NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2)
Non-Life Insurance Products for NISM-Series-X-B
Non-life insurance covers risks other than life: health, accident, motor, property, travel and liability. It pays for a loss, usually up to a sum insured, under stated terms. For X-B, learn the core principles first, then what each policy covers, excludes and pays, and how claims work.
What this chapter covers
This chapter covers general insurance products that an investment adviser must understand when building a client's risk plan. You study the principles behind indemnity contracts, then the main product types: health, personal accident and disability, motor, home and property, travel and liability. It ends with how claims are made and how to choose a policy.
In the paper, this chapter sits in the risk management and insurance part of financial planning. Life insurance covers the risk of death. Non-life products cover the other risks that can drain savings: a hospital bill, an accident, a car damaged in a crash, a house fire. An adviser who ignores these risks leaves the client's investment plan exposed.
X-B is case-based and tests application. You may get a client profile and be asked which cover fits, what a clause means, or why a claim may be reduced. So learn the logic of each term, not only its definition. Always check the exact wording in the current NISM workbook, as limits and rules can be revised.
Insurance questions are usually easy to score if your concepts are clear, because they test definitions, conditions and matching a product to a need. They also link to other chapters such as goal planning, risk profiling and asset allocation. A confident hold on this chapter gives you steady marks in both standalone MCQs and caselets. With negative marking in the paper, knowing exact terms helps you avoid wrong answers on trap options.
Non-Life Insurance Products: topics in the order to study them
- 1Principles of Non-Life Insurance and Policy TermsIndemnity, insurable interest, utmost good faith and policy terms are used in every later product, so learn them first.
- 2Health Insurance ProductsThe most tested and most relevant product for clients, and it uses terms like sum insured, waiting period and co-payment heavily.
- 3Personal Accident and Disability InsuranceIt builds on health cover and shows how benefit-based policies differ from indemnity policies.
- 4Motor InsuranceA structured product with clear cover types and add-ons, easy to learn once the basic terms are known.
- 5Home and Property InsuranceIt applies indemnity ideas such as under-insurance and average to physical assets.
- 6Travel, Liability and Other Non-Life PoliciesThese are shorter, varied products, best studied after the main ones so you can compare them.
- 7Claims Process and Policy Selection ConsiderationsIt ties all products together: how claims run and how to pick cover, which suits case-based questions.
How to prepare Non-Life Insurance Products
Treat this chapter as a set of products built on one set of principles. Learn the principles well, then compare products on the same few points.
- Read the principles topic first and write each term in your own words with a one-line example.
- For each product, make a small note on four points: what it covers, what it excludes, how the payout is decided, and who needs it.
- Make a list of policy terms such as sum insured, deductible, co-payment, waiting period and exclusions, and note which products use them.
- Separate indemnity policies from benefit policies. Check how this changes the payout in each product.
- Practise with a sample client: pick the cover needed, then check whether the sum insured is adequate.
- Read the claims process last and note documents, timelines and reasons for rejection or reduction exactly as the workbook gives them.
- Attempt chapter MCQs and review every wrong answer by finding the exact term or condition you missed.
Common mistakes in Non-Life Insurance Products
Treating all non-life policies as paying the full sum insured.
Fix: Ask whether the policy is indemnity or benefit based. Indemnity pays actual loss up to the sum insured.
Mixing up deductible and co-payment.
Fix: Remember a deductible is a fixed amount subtracted first, while co-payment is a share of the claim you bear.
Ignoring waiting periods and exclusions in health cases.
Fix: In every health caselet, check pre-existing conditions, waiting periods and exclusions before choosing the answer.
Confusing third-party and own-damage motor cover.
Fix: Third-party cover handles harm to others; own-damage cover handles your vehicle. Learn which is mandatory.
Memorising figures and limits from old notes.
Fix: Use the current NISM workbook for all exact numbers, timelines and rules.
Recommending a product without matching it to the client's need.
Fix: In caselets, identify the risk, the existing cover and the gap first, then pick the product.
Last-day revision: Non-Life Insurance Products
- Non-life insurance covers risks other than death, mainly through indemnity contracts.
- Indemnity means compensation for actual loss, not profit from a loss.
- Insurable interest means you must stand to lose financially if the insured event happens.
- Utmost good faith means you must disclose all material facts honestly.
- Sum insured is the maximum the insurer will pay, not a promised payout.
- Co-payment is a share of the claim you bear; a deductible is an amount subtracted before the insurer pays.
- Waiting periods and exclusions can delay or deny a health claim.
- Personal accident and disability covers often pay a fixed benefit rather than actual expenses.
- Motor third-party cover is legally required in India; own-damage cover is separate.
- Under-insurance of property can reduce your claim proportionately.
- Liability policies cover legal liability to others, not your own loss.
- Check the policy wording and documents first when a claim is delayed or rejected.
Non-Life Insurance Products practice questions
- In a standard fire and special perils policy issued in India, which of the following is the usual basis on which the sum insured for a build…
- Under a motor insurance package policy in India for a private car, which of the following is covered under the own damage section?
- Rakesh's shop stock is worth ₹20,00,000, but he insured it under a fire policy with an average clause for a sum insured of ₹15,00,000. A fir…
- Under a health indemnity policy, the waiting period for pre-existing diseases is best described as:
- In a standard Indian fire and special perils policy, which of the following is the basis on which a claim for damaged stock is normally sett…
- Under a marine cargo policy, which clause covers loss from the cargo being lost or damaged during transit and typically terminates when good…
- Caselet: Mr. Rakesh Iyer, 42, has a family floater health policy with a sum insured of Rs 10 lakh and a sub-limit of 1% of sum insured per d…
- Caselet: Mr. Khanna insures his car under a comprehensive motor policy with an IDV of Rs 6,00,000. The car is stolen and never recovered. Th…
Non-Life Insurance Products in other exams
The same ground in other exams, if you are preparing for more than one or want another angle on it.
Non-Life Insurance Products: frequently asked questions
What is non-life insurance in NISM-Series-X-B?
It means insurance products other than life insurance, such as health, accident, motor, property, travel and liability cover. The chapter teaches what each covers, how payouts work and how claims are handled.
Is this chapter conceptual or number-based?
It is mostly conceptual, with some simple calculations such as co-payment, deductibles or proportionate claims. Clear understanding of terms matters more than heavy calculation.
How should I study the policy terms?
Learn each term with a short example and note which products use it. Then test yourself on pairs that are easy to confuse, like deductible and co-payment.
Does negative marking affect how I attempt these questions?
Yes. X-B has negative marking of 25% of the marks assigned to a question. If you can remove two options using the exact term or condition, an informed attempt is reasonable; avoid pure guesses.