Insurance MCQ Questions and Solutions with Explanations

91

If the proponent has no insurable interest in the insured, the underwriter will

A) Accept with reduced sum assured B) Reject the proposal C) Accept with lien D) Accept with extra premium

Discuss

Answer & Solution

Answer: Option A

Solution:

If the proponent has no insurable interest in the insured, the underwriter will accept with reduced sum assured.

92

Which of the following statements is correct?

A) Policyholder cannot earn market rate of interest on his cash value B) In universal life plan, policyholder can vary payments of premium C) Universal life plan is a traditional plan of assurance D) Variable life insurance is a temporary plan of insurance

Discuss

Answer & Solution

Answer: Option B

Solution:

Universal life can provide you with a variety of different payment options, including a flexibility of changing your death benefits, as well as the potential to accumulate cash value over time.
Hence, option (2) is correct.

93

Which of the following is the most appropriate explanation for the fact that young people are charged lesser life insurance premium as compared to old people?

A) Young people are mostly dependent B) Old people can afford to pay more C) Mortality is related to age D) Mortality is inversely related to age

Discuss

Answer & Solution

Answer: Option C

Solution:

Mortality is related to age and hence, young people who are less likely to die are charged lower premiums as compared to old people.

94

Which is true of Current Money method of dividend payment?

A) Returns depend on when the investment was made B) Different investment blocks get different returns C) It is also called segmented or investment block method D) All of the above

Discuss

Answer & Solution

Answer: Option D

Solution:

All the above are true regarding current money method of dividend payment.
Returns depend on when the investment was made, Different investment blocks get different returns and It is also called segmented or investment block method.

95

In ULIPs, the result of policy allocation charge would be that _________ amount would be allocated for investment in units.

A) More B) Less C) High D) Any of the above

Discuss

Answer & Solution

Answer: Option B

Solution:

In ULIPs, the result of policy allocation charge would be that less amount would be allocated for investment in units.

96

In which type of products were protection and saving elements separated?

A) Traditional cash value plans B) Non-traditional plans C) Both A & B D) None of the above

Discuss

Answer & Solution

Answer: Option B

Solution:

In non-traditional plans, protection and saving elements were separated.

97

Which of the following statements is correct?

A) The policy document has to be signed by a competent authority, but need not be compulsorily stamped according to the Indian Stamp Act B) The policy document has to be signed by a competent authority and should be stamped according to the Indian Stamp Act C) The policy document need not be signed by a competent authority, but should be stamped according to the Indian Stamp Act D) The policy document neither needs to be signed by a competent authority nor it needs to be compulsorily stamped according to the Indian Stamp Act

Discuss

Answer & Solution

Answer: Option B

Solution:

According to the Indian Stamp Act, the policy document has to be signed by a competent authority as well as stamped. Hence, option (2) is correct.

98

Which of the following statements best describes an ordinary annuity?

A) Equal cash flows at equal time intervals forever B) Equal cash flows at equal time intervals for a specific time period C) Lumpy cash flows at equal time intervals forever D) Lumpy cash flows at equal time intervals for a specific time period

Discuss

Answer & Solution

Answer: Option B

Solution:

An ordinary annuity is a series of equal payments made at the end of each period for a fixed period of time.

99

What is the special feature of a Family Floater policy?

A) The total sum insured floats amongst the family members B) Husband/wife, children and parents/parents-in-law can be covered C) Both A & B D) None of the three

Discuss

Answer & Solution

Answer: Option C

Solution:

A family floater health insurance plan is an insurance plan that is tailor-made for families. It is quite similar to the individual health plan with an add-on benefit of providing health coverage for the entire family.

100

Which special feature of Unit Linked Policy allowed change from one fund to another?

A) Transfer B) Switching C) Assignment D) Loan

Discuss

Answer & Solution

Answer: Option B

Solution:

Switching is the special feature of Unit Linked Policy that allowed change from one fund to another.

Insurance MCQ Questions and Solutions with Explanations | Commerce