Insurance MCQ Questions and Solutions with Explanations | Commerce

A third-party administrator (TPA) is an organization that processes insurance claims or certain aspects of employee benefit plans for a separate entity.
Reimbursement of the hospitalization expenses can be claimed where cashless hospitalization facility is not availed or treatment is availed in a non-network hospital. In that case the pre-authorisation is not required. The customer would need to settle the bills at the hospital and submit the documentation in attestation within 30 days from the date of discharge.
In case of emergencies, cashless facility does not require pre-authorisation for the conduct of treatment in a hospital. After the patient is admitted, the hospital fax the pre-authorisation to the TPA.

As the limitations of traditional life insurance plans became obvious, a number of shifts occurred in the product profiles of life insurers. These have been summarised below:
(a) Unbundling: This trend involved separation of the protection and savings elements, and consequently the development of the products which stressed on protection of savings, rather than a vague mix of both.
(b) Investment linkage: The second trend was the shift towards investment linked products which linked benefits to policyholders with an index of investment performance. There was consequently a shift in the way life insurance was positioned.
(c) Transparency: Unbundling also ushered greater visibility in the rate of return and in the charges made by the companies for their services (like expenses, etc.). All these were explicitly spelt out and thus, could be compared.
(d) Non-standard products: The fourth major trend has a shift from rigid to flexible product structures which is also seen as a move towards non-standard products. When we speak of non-standard, it is with respect to the degree of choice which a customer can exercise with respect to designing the structure and benefits of the policy.

If the insured person loses the original life insurance policy document the insurance company will issue a duplicate policy without making any changes to the contract. If you lose your policy bond, report it to the insurance company immediately. Get a duplicate policy by complying with the formalities. The duplicate policy confers the same rights as the original policy bond.

Amount of annuity payable is inversely related to duration of annuity payments. Usually, the time period is 1 year, which is why it is called an annuity, but the time period can be shorter, or even longer. These equal payments are called the periodic rent. The amount of the annuity is the sum of all payments.

Hospital is an institution in which sick or injured