Preparing for a life insurance interview can be quite challenging. Insurance is a broad field covering many diverse topics and concepts. Anyone working in this sector must be a subject matter expert who is well-versed with the nitty-gritty of life insurance.
We’ve created a detailed list of some of the most common life insurance interview questions that will not only help you understand the fundamental concepts of the field but also give you a glimpse of what to expect during a life insurance interview.
Even if your native language is Hindi or something else, at the time of the interview, chances are that you will be questioned in English. However, you can translate these insurance interview questions in Hindi if you wish to prepare for the interview in your native language and make your very own insurance interview questions pdf in Hindi.
If you have an interview lined up, make sure to give this article a good read to enhance your chances of bagging the role!
Easy Life Insurance Interview Questions
1. What is “Insurance Coverage?”
Ans: Insurance coverage is the amount of liability covered for an entity or an individual through insurance services, Insurance coverage such as life insurance or auto insurance is issued by the insurer in case of unforeseen incidents.
2. What are the Various Kinds of Insurance Coverage?
Ans: Insurance policies are of two kinds:
- General or non-life insurance
- Life insurance
3. What is Meant by Beneficiary?
Ans: The beneficiary is the person who gets nominated for the insured amount in case the policyholder dies.
4. What do you Mean by ‘Insured’ and ‘Insurer’?
Ans: The insurer is the party in the insurance contract undertaking to pay compensation. The insured is the one who holds the policy and the insurer covers the same.
5. What is the Difference Between ‘Irrevocable Beneficiary’ and ‘Revocable Beneficiary’?
Ans: ‘Irrevocable beneficiary’ is a designation in which the policyholder must take the beneficiary’s consent before changing the beneficiary’s name. On the other hand, a revocable beneficiary allows the policyholder to change the beneficiary name without getting the named beneficiary’s consent.
6. What do you Mean by the Contestable Period in an Insurance Policy?
Ans: Contestable period refers to the duration in which the insurance company holds all the right to investigate the required policy and determine whether they should pay or not pay the insured. This period usually lasts for a year or two.
These were some very easy yet common questions you will find in any HDFC life insurance questions and answer pdf. However, when it is your first attempt, and your anxiety levels are high, you might also give wrong answers to these. So try to keep your calm during the interview and boost your confidence beforehand with consistent practice.
To add to that, you might also like to practice some HDFC life insurance interview questions that are a level or two more complicated than the previous ones and challenge your critical thinking as well as the knowledge quotient. Below are some of such HDFC life insurance interview questions that will definitely prepare you to excel!
Also Check, Job-ready Program in Financial Modelling & Analysis from upGrad.
Challenging Life Insurance Interview Questions
7. What is a ‘Deductible’?
Ans: Deductible is among the clauses an insurance company uses as a threshold for the policy payment for travel or health insurance. It is a decided amount that you must pay from your pocket when you claim the insurance. For example, if the deductible is INR 25,000 and you have insurance coverage of INR 1,00,000, you would have to pay INR 25,000 out of your pocket and the insurance company will cover the rest of the INR 75,000.
8. What is a No-Claim Bonus?
Ans: No-claim bonus refers to a benefit insurance companies offer to those who haven’t claimed insurance during the preceding year of cover. It lowers the premium for the following year.
9. What do you Mean by Co-Insurance?
Ans: Co-insurance is a policy usually offered by health insurance companies. In this policy, you share the coverage with the insurance policy in a percentage of the policy value after the deductible. Usually, the split is 80%/20% where the policyholder has to pay 20% while the insurance company pays the 80% of the covered amount.
Suppose you have claimed health insurance for INR 20,000 and it requires a deductible of INR 10,000. After paying the deduction, the remaining amount is INR 10,000 and the co-insurance is 80/20. Now you’d have to pay INR 2,000 out of your pocket and insurance will pay INR 8,000.
10. What is a Loss Payee?
Ans: Loss payee is an institution or person that receives the insurance payment for the loss of a vehicle or property you own. In the event of payment being made under the policy in relation to the insured, it would go to the third party rather than to the beneficiary of the same. For example, if you had auto insurance of a car you bought on loan and the car crashed within the loan’s payment duration, the money would go to the lender rather than you.
11. What do you Mean by Surrender Value?
Ans: Surrender value, also known as cash value or cash surrender value is the monetary amount the policyholder gets from the life insurance company if they decide to exit the same before it reaches the maturity date. A common premium policy would acquire surrender value if the policyholder has paid its premium for three years continually. The policy ceases as soon as the policyholder withdraws the amount and they might lose all the returns on the policy.
12. How do you Claim an Insurance Policy?
Ans: To claim an insurance policy, you first have to fill up the claim form and contact the financial advisor from whom you purchased the policy. After completing these steps, you have to provide the required documents such as the payment receipt. When everything is verified and deemed fine, you would get your insurance claim within seven days of your claiming date.
Also Read: Banking Job in India
13. What do you Mean by Paid Value?
Ans: The paid value is the reduced assured amount the insurance company pays if the policyholder stops paying premiums after a specific duration. In simple terms, when a person stops paying premiums after a specific duration, the policy remains but with a lower assured amount, this low amount is called paid value or paid-up value.
