PERSONNEL
Marketing Personnel are bound to place business with complete disclosure of facts i.e. medical & financial aspects. Any proved falsification, misstatement, concealment in procuring and reporting the business by them will result in strict action that may include their termination / demotion and/or forfeiture of benefits.
8-NOMINATION STATE LIFE UNDERWRITING GUIDELINE 2019
Under the provisions of section 72 of insurance ordinance 2000, the policyhold nominate person (s) whom he / she desires the benefits under his / her pon paid in case of a claim by his/her death. Similarly, the policyholder has got to change or cancel the previous nomination (s) or substitute by a fresh one,naming
person (s) on revised basis according to his / her requirements. This right can be exercised by a policyholder at any time and for as many times as he / she desires provided the policy is in-force but there must exist a definite relationship between assured and the nominee. Preferably a copy of CNIC be obtained and number be mentioned at relevant place in proposal form.
9-GUARDIANSHIP STATE LIFE UNDERWRITING GUIDELINE 2019
Policies affected for the benefit of minor children without appointment of guardian, result into difficulties by the claimant in obtaining guardianship certificate from competent courts. In order to safeguard against such a situation, the appointment of a guardian shall be lawful in light of Section 72 of Insurance Ordinance 2000 and must be insisted at the time of proposal. CNIC number and consent (signature) of guardian in writing are required.
10-ASSIGNMENT STATE LIFE UNDERWRITING GUIDELINE 2019
Assignments conventionally are of two types: absolute and collateral. To protect the assignee fully, written notice must be given to the Corporation. Assignment of a policy whether with or without consideration, may be made only by endorsement upon the policy itself or by a separate instrument, signed in either case, by the assignor and ” duly attested” (means attested in the manner required for financial or future obligations by article 17 of the Qanoon-e-Shahadat order, 1984) specifically setting forth the fact of assignment.
On reassignment it is incumbent on the policyholder to re-designate the nominee, in the absence of which death proceeds become payable only to the “Estate” of the assured.
The underwriter’s freedom to underwrite is paramount. Therefore, the underwriter will have the discretion to decline, reduce or modify the proposal or cut out a rider EVEN if the case appears to be acceptable, if he/she believes that the assurance is excessive in relation to the economic status or otherwise not bona-fide. Similarly, he/she has the discretion to take whatever measures (including asking for further medical / other requirements he / she deems appropriate on medical or occupational or any other ground whatsoever.
12-COMPLETION OF PROPOSAL FORM
1-Proposal form should be filled and signed clearly with one ink and the same pen and in one hand writing preferably in block letters. Proposal forms filled in and signed with different ink & pen should not be entertained.
2-Answer to every question should be simple, clear and free from ambiguities
Answers that tend to create confusion should be avoided. For against the column relating to occupation, words like “Busine should be avoided. Full description of work / duties should be Likewise, the answers should be given in ‘Yes’ or ‘No’ (Dash NA are not acceptable). Column(s) left blank or marked with overwriting, erasing, or use of white fluid in any column of the forms are not acceptable. These will entails fresh requirement(s) the delaying the process of the process of the proposal and cu inconvenience to the office, field personnel and the proposer. However any correction made in any column of the proposal form after cutting
original writing under full signatures of the proposer shall be acceptable
3-Every proposal form must accompany an attested and self-attested Photocopy of documents as a proof of identity and age. No policy shall be issued without age admission. A rubber stamp reading “ONLY FOR LIFE INSURANCE” he
affixed on the copy of CNIC.
4- Complete names and codes of the field channel should be written on proposal
forms. In no case, subsequent change (s) be allowed, unless it is proved documentary that it happened by mistake.
5-A non-medical proposal form preferably be used where the proposer qualifies for non-medical scheme and likewise a medical proposal form for a case
falling under medical scheme.
6- All Photostat copies of CNIC & documents submitted by the applicant must
bear his/her signature also; apart from attestation by authorized
7-It shall be ensured to obtain the Mobile/cell number/e-mail addresses of the proposer and incorporated in the system for ready communication.
8-Copies of documents, signatures and thumb impressions should be attested/verified by the Area Manager or eligible Sales Manager. Such attestation will be assumed to have been made after the attesting officer has seen the genuine, original documents and signatures or thumb impressions
affixed before him. Any excuse in “good faith” is not acceptable.
9-. Where the nominee is a minor, a guardian should be named with his/her CNIC
number in the proposal form who must also affix his / her signature / thumb
impression in the relevant spaces. .
10- Thumb impression should be clear, neat and be affixed with the help of a stamp pad. In exceptional circumstances, where stamp pad is not available, any other ink may be used in a manner so that grooves of the thumb are
clearly seen in the impression.
11- In case, signatures of the proposer on proposal form, CNIC and on
documents differ, the concerned Area Manager / Sector Head should cerm those under his / her signature and official stamp with the following words “I identify Mr.————————as proposer under proposal No.—————————–\holder of policy No.——————————- and certify that he/she has signed the proposal form — ————————–personal statement—————- — declaration of good health before me”.
Preferably, the pre-printed proforma (NB-58) for the purpose be used.
12-Proposals of life assurance from retired defense personnel, should always, preferably carry a self-attested copy of discharge certificate of service book in which medical category of life proposed assured is clearly mentioned.
13-If answer relating to supplementary contracts at the proposal form, is first ticked and then crossed out or deleted, a confirmation in writing from the proposer would be sought preferably on Amendment Form. Alteration of any kind must be avoided. A straight line should cross out the questions other than those ticked.
14- If the assured affixes his / her thumb impressions the vernacular declaration must also be signed by the same person who is witnessing the proposal.
15-If a Non-Medical Proposal is procured from outside of Pakistan, it shall either be witnessed by the respective Consulate Office of Pakistan/Kafeel/HR Department of the Employer (in case of well-established Firm), by authorized Notary Public Office or by an Agent/Employer of Agent of State Life accompanied by a copy of Passport of showing his/her presence in business procuring country.
16-Full details of previous policies/proposals must be given in reply to the question asked in proposal form. Same must be counter-checked with Policy Indexing data.
17- If more than one proposal forms are simultaneously submitted on one life, it is necessary to cross reference of all proposals. Also apart from all the due requirements a separate personal statement duly completed (in original) must be submitted, for each submitted proposal. Photocopies are not acceptable.
18-A proposal under GPF or salary saving scheme must accompany a Photocopy of CNIC duly attested by an authorized officer of the proposer’s organization. Also, detailed statement of accounts on the letter head of that organization duly signed by its authorized officer accompanies the cheque. The cheque amount shall not be accepted without such a list. The list on simple paper shall not be accepted. In case of Provident Fund (PF) cases the regulatory provision regarding illustration shall be ensured to be followed.
19-Where medical / clinical reports have been called free of cost, the proposer should be asked to attached with the proposal form, relevant receipt (s) obtained from the doctor / laboratory as proof of having the payment made.
20-Any additional medical requirements called for by the underwriter (other than the due requirements) shall be done at the proponent’s own cost.
21`-Reconsideration of Deferred or declined cases: No fresh medical / clinical tests should be arranged in deferred / decline cases, unless permission for the same has been obtained from Functional Head of New Business Department. Similarly, medical examinations / clinical tested should not be arranged on the lives falling in non-medical scheme unless specifically asked in writing by the underwriter. Otherwise, the cost in all such cases shall be debited to the concerned field channel. Reasons for such uncalled for examinations will be called by the Underwriter.
22-No proposal form, amendment form, personal statement, DGH or any other form shall be accepted unless the signature / thumb impression by the proposer, or attesting officer, bear the date under his / her signature or in the columns provided for.
23-While completing agent’s / filed officer’s confidential report at the end of the proposal form or a separate confidential report by those higher ups in the channel, utmost care must be exercised to extract and report true state of affairs in response to each question, after making necessary inquiries / investigations. While undertaking the risk, underwriter assumes that the reporting official has given the report after making such inquiry
24-instead of usual procedure of calling random medical reports in non-medical scheme below mentioned addition would also be required: The field worker knows the proponent for less than 6 (six) months then invariably call for MR.
25- Underwriting instructions regarding treatment of expired CNIC (Reference CIR/PO/14/2012) dated 27th December 2012.
Minimum age at entry is 18 years.
Lives between the ages of exact 18 years and nearest birthday 19 years may be
entertained at the rate of premium chargeable for age 20 years. Maximum age at entry (Exact age)
|Standard lives||Normal condition|
|Substandard lives||Normal condition|
14.SPECIAL CONDITIONS MEAN:
1-Where all examination and tests have been conducted by the most reliable examiner, laboratories etc. of the area named by the underwriter and under the supervision of senior field personnel with minimum routine requirements of MR, PUR, Chest X-Ray, ECG, and BS, including SGPT.
