Document Sample
Notice and proof of claims
Written notice of claims with full particulars must be give to the Company immediately
In case of death written notice must, unless reasonable cause is shown, be given before
internment or cremation, and in any case, within one calendar month after the death,
In the event of loss of sight or amputation of limbs, written notice thereof must be given
within one calendar month after such loss of sight or amputation:-
1. Proof of claim satisfactory to the Company shall be furnished.
2. Any medical or other agent of the company shall be allowed to examine the person of
the Insured on the occasion of any alleged injury or disablement and as may reasonably
be required.
In the event of the death, to make a post mortem examination of the body of the insured.
A post mortem examination report, if necessary, be furnished within the space of fourteen
days after demand in writing.
In the event of a loss of sight the Insured shall undergo at the Insured's expense such
operation or treatment as the company may reasonably deem desirable.
In the case of claim by death or permanent total or permanent partial disablement, all
sums payable hereunder shall be only on the delivery of this policy for cancellation and
discharge and in the case of a temporary total disablement, only upon termination of such
No sum payable under this policy shall carry interest.
No claim is payable if the claim is fraudulent or supported by fraudulent statement.
Material Alterations
(a) The insured shall give immediate notice to the company of any change in his business
or occupation.
(b) The insured shall on tendering any premium of the renewal of this policy give notice
in writing to the company of any disease, physical defect or infirmity with which he has
become affected since the payment of last preceding premium.
Change of occupation may materially alter the risk and attract a higher rate of premium.
Similarly, any disease (e.g. diabetes) or physical infirmity may also alter the risk. The
insurers may take appropriate underwriting decisions such as loading of premium,
restricted cover etc.
This policy may be renewed by mutual consent every year and in such event, the renewal
premium shall be paid to the Company on or before the date of expiry of the Policy or of
the subsequent renewal thereof. The Company shall not, however, be bound to give
notice that such renewal premium is due.
The Company may at any time, by notice in writing, terminate this policy and the
Company shall return to the Insured a pro-rata part of the premium. Such notice shall be
deemed sufficiently given if posted and addressed to the insured and shall be deemed to
have been received by the Insured at the time when the same would be delivered in the
ordinary course of post.
The policy may be cancelled at any time by the Insured by a notice in writing under a
Certificate of posting or a Regd. AD. Such notice shall be deemed to be effective from
the date of dispatch of the same by the insured.
Refund of premium at short period scale is made subject to there being no claim under
the policy.
The Company shall not be bound to take notice or be affected by any notice of any trust,
charge, lien, assignment or other dealing with or relating to this policy but the receipt of
the Insured or his legal personal representatives shall in all cases be an effective
discharge to the Company.
The Company treats the insured as the absolute owner of the policy. Receipt of the
insured or his legal personal representatives that is, those with a Succession Certificate,
etc granted by a court of law will be an effective discharge to the Company.
Although the assignment of the policy is not permissible under the Insurance Act, these
policies can be assigned under the Transfer of Property Act. It should be remembered that
when these policies are assigned, it is only the policy amount that is assigned and not the
subject matter of the policy. In other words, the assignment involves a new creditor for
the insurers and not a new insured. This alteration has obviously no effect on the rating or
underwriting of the risk. If the assignment is effected on the policy document itself, no
stamp duty is payable. If however, it is effected on separate paper, it attracts a stamp duty
of Rs.15/-
Arbitration and Disclaimer
The following points must be noted.
Differences regarding amount of loss (not question of 1iability) are to be referred to
The award of arbitration is a precedent to suit in Court of Law
If the insurers disclaim liability the insured has to file a suit in a Count of Law within 12
months from the date of such disclaimer.
Special Features of P.A. Policy
The cover is for 24 hours and on a worldwide basis. Travel as a passenger in a licensed
standard type of aircraft is automatically covered.
The basic principle of fixing rates of Premium in any class of insurance is that rates of
premium should be commensurate with the hazard involved. Thus, in fire insurance rates
of premium vary according to the type of construction, the type of occupancy, the type of
goods stored etc.
