Policy bond

In one of the Posts in July we have already discussed a ‘Policy’ and a promise was made that we shall discuss each of those items in detail later. That promise is taken up here and now. As discussed Policy is an evidence of insurance contract   and not the contract itself. A policy is issued in the form of a policy bond, which has mainly four parts. They are (i) a reference to the proposal, reports, allied papers and declarations and the promise of the life insurer to pay the benefits if premiums are paid as stipulated in the policy (ii) Schedule of the policy (iii) Conditions and privileges of the policy (iv) Blank space in the policy bond.

Every policy bond will have the name and emblem of the life insurance company on its front page as a ‘heading’. Below the promise of the life insurer an authorized signatory will put his signature    and affix the official seal of the company. The policy will be dated, i.e. date of issue will be given on the policy. Policy is to be stamped according to provisions of Indian Stamp Act. This can be done by affixing ‘Insurance Stamps’ on the policy bond or by paying consolidated stamp duty to the government (if permitted by the State government as stamps are supplied by the state treasury)   and making a statement on the policy bond that “Consolidated stamp duty paid to government vide ….(payment details)…”