2-The underwriter may call for any additional medical requirement deemed necessary for the assessment of the risk.
3-The cost of MR and PUR will be borne by State Life. The cost of Chest X-ray ECG,BS and other medical requirements shall be borne by the proposer, which will be reimbursed only if proposal is completed for a sum assured of Rs.250,000/- or more:
15. MINOR LIVES
All persons below the age of 18 years (.e. before reaching their 18th birthday) come under the category of Minor Lives may be entertained within the following rules:
1-Available tables and age limitations.
|TABLE||AGE NEAREST BIRTHDAY AT ENTRY|
|01||01 YEARS||BELOW 18 YEARS|
|03||01 YEARS||BELOW 18 YEARS|
|07||01 YEARS||15 YEARS|
2-Only first class standard lives be entertained, no sub-standard life be permitted
. 3-Preferably real father or mother should propose for assurance of children.
4-The proposer under table 01/03/05 should have existing assurance on his/ her own life for double the sum proposed on minor life unless he/ she is proved un-insurable.
.5- There should be a balanced assurance programe for the family e.g. all
insurable brothers/sisters are insured for an equal amount instead of singling out any one child unless there are legitimate reasons for such a preference, and the underwriters have an opportunity to satisfy him/her-self through
necessary investigations.STATE LIFE UNDERWRITING GUIDELINE 2019
6- Maximum sum assured available to a minor life below 10 years is 1.0 million
and below the 18 years is Rs. 2.0 million, may be considered by fulfilling all due requirements. For further consideration regarding enhancement of Sum Assured cases may be referred to PHS (PO) after compliance of all due
requirements.STATE LIFE UNDERWRITING GUIDELINE 2019
7-Financial status of the proposer shall have to be established.
8-Non-Medical Scheme is not available for minor lives applying for a separate insurance policy. For children aged 10 years (nearest birthday) and above, minimum requirement will be a full medical report by an authorized medical examiner except up to sum assured 200,000 under plan 03/05/07. Beyond sum assured 200,000 a juvenile medical report shall be required for children aged 10years or below and for children aged more than 10 years a Medical
Report shall be required.
9-. Definite and authentic age proof of the minor life must be furnished with the proposal.
10- ADB Supplementary Contract can be allowed if desired, at the age of five years or more, to the child.
11-GI Rider can be issued if desired on minor lives, who have birthday.
12-Underwriter shall satisfy him/ herself about the existence of the income to continue payment of premium in the absence of payer Working minors are strictly prohibited.
16-NON MEDICAL SCHEME STATE LIFE UNDERWRITING GUIDELINE 2019
1-Non-medical Scheme applies to all lives proposed except where otherwise provided in minor lives and female lives’ rules.
2-As a part of routine study, the underwriter should have a random medical check of approximately one-tenth of non-medical cases, and arrange physical investigation of medical and non-medical cases of at least 3% of cases of each area and the findings be reported to concerned Zonal Head and Regional In-charge-PHS under intimation to Divisional Head (PHS), Principal Office, on monthly basis.
3- Besides calling for a medical report as a random check, the underwriter may call for medical examinations under supervision in cases of doubtful nature or where unfavorable features are involved.
4- Lives aged below 18 years (Except as at para viii of Minor Life) & above fifty five (55) years will always be medically examined.
5- Flight Crew would mean only Pilots, Co-Pilots, Flight Engineers, Navigators etc. but not Air Hostesses, Stewards, Pursers etc.
6-Self-attested copy of CNIC of proponent duly verified by the concerned SM/AM for identification purposes must accompany with the proposal.
7-A non-medical proposal will be processed only if accompanied with full premium. This condition will not apply if the policy is to be financed through Provident Fund but NTU Fee of Rs.500/- will be charged if such a proposal remains incomplete after 3 months. If a proposal is submitted without full premium deposit, the same may be processed at the request and on written undertaking by the Sales Representative that Not Taken Up Fee of Rs. 500/may be charged to his account if the case remains incomplete after 3 months apart from all medical expenses incurred on proposal. If it could not be recovered from Sales Representative then it should be recovered from Sales Executives and/ or Sales Manager.
9-FIB may be allowed up-to 50 percent of the sum assured of basic policy, subject to a maximum of 60 percent of steady yearly earned Income. If FIB exceeds 25 percent, the commuted value of whole of FIB will be accounted for in calculation of Total Sum at Risk.
10- SWP may be allowed up-to half of the relevant Non-Medical Limit .
11-The additional requirements for substandard lives will be determined on case to case basis by the underwriter.
12-For lives below the age of 18 years, reference be made to Minor Lives Insurance Guidelines.
13-The limits indicated will embrace all in-force policies proposed within last three years
17. DETERMINATION OF ROUTINE UNDERWRITING REQUIREMENTS
Routine underwriting requirements shall be determined on the basis of SAR (Sum at Risk), which includes:
1-Sum Assured desired under the basic policy.
2- Commuted Value of entire FIB, if proposed in excess of 25% of the basic sum assured. Corresponding concession shall be available to Child Protection and Child Education & Marriage Plan, which have an in-built 10% and 24% FIB respectively. Total FIB on a life should not exceed 60 percent of approximate steady annual income.
For example, under a 20 years Endowment for Rs. 300,000/- with AIB and FIB of Rs. 30,000 per annum (10%). The TSAR for underwriting requirements purpose will be Rs. 300,000/-. However, if the amount of FIB is increased to Rs. 90,000/- per annum (30%). TSAR for underwriting purpose under this policy will be as follows:
|COMMUTED VALUE UNDER FIB 90,000*11.78||1,060,200/-|
|TSAR FOR UNDERWRITING REQUIREMENT PURPOSE||1,060,200/-|
3-Sum Assured under Term Insurance Rider and /or GI Rider,
4-if desired. 50% of Sum Assured, if R.P.R is desired.
5- Total Sum at Risk under all existing policy (ies) with the Corporation (including FIB & T.I.R etc. if attached). For determining the medical requirements, the Total Sum at Risk under all such policies on the same life. which were issued three or more years before the date of new proposal will not be taken into consideration. For instance, for a policy applied for on January 1, 2017, policies issued before January 1, 2014, will not be taken into account for determining the Total Sum at Risk.
6-One and a half times of sum assured will be taken as a Underwriting purpose, under Muhafiz Plus plan (Table -78) Refund of Premium Supplementary Contract, similarly under Shar (Table -36) double of the sum assured shall be taken into account .
7-In substandard cases, the additional medical requirements determined by the underwriter on individual merits.
8- ADB, AIB & WP Supplementary contracts will not be taken into account for this purpose.
18.SUM AT RISK FOR REINSURANCE PURPOSES
Sum at risk for Reinsurance purposes includes:STATE LIFE UNDERWRITING GUIDELINE 2019
1-Basic sum assured
3-FIB (including in-built and Supplementary Contract). Please note that whole amount of FIB is ceded to the Reinsurer.
4- In-built fixed period income in Muhafiz Plus Plan.
5- Sum at Risk of all previous inforce policies irrespective of period of issue.
6-If under previous policy FIB is attached, whether as in-built or supplementary rider the commuted value shall be worked up on the basis of factor for remaining term.
If sum at risk on the basis of above calculation exceeds the retention limit of Rs. 5,000,000/- then the excess amount will be ceded and all underwriting requirement will be based on the total sum at risk.
Example of sum at risk for Reinsurance purposes is given below:
|SUM ASSURED||RS 10,00,000/-|
|SUPPLEMENTARY CONTRACTS||AIB FIB 15%20 YEARS TIR ONE TIME|
|TABLE & TERM||03/20|
|PREVIOUS POLICIES||RS 800,000/ (ISSUED IN 2010 WITHOUT RIDER)|
RS 600,000/(ISSUED IN 2011 WITH AIB)
Previous Policies = 800,000 + 600,000 = 1,400,000
SUM at Risk for Reinsurance = 3,767,000 + 1,400,000 = 5,167,000/=
Underwriting requirements shall be based on Rs. 5,167,000/
19- COMMUTED VALUE FOR FIB RIDER OF RE.1/-PER ANNUM
|TERM OF FIB||FACTOR||TERM OF FIB||FACTOR||TERM OF FIB||FACTOR|
N.B.This chart is exclusively for determine the SAR for medical and reinsurance purposes.
