Page 8 - Life Insurance underwriting Ebook IC 22

diminishing lien clause would be effective.

c) Specific exclusions
 In this method, a proposal is accepted by the insurance company

with some exclusion(s). This clause restricts the payout of a claim for
the full cover. If death were to occur under specified conditions or

denies claim payment under certain conditions .e.g.:-Policies which
have a special exclusion imposed which does not pay any claim .if the

person dies in an air-crash while he is executing his aviation duties as
a fighter-pilot. but could pa} the claim in frill if he was travelling as a

regular fare-paying passenger and death were to occur in an air-crash

 If the insured dies due to a condition that has been excluded from

the policy then the insurance company denies payment of the claim
to the nominee(s).

 These exclusions could lead to litigations e.g. if policies with such

exclusions are issued and assigned to mortgage loans, and if death
claim is denied this could lead to aggrieved beneficiaries and legal

battles between the beneficiaries and the insurance company.

4.3 Postponement of the acceptance of risk

There could be situations where the health condition of a client is uninsurable at

the time of application e.g. if the client has been advised to undergo a cardiac
surgery and post-operative treatment since there exists a possibility of
improvement in his health after the surgery and taking necessary rest and

treatment; it would not be fair to decline the proposal. The underwriter can take
a decision to postpone the proposal for a certain period if he feels that the risk

associated with the individual will diminish after a certain period and the
individual can become insurable and could be accepted with a better rating.

4.4 Declinature of the proposal

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