In personal accident insurance, the main factor used is the occupation. Generally
speaking exposure to personal accidents at home, on the street etc. is the same for all
persons. But the risks associated with profession or occupation vary according to the
nature of work profiled. For example, an office manager is less exposed to risk at work
than a civil engineer working at a site where a building is being constructed.
 It is not practicable to fix a rate for each profession or occupation. Hence, occupations
are classified into groups, each group reflecting, more or less, similar risk exposure. The
system of classification is simple and found to be workable in practice.

Classification of risk
Risk Group I :
Accountants, Doctors, Lawyers, Architects, Consulting Engineers, Teachers, Bankers,
Persons engaged in administration functions, Persons primarily engaged in occupations
of similar hazards.
Risk Group II:
Builders, Contractors and Engineers engaged in superintending functions only,
Veterinary Doctors, Paid drivers of motor cars and light motor vehicles and persons
engaged in occupation of similar hazards and not engaged in manual labour,
All persons engaged in manual labour (Except those falling under Group III), Cash
Carrying Employees, Garage and Motor Mechanics, Machine Operators, Drivers of
trucks or lorries and other heavy vehicles, Professional Athletes, and Sportsmen,
Woodworking Machinists and Persons engaged in occupations of similar hazards.
Risk Group III:
Persons working in underground mines, explosives, magazines, workers involved in
electrical installation with high tension supply, Jockeys, Circus Personnel, Persons
engaged in activities like racing on wheels or horseback, big game hunting,
mountaineering, winter sports, skiing, ice hockey, ballooning, hang gliding, river rafting,
polo and persons engaged in occupations / activities of similar hazard.
Age Limits
The minimum age limit is 5 years and maximum 70.
In case of persons who already have a cover, policies may be renewed after they
complete 70 years but upto the age of 80 subject to a loading 5% of the renewal premium.
In case of fresh proposals from persons above 70 years but below 80 years cover may be
granted at normal rates plus loading of 10%.
No medical examination is required for renewal or fresh cover.
Family Package Cover
Family Package cover may be granted on the following pattern:
(i) Earning Member (Persons                100% of the Capital Sum Insured for each
 Insured) and Spouse, if earning.          .
(ii) Spouse (if not earning member)        50% of the Capital Sum Insured or
                                               Rs.l lakh whichever is lower.
(iii)Children (between the age              25% of the Capital Sum Insured
    of 5 years and 25 years)               or RS. 50000/- whichever is
        .                                  lower per child.

(1)      For children the cover is limited to Death and Permanent Disablement (total or
(2) Premium payable for husband and wife will be on the total sum insured for husband
and wife.
(3) A discount of 5% may be granted on the gross premium.
Extensions of the Policy
Medical Expenses
A personal accident policy can be extended by endorsement, on payment of extra
premium to cover medical expenses incurred by the insured in connection with the
accidental bodily injury. These benefits are in addition to the other benefits under the
War and allied risks
War risk cover can be granted to Indian personnel / experts working in foreign countries
on civilian duties at the following additional premium.
(a) P.A. Policies issued during                50% extra over the normal
Peace- time normal period                      rate (i .e. 150% of the normal rate.)
(b) PA. Policies during abnormal/              150 % extra over the normal rate
apprehensive period (i.e. during the period (i.e. 250% of the normal rate)
when warlike conditions have already
occurred or are imminent in foreign
countries where the Indian Personnel
are working on civilian duties)
The proposal form The form elicits information on the following Personal details
(i)     Physical condition
(ii)    Habits and pastimes
(iii)   Other or previous insurances
(iv)    Previous accidents or illness
(v)     Selection of benefits and sum insured
(vi)    Declaration
Personal details relate to age, height and weight, full description of occupation and
average monthly income.
Age will show whether the proposer is within the limits of age for entrants for the policy
desired. Weight and height should be compared with a table of average weight for sex,
height and age and further investigation can be made if the proposer is 15 percent or more
over or under the average.
