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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-5 section-5

Each section contains 100 MCQs on Insurance .
41
What is a policy withdrawal?
Discuss
Answer & Solution
Answer: Option B
Solution:
Policy withdrawal is Surrender of policy in return for acquired surrender value. In case of life insurance, if you surrender a policy before the completion of its full term, you could get back a portion of the money you paid as premium, after deducting charges. This money is surrender value.
42
Which of the below is one of the ways of defining surplus?
Discuss
Answer & Solution
Answer: Option D
Solution:
Excess value of assets over liabilities is one of the ways of defining surplus. A surplus is an excess of total assets over total liabilities. The trade surplus is likely to persist, and reserve assets, after all, are generating interest incomes. A pension fund has a surplus when its assets exceed its obligations to current and future pensioners.
43
Which of the below is not a component of ULIP premiums?
Discuss
Answer & Solution
Answer: Option D
Solution:
Social security charge is not a component of ULIP premiums. Social security contributions are compulsory payments paid to general government that confer entitlement to receive a (contingent) future social benefit.
44
Life insurance companies may offer rebate to the buyer on the premium that is payable on the basis of _________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Life insurance companies may offer rebate to the buyer on the premium that is payable on the basis of sum assured chosen by the buyer. They are in most cases the same throughout the term and are expressed as an annual rate. The rebate for sum assured is offered to those who buy policies with higher amounts of sum assured. Rebate for mode of premium: Premiums can be on annual, half yearly, quarterly or monthly basis.
45
Interest rates are one of the important components used while determining the premium. Which of the below statement is correct with regards to interest rates?
Discuss
Answer & Solution
Answer: Option C
Solution:
Higher the interest rate assumed, lower the premium. In other words the higher the rate of interest assumed, the lower the present value.
46
With regards to valuation of assets by insurance companies, _________ is the value at which the life insurer has purchased or acquired its assets.
Discuss
Answer & Solution
Answer: Option D
Solution:
With regards to valuation of assets by insurance companies, Book value is the value at which the life insurer has purchased or acquired its assets.
47
In case of _________, a company expresses the bonus as a percentage of basic benefit and already attached bonuses.
Discuss
Answer & Solution
Answer: Option B
Solution:
In case of Compound bonus, a company expresses the bonus as a percentage of basic benefit and already attached bonuses.
48
Which of the below is an example of standard age proof?
Discuss
Answer & Solution
Answer: Option C
Solution:
Passport is an example of standard age proof.
49
Which of the below can be attributed to moral hazard?
Discuss
Answer & Solution
Answer: Option A
Solution:
Increased risky behaviour following the purchase of insurance can be attributed to moral hazard. Moral hazard is a situation in which one party gets involved in a risky event knowing that it is protected against the risk and the other party will incur the cost. It arises when both the parties have incomplete information about each other.
50
Which of the below features will be checked in a medical examiner’s report?
Discuss
Answer & Solution
Answer: Option B
Solution:
Height, weight and blood pressure will be checked in a medical examiner’s report.