20-PROPOSER’S SIGNATURES ON DOCUMENTS SUBMITTED WITH THE PROPOSAL
All documents in support of financial status, photocopies of age proof and identification, medical reports etc. must bear the proposer’s signatures and submitted duty attested by the authorized Sales Managers and above. The underwriter has the discretion to call for the originals to compare them with the copies submitted
21-GUIDELINES REGARDING MEDICAL EXAMINATIONS
1-Services of only authorized medical examiners and clinics should be availed for the purpose of medical examination/reports and in no case, unauthorized doctor / clinics be approached for the purpose. Also, remember that no female doctor is allowed to examine male lives proposed. 2-No reimbursement will be made for utilizing the doctor/clinics not on our panel unless the prior permission under specific circumstances has been obtained from Functional Head (New Business)/Underwriter.
3-A Proposer should be taken for medical examination only to the authorized examiner in the proposer’s own locality, unless necessitated and explains otherwise
4-Medical examination should be carried out only at the doctor’s clinic Medical examination of the proposer at his residence, office or at any place other than the consulting room or dispensary of the medical examiner would not be permitted
6-A lady doctor should not be asked under any circumstances to examine a male life. Such reports will not be accepted and no fees will be paid thereon.
7-In case of medical examination on the field personnel’s own life, the underwriter shall decide by which examiner he is to be examined.
8- Medical reports from a medical examiner shall not be accepted in cases where:
a) He is related to any member of field related channel:
b) He has financial interest in the case beyond his medical fees:
c) The proposer or agent is his employer, employee, or immediate colleague in service.
9-The medical examiners should be instructed to forward the reports when completed, direct to the concerned underwriting department of the corporation under sealed envelope.
10-The abbreviations used for medical/clinical examinations in this underwriting guideline stand for the following:
(a) MR—– Medical Report by an authorized examiner with appropriate
(b) PUR—–Pathological Urinalysis report
(c) ECG—–Electro Cardiogram at rest (12 leads)
(d) Ex-ECG-Electro Cardiogram after exercise with Double Master’s
Exercise Test on Swiss Re Pattern
(e) BS —— Blood Studies (CBC, ESR, FBS) Cholesterol, Blood Urea.
(f) HIV —-Human Immune Deficiency Virus Antibody Test
(g) LFTS —-Liver Function Test, Bilirubin (Total, direct, Indirect) Gamma
GT, ALT, AST, Alkaline phosphatase.
(h) SGPT/ALT —- Serum glutamic pyruvic transaminase
(1) Lipid Profile — total cholesterol, high-density lipoprotein (HDL) cholesterol
triglycerides, and the calculated low-density lipoprotein (LDL cholesterol
j)HBsAg —- surface antigen of the hepatitis B virus
(k) Anti-HCV — the Hepatitis C Antibody Test
22.-MEDICAL EXAMINATIONS OF SUBSEQUENT PROPOSALS
Report and PUR remains in force for six months and all other tests one year. Further proposals within the medical examiner’s limit can
A Standard Medical Report and PUR remain in force for one year. Further proposal with in medical examiner,s limit can be entertained during that period for standard lives. Other medical tests remain valid for one year if standard in nature.
23.GUIDELINES REGARDING SPECIAL MEDICAL EXAMINATIONS
In case of certain proposals, depending upon the age, sum assured and adverse features in the family history, personal history or medical reports, special medical reports may be necessary in addition to the usual routine medical reports. It should be noted that the underwriter has discretion to call for such or other additional special medical reports if the special circumstances of any particular case warrants the need of such reports.
24. MEDICAL EXAMINATION OF FEMALE LIVES
Female lives should be examined only by appointed lady doctors or by male gynecologists authorized to examine ladies. However, male medical examiners may examine the female lives with sum assured up-to Rs. 500,000/-, provided the female life has no objection to that effect. The NOC shall be in writing and attached with the proposal.
A policy may be backdated for a period not exceeding six months, provided:
(a) Proposer sends a separately signed request specifying the desired date of
(b) Full late fee is paid at the current rate; if the back dating period stretches
back beyond 15 days. However, no backdating fee will be charged for three (3) months of the backdating on cases issued in June and December
2- In order to remove any possible doubt, It is clarified that though as a matter
of practice, the date of issue of a letter of acceptance or the date of receipt of full premium is taken as the date of commencement, yet for the purpose of backdating, the request to commence the policy from a date prior to the Date of Proposal will be considered as backdating and the period of backdating will be equal to the difference between the Dates of Receipt of proposal ( in New Business) and Date of Commencement, if earlier
3-In the event of backdating, the medical requirements shall be based age attained on the date of receipt of proposal, as well as Mortalin shall be charged at attained age.
4-Backdating is not allowed even for a day in N.D Scheme exe December closing. Where instructions contained in circular PHS/PO/24/2014 be followed.
26. MINIMUM PREMIUM
In view of the cost involved in the issuance of receipt and maintenance of accounts and realizing the fact that policies with greater frequency and lesser amount of premium are more prone to lapse, the minimum acceptable installment of premium with yearly mode of payment is Rs. 9,000/= while other than yearly mode is Rs 7,500/=.
27-INSURANCE OF FEMALE LIVES.
Insurance will be available to female lives as per following categorization:
Category A:STATE LIFE UNDERWRITING GUIDELINE 2019
This category includes females who have been an independent and self-earned income from employment in government departments, reputable schools, colleges, universities, multi-national companies, banks, well established private firms or by practicing as a qualified lawyer, qualified medical practitioner, qualified accountant or owner of business (if actively managed by her) should be treated at par with males. Qualifications must normally be substantiated with proof of vocation.
Category B.STATE LIFE UNDERWRITING GUIDELINE 2019
This category includes females who have an independent earned income form business as sleeping business partners (or not actively engaged), from land, investments, shares, or service in private un-regulated, non-recognized organizations. No restriction to plan of insurance, supplementary contracts and su assured would apply. However, qualifications must normally be substantiate proof of source of income. Health requirements are to be treated at par with males upto 10 lac sum at risk. Medical Reports / Other tests shall apply beyond (10) Lac at risk.
Category C STATE LIFE UNDERWRITING GUIDELINE 2019
Housewives and others with no independent earned income, ladies having unsteady source of income from vocation like tailoring, handicrafts, milk selling, animals & birds breeding, tutoring, working in unregulated Madrassa’s or small low lines school/institutions etc., fall under this category. Medical Report/ Other tests, Sales Manager/ Area Manager’s Report shall be required and the sum at risk will be restricted to (01) Million without any rider.
In case of housewives in table 19 following provisions shall apply:
House-wives at least matric.
Treat at par with males without any rider. Medical report by a lady doctor and other tests etc., applicable, and proof of education is required.
Under-matric (including Illiterate) housewives.
Policies without any rider on female lives up-to 1 million Sum Assured may be entertained provided medical on female life is conducted by a lady doctor and Sales Manager / Area Manager’s satisfactory report is submitted. In case of illiterate proponent, Sector Head’s separate satisfactory moral hazard exclusion report will be required. However, the underwriter should be more vigilant while underwriting such cases.
Equivalent insurance STATE LIFE UNDERWRITING GUIDELINE 2019
Insurance equal to the insurance of husband can be given to married ladies, which fall under the category “C” (inclusive literate and illiterate) as per other conditions illustrated at category “C”.
House wives or females having no steady income should be considered in the light of laid down female rules. However, annual premium of a housewife should not exceed 8% of her husband’s annual income.
28- GENERAL CONDITIONS
i. The standard female lives’ proposals will be accepted at a lower premium rate
2- If a lady proposed is pregnant, pregnancy exclusion clause till 03 months after termination of pregnancy will be applied from the date of issue. Consent of the proposer should be obtained in writing. Endorsement should also be made on policy documents / Schedule.
3-In Jeevan Sathi policies, if female life is pregnant but otherwise insurable, joint life policy may be deferred until three months after termination of pregnancy. In the meantime, a single life policy may be issued on male life. The single life policy may be converted to a joint life policy, such as table 19, three months after the termination of pregnancy after completing medical requirements if any.
4-All riders will be available to female lives in A & B category on the same terms as for males. Where the SWP is desired, the premium will be charged at double the rate of males.
5-Sub-standard lives will be acceptable subject to appropriate rating. Concession of two years in age will not be allowed to sub-standard lives and for H&S rider
6- Other terms and conditions will be the same as for male lives.
29.N.D POLICIES TO FEMALE LIVES:
ND policies to female lives under the category ‘A’, ‘B’ & ‘C’ are available.
30.DISCOUNT IN AGE:
Two years’ discount in age is permissible to adult standard life females only. For the purposes of premium calculation, following points will apply.
1-. Actual age will be shown in proposal form and policy schedule.
Two years age discount (rate down) will be given for premium calculation only.
2-. Two years’ age discount (rate down) will not apply for H&S and SWP riders
and SWP premium rate will be charged at double the male rate.
