LIC ADO Interview Preparation Guide
(Part - 1)
In this blog we have discussed about some " Preparation tips and concepts about Insurace and its types" and also about " Insurance Regulatory and Development Authority of India (IRDAI) " . We hope that it will help you. Thank you.
Some tips on Interview Preparation :
An interview is a formal two-way communication process where an interviewer assesses the qualifications, personal details, personality, and capabilities of an interviewee. Interviews are conducted for various purposes, including job selection, university admissions, and commissions' evaluations for prestigious courses.
A. There are three major types of interviews :
(i) Telephonic Interviews : These interviews are conducted over a phone call and typically last for 10-15 minutes. In telephonic interviews, communication skills and knowledge play a crucial role as only audio is used for communication. They are usually conducted in the initial rounds to gather basic information about the candidates.
(ii) Individual Interview : Individual interviews can be conducted either virtually or face-to-face. They involve only one interviewer and tend to be more detailed compared to other interview formats. In individual interviews, the candidate's body language, personality, presence of mind, behavior, and qualifications are evaluated.
(iii) Group Interview : Group interviews can be conducted virtually or in-person. They involve a panel of interviewers, usually consisting of 4-5 members. Group interviews tend to be longer and often make candidates nervous and anxious due to the presence of multiple interviewers.
It is important for candidates to prepare and be aware of the specific requirements and expectations of each type of interview to enhance their chances of success.
B. The significance of Interviews :
Interviews play a crucial role in the functioning of any organization. They provide both the institution and the individual with an opportunity to gain insights into each other's goals and objectives. Below are the various importance of interviews:
(i) Platform for Presentation : Interviews offer candidates a valuable platform to showcase their achievements, skills, and qualifications to the institution or company they aspire to join.
(ii) Understanding Motives : Through interviews, recruiters can gauge the candidates' motives and determine their genuine interest in serving the institution over the long term.
(iii) Skill Evaluation : Interviews serve as a means to assess the skills and abilities of the candidates. This evaluation helps recruiters gauge the suitability of the candidates for the desired position.
(iii) Selecting the Best Fit : Interviews aid recruiters in selecting the most suitable candidate for a particular role. They facilitate a comparison of candidates based on various aspects, enabling the identification of the best fit for the institution's requirements.
Overall, interviews are vital in establishing a productive connection between the institution and the candidates, ensuring that the most qualified individuals are selected to contribute to the institution's success.
C. Effective Interview Preparation Tips :
Preparing for interviews can be overwhelming, and it's easy to overlook important details. While there are numerous tips to keep in mind, here are some fundamental ones that cover various aspects of the interview process, helping you perform at your best:
(i) Be Punctual : Arriving late or missing the interview is the worst mistake you can make. Aim to reach the office or interview venue 20 to 30 minutes early. This allows you to compose yourself and appear fresh during the interview. If unfamiliar with the location, research it a day in advance to avoid delays.
(ii) Research the Company : Acquire in-depth knowledge about the company or organization you are interviewing for. Understanding their background and values will help you align your skills and qualifications to their requirements effectively.
(iii) Dress Professionally : Maintain a professional appearance by dressing appropriately. Avoid overdressing, casual attire, or excessive accessories. Choose clean, well-ironed clothes, style your hair neatly, and opt for a mild fragrance to make a positive impression without overwhelming the interviewer.
(iv) Make Eye Contact : Establishing eye contact is vital in any form of communication. Despite nervousness, make a conscious effort to maintain firm eye contact with the interviewer. Avoid looking at walls or furniture, as it may come across as awkward or immature.
(v) Gather Required Information : Boost your confidence by thoroughly understanding your field and qualifications. Be prepared to answer questions and handle unexpected queries confidently. Avoid exaggerating or providing nonsensical explanations, as interviewers value concise and meaningful responses.
(vi) Know Your Motivation : Expect to be asked why you applied for the interview. This question reflects your intentions and aspirations. Provide a genuine response that highlights your desire for long-term experience and learning, emphasizing how the organization aligns with your goals. Avoid irrelevant or uninformed answers such as "just looking for a job" or "heard about a vacancy and applied."
By following these basic interview preparation tips, you can enhance your chances of success and make a positive impression during the interview process.
Now we discuss about Insurance.