The amount the insurance company assures to pay reduces if the person claims the paid-up value. The reduction depends on how soon before the maturity period has the person requested the paid value.
14. What Happens If a Person Doesn’t Pay Premium Payments?
Ans: In normal cases, if a person stops paying premiums, the insurance company gives them 10-15 days as a grace period after the due date. However, if the person doesn’t pay even in the grace period, their policy lapses. After that duration, the person would have to pay the due premium along with interest charged on the premium since the due date to revive the policy.
On the other hand, if the person paid premium payments for a substantial duration (2-3 years minimum) and then they stop paying the premium, the Insurance company will deduct the premium from the accumulated sum. This is particularly common with permanent life insurance policies. It continues until the accumulated funds deplete after which the company terminates the policy.
If you have already added these in your HDFC life insurance interview questions pdf and did not find anything that has troubled you, then you are off to a great start. However, it is also true that no matter how much you prepare well for an interview, if the interviewer is in a mood to test your depths they will keep on asking more and more tricky questions.
So for those situations also you need to be prepared. For that, you need to make an advanced level HDFC life insurance interview questions and answers pdf, for which you can take reference from below.
Advanced Life Insurance Interview Questions
15. Can you Differentiate Between a Participating Policy and a Non-Participating Policy?
Ans: In a participating policy, the insurance company shares its generating profit with the policyholder and gives them dividends while in a non-participating policy, the company doesn’t give any profits to the policyholder.
16. Can a Beneficiary Claim the Policy if the Policyholder has been Missing for Multiple Years?
Ans: Yes, a beneficiary can claim the policy but there are a few conditions they must meet. First, they must have a court declaration stating that the policyholder has been missing or announced legally dead. Second, the person must have been missing for more than seven years.
17. Can a Person Limit the Premium Payments for a Smaller Amount of Years than the Policy’s Duration?
Ans: Some insurance companies offer the option where the person has to pay premium payments in three, five, seven, or ten years according to their income and receive the whole coverage they would have received with the usual duration.
18. Can a Person Pay the Premium Through an Insurance Agent? If so, is it Safe to do So?
Ans: Yes, a person can pay the premium through their agent if they make the payment through cheques to their Insurance company and receive all the receipts for such payments.
19. What is a General Insurance Policy and What Does it Cover?
Ans: General insurance policies are also known as non-life insurance policies and offer payments based on the loss from a specific financial event. They are generally defined as any insurance that is not a life insurance policy. Some of the things it covers are legal liabilities, travel, personal property (house or car), accident, health, machinery breakdown, theft, etc.
20. Can a Person Take Two Life Insurance Policies and Claim For Both?
Ans: Yes, a person can take two life insurance policies and claim for both of them.
Must Read: Job-ready Program in Financial Modelling & Analysis
General Life Insurance Interview Questions
1. What Is an Insurance Policy?
An insurance policy is a contract between 2 persons wherein a person agrees to pay a fixed sum of money to the other person on account of any loss.
2. What are the different types of life insurance?
Different types of life insurance policies in India are:
- Term insurance
- Unit Linked Insurance Plans
- Whole life insurance
- Child Insurance Plans
- Endowment plans
- Term insurance with return of premium
- Group life insurance
- Retirement Plans
- Money-Back policy
3. How much life insurance does a person need?
As a general rule, insurance companies offer 5-10 times the annual income of the policyholder as the maturity amount.
4. What is the difference between term and whole life insurance?
Any insurance that continues for a fixed period of time is known as term insurance. Any insurance that continues throughout the lifespan of the policyholder until he/she dies is called a whole-life insurance.
5. Can a policyholder change his beneficiary?
Any policyholder at any point of time can change/ rename his/her beneficiary in the life insurance policy. The holder simply needs to contact the insurance company, fill out a form and the beneficiary shall be changed accordingly.
6. What happens if the policyholder cannot pay his/her annual premium?
If at any point of time, a policyholder fails to pay the annual premium, then the policy is deemed void. However, in certain exceptions, insurance companies may offer “waiver of premium” subject to certain terms and conditions.
7. What tax benefits can one claim under life insurance policies?
Any individual can claim deductions up to 1,50,000 INR on their life insurance policies under section 80C of the Income Tax Act.
8. Who regulates life insurance in India?
The IRDAI or the Insurance Regulatory and Development Authority of India is oversees all insurance related matters in the country. It is a statutory body set up by the government of India under the IRDAI Act, 1999.
9. Is the insurance company liable to pay on account of suicides?
As per governmental regulation, if any policyholder commits suicide within 2 years of taking a life insurance policy, then the insurance company is not liable to pay the amount. However, suicides after 2 years do not have any effect over the life insurance policy and the companies are bound to pay the beneficiaries.
