Insurance MCQ Questions and Solutions with Explanations | Commerce

In a life insurance contract, the stated sum of money to be paid to the beneficiary upon the insured’s death is termed as Face Amount. Also called the Coverage Amount, Face Amount or Sum Insured. A contract that pays a fixed sum of money at regular intervals, usually for life. A contract that pays an income for a set number of years, and will pay the annuitant's beneficiary or estate if the annuitant dies before the end of the payment term.

A single policy covering a group of individuals, usually employees of the same company or members of the same association and their dependants is called Group Insurance. A group insurance policy gives you advantages of standardised coverage and very competitive premium rates.

A seller’s market in which insurance is expensive and in short supply is termed as Alternative Market. A term commonly used in risk financing to refer to one of a number of risk funding techniques is known as Alternative Market.

An environment where insurance is plentiful and sold at a lower cost, also known as a Buyers market is called Soft Market.

The concept of insurance involves a transfer of Risk. A transfer of risk, considered the underlying tenet of insurance transactions, is a risk management technique where risk shifts from one party to another.

Rakesh recently bought a health insurance policy and a personal accident policy. The insurance market fall in Non-life insurance in both cases.

The main role of an underwriter in a non-life insurance company is normally to design the structure of the products to be offered.

Akshat is a relatively cautious person. In insurance terms, this will normally increase the likelihood that he will Require insurance cover. Insurance coverage is the amount of risk or liability that is covered for an individual or entity by way of insurance services.

Perils are risks that policyholders will die before a specified date and hazards are factors which could influence that risk. Perils are factors which affect the risk being insured and hazards are the size of the risk being insured.

Financial loss would be severe even though chance of loss is small and situation of low probability but high severity is where insurance works as efficiently and effectively.