3-Where tabular rate is minimum 20 years the minimum rate will apply even if a female is 21 years or less.
4- Under Child Protection Plan, two years’ age discount (rate down) will apply to female payers only and not to female child.
5-Under table 17, age discount (rate down) will apply both to determine term of insurance and rated down age for premium rate. Please see the following illustration:
|Actual age &term applied for||Rated down age &term for insurance applicable||premium|
|30 years /40 years||28 years /40 years||RS.26.40|
|35 years / 35 years||33 years /37 years||RS 29.28|
|MALE LIFE||FEMALE LIFE||DIFFERENCE IN AGE||DEDUCT FORM THE AGE OF OLDER LIFE|
|ACTUAL AGE||REDUCED AGE|
|40 YEARS||35 YEARS||33 YEARS||7 YEARS||3 YEARS|
|35 YEARS||32 YEARS||30 YEARS||5 YEARS||2 YEARS|
7-If initial age of a female is higher than the maximum permitted under the table, she can’t get the benefit of two years’ age discount (rate down) merely to get benefit of the Table.
Moral hazard and other related risks loom large in cases of illiterate lives. This entails a greater responsibility on the agent, as he/she must exercise great care in selecting illiterate lives.
All information on proposal form should be truly mentioned in regard to medical and financial aspects.
Thumb impression of the life proposed on proposal form should be attested by the Sales Manager. Thumb impressions wherever required should carefully be affixed with the help of a stamp pad, so as to ensure that thumb grooves are seen distinctly and tally with those on the CNIC.
32-AGE PROOF STATE LIFE UNDERWRITING GUIDELINE 2019
Each policy issued by “State Life “carries a stipulation that no benefits will be payable unless the age of the assured is admitted. Hence, the Age proof should be obtained with the proposal and no policy should be issued unless satisfactory age proof is made available.
a) For standard adult lives below 60 years and substandard lives below 55 years
of age, following documents listed in order of preference may be entertained as age proof.
1-Computerized National Identity Card issued by NADRA is invariably required with every proposal for identification purposes and it should as such also be accepted as evidence of age that should be self-attested/and verified by the field personnel.
2-Certificate of qualifications or a certified extract from the records of , Board of Secondary & Higher Education / University, if the date of birth is stated therein.
3-. Certified extract from Government records such as Service Book civil list
etc. or from the service records of autonomous bodies, local bodies semi government institutions etc.
4-Domicile and FRC (Family Registration Certificate ) or nationality certificate if it bears the date of birth, issued by the competent govern authority/ies.
Passport issued at least 1 year ago.
6- Any other document like driving license, Government permit or licen
bearing age or date of birth, which was issued at least two or more year
before the date of proposal.
STATE LIFE UNDERWRITING GUIDELINE 2019 Notes:
A.- For minor lives, their registration number with NADRA along with
certificate, school certificate etc. may be considered as age proof
B- For standard lives of 60 years or over and substandard lives of 55 year or over, documents listed at 1 to 3 would preferably be acceptable.
C. -Documents in evidence of age should normally be submitted in original,
These will be returned after scrutiny, if however, a photostate of true copy is submitted, it must bear signature/thumb print of the proponent
and attested by an authorized personnel of State Life,
D.- Any such document as Domicile Certificate, Passport, Identity Card etc.Issued within one year before the date of proposal or sub-sequent to that day, require extra care and caution but may be accepted at the
discretion of the Underwriter, if age is verified by the Sector Head.
E.- If a document bears the year of birth without the date and month, 1
January of that year will be assumed as the date of birth.
33-FINANCIAL STATE LIFE UNDERWRITING GUIDELINE 2019
While underwriting a proposal, underwriter has to take into consideration the AMOUNT OF INSURANCE payable on death of the assured in comparison with the possible LOSS OF INCOME which would otherwise be suffered by the legal haire ON death of the life assured Good Forbid). Aspect of Anti-Money Laundering/CFT shall be check before as policy matter of the corporation.
34. GENERAL STATE LIFE UNDERWRITING GUIDELINE 2019
1-Financial worth of a proposer should commensurate with the T.S.A.R Which includes Sum Assured + FIB + T.I.R + S.W.P + R.P.R and T.S.A.R (reserved) on previous policies.
2-Annual premium of present proposal and previous should not preferably be more than 20% of a proponent’s annual income. Otherwise, check the possibility of moral hazard and over-insurance. Such cases should be referred to Zonal Underwriting Committee to eliminate the above aspect. However, possibility of understating the income should be kept in mind while underwriting such cases.
3-AIB cover should not be more than three times of the proponent’s annual income and be according to Sum Assured. Maximum accident cover available under AIB / ADB under single life is Rupees10 Million.
4- Cases up-to five (5) Lacs TSAR may be accepted on Sales representatives report and witness. Cases up-to ten (10) Lacs TSAR may be accepted on Sales Representative’s report duly witnessed by the Sales Executive/Senior Sales Executive/Sales Manager.
5- It is preferred to have documentary evidence of financial worth in all cases exceeding Rs. 10 Lacs (Total Sum at Risk), including Sum Assured + FIB (Above 25%) + TIR +RPR + TSAR of previous policies. However, if concerned Sales Manager complete the agent’s confidential report on proposal form then the documentary evidence of income may not be insisted unless
a. the TSAR is up to 10.LAC and Sales Manager’s Confidential Report on
prescribed proforma duly verified by the Area Manager is submitted.
b. The TSAR is up-to Rs. 25 Lacs and the Sales Manager’s confidential report
on prescribed Performa duly verified by the Area Manager is submitted.
C. Where the TSAR exceeds Rs. 25 Lacs but is below Rs. 50 Lacs, the Area
Manager should give a separate Confidential Report on prescribed
proforma duly verified by the Sector Head.
d. Where TSAR is between Rs. 50 to Rs. 75 Lacs, the Sector Head should
give Confidential Report on prescribed proforma. However, the cases of TSAR over Rs. 75 Lacs up-to Rs. 1 Crore may be accepted on Sector Heads Report duly verified by the Zonal Head.
e. Where TSAR is over Rs. 1 Crore, all other due requirements including following are to be furnished:
i. Independent Confidential report by the Zonal Head on the format
(Reports based on telephonic discussion and reference will not be
ii. Swiss Re financial Questionnaire form.
III. Direct evidence of income OR financial worth justifying the cover
In order to keep a check/control over the legitimacy of Confidential Reports submitted by the procuring channel up-to Sector Heads, 10% of the submitted reports must be counter checked / confirmed by the Zonal Head. A comprehensive report regarding ‘authenticity of reports should be submitted to Divisional Head (Marketing) and Divisional Head (PHS) on monthly basis by the Zonal Head. This activity be made a part of monthly MIS by New Business Department.
STATE LIFE UNDERWRITING GUIDELINE 2019 NOTE
1-Non-medical cases where the field officer’s report has been completed by newly promoted employer of the agent need to be underwritten cautiously. 2-A random check through inquiry by the underwriter may be made to verify the authenticity of the financial worth as reported in the Confidential Reports, either before or after issuance of the policy, and any material variation should be reported to Zonal Head for necessary action.
35-AMENDMENTS TO PROPOSAL FORM
Whenever any change is desired before issuance of a policy, an amendment form (Annexure A), stating the full particulars of the change duly signed by the Life Proposed and the proposer in the same form and style as on the original proposal be obtained. The amendment may be allowed if it is in conformity with the underwriting rules.
If a proposal has not been resulted into a policy for any reason within six (6) months of the date of receipt (in any Underwriting Department) of that proposal and fresh proposal(s) is / are received on the same life under agencies other than those in which the first proposal was received, it/ these will be dealt with as under:
i. If the Sum Assured and F.Y.P given in subsequent proposal(s) is equal to or less
than those given in the 1“ proposal when submitted, then full credit on completion thereof will be given to the Sales Representative who secured the first proposal.
2-If the Sum Assured and F.Y.P given in subsequent proposal(s) is more than that given in the first proposal, the credit on completion will be given to the sales representative whose first proposal was received, to the extent of the sum assured and F.Y.P shown in the first proposal. For the balance, if any, credit will be given to the sales representative(s) who submitted subsequent proposal(s).
3-It may be clarified that any amendment(s) received on the first proposal with regard to sum assured or F.Y.P before the receipt of 2nd or subsequent proposals will not be taken into consideration while sharing the credit and the sum assured and the F.Y.P shown in the first proposal when received in the underwriting department as described hereafter.