10. How to claim life insurance maturity amount?
To ensure a hassle-free claim process the beneficiaries of the policyholder must produce the following document before the company:
- Death certificate of the policyholder
- Fully filled claims form
- Policy document
- Proof of beneficiary
11. Can an insurance company cancel a life insurance policy after its premium has been paid?
Any insurance company can review the policy within 2 years for any kind of discrepancies and misrepresentations. If during the period, the company identifies such misrepresentations, they can cancel the entire policy. Any discrepancy found out after 2 years is not admissible and companies are bound to continue the policy.
12. What if the policyholder is not in physical condition to pay for the premiums?
If due to any accident or illness, the policyholder is unable to pay his/her premium, the company can offer a “waiver of premium” feature. The company pays the premium to keep the policy active.
13. What types of payment methods are available?
Upon the death of the policy holder, the beneficiaries can claim the maturity amount in different forms. Either the full amount at once, or at equal monthly installments or a combination of both.
14. Why do individuals need to show a proof of income?
The primary objective of a life insurance policy is to ensure financial stability of the legal heirs of the policyholders upon his/her death. Thus, a proof of income determines the exact amount of money that should be paid after the death of the policyholder and also whether he/she can continue with their premium payments.
15. What is a cash-back money life insurance policy?
A money back life insurance policy ensures payment of a fixed amount from the maturity value after completion of certain years.
How to Prepare Life Insurance Interview Questions and Answers
The best way to prepare life insurance interview questions and answers would be through learning about the field. With a deep understanding of the various sections of life insurance, you can easily bag a lucrative role in this sector.
However, here are some tips you can follow to make your preparation more structured and efficient after following HDFC life insurance interview questions and answers pdf.
- Significant knowledge about the industry
When going for an interview, you must have sound knowledge of the company, including its market positions, its organisational values and most importantly, its market competition.
You might get asked questions from any of such topics, hence have your base cleared about the insurance industry, how it works, and who are the leaders in the industry.
This will grant the interviewer a detailed insight into your knowledge and skill set. It also portrays that you have devoted individual time learning about the company, which means you are serious about the job.
- Prepare about the role that you are applying for
Not knowing what you are applying for can be a big turndown.
When the interviewer asks whether or not you are aware of the responsibilities you will be taking, you need to have some answers.
Therefore, search online and learn about the job role you are applying for. Plenty of websites are filled with details on roles and responsibilities associated with a certain job role. Hence, look through them and get a rough idea of the responsibilities you might be taking once you get the job.
- Prepare to present your strengths and weaknesses
‘Why should we hire you?’ is a very common question in most of the personal interview rounds. Your answers can not be like, “because I need a job, I think you should hire me”. Or you should not come across as very superficial by saying, “I am the best, and that’s why you should hire me”.
Try and be honest and humble. So, prepare a speech where you beautifully portray your strengths and weaknesses.
- Make up a mindset for facing tough questions
Oftentimes, even after knowing the answer, anxiety can ruin your chances of fluently answering tricky questions. Try your best to handle the situation and if you do not know the answer to any of the questions, then be honest and tell them that you don’t know. That is far better than giving a wrong answer!
- Prepare questions that you would want to ask when given the opportunity
The interview is a two-way process. Hence, prepare a few relevant and genuine questions to ask them. Often time candidates hesitate to ask any questions when given the opportunity. Refrain from doing so. You can ask the interviewer about the training and progression opportunities in the company, the vision of the company for the next few years if overtime is expected, how they would describe a typical work day or what are the biggest challenges of this role. Not having any questions might make you appear unprepared or disinterested.
- Prepare yourself for salary negotiation
If it is your first job, you must strengthen your negotiation skills. You might get under-compensated if you are unaware of the industry standards. Therefore, do your research on the pay scale of the job you are applying for and try and use that information when asked about your expectations.
While negotiating, do not forget to mention why you feel you are worth getting the amount, otherwise, the interviewer might think you are quoting any random number that you saw on the internet.
- Gain knowledge about non-monetary compensations
If you are not satisfied with the monetary compensation that they are offering, do not back off immediately. Ask them about the other types of compensation they offer apart from the base pay and then make a decision considering all the pros and cons.
Whether preparing insurance interview questions in Hindi or English, your attitude and confidence are among other aspects which are deeply gauged. Make sure to work on them.
If you’re interested in learning more about this field, we recommend taking a life insurance course. It would teach you the necessary skills required to become a life insurance professional through exclusive training and mentorship.
At upGrad, we offer the following three courses:
- Job Guaranteed PG Program in Life Insurance with HDFC Life
- Job Guaranteed PG Program in Life Insurance with Tata AIA Life
- Post Graduate Program in Life Insurance with PNB MetLife
You can pick any one of these courses and kick start your insurance career.
Conclusion
We hope that you found our article on life insurance interview questions and answers useful.
We know how challenging it can be to prepare for an interview, however, remember that it’s not a herculean task. Stay confident and give direct answers to any questions. Although many people get nervous during interviews, remember that it’s very common and recruiters know that.
With upGrad, aspirants can choose to pursue Job-ready Program in Financial Modelling & Analysis in association with PwC India.
Let us know what you thought of this article by dropping a comment.
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