Reply To: Interview Question for CT5-10
Mayank Goyal
Q. Differentiate between Surrender and lapse of a policy?
Ans: When policyholders want to receive the benefit before the expiration, they can terminate the policy; this is called surrendering the policy. In such cases, the insurance company cut a certain fixed proportion and pays the remaining amount.
When due to some reasons, the policyholder stops paying the premium due to the policy, the company lapses/terminates the policy and no premium or claim payments are made in these scenarios.
Sent from my SM-A605G using Actuarial Info mobile app
Ans: When policyholders want to receive the benefit before the expiration, they can terminate the policy; this is called surrendering the policy. In such cases, the insurance company cut a certain fixed proportion and pays the remaining amount.
When due to some reasons, the policyholder stops paying the premium due to the policy, the company lapses/terminates the policy and no premium or claim payments are made in these scenarios.
Sent from my SM-A605G using Actuarial Info mobile app
Sent from The Actuarial Club mobile app