(a) NON MEDICAL STATE LIFE UNDERWRITING GUIDELINE 2019
The priority of submission of proposal under Non-Medical scheme shall be determined on the basis of the date on which the proposal form and personal statement completed in all respects along with the payment of first premium in full, was received by the underwriting department. However, in case, the policy is to be financed out of G.P Fund (where it is not necessary that the full first premium be deposited with the proposal) the right for credit of the first securing agent shall stand till the validity of letter of acceptance.
(b) Medical STATE LIFE UNDERWRITING GUIDELINE 2019
The priority of submission of proposal shall be determined on the basis of date on which the proposal form completed in all respects with the medical reports and other routine medical requirements as per underwriting rules, is received in the respective underwriting department.
37-PAYMENTS OF OUTSTANDING PREMIUMS
If New Proposal is submitted and premium of any previous policy (ies) are due, the new case may be entertained subject to payment/realization of outstanding premiums under previous policy (ies).
38-INCOMPLETE OR CANCELLED PROPOSALS
If a proposal is not finalized into a policy within six months of its proposal date, it may be filed as a “not taken up case”. Not Taken Up fee equal to full medical expenses or Rs. 500/- whichever is higher, will be realized from the deposit on the proposal. If there was no deposit, it will be debited to and recovered from the account of concerned sales representative.
Not taken up fee will not be charged, where:
1-Some additional medical requirements such as X-rays, ECG, etc. were called at the
proposer’s own cost;
2- The case has been counter offered with extra premium or lien.
3-The proposal is postponed or declined. However, if there was declinature or postponement and the fresh medical was arranged permission of the underwriter, the concession will not apply:
4-Under non-medical proposals, if the sales representative could be premium, acceptance letter may be issued at his/her request undertaking that Not-taken Up fee of Rs. 500/- may be charged if + remains incomplete after three months.
39-PREVIOUSLY DECLINED OR POSTPONED CASES
If the life proposed has ever been declined or refused insurance, permanently or temporarily, the sales representative while soliciting his fresh proposal should:
i. Ensure that a period of at least one year has elapsed since the declinature and the specified period of postponement has been completed.
ii. Get only proposal and personal statement completed;
iii. Obtain full detail of all previous proposals / policies. If necessary, a separate
note may be obtained from the life proposed;
iv. Submit the proposal and personal statement along with complete details of all
previous proposals/ policies to underwriting Department;
V. Not arrange any medical examination without the advice of the underwriter.
vi. The medical and other requirements will be quoted by underwriting department after assessment of the facts given in the proposal and the personal statement.
40- CHANGE OF AGENCY IN POSTPONED CASES:
In a postponed case, if the requirements are not furnished within two months of the expiry of postponement period, fresh proposal in a different agency may be entertained.
Cost of all medical examinations/tests arranged without prior permission will be realized from the deposit if any, or recovered from the Sales Representative’s account unless the proposal results in a policy justifying all such requirements.
41-ACCEPTANCE WITH EXTRA
When it is necessary to levy extra premium or lien of Standardized Physical extra following requirements be called for:
1-An acceptance letter (two copies) be issued by New Business Department. Consent of the proposer on the prescribed format signed by the proposer in the same form and style as on the original proposal form.
2-Declaration of Good Health signed by the proposer in the same form and style as on the original proposal form after 31 days of last declaration.
unless these requirements are submitted and found satisfactory, the policy will not be issued even if the balance of premium is received.
42-SURRENDER/PAID-UP/FORFEITURE/LAPSED OF OLD POLICIES
if previous policy/policies on the same life has/ have been converted into paid up. surrendered lapsed or forfeited under the non-forfeiture provisions of the policy/policies, within a period of 12 months before and after the selling of a new policy, no commission or over riding commission etc., will be payable to any field worker to the extent of the premium applicable to the Lapsed/ Surrendered/ Auto paid-up/ auto- surrendered of policy/ies, where the commission has been paid on such a policy/ies, it will be recovered from the field worker concerned in lump sum as soon as the irregularity is detected.
The commission and over-riding commission etc., on the new policy will not be payable, in case it is financed by surrendering a paid-up policy even if it was converted to paid-up insurance more than 12 months ago
43-PREVIOUS LAPSED/AUTO PAID-UP AND AUTO SURRENDERED POLICIES
If previous policies are in lapsed, auto paid-up or auto surrendered condition for less than five years, then the proposer should be insisted upon to revive/reinstate the previous policy/ies, before issuance of the new policy
Issuance of a new policy may be considered after reinstatement / revival of lapsed policy/ies unless the proposer could establish that there is any concrete reason to purchase a new policy and losing the benefits of previous policy, to the satisfaction of Zonal Underwriting Committee
44-POLICIES UNDER THE PROVISIONS OF THE MARRIED WOMEN’S PROPERTY ACT 1874
Policies under Section 6 of the MWP Act 1874 can be issued to the male lives only for the absolute benefit of their wives or children.
A MWPA Declaration should be submitted along with the proposal form. In column meant for nomination on the proposal form, instead of writing the name of the nominee(s) under Section 72 of the insurance Ordinance 2000, the words “Under Married Women’s Property Act 1874” should be written
A female can effect a policy under Section 5 of the MWP Act on her life or of her husband for her own benefit in the ordinary manner.
45-REVIVAL/RE-INSTATEMENT OF POLICIES:
A policy may be revived or reinstated within five years of lapsation, auto surrend auto paid-up date. In special cases, where policy remains auto surrendered or paid for more than five years consideration for revival/reinstatement may be given suhi to the condition that remaining term to maturity will not be less than ten years.
Important points for revival/re-instate;
1-All underwriting requirements while considering revival or reinstatement should be based on attained age and sum assured.
2- If policy is rated-up at the time of revival then extra mortality shall also be calculated on current age. Extra premium will be charged from the current due premium and not on arrears of premiums.
3-Functional Head PHS department can approve DGH/Non-Medical Application for revival/reinstatement to conserve the business without any limit.
4-All cases involving medical consideration invariably be referred to CMA/authorized underwriter of New Business Department for underwriting opinion before forwarding it to Functional Head (PHS) for further process.
5-Requirements under an auto paid up policy should be based on the difference between total sum at risk and the paid up value before reinstatement of original sum assured and benefits.
6-If female life is pregnant at the time of revival/reinstatement of policy then it may be revived/reinstated subject to pregnancy exclusion clause under 03 05 & 06 whereas cases under Table 19 be deferred.
7-Premium of AIB/ ADB/ TIR for the period under which policy remained lapsed or Auto-Surrendered or Auto Paid-up should not be charged as arrears.
8-Decision of the underwriter will be final and he/she may call for any requirement(s) as deemed fit.
9-A lapsed or paid up policy (issued under regular scheme) may be revived/reinstated under ND Scheme.
46-SHORT PREMIUM DEBIT TO S.R.
In standard cases short premium debit shall be allowed to the extent of RS 1000/- (Rupees one thousand only) under policies having annual premium up to Rs 20000 In case where premium is more than Rs.20,000/-, 5% of the premium subject to maximum of Rs.25,000/=(Rupees Twenty five thousand only) will be
debited. It shall
he allowed to the extent of actual Extra Mortality amount determined by the underwriter short fall of the premium shall be debited to the commission account of
concerned field agent after on his request duly verifies by the concerned Area mager or Sector Head.
While allowing the debit for short premiums, margin for deduction of Tax at source should be kept in view to avoid any debit balance in commission record.
47-STATE LIFE UNDERWRITING GUIDELINE 2019 REQUIREMENTS.
A brief summary of the usual underwriting requirements is given here under:
|S#||Period of lapsed /auto-surrender /paid -up||Underwriting||Requirements|
|01||Premium being paid after grace period but with in 3 months|| |
declaration of good health
declaration of good health
|02||Premium being paid after 3 month but with in 6 months of laps,auto-surrender ,auto paid up||1-late fee|
2-declaration of good health
2-declaration of good health
2-medical revival application (FMR)
As prescribed by the under writer on case to case basis considering the impairment
|03||Premium being paid after 6 months but with in 9 months of lapse ,auto-surrender ,Auto paid up date.||1-late fee|
Revival application or
As per attained age and sum assured
Same as non-medical requirements
2-application of medical revival
3-all medical reports
According to current age or as prescribed by the underwriter
|04||Premium being paid after 9 months but with in 12 months of lapse auto-surrender ,auto- paid up||1-late fee|
2-non-medical revival application
As per attained age and sum assured
2-application for revival
2-application for medical revival
3-all medical reports
According to current age as prescribed by underwriter
|05||Premium being paid after 12 months of laps,auto-surrender auto –paid up update||1-late fee|
|Standard & substandard life|
2-application for medical revival
3-all medical reports
According to current age or as prescribed by the under writer
The purchase and maintenance of insurance on the life of a key-man should be authorized by the Board of Directors of the Company or Corporate Body. In partnership cases, a partner’s resolution should be made available. A letter by the employer indicating such resolution or decision be attached with the proposal. Usual Proposal Form and the Supplementary Proposal Form should be completed. Proposal Form should be signed by the Key-man and the authorized officer of the firm. Supplementary Proposal Form is to be signed by the authorized officer of the firm
In case of proposals with large sum assured, the Underwriting Department Re -insurers may require additional information, proformas, Declarations, other documents, and reports concerning financial aspects. These may include Key-man Questionnaire, balance sheet of the Firm, proof of income of the Key-man ang inspection report from an authorized officer of State Life.
