Page 36 - Life Insurance underwriting Ebook IC 22

 Factors to be considered for insurance for women with no income
 Marital status
 Nature of the plan requested for

3.2 Insurance on minors

From a purely risk cover perspective; insurance on the life of children does not make
any financial sense. But still there is a market for this segment. Many parents apply for
modest or large covers on the lives of their children for one or more of the following
reasons:

 as a targeted saving vehicle
 to get insurance at low cost when the children enjoy very good health and
insurability
 in anticipation of their insurance needs as adults
 to pass on the wealth to the future generation

An underwriter needs to be aware of the above aspects while arriving at the cover.
Other aspects of insurance i.e. the health status and amount of cover on the siblings
and parents themselves also need to be given due consideration to minimize the moral
hazard.

Important

Child plans are very popular among the parent community. It is every parent's dream
that their child gets the best education and a lavish wedding, and parents are ready to
do everything it takes to accomplish this. So the moment the child is born, parents start
investing for the child's education and marriage.

Child insurance plans help the parents in securing the financial future of their children.
Child plans are purchased by parents to save fiords for their children's education,
marriage and other financial needs, and also offer financial security for the children's
future in case any unfortunate event e.g. the parents' untimely death.

3.3 Key person insurance
A predominant reason to purchase life insurance on the life of a key person is ID
indemnifies the company against the loss of the key person whose skills and
contribution are critical to the company.

The common challenges faced by the underwriters while assessing a proposal and a
key person are:

 to qualify the proposed insured as a key person
 to quantify the potential financial loss to the company on the death of this insured

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