Insurance MCQ Questions and Solutions with Explanations

31

In keyman insurance policy the basis for issue of such a policy is

A) Income of the keyman B) History of the business C) Profitability of the business and the role of the keyman in that profitability D) State of the national economy and rate of inflation

Discuss

Answer & Solution

Answer: Option C

Solution:

In keyman insurance policy the basis for issue of such a policy is profitability of the business and the role of the keyman in that profitability. Keyman insurance can be defined as an insurance policy where the proposer as well as the premium payer is the employer, the life to be insured is that of the same employer's key employee (Keyman) and the benefit, in case of a claim, goes to the employer.

32

Which is incorrect of the following?

A) Being judgmental is the opposite of listening B) Sometimes prospect’s objection to accepting the agent’s recommendation may arise out of the past experience of hurt ego and unfair dealings by some others connected with insurance C) Genuine interest in the other person is always respecting him in social relationships as also in insurance dealings D) Prospect should feel obliged to the agent for being enlightened on life insurance

Discuss

Answer & Solution

Answer: Option D

Solution:

Prospect should not feel obliged to the agent for being enlightened on life insurance. Prospect is a potential new customer who can be approached for buying an insurance policy.

33

Pick out the incorrect statement.

A) Life insurance is sold, not bought B) Selling is neither a science nor an art C) In prospecting for life insurance, members of a community association will be classified as a natural market D) Loss assessment is not part of sales process

Discuss

Answer & Solution

Answer: Option B

Solution:

There's a common belief that it takes a combination of both art and science to be a successful salesperson, that is, a balance of both innate ability and systemic organization. Artistic ability is generally considered to be innate, coming from within an individual.

34

Insurance needed by a person can be determined by

A) Human Life Value method B) Life Term proposition method C) Future Life value method D) Human Economic value method

Discuss

Answer & Solution

Answer: Option A

Solution:

Insurance needed by a person can be determined by Human Life Value method. The human life value concept deals with human capital, which is a person's income potential. It goes beyond just the numbers and considers the overall impact of losing someone, especially the breadwinner.

35

State which of the following ones is a transactional product.

A) Bank Deposit B) Life Insurance C) Shares in stock market D) Bonds and debentures

Discuss

Answer & Solution

Answer: Option A

Solution:

Bank Deposit is a transactional product. Transaction Banking division of a bank typically provides commercial banking products and services for both corporates and financial institutions, including domestic and cross-border payments, risk mitigation, international trade finance as well as trust, agency, depositary, custody and related services.

36

Term Policy is ideally suited for

A) One who needs periodical sums of money in his life? B) One who has a high insurance budget C) One who has a low insurance budget D) One who looks for high returns

Discuss

Answer & Solution

Answer: Option C

Solution:

Term Policy is ideally suited for One who has a low insurance budget. Term life insurance, also known as pure life insurance, is life insurance that guarantees payment of a stated death benefit during a specified term. Once the term expires, the policyholder can either renew for another term, convert to permanent coverage, or allow the policy to terminate.

37

Which one of the below is not a case of annuity?

A) Payment of Rs.10, 000 received today last year on the same day and likely payment of a similar sum by the insurer next year B) Electricity Bill C) Car payments made by the loanee car owner D) Periodical mortgage payments

Discuss

Answer & Solution

Answer: Option B

Solution:

Electricity Bill is not a case of annuity.

38

State the correct statement out of the following ones.

A) Primary care means acute care to a patient in a hospital B) It means extensive care provided to a patient in a acute setting C) First point of contact for health care to a needy person D) Care provided by experts to solve a medical problem faced by a patient

Discuss

Answer & Solution

Answer: Option C

Solution:

First point of contact for health care to a needy person. Primary healthcare is the first contact a person has with the health system when they have a health problem.

39

Mortgage Redemption Insurance is nothing but

A) It is a constant term insurance B) It is an increasing term insurance C) It is savings insurance like universal life insurance D) Decreasing Term Insurance

Discuss

Answer & Solution

Answer: Option D

Solution:

Mortgage Redemption Insurance is nothing but decreasing Term Insurance. An MRI is a form of life insurance that pays off a part or the whole of the insured's outstanding mortgage balance in case of his or her death or total disability.

40

State the incorrect statement of the following ones.

A) In a term insurance the benefits are fixed throughout the duration B) In an MRI the insurance benefit on account of cover will decrease year after year C) There is no material difference between a term insurance policy and an MRI as far as benefits are concerned D) MRI is suitable for a loan sought from a bank as a mortgage cover

Discuss

Answer & Solution

Answer: Option C

Solution:

There is material difference between a term insurance policy and an MRI as far as benefits are concerned.

Insurance MCQ Questions and Solutions with Explanations | Commerce