IBSL

FAQ

In the middleclass families, the whole family depends on the earning member of a family whether he or she is a married person or a single, for their existence. In the case of a married person, wife and children depend on him whereas in the case of an unmarried person, the parents, brothers and sisters depend on him or her. Untimely demise of the breadwinners in the family will create a financial crisis and their future will be at stake until they find a source of income for their existence. A life insurance policy taken by the breadwinner will undoubtedly help the family to continue to manage the immediate financial need from the death claim settled by the insurance company. In the event the policyholder survives up-to the maturity date, the maturity claim paid by the insurance company is a saving which could be invested.

This FAQ page answers pertinent questions on risk management and FAQ serves as a kind of roadmap. You will never be lost or feel frustrated when a situation is beyond your control. Also, we will continue to keep you updated with more information through this page, using the feedback we receive from you.

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Q1:	Which are the companies registered as insurers in Sri Lanka to engage in life insurance business?

A1:	Sri Lanka Insurance Corporation Ltd Union Assurance PLC Ceylinco Insurance PLC Eagle Insurance PLC Janashakthi Insurance Co Ltd Cooperative Insurance Co Ltd Asian Alliance Insurance PLC HNB Assurance PLC Amana Takaful PLC Life Insurance Corporation (Lanka) Ltd Seemasahitha Sanasa Rakshana Samagama ABC Insurance Company Limited Allianz Life Insurance Lanka Ltd

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Q2:	Who are Intermediaries?

A2:	Intermediaries are persons who engage in the procurement of insurance business on behalf of insurance companies and are remunerated by the insurers by way of commission.

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Q3:	Who is an Insurance Agent?

A3:	An insurance agent is an individual appointed by an insurance company or an insurance broker. No insurance broker or an insurer shall appoint an insurance agent who is already registered as an insurance agent with any other insurer or insurance broker. Insurance agents procure insurance business on behalf of the insurer or the insurance broker. Insurance agents are not employees of insurers or insurance brokers and they are remunerated by way of commission at the rates prescribed by the Insurance Board of Sri Lanka.

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Q4:	Who is an Insurance Broker?

A4:	An insurance broker is a public or private company incorporated under the Companies Act and registered as an insurance broker by the IBSL under the Regulation of Insurance Industry Act No.43 of 2000. Insurance brokers look after the interest of their clients and provide advice in selecting the appropriate insurance cover required to protect their risks and also recommend the insurer with whom the insurance policy may be placed with.

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Q5:	How do I know if the Broker and/or Agent is authorized to sell life insurance policies?

A5:	A life insurance agent is appointed by an insurance company or an insurance broker. Identity card issued by the insurer or the insurance broker is the proof that he or she is entitled to procure life insurance business on behalf of the insurer or the insurance broker. If you are suspicious of the person concerned you could verify from the insurer or the insurance broker who appointed the agent. Insurance brokers are licensed by the IBSL and Certificates of Registration is issued to each them for each class of insurance business.

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Q6:	How does a life insurance company evaluate my risks?

A6:	The insurance company assesses your risk by analyzing your family history and other information such as sex, age, habits, your/family medical history, health condition, occupation, financial status etc provided by you in the proposal form and in other statements and from the medical reports obtained when applicable.

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Q7:	Should I pay my premiums through the Agent?

A7:	Always it is advisable to obtain the receipt for your premium payment from the insurance company. Insurance agents are not allowed to issue receipts on behalf of the insurance company. Therefore you should endeavour to obtain a receipt issued by the insurer through the insurance agent for the premium payment you made to him. In the event, the premium due is not paid within the days of grace, your policy may lapse, depending on the condition laid down in the policy.

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Q8:	Do I enjoy a grace period to pay the premiums?

A8:	Generally for the payment of insurance premium on life insurance policies, insurance companies provide a grace period of two weeks in respect of monthly premium and one month in respect other modes of payments. If your policy lapses or become a paid up policy for non-payment of premium, you could reinstate your policy at the discretion of the insurer by paying the outstanding premium with interest and also you may have to undergo a medical test depending on the sum assured, the period of lapsation etc.

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Q9:	How can I cancel my existing policy and replace it with another?

A9:	Generally canceling and obtaining a new policy is uneconomical since you will not be entitled to any refund unless your existing policy has acquired surrender value, which would be very much lower than the premium that you have already paid. Further, as the rate of premium payable under life insurance policy depend on the age at which you commenced the policy, you will have to pay higher premium on the new policy. Also, as a general rule insurance companies do not always agree to issue a new policy by canceling the existing one.

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Q10:	What do I do when the insurance policy has matured?

A10:	When your life insurance policies have a maturity date except the whole life insurance policies. Usually, the insurance company will communicate with you in advance before the maturity date. In addition to filling certain discharge forms, you are required to tender the original policy and instruct the insurance company in what manner you wish to obtain the proceeds of the policy.

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Q11:	How does one deal with a claim under the life policy?

A11:	It is always better to keep an immediate family member apprised of your insurance policy so that he or she could initiate action to obtain the policy proceeds in the event of your sudden demise. It is always advisable to assign your policy in favour of a relation or nominate a person to receive the benefits under the policy which otherwise would result in the disbursement of death benefits through legal process. In all other cases, such as disability benefits due to sickness or accident, family income benefits, total permanent/partial disability, inform your insurance advisor (agent or broker) and the insurance company immediately to process the claim.