Physical condition details relate to any physical infirmity or defect, chronic diseases etc.
Proposers who have lost a limb or the sight of any eye may only be accepted on special
terms in approved cases. They constitute abnormal risks because they are "less able to
avoid certain types of accidents and in view of the fact that if the remaining arm or leg is
injured or the sight of the remaining eye is affected, the degree and length of disablement
is likely to be much greater than normal.
Diabetes may retard recovery as the wound may not heal quickly and the disablement
may be unduly prolonged.The medical history of the proposer must be examined in order
to determine whether and to what extent injuries or illnesses may affect the future
accident risks. There are many complaints of such an obviously serious nature as to make
the risk uninsurable, e.g. valvular disease of the heart.
Hazardous pastimes like mountaineering, polo, motor racing, aerobatics etc, require extra
Sum Insured
The sum insured is selected by the insured but insurers ~exercise some control. The sum
insured is compared with the average monthly income of the insured. A policy for Rs. 1
lac may not be granted to a person earning Rs.1000/- per per month, because in the event
of temporary disablement, his benefit per week is Rs.1000/- (Rs.4000/-) per month)
which is disproportionate to his monthly salary. The sum insured could be up to 24
months income.
Although it is difficult to specify the exact amount for which the cover could be granted
(since the practice differs with insurers), where no weekly benefit cover is allowed it may
be indicated that the cover may be granted for say, an amount equivalent to 60 to 72
months' earning of the insured. This restriction is not very strictly applied if the policy is
for Capital Sum only.
While giving cover to persons who are not gainfully employed e.g. housewives, students
etc. the insurers make sure that they provide for capital benefits only and that no weekly
compensation is provided for.

Flight Insurance Coupons
Passenger Flight Coupon provides cover for accidental bodily injury (as defined in the
personal accident policy), whilst in or entering into or descending from any aircraft
owned and / or operated by a regular airline over a scheduled route by which the insured
is traveling as a passenger during the flight specified.
The benefit chart is as under:
Contingency                                  Benefits
Death /Loss of two limbs/ Loss of
one limb and one eye/ Loss of two eyes       Capital Sum Insured (100%)
Loss of one limb or one eye                  50 % of Capital Sum Insured
Temporary total disablement                  1 % of Capital Sum Insured per week
The rate of premium is Re. One per Rs.10,000/- capital sum insured for flight not
exceeding 24 hours duration.
There are two methods of issuing these covers (a) The cover may be issued for specific
flight( s) only or (b) The cover may be issued for a certain specific period of time and the
company will be on risk in respect of all the flights undertaken by the insured within that
Under (a) flat premium is charged based on the sum insured and the duration of flight(s).
Under (b) a deposit premium is collected from the insured, equal to number of flights,
expected to be undertaken during the policy period. At the end of the policy period the
insured is expected to declare all the flights actually undertaken by him. On the basis of
this information the premium earned is calculated and the deposit premium is adjusted.
These declaration policies can be given not only to individuals but also to companies in
respect of their employees, who travel by air frequently.
Arranging covers on specific flights basis is time consuming and cumbersome for both
the insurer as well as the insured. The insurer has to issue a document each time a flight
is undertaken. Often people may have to fly at short notice and may not have sufficient
time to obtain a flight insurance coupon. Declaration policies are therefore popular. Since
however, the insurer is fully dependent upon the insured for accounting of each and every
flight undertaken (basis for calculating premium) moral hazard of the proposer should be
beyond reproach. Such covers are therefore given only to reputed concerns and clients of
long standing.
Janta Personal Accident Insurance
The salient features of the revised market agreement for Janata Personal Accident policy
effective 1-11-1999 are as follows:
Any person, irrespective of sex and occupation in the age group 10 to 70 years may be
The minimum sum insured is Rs.25,OOO/- and maximum Rs.l,OO,OOO/- per person per
annum. The rate of premium is Rs.15/- per sum insured of Rs.25,OOO/- which can be
increased in multiplies of Rs.25,OOO/- and rate applicable accordingly.
