7. Policy servicing

Question 1

Regulations to the Long Term Insurance Act is very clear on the fact that no life insurance company may sell a policy that has a term of less than …, if there is a savings element, other than a
retirement annuity.

Answer 1

5 years

Question 2

What is one of the most important departments within life insurance companies?

Answer 2

Policy servicing departments

Question 3

What dictates how a policy servicing department gets structured?

Answer 3

The market the insurance company focuses on.

Question 4

Name three of the roles and functions every life insurer needs to fulfill?

Answer 4

1. Conforming to legal requirement.
2. Acting in accordance with the conditions of the policy document.
3. Abiding by company practice.

Question 5

Why does a life insurer issue a policy document?

Answer 5

Provide proof that a contract has been entered into.

Question 6

What should an insured do if his policy document gets stolen or destroyed?

Answer 6

The insured can simply request the insurer to issue him/her a replacement policy document.

Question 7

List the details displayed on the policy document?

Answer 7

1. Client details
2. Premium details
3. Benefit details
4. Special conditions

Question 8

What does the general conditions of an insurance policy refer to?

Answer 8

These are conditions that apply to all insured individuals and will be indicated on each insurance policy.

Question 9

What does the special conditions of an insurance policy refer to?

Answer 9

These are the conditions that apply specifically to the insureds policy. This can be due to health or other related issues.

Question 10

What happens should the insured miss a debit order?

Answer 10

The insurer will in force a double debit system which will bring bring the insured up to date with payments.

Question 11

What happens should the insured miss two straight debit orders?

Answer 11

The policy will subsequently cease/lapse. The insured could have an opportunity to reinstate the policy.

Question 12

What is an automatic policy loan?

Answer 12

Where the policy has been in force long enough for the surrender value to be used to pay future premiums and keep benefits in place for as long as possible.

Question 13

What happens with the policy that’s on APL and the surrender value runs out?

Answer 13

The policy will lapse and all benefits will be lost.

Question 14

What are the conditions to grant a loan against a policy?

Answer 14

1. Interest will be charged on the loan.

2. Loan can either be paid back by higher premiums or subsequent proceeds of a claim.

Question 15

What are the 4 objectives with the ASISA code on policy quotations?

Answer 15

1. Regulate use of projected values.
2. Show consequences of early termination.
3. Show effect of all expense charges.
4. Show impact of premium over time.

Question 16

What are required from ASISA members in terms of the replacement of life policies?

Answer 16

Members need to ensure that all outcomes are in accordance with the requirements of Treating Customers Fairly.