Insurance MCQ Questions and Solutions with Explanations

41

Which is the right time for taking life insurance?

A) When you are about to get married B) Soon after you have got married C) Just when you are joined a new job D) All of the above

Discuss

Answer & Solution

Answer: Option D

Solution:

All of the above is the right time for taking life insurance.

42

Retention of risk may be done conveniently by

A) Large corporations B) Small companies C) Single individuals D) None of the three

Discuss

Answer & Solution

Answer: Option A

Solution:

Retention of risk may be done conveniently by large corporations. The business would be responsible for all costs and damages that occur as the result of a crisis, accident or other unforeseen incident that results in loss. Retention refers to the assumption of risk of loss or damages.

43

A valuation is done by a life insurer because

A) It is a statutory requirement B) It is necessary to be able to declare dividends to shareholders C) It tells the insurer how well it is managing the business D) All of the above

Discuss

Answer & Solution

Answer: Option D

Solution:

A valuation is done by a life insurer because It is a statutory requirement, it is necessary to be able to declare dividends to shareholders and it tells the insurer how well it is managing the business.

44

The reason for charging level premiums is

A) Risk increases as age increases B) It is convenient to the policyholder C) It is convenient to the insurer D) All of the above

Discuss

Answer & Solution

Answer: Option D

Solution:

The reason for charging level premiums is Risk increases as age increases, it is convenient to the policyholder and it is convenient to the insurer.

45

What does a premium depend upon?

A) The place of worship visited by the person to be insured B) The state of health of the policyholder C) The decision of the underwriter D) The report of the agent

Discuss

Answer & Solution

Answer: Option C

Solution:

Premium depend upon the decision of the underwriter.Their job is to review applications for insurance, analyze risks and decide whether the company will offer coverage.

46

Which one of the following statements is correct?

A) In a limited payment policy, there is a maximum limit to the SA B) In a limited payment policy, there is a maximum limit to the term C) Both the statements above are wrong D) Both the statements above are correct

Discuss

Answer & Solution

Answer: Option C

Solution:

30 yrs is the maximum period for which most companies offer term insurance plans to individuals. The minimum insurance term is usually 10 years. 65 yrs is the maximum age till which most insurance companies offer life cover under term plans.

47

Which one of the following statements is true with regard to Children’s policies?

A) On vesting, the insured person has an option to change the term of the policy B) On vesting the insured person has an option to increase the SA C) Both the statements above are wrong D) Both the statements above are correct

Discuss

Answer & Solution

Answer: Option C

Solution:

On vesting, the insured person doesnt have an option to change the term of the policy and to increase the SA.

48

Which one of the following statements is correct?

A) Every plan of insurance is a combination of two basic plans B) The name given to a plan indicates the benefits available under the plan C) Both the statements above are correct D) Both the statement s above are wrong

Discuss

Answer & Solution

Answer: Option A

Solution:

Every plan of insurance is a combination of two basic plan. Insurance cos are offering variants of term plans and have crafted innovations that suit various customers and situations.

49

Which one of the following statements is correct?

A) Underwriting is done only when there is a medical examination B) Medical examination is necessary before a policy can be issued C) Both the statements above are correct D) Both the statements above are wrong

Discuss

Answer & Solution

Answer: Option D

Solution:

Medical underwriting is a health insurance term referring to the use of medical or health information in the evaluation of an applicant for coverage, typically for life or health insurance. The use of medical underwriting may be restricted by law in certain insurance markets.

50

Which one of the following statements is correct?

A) The underwriter determines the premium to be charged B) The underwriter is an employee of the insurer C) Both the statements above are correct D) Both the statements above are wrong

Discuss

Answer & Solution

Answer: Option C

Solution:

Both the statements above are correct.
The underwriter determines the premium to be charged and the underwriter is an employee of the insurer.

Insurance MCQ Questions and Solutions with Explanations | Commerce