Insurance Study Notes For LIC AAO 2016 Exam

Dear Aspirants,
LIC AAO Exam is scheduled to take place in the month of March. For which the preparation has to be done at appropriate time. Considering this, for the upcoming LIC AAO exam, we are providing Study notes for Insurance. We hope that will help you.

What is Mortality Charge?

Mortality Charge is the amount charged every year by the insurer to provide the life cover to the policyholder on the life of the Life Insured. It is also called as Cost of Insurance.
It is the actual cost of insurance by the life insurance company. It is usually deducted with other charges in the policy, before investing your money. Mortality is dependent on the sum at risk (sum assured minus fund value) and should reduce as the fund value increases in the policy term. It is calculated per thousand of sum at risk. Higher the sum at risk, higher is the charge. Ideally, it should reduce as the fund value increases, but it does not.

What is Maturity Date?

The maturity date is the date when the amount paid towards the life insurance policy is given to the policy holder once the term of the policy ends. The maturity date tells you when you will get your principal back and for how long you will receive interest payments.

Who is an Agent?

An Agent is a person who is licensed by state to sell Insurance. The Agents serve as an intermediary between the insurance company and the insured. The insurance company is responsible for the acts of its agents, and it can be assumed by the insurance applicant that any information or payment of money to the agent will be received by the insurance company.
Agents are only responsible for the timely and accurate processing of forms, premiums, and paperwork.
Captive Agent – Agent sell Insurance of a specific Company.
Independent Agent – Agent who works independently and sells Insurance of many companies.

Who is a Broker?

An insurance broker is a specialist in insurance and risk management. Brokers act on behalf of their clients and provide advice in the interests of their clients. The insurance Company is not responsible for because the broker represents the insurance client, not the company.
Insurance brokers can be best described as a kind of super-independent agent.
Insurance brokers represent the applicant, and help the applicant to find the right insurance company at the best price. Businesses use brokers because they often have special insurance requirements, such as employee benefits. A broker can help them develop an insurance plan and write the policy, then find an insurance company willing to take the risk. Because brokers work in the field every day, they are familiar with many insurance companies, and what kind of risks they are willing to insure.

What is Annuity?

A long-term contract sold by an insurance company designed to provide payments to the holder at specified intervals, usually after retirement.
The goal of annuities is to provide a steady stream of income during retirement.
Many aspects of an annuity can be tailored to the specific needs of the recipient. In addition to choosing between a lump sum payment and a series of payments to the insurer, you can choose when you want to annuitize your contributions – that is, start receiving payments.
An annuity that begins paying out immediately is referred to as an immediate annuity, while those that start at a preset date in the future are called deferred annuities.
Thanks!