Some Imporatnt Concepts about Insurance :
A. About Insurance :
Definition of Insurance : Insurance is a contract where individuals facing similar risks agree to share the losses resulting from those risks on an equitable basis. It provides protection against specific risks by distributing the potential financial burden among a group of insured individuals.
Example of Risk Sharing : Suppose there are 10,000 houses in a city, and each year, 10 houses are destroyed by fire. If the loss due to fire is Rs. 1,00,000 per house, the total estimated loss would be Rs. 10,00,000. By dividing this loss among the 10,000 house owners, each owner's share would be Rs. 100. Thus, through a small annual contribution of Rs. 100, all 10,000 house owners obtain protection against the risk of fire.
B. Characteristics and Needs of Insurance :
(a) Characteristics :
(i) Contractual Nature : Insurance is a contract between two parties: the insurer and the insured. The insurer agrees to compensate the insured for certain risks in exchange for the payment of insurance premiums. Indian Contract Act provisions, such as proposal, acceptance, consideration, competency of parties, and lawful object, apply to insurance contracts.
(ii) Principle of Mutual Help : Insurance is a cooperative mechanism that spreads the losses caused by specific events among a group of insured individuals. It operates on the principle of mutual assistance.
(iii) Principle of Large Numbers : Insurance relies on a large number of insured individuals to reduce the cost of insurance and premiums. More insured individuals lead to lower costs, while fewer insured individuals result in higher costs.
(iv) Uncertain and Unforeseen Events : Insurance covers events that are uncertain and unforeseen. It provides financial indemnity for the insured property against specific risks during the insurance period.
(v) Regulation and Authority : Insurance business is regulated by specific acts enacted by the central or state government in each country. In India, life insurance is regulated by the Life Insurance Corporation of India Act 1956, and general insurance is regulated by the General Insurance Business (Nationalization) Act 1972. The Insurance Regulatory and Development Authority (IRDA) was established in 1999 to regulate the insurance industry in the country.
(vi) Social and Economic Device : Insurance is a social and economic mechanism that shares the financial burden of unforeseen events among the public exposed to risks.
(vii) Risk Evaluation and Premium Determination : Insurance companies assess the risk and determine the amount of premium accordingly. Higher risks result in higher premiums.
(viii) Compensation for Unforeseen Events : Insurance companies are liable to pay compensation, or the claim amount, only if specific unforeseen events occur in the case of fire, marine, and accident insurance.
(ix) Legitimate Contract : Insurance is a lawful contract that transfers the risk from one individual to a group of individuals. Policyholders pay premiums as consideration, and insurance serves to increase productivity and convert uncertainty into certainty. It is not a form of gambling or wagering.
(b) Needs :
(i) Economic Protection : Insurance provides economic protection to individuals and their property by covering potential losses.
(ii) Investment and Future Needs : Life insurance serves as an investment for meeting future needs such as education, marriage, and income provision for old age.
(iii) Tax Relief : Premium payments made during the financial year can provide income tax relief to policyholders.
(iv) Social Security : Insurance has gained importance as a social security device in recent years.
(v) Business Protection : Insurance protects businesses by safeguarding investments against various risks, ensuring operational continuity, and facilitating business growth.
(vi) Minimization of Uncertainty : By providing financial support, insurance minimizes uncertainties in business and human life.
C. Types of Insurance in India – Risks and Benefits :
(i) Term Insurance or Term Plan : It provides financial coverage to the beneficiary of the insured person for a specific period. The death benefits can be claimed by the beneficiary in the event of the policyholder's death during the policy term.
Risk : No pay-out is provided if the insured person outlives the policy term.
Benefits : Offers high coverage or sum assured at low premiums.
(ii) Whole Life Policy : Provides insurance cover for the entire life of the policyholder as long as the premiums are paid. Maturity benefit is received by the policyholder upon surviving the policy term, while the nominee receives the death benefit.
Risk : Changes in company policies, bankruptcy, or poor performance can impact the returns negatively.
Benefits : Coverage for the whole life or up to 100 years in some cases, with the option for partial withdrawals.
(iii) Endowment Plan : Combines life insurance coverage with regular savings over a specific period. Offers a lump sum amount on policy maturity or to the beneficiaries in case of the policyholder's death during the term.
