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Insurance MCQ Questions and Solutions with Explanations | Commerce

Insurance MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Insurance MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-3 section-5

Each section contains 100 MCQs on Insurance .
21
All of the following are characteristics of variable life insurance EXCEPT:
Discuss
Answer & Solution
Answer: Option A
Solution:
All of the following are characteristics of variable life insurance except flexible premium payments. A flexible premium annuity allows the 'annuitant', or the owner of the annuity, to make premium payments over a number of years. You would have to pay a small amount to start the annuity, but you make contributions over a number of months or years.
22
Which of the below is correct with regards to universal life insurance?
I: It allows policy owner to vary payments.
II: Policy owner can earn market based rate of return on cash value
Discuss
Answer & Solution
Answer: Option C
Solution:
Both are correct with regards to universal life insurance: It allows policy owner to vary payments and policy owner can earn market based rate of return on cash value.
23
All of the following is true regarding ULIP’s EXCEPT:
Discuss
Answer & Solution
Answer: Option B
Solution:
All of the following is true regarding ULIP’s except life insurer provides guarantee for unit values.
24
What does unbundling of life insurance products refers to?
Discuss
Answer & Solution
Answer: Option D
Solution:
Unbundling of life insurance products refers to separation of the protection and savings element. A unbundled life insurance policy contains a savings and investment component that the policyholder can use during his or her lifetime or pass on to beneficiaries.
25
Which of the below risk cannot be addressed through pensions?
Discuss
Answer & Solution
Answer: Option D
Solution:
Early death cannot be addressed through pensions. A minimum qualifying service of 10 years is necessary for eligibility for Pension. The Government has reduced the qualifying service from 33 years to 30 years to become eligible for full Pension with effect from 1.4.2003.
26
What is the basic contingency associated with pensions?
Discuss
Answer & Solution
Answer: Option C
Solution:
Post-retirement income security is the basic contingency associated with pensions. A pension plan is a good way to secure your financial stability post-retirement. These pension plans which are maintained by the employers protect you from any uncertainty that may come unannounced post your retirement.
27
In an ordinary annuity, payments are made or received _________ of each period.
Discuss
Answer & Solution
Answer: Option B
Solution:
An ordinary annuity is a series of equal payments made at the end of consecutive periods over a fixed length of time. While the payments in an annuity can be made as frequently as every week, in practice, ordinary annuity payments are made monthly, quarterly, semi-annually or annually.
28
The term TPA refers to _________. (Answer with regards to health insurance)
Discuss
Answer & Solution
Answer: Option C
Solution:
The term TPA refers to Third Party Administrator. Third Party Administration (TPA) is a service given to a Mediclaim policyholder by providing cashless facility for all hospitalizations that come under the scope of his/her Mediclaim policy.
29
Which of the below group would not be eligible for a group health insurance policy?
Discuss
Answer & Solution
Answer: Option D
Solution:
Group of unrelated individuals formed for the purpose of availing group health insurance would not be eligible for a group health insurance policy.
30
Who cannot be covered under a family floater policy?
Discuss
Answer & Solution
Answer: Option D
Solution:
Maternal uncle cannot be covered under a family floater policy.