49-NON DECLINATURE (N.D.) SCHEME
Subject to the following rules a policy under N.D. Scheme may be allowed to a those who, irrespective of their state of health, qualify for insurance.
1-A proposal under N.D scheme must be submitted with all the paper by Area Manager / Authorized Sales Manager and full yearly premium
the papers verified yearly premium, with an authentic age proof. Any short premium debit to commission if allowed shall constitute part of the full premium. Also, remember that an N.D policy cannot be backdated even for a single day, except that during year end closing, instructions contained in circular # PHS/PO/CIR/24/2014 shall prevail.
3-No Supplementary Benefit is allowed.
4-This scheme is available to persons aged 20 years to 58 years (both males and females), definite age proof is required at the time of proposal.
5-N.D. extra will be charged as per rates prescribed in the Rate Book.
6-The usual occupational extra will be charged if the life proposed follows a hazardous occupation or takes part in hazardous sports. If the occupation or pastime of the proposer is so hazardous that the proposal would ordinarily be declined, then under the ND Scheme it may be charged to cover the extra hazard.
7-If ND scheme is opted for in already submitted medical or non-medical proposal, which has been postponed or declined then there is no need to call for afresh Proposal Form. However, Underwriter will issue counter offer of ND Scheme through a letter mentioning the break-up of premiums along with initialed/signed “N. D. Declaration” and only the same will be acceptable for issuance of policy under ND Scheme.
8-Sum Assured per life under all policies shall not exceed Rupees 5 million. Any existing non-ND policies will not be counted towards the maximum.
9-Full annual premium must be deposited along-with the proposal form otherwise, it will not be processed. (Any permissible debit to agency commission shall count towards part of the full premium).
10- Back-dating is not allowed even for a day except as laid down in circular No. 24/2014 of PHS (PO).
11- ND declaration will be obtained duly signed and witnessed.
12- If a subsequent proposal with all tests/medical examination done under the supervision of the individual of New Business department is accepted at usual terms and conditions, the existing ND policy (ies) will be regularized from that date accordingly.
13-Life cover does not start immediately under a policy written under ND Scheme. It will gradually build up-to 100% as follows:
a) Death In First Policy Year.
No payment of claim except where death occurred by accident as defined in the policy document
b) Death In The Second Policy Year:
Payment of sum assured, only if death w occurred by accident as defined in the policy document otherwise refund of second years premium only.
c) Death In The Third Policy Year:
Payment of full sum assured and bonuses as provided for in the policy.
14-Under ND policy, 31 days’ grace period will be strictly observed lapsed, it may be revived in one of the following two ways:
The policy can be revived/ reinstated by payment of arrears premium with late fee and providing such medical evidence as “State Life” may deem fit, free of cost to State Life. In this case policy will be underwritten afresh and if revived full cover maven start from the date of revival.
The policy can be revived under this method by paying the arrears of premium with late fee and fresh declaration of ND. The death benefits payable in the next two years after such revival would be as detailed below:
a) Death in first policy year after revival/reinstatement
Surrender value of the policy or full sum assured (in case
accidental death only.
b) Death in second policy year after revival
Surrender value of the policy, or one annual premium whichever is greater or full sum assured in In case of accidental death only
15-death only). After the policy has completed at least two years form the revival/reinstatement date, usual death benefit as of ordinary policy will be available
. ANF options will also be available under this policy.
16- An ND policy will get exactly the same bonuses
get exactly the same bonuses as it had been
been underwritten under normal plan.
50-SUPPLEMENTARY CONTRACTS:STATE LIFE UNDERWRITING GUIDELINE 2019
1. ACCIDENTAL DEATH BENEFIT (ADB)
1-It may be offered to ages 5 to 55 years. Females under category A & B only can be offered also to avail this benefit.
2-Maximum term of this Supplementary Benefit is not allowed to exceed the premium paying term of the basic policy, or 60 years of age of the life proposed whichever is earlier.
3-Maximum permissible total sum assured (Principal Sum) under all accidental covers is Rs.10,000,000/-. This limit includes all accidental supplementary benefits as well as the built-in accident covers (as is the case with 18, 36, 74 and 78) under all existing policies on the same life.
4-. Normally, the sum assured for should not be more than
(a) sum assured
of the basic policy or
(b) three times the total annual income of the life
proposed, whichever is less.
5-. Normal rate for standard lives with completely non-hazardous occupation is Rs.1.25 per one thousand sum assured.
6- Premium is charged according to the health and occupation of the life
proposed, For occupations, which call for Occupational Extra, this supplementary benefit may be available at one-and-a-half times or double the normal rate. Presence of some extra ordinary hazard and/or physical impairment may cause refusal of this supplementary benefit or further increase
in the premium rate.
7-This supplementary benefit may not be attached with policies issued under
Table 07 (on child’s life if age is less than 5 years) 09, 14, 18, 22, 23, 36, 71, 74 and N.D Scheme.
2. ACCIDENTAL INDEMNITY BENEFIT (AIB) STATE LIFE UNDERWRITING GUIDELINE 2019
1-It may be offered to self-supporting Males and Females (Females in Category A& B only).
2- It is available to adult lives between 18 and 55 years of age for a term that ends on or before age 60 years. It is not available to minor lives. m) 3-Maximum term of this Supplementary Benefit is not allowed to exceed the
premium paying term of the basic policy.
4- Maximum permissible total sum assured (Principal Sum) under all accidental covers is Rs. 10,000,000/-. This limit includes all accidental supplementary benefits as well as built-in accident covers (as is the case with T.14, T.18, T.,36, T,.74 and T,.78) under all existing policies on the same life.
5- Normally, the Principal Sum (sum assured) for AIB should not be more than
sum assured of the basic policy or
(b) three times the annual income of the
proposed, whichever is less.
6- The rate of premium for standard lives will range from Rs. 4/- to Rs. 10/.
thousand, depending on occupational rating of the life proposed. (Please
occupational rating manual). Rate may also be increased due to physical extra
7- Premium is charged according to the health and occupation of the lit
proposed. Presence of some extra-ordinary hazard and/or physical impairments may cause refusal of this supplementary benefit or further
increase in premium rate.
8- This supplementary benefit may not be attached to policies issued under T-07
(on child’s life) 09, 18, 22, 23, 71 and N.D Scheme.
This rider may also not be attached with policies having ADB, WP & SWP as Supplementary Benefit
9-War and Aviation Risks fall under the Excluded Risks of the contract it is not advisable to offer this supplementary benefit to Armed Forces Personnel
10- For the purpose of this rider, sum assured will be equal toRs.25000/-for each
unit of Big Deal (T.14)
3-FAMILY INCOME BENEFIT (FIB) STATE LIFE UNDERWRITING GUIDELINE 2019
1-It may be offered to self-supporting males and females, who are gainfully employed except females in Category “C”.
2-It is available to adult lives between 18 and 55 years of age for a term that ends on or before age 65 years. It is not available to minor lives.
3-Maximum term is not allowed to exceed the premium paying term of the basic policy.
4-It can be selected from 10% to 50% of the sum assured of basic policy provided the income benefit so desired remains within 60 percent of approximate assessable earned income of the life proposed.
5-The normal rates are for only standard lives with completely non-hazardous occupation of the life proposed, and will be rated up according to the health and occupation of the life proposed. Presence of some extra ordinary hazard and/or physical impairment may cause refusal of this supplementary benefit or further increase in premium rate.
6-It may not be attached beyond 40% of sum assured under Table 07 policies the life of payer. The FIB under table 75 should not be more than 26% of the basic sum assured. FIB under table 18 could be attached up-to 25% of Basics assured.
7-It is not available with plan 09, 14, 22, 23, 24, 25, 71, and N.D. Scheme.
4-GUARANTEED INSURABILITY (GI) STATE LIFE UNDERWRITING GUIDELINE 2019
1-It is available to Standard male and female lives who follow non-hazardous occupation, profession and pursuits. It is not available with the policies carrying an occupation or aviation extra premium or issued to personnel of armed forces.
2-It will be offered for option dates as prescribed in the Premium Rate Book.
3-Face amount of the basic policy must be Rs. 15,000/- or more. The basic policy must be under a permanent plan i.e. Endowment etc, with the premium payment period extending to the policy anniversary age 40 (i.e. the last option date) or beyond.
4-Minimum amount of GI Supplementary Benefit is Rs. 15,000/- and maximum Rs. 50 000/-. If the Sum Assured of basic policy is greater than Rs. 50,000/- the amount of GI Supplementary Benefit must be restricted to Rs. 50,000/-. In case of a Big Deal Policy, face amount of the basic policy would be the bonus sharing component i.e. Rs. 25,000/- per unit of Big Deal.
5-Only one GI Supplementary Benefit will be issued on the life of any one person.
6- It is available only to assured under life policies.
7-It is attached only at the time of issue of the basic policy.
8-Issuance of the GI supplementary benefit will not prevent addition of other types of Supplementary Benefit (TIR, FIR, etc., if otherwise permissible), but the GI will apply to the basic policy only.
9-In determining medical examination requirements, this supplementary benefit will be disregarded for issue of ages under 20. For ages 20 and over, the basic amount of the supplementary benefits will be added to the T.S.A.R. of the policy,
to arrive at the revised T.S.A.R., for determining the underwriting requirements.
10- It may not be attached to policies issued under Table-07 (on child’s life) 09, 18,
19, 22, 23, 24, 25, 36, 71, 73, 75, 76, 77, 78 and N.D. Scheme.
5. HOSPITAL AND SURGICAL RIDER (H & S) STATE LIFE UNDERWRITING GUIDELINE 2019
1- This supplementary benefit can be issued only to standard males and females of category A who are gainfully employed between ages of 18 and
2-It is not available to minor lives. It may be attached to new and existing policies issued under whole life.
Endowment assurance and big deal plans provided the basic sum assured of the policy is at least Rs. 25,000/- (one unit in case of big deal).
3- It cannot be underwritten under non-medical scheme. All examinations in connection with this supplementary benefit will be performed by one of the
doctors mentioned in the list of examiners specially approved
4-Maximum term is not allowed to exceed the premium paying term
5-. It is not available with a policy on a quarterly or monthly mode of payment
No action will be taken on the proposal submitted with such a mode
6- A request for this supplementary benefit must be made in the appropriate
column relating to supplementary benefits of the proposal form.
7-. It is not available with polices issued under T-07 (on child’s life) 09, 18, 22
23, 24, 25, 71, 73, 75, 76, 77, 78, and N.D scheme.
8-. On payment of double amount of premium, the benefits and their limits
may be doubled.
9-This premium may be increased by state life at any time after the third policy anniversary by giving at least three-month’s notice.
10- At present, it is limited to persons living in or near cities where hospitals and doctors have been approved by state life for hospitalization and medical examinations, changes in residence to any of the cities covered by the scheme, will be permissible without affecting the benefits. In case, however, a policyholder changes his permanent residence to a city other than those covered by the scheme, he / she may on request, get the H&S cancelled with a refund of the unearned portion of the premium on pro-rata basis.
6. REFUND OF PREMIUM RIDER (RPR) STATE LIFE UNDERWRITING GUIDELINE 2019
1-RPR may be offered at ages from 20 to 60 years.
2-The available term ranges from 10 to 25 years.
3-It is available to only those policies, which are rated standard. It is available to those policies where extra premium is charged.
4- It can be attached to the table 03, 05, 07 and 36 only.
5-The premium rates are quoted as percentage of premium payable under the policy excluding the premium for RPR.
6-The sum at risk for this rider for underwriting purposes will be equal to 50% of the basic sum assured under the policy to which it is attached.
7. SPECIAL WAIVER OF PREMIUM (SWP) STATE LIFE UNDERWRITING GUIDELINE 2019
1-SWP may be offered to self-supporting males and females in category A, who are gainfully employed. Females will be charged at double the male rates.
2-It is available to adult lives between 20 to 55 years of age for a term that ends on or before age 60 years. It is not available to minor lives.
3-Maximum term is not allowed to exceed the premium paying term of the policy. SWP may not be attached to policies carrying W.P supplementary benefit as the latter’s benefits are already incorporated in swp
4-If desired with a policy proposed under non-medical scheme, the non medical limits will be half of the regular non-medical scheme.
5-Premium is charged according to the health and occupation of the life proposed. Presence of some extra ordinary hazard and / or physical impairment may cause refusal of this or further increase in the premium rate.
6- The premium may be increased by state life any time after third policy anniversary after giving at least 3 months’ notice
7-It may not be attached to policies issued under table-07 (on child’s life) 09, 18. 22, 23, 24, 25, 36, 71, 73, 75, 77 and N.D scheme.
8-As the war and aviation risks fall under the excluded risks of the contract, it is not available to offer it to armed forces personnel,
8. WAIVER OF PREMIUM STATE LIFE UNDERWRITING GUIDELINE 2019
1-It may be offered to self-supporting males and females (in category A), who are gainfully employed. Females will be charged at double the male rates. 2-It is available to adult lives between 18 and 55 years of age for a term that
ends on or before age 60 years. It is not available for minor lives.
3- Maximum term of this supplementary benefit is not allowed to exceed the
premium paying term of the basic policy.
4-Maximum permissible total sum assured (Principal Sum) under all accident covers is Rs. 10,000,000/- This limit includes all accidental supplementary benefits as well as the built-in accident cover (as is the case with T-14, T-18, and T-36) under all existing policies on the same life .
5-The normal rates for standard lives with completely non-hazardous occupations vary between Rs. 0.50 and Rs. 1.00 per thousand sum assured, depending on the age at entry of the proposer.
6- Premium is charged according to the health and occupation of the life proposed. Presence of some extra ordinary hazard and/or physical
impairment may cause refusal or further increase in the premium rate. 7-It may not be available with policies carrying AIB or SWP supplementary benefits as its benefits are already incorporated in these supplementary benefits.
8- It may not be available to policies under table-07 (on child’s life) 09, 18, 22, 23, 24, 25, 36, 71, 73, 75, 77, and ND Scheme.
9- As the war and Aviation Risks fall excluded risks of the contract, it is not advisable to offer this supplementary benefit to Armed Forces Personnel.
9. TERM INSURANCE RIDER (T.I.R.) STATE LIFE UNDERWRITING GUIDELINE 2019
1- It may be offered to self-supporting males and females in category A only.
It is available to adult lives between 20 and 60 years of age for a term that ends on or before age 70 years. It is not available to minor lives.
2- Maximum term is not allowed to exceed the premium paying term of the basic policy.
3-Presence of some extra ordinary hazard and/or some physical impairment may cause refusal or further increase in the premium rate.
4- Occupation Extra will also be charged as per rate charged on basic life premium.
5- It may not be attached to policies under T-07 (on child’s life) 09, 14, 18, 22, 23, 24, 25, 71 and N.D. scheme.
It can be issued up to the following maximum limits:
|In case where an FIB is Attached or FIB is up to 25% of the basic sum Assured.||Three times the basic sum assured.|
|In case where FIB is Above 25% of the basic Sum assured||Two times the basic sum assured.|
10-HEALTHY LIFE STYLE STATE LIFE UNDERWRITING GUIDELINE 2019
Existing and prospective policyholders whose policies are in the annual mode of premium payment and Family Income Benefit Rider (FIBR) is attached to them and who maintain a “Healthy Life Style”(HLS) are entitled for increase in the annual FIB by 25% without charging any additional premium.
A healthy life style (HLS) means that
1-Life assured does not smoke, chew, or sniff tobacco in any shape or form(If a person used tobacco previously but has given it up totally at least twenty four months ago, he will also be eligible)
2-Life assured is a total abstainer from heroin, alcohol and all other intoxicants and Narcotics
(iii) The height, weight and all other physical characteristics, family history,
occupation, pastimes and other factors of the life assured are within normal underwriting limits for AOR (“Accepted-as-proposed at Ordinary
Rates”) The main features and conditions for increase in FIB are explained below:
1-This increase will apply to:
A-New proposed policies issued with FIBR with a minimum basic sum assured of Rs. 100,000/-. But for all children’s policies the minimum
required basic sum assured will be only Rs. 50,000/-.
B- All existing policies irrespective of the minimum basic sum assured which are in force with FIBR with up-to-date premium position and whose remaining term is 10 years or more:
C-All existing policies which at present have no FIB, but with which the policyholders wish to attach FIB on application, where sum assured is Rs. 100,000/- (At least Rs. 50.000/- under children’s policies) and which are in force, by payment of premium , for at least three years and remaining term is 10 years or more.