Risk : Protection is provided only for the specified period, higher premiums compared to other plans, and low returns.
Benefits : Maturity benefits, periodical bonuses, surrender values, paid-up values, and loan values.
(iv) Unit Linked Insurance Plan (ULIP) : A market-linked product that combines investment and insurance. Offers flexibility to invest in equity or debt funds based on the investor's risk appetite.
Risk : Returns are not guaranteed, and charges associated with the scheme can affect returns.
Benefits : Market-linked returns and investment flexibility.
(v) Money Back Policy : Provides financial protection in case of death or critical illness of the policyholder. Pays periodic survival benefits during the policy term and the entire sum assured to the nominee upon the policyholder's death.
Risk : Long tenure and potential for lower returns.
Benefits : Regular survival benefits, maturity benefit, and full sum assured paid to the beneficiaries upon death.
(vi) Children's Policy : Combines insurance and investment to secure the child's future, including education and marriage. Builds a corpus over time and provides financial support in case of the parents' demise.
Risk : Additional charges may impact returns, especially in the initial stage.
Benefits : Corpus building for the child's future, one-time pay-out or annual installments, and some plans waive future premiums on the
life insured's demise.
(vii) Annuity Plan/Retirement Plan : Provides regular payments for life in exchange for a lump sum investment. The life insurance company invests the funds and pays out returns generated from it.
Risk : Annuity plans can be costly, and there may be surrender penalties for early withdrawal.
Benefits : Guaranteed pay-out, possibility of higher income for health issues.
Note : The risks and benefits mentioned are general considerations and may vary based on specific insurance products and companies.
About Insurance Regulatory and Development Authority
of India (IRDAI) :
Insurance Regulatory and Development Authority of India (IRDAI) is a statutory body established under the Insurance Regulatory and Development Authority Act, 1999 (IRDAI Act 1999) by the Parliament of India. It is responsible for the overall supervision and development of the insurance sector in the country.
1. MISSION STATEMENT OF THE AUTHORITY :
- To protect the interest of and secure fair treatment to policyholders
- To bring about speedy and orderly growth of the insurance industry (including annuity and superannuation payments), for the benefit of the common man, and to provide long term funds for accelerating growth of the economy
- To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates
- To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery
- To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players
- To take action where such standards are inadequate or ineffectively enforced;
- To bring about optimum amount of self-regulation in day-to-day working of the industry consistent with the requirements of prudential regulation
2. Duties, powers and functions of IRDAI :
Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDAI..
Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business.
Without prejudice to the generality of the provisions contained in sub-section (1), the powers and functions of the Authority shall include –
- Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration
- protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance
- specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents
- specifying the code of conduct for surveyors and loss assessors;
3. Promotion and Regulation :
- Promoting efficiency in the conduct of insurance business
- Promoting and regulating professional organisations connected with the insurance and re-insurance business
- Levying fees and other charges for carrying out the purposes of this Act
- Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organisations connected with the insurance business
- Control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938)
- Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries
- Regulating investment of funds by insurance companies
- Regulating maintenance of margin of solvency
4. Other duties :
- Adjudication of disputes between insurers and intermediaries or insurance intermediaries
- Supervising the functioning of the Tariff Advisory Committee
- Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organisations referred to in clause (f)
- Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector and
- Exercising such other powers as may be prescribed
5. Chairman and Members of Authority :
As per the section 4 of IRDAI Act 1999, Insurance Regulatory and Development Authority of India (IRDAI, which was constituted by an act of parliament) specify the composition of Authority
The Authority is a ten member team consisting of
(a) A Chairman – Mr. Debasish Panda
(b) Five whole-time members –
(i) Mr.Thomas M Devasia , Member (Non-Life)
(ii) B.C. Patnaik , Member (Life)
(iii) Mr. Parmod Kumar Arora Member (Actuary)
(iv) Ms. S. N. Rajeswari , Member (Distribution)
(v) Mr. Rakesh Joshi , Member (Finance & Investments)
(c) Four part-time members –
(i) Suchindra Misra , Additional Secretary, DFS, MoF
(ii) CA.Aniket Sunil Talati , President, I. C. A. of India
Source : Official website of IRDAI
Note : All appointed by the Government of India
[ Ref. No.:IRDA/GEN/02/2007| Date: 02-01-2007 ]
