Insurance MCQ Questions and Solutions with Explanations

31

When critical illness rider benefit is payable?

A) When the life insured dies of a critical illness B) When the insured is diagnosed with critical illness C) When the life insured is diagnosed with a illness not covered under the policy D) When the life insured assigns his critical illness rider benefit also in favour of assignee

Discuss

Answer & Solution

Answer: Option B

Solution:

A critical illness rider makes living benefits payable to the insured for medical expenses prior to death.Generally, the extra cover is equal to the sum assured on the base policy and is paid upon diagnosis of the illness.

32

On payment of a rider benefit, what happens to a policy contract?

A) Ceases B) Dies C) Cancelled D) Continues

Discuss

Answer & Solution

Answer: Option D

Solution:

On payment of a rider benefit, a policy contract continues. A rider is an add-on to the primary policy, which offers benefits over and above the policy subject to certain conditions. One way to maximize the benefits on your life insurance policy and to customize it to suit your specific needs is by opting for riders.

33

In a Unit Linked plan what is the maturity claim payable?

A) Sum insured B) Sum insured less survival benefits paid already C) Nothing is payable D) Fund value

Discuss

Answer & Solution

Answer: Option D

Solution:

In a Unit Linked plan, Fund value is the maturity claim payable. At the time of maturity of the plan, the policyholder receives the value of the fund, along with bonus and loyalty benefits, if any.

34

In a Unit Linked plan what is the death claim payable?

A) Sum insured B) Sum insured less survival benefits paid already C) Sum insured or fund value which is higher D) Fund value

Discuss

Answer & Solution

Answer: Option C

Solution:

In a Unit Linked plan, Sum insured or fund value which is higher is the death claim payable. The unit-linked insurance plans ( Ulips) provide both death and maturity benefits to the policyholder. If he dies during the term of the policy, the beneficiary will receive one of these: sum assured, the higher of the fund value and sum assured, or sum assured and the value of the fund, depending on the terms of the policy.

35

When a death claim is payable?

A) If a policyholder dies after maturity of a policy B) If a policyholder dies during the term of policy C) If a policyholder dies after surrendering a policy D) If insured dies after Foreclosure of a policy

Discuss

Answer & Solution

Answer: Option B

Solution:

When the person assured dies during the Term of the policy i.e. before the date of maturity, proceeds under the policy as a claim, is payable to the beneficiary which is called a Death claim.

36

Repudiation of death claim means –

A) Acceptance of full sum insured B) Accepting without any pre-condition C) Rejection of a claim D) Acceptance with health extra

Discuss

Answer & Solution

Answer: Option C

Solution:

Repudiation of death claim means rejection of a claim. A repudiated claim is a claim that has been rejected by an insurance company.

37

Maturity claim is payable when _________

A) When the insured survives the first 5 years B) When the insured dies during policy term C) When the insured is diagnosed with a critical illness D) When the insured survives policy term

Discuss

Answer & Solution

Answer: Option D

Solution:

Maturity claim is payable when the insured survives policy term. Maturity Claim is associated with the Maturity Benefit of the Policy i.e. the claim which arises when the policy matures. It simply means that when the policy completes its tenure, a certain amount of money called Maturity Claim amount is settled towards the life assured.

38

Which is a death claim?

A) Early claim B) Non-early claim C) Both A & B D) None of the above

Discuss

Answer & Solution

Answer: Option C

Solution:

Early claim and Non-early claim both are death claim. If the life assured dies during the term of the policy, the death claim arises. If the death has taken place within the first two years of the commencement of the policy, it is called an early death claim and if the death has taken after 2 years, it is called a non early death claim.

39

A claim arising within _________ years of taking a policy is called an Early claim.

A) One B) Two C) Three D) Four

Discuss

Answer & Solution

Answer: Option C

Solution:

A claim arising within three years of taking a policy is called an Early claim.

40

Section 45 of Insurance Act, 1938 safeguards the interests of –

A) Insurers B) Policyholders C) Assignees D) Nominees

Discuss

Answer & Solution

Answer: Option B

Solution:

Section 45 of Insurance Act, 1938 safeguards the interests of Policyholders. It also takes due care of the interest of both Insurers and Insured.

Insurance MCQ Questions and Solutions with Explanations | Commerce