2-Increase will also be given under policies where a built in FIB is available like Child protection policies (Table 07), Child education & Marriage plan (Table 75), and Shehnai policy (Table 77), if all other conditions are complied with.
3- Increase will be given under policies accepted at ordinary rates (AOR). Policies accepted at extra mortality or with restrictions imposed due to height, weight, other physical characteristics, family history, occupation and pastime etc. will not be eligible for this increase.
4-Total increase in FIB under all policies on single life is limited to Rs. 30.000/- p.a.it means that if the total FIB before enhancement on all policies on the same life is Rs. 120,000/- p.a or more, then the total enhancement will be limited to Rs. 30,000/- on all policies.
If the assured has two or more policies with FIBR then the enhancement will be made for the first policy with the largest outstanding FIB term, then working backwards till the maximum enhancement of Rs. 30,000/- is achieved.
5-Increase will not apply to policies, which have already resulted into claims. 6-Only policies with annual mode of premium payment will qualify for the increase.
PROCEDURE STATE LIFE UNDERWRITING GUIDELINE 2019
1-For new policies, the usual proposal form will be completed and the premium calculated and deposited as though there is no enhancement. However proposal should accompany:
a) Healthy Life Style Questionnaire; (Annexure E)
b) Application for increase. (Annexure F)
2-for existing policies, with already attached FIBR the life insured should submit:
A-Healthy life style questionnaire; (Annexure E)
B- Declaration of good health;
C-Application for increase; (Annexure F)
D-Original policy documents.
3-For existing policies without FIBR the life assured should pay the basic FIRP premium in addition to the foregoing formalities.
If it is approved by the underwriter, then the FIB will be increased by 25% and an HLS endorsement will be made on the policy documents as per specimen attached at an Annexure “G”.
Initially no additional underwriting requirements are required for increased 25% FIB under new or existing policies except healthy life style questionnaire. It means that if the HLS increase applies to a case with 25% FIBR, the FIB being 25% + (25% of 25) = 31.25% the underwriting requirement will be as those applicable to basic rate i.e. 25% and not 31.25%, unless specifically asked for by the underwriter in any case. However, state life reserves the right to verify the facts through any medical tests or otherwise at any time or times during currency of the policy.
ILLUSTRATION STATE LIFE UNDERWRITING GUIDELINE 2019
For an existing policy, the enhanced value of FIBR should be calculated in the following manner. The calculation is illustrated for a policyholder having a policy with FIBR and qualifying for the HLS FIB increase without paying additional premium. Suppose the basic sum assured is RS 100,000\= with 20% FIBR (i.e. RS 20,000\= per annum)
Step 1: Multiply existing FIB percentage by a factor of 1.25 to obtain enhanced FIB
For the illustrated policy it means multiplying 20% by 1.25 resulting in an enhanced FIB percentage of ( 20% X 1.25) = 25%.
Step 2: Multiply the basic sum assured by the enhanced FIB percentage
the enhanced amount of FIB.
issured by the enhanced FIB percentage to obtain
For illustrated policy it means multiplying the bas 100,000/- by 25%, resulting in the enhanced 100,000/- X 25%) = Rs. 25,000/- per annum.
it means multiplying the basic sum assured of Rs.
enhanced amount of FIB of (Rs.100,000/-x25%=RS.25000/- per annum
In this way existing FIB amount of Rs. 20,000/- under the policy will be increased FIB 25% ie, increase of Rs. 5,000/- enhancing the FIB amount to Rs. 25,000/
SALIENT FEATURE OF LIFE INSURANCE PLANS OFFERd BY STATE LIFE INSURANCE CORPORATION OF PAKISTAN
STATE LIFE UNDERWRITING GUIDELINE 2019
|plan||Age minimum at entry||Age maximum at entry||Age (max) on maturity||Allowable rider|
|WHOLE LIFE (01)||05||65||85||NO RESTICAON EXCEPT RPR|
|ENDOWMENT (03)||05||65||75||NO RESTICATION|
|PROGRESSIVE ENDOWMENT (04)||20||50||70||NO RESTICATON EXCEPT RPR|
|ANTICIPATED ENDOWMENT(05)||20||57||75||NO RESTICATION|
|JOINT LIFE (06)||20||65-INDIVIDED LIFE|
50 –EQUINALENT AGE
|NORESTICATION EXCEPT RPR|
|SINGLE PREMIUM (09)||20||60||70||NOT ANY|
|FAMILY PENSSION(12)||20||52||70||NO RESTICATION EXCEPT RPR|
|BIG DEAL(14) SPECIAL REBATES||20||45||55||AIB,WP,SWP,GI,H&S|
|OPTIONAL MATURITY(17)||20||45||70||NO RESTICATION EXCEPT RPR|
|RURAL LIFE (18) NO POLICY FEE SPECIAL REBATES||20||55||75||FIB ONLY|
|JEEVAN SATHI(19)||20||65 INDIVIDUAL LIFE|
|75 INDIVIDUAL LIFE|
70 EQULENT AGE
|NO RESTICATION EXCEPT RPR & GI|
|MORTGAGE(22)||20||62||RISK CEASING AGE 70||NOT ANY|
|NEGEHBAN PLAN (24)||20||60||RISK CEASING AGE 70||ADB.AIB ONLY|
|NEGEHBAN PLAN PLAN(25)||20||60||RISK CASING AGE 70||ADB ,AIB|
|SHADABAD PLAN (36)||20|
|PERSONEL PENSSION SCHEME (71)||18||NO LIMIT||NO LIMIT||TTI,TAIB TADB AIB,ADB,FIB,TIR|
|73 soneheri policy NOTE|
1-MINIMUM SUM ASSURED RS.50,000/
-2-MODE IS YEARLY 3-NO POLICY FEE ON REBATE IN HIGHER SUM ASSURED CASES
|MUST BE 20 YEARS||60||70||FIB,TIR,ADB,AIB|
|SADABAHAR PLAN|| |
01 -CHILD LIFE
20 -YEARS ADULT LIFE
|CHILD EDUCATION &MARRIAGE PLAN(76)||01 CHILD LIFE MUST BE 20 YEARS ADULT LIFE||15-CHILD|
NOTE 1-MINIMUM SUM ASSURED RS.50,000/-2-MODE IS YEARLY 3-NO POLICY FEE ON REBATE IN HIGHER SUM ASSURED CASES
MUST BE 20 YEARS ADULT LIFE
STATE LIFE UNDERWRITING GUIDELINE 2019
|RIDER||AGE (MIN)@ ENTRY||AGE (MAX)@ ENTRY||AGE (MAX) ON MATURITY/TERMINATION OF SUPPLEMENTARY RIDERS||ALLOWABLE PLAN|
|TERM INSURANCE RIDER-TIR||20||60||70||01,03,04,05,06,07(PAYER’S LIFE)12,17,19,36,73,75,76,77,,78|
|FAMILY INCOME BENEFIT RIDER-FIBR||18||55||65||01,03,04,05,06,07(PAYER’S LIFE )12,17,18,19,36,73,75,76,77,78|
|ACCIDENTAL INDEMNITY BENEFIT-AIB||18||55||60||01,03,04,05,06,07(PAYER S LIFE)12,14,17,19,24,25,36,73,75,76,77,78|
|ACCIDENTAL DEATH BENEFIT-ADB||05||55||60||01,03,04,05,06,07(PAYER LIFE )12,17,19,24,2573,75,76,77,78|
|WAIVER OF PREMIUM-WP||18||50||60||01,03,04,05,06,07,(PAYER ‘S LIFE),12,14,17,19,75,76,78|
|SPECIAL WAIVER OF PREMIUM -S.W.P||20||50||60||01,03,04,05,06,07(PAYER ‘S LIFE),12,14,17,19,78|
|HOSPITAL& SURGICAL –H&S||18||50||60||01,03,04,05,06,07(PAYER’S LIFE),12,14,17,19,36|
|GUARANTEED INSURABILTY -GI||10||37||40||01,03,04,05,06,07(PAYER’S LIFE)12,14,17|
|REFUND PREMIUM RIDER-RPR||20||60||70||03,05,07,36|
|TAHAFFUZ TERM INSURANCE SUPP; CONTRACT.||18||60||ON COMPLETION OF SIXTH POLICY YEAR||71|
|TAHAFFUZ ACCID;DEATH BENEFIT SUPP;CONTRACT||18||60||ON COMPLETION OF SIXTH POLICY YEAR||71|
|TAHAFFUZ AIB SUPP; CONTRACT||18||60||ON COMPLETION OF THE SIXTH POLICY YEAR||71|