The insurance pays specified benefits if the insurance sustains bodily injury resulting
solely and directly from accident caused by outward violent and visible means and such
bodily injury within 12 calendar months of its occurrence be the sole and direct cause of
specified contingencies.
Contingencies                                  Sum Insured Payable
1) Death                                       100% of S.I.
ii) Total and irrecoverable loss               50% of S.I.
of sight of both eyes or losses
of use of two hands or feet of loss of sight
of one eye and loss of use of one hand or foot.
iii) Total and irrecoverable loss of sight of one     50% of S.I.
eye or loss of use of one hand or foot.
iv) Permanent total disablement due to accident       100% of S.I.

Group Discount
Group Size                                     Discount (%)
101 to 1,000                                   (5)
1,001 to 10,000                                7.5
10,001 to 50,000                               10
50,001 to 1,00,00                              12.5
1,00,001 to 2,00,00                            15
2,00,001 to 5,00,00                            20
5,00,001 to 10,00,000                          25
Above 10,00,000                                30
Group insurance policy should be issued only in respect of the named Groups. For the
purpose of availing of Group Discount and other benefits the proposed "Group" should
fall clearly under anyone of the following categories:
Employer - employee relationship including dependents of the employee.
Pre identified segments / groups where the premium is to be paid by the State / Central
Members of a registered co-operative society. Members of Registered Service Clubs.
Holders of credit card of Banks / Diners / Master / Visa Holders of Deposit Certificates
issued by Banks / NBFC's Shareholders of Banks / Public Limited Companies.
No Group Discount can be offered on the 'anticipated' group size. Group Discount is to
be considered and worked out only on the actual number of members registered in the
'Group' at the time of taking out the policy.
Claims under such policies cannot be paid to anyone other than the individual insured.
Wherever group policies for higher Sum Insured are needed, the same shall be covered
under Personal accident policy.

Long Term Discount
Term of the Policy (Year)                    Discount (%)
1                                            NIL
2                                            5
3                                            10
4                                            15
5                                            20

Underwriting Instructions
a)The policy in respect of individual or Group JPA should be issued for a maximum
period of 3-5 years.
b)In case of long term policy, the premium is to be collected in one lump sum amount in
c) No refund of premium will be allowed even if the claim arises in the earlier years
under long term policy.
d)No renewal of group policy should be encouraged where loss ratio is 60% and above.
e)PTD should be covered as per existing JPA policy and only Death cover should not be
Claims Procedure
Immediate notice to be given to the policy issuing office.
Claim Form to be submitted with medical certificate and bills.
For death claim, Nominees should submit:
(i)    Death Certificate
(ii)   Original Policy
(iii)   Claim Form
(iv)    post mortem Report
(iv)    police Report if complaint is lodged
Claims of person presumed to be dead due to drowning, may be settled after two years of
the submission of the following documents:
(i)     Police report and final investigation report
(ii)    Report of findings by Customs / Port Authorities
(iii)   Affidavit duly notarized.
Subject to above, claims of persons of a fishing vessel which is missing or a total loss
will be presumed dead and claim settled accordingly.
The cover is mainly for the benefit of the people living in the rural areas of the country.
The sum insured is fixed at Rs.l0,000/- @ a premium of Rs.5 only.
The following benefits are covered
Death                                          Rs.10,000
Loss of both eyes / Loss of two limbs          Rs.10,000
/ Loss of one limb and one eye
Loss of one eye
Loss of one limb                               Rs.5,000
Permanent total disability                     Rs.10,000
The other features of the scheme are:
Age limits are minimum 10 years and maximum 70 years. A policy-cum-proposal form is
Claims procedure is simplified. There is a provision for nomination so that death claims
are settled expeditiously. Post mortem report is not insisted upon where evidence of
accident is clearly available.
Group discounts and long-term discounts are available.
( JPA and Gramin PA policies form part of rural insurance but are dealt with here as they
are a variation of standard personal accident policy.)