Insurance MCQ Questions and Solutions with Explanations | Commerce

Young persons are charged lower premium as compared to older persons because younger persons have lower mortality on account of lower age. For example, a racecar driver faces an increased risk of death and, as a result, may pay high life insurance premiums or be denied coverage.

Consideration deals with premium in a valid contract. Consideration means “something in return” (quid pro quo).

If a policy is absolutely assigned to Ramesh and on the death of Srikant, the life assured, Ramesh will be paid the claim amount.

An individual with aggressive risk profile is likely to follow wealth accumulation. Accumulation by definition doesn't happen overnight, it is a gradual and continual increase over time. We believe one of the most important ingredients for accumulating wealth is planning. Planning to accumulate wealth enables you to work effectively toward your goals.

Shares is an accumulation product. Accumulating shares is a classification of common stock given to shareholders of a company in lieu of or in addition to a dividend.

Mortgage Redemption policy is suited to clear off a client’s liability for mortgage loan. A mortgage redemption plan is an insurance that is available to those who take a home loan and corresponds to the quantum of loan that they take. The advantage of such a policy is that in case the insured dies during the loan repayment period, the insurance pays off the loan liability. This plan normally provides insurance cover only up to the age of 65 years because all loans are often liquidated by an individual by the time he reaches this age, if not by the time he retires at the age of 60 years.

In decreasing term insurance the premium is constant through the term. A term life insurance policy in which the policyholder pays a constant premium but the benefit decreases over time, either on a monthly, quarterly, or yearly basis.

In decreasing term insurance the premium is constant through the term.

It is easy to know cash value and savings value components in a traditional plan. Cash value life insurance is a form of permanent life insurance that features a cash value savings component.

Persons with comfort in equity on account of their knowledge are the likely buyers of variable life policies. Variable life insurance is a permanent life insurance policy with an investment component. The policy has a cash value account, which is invested in a number of sub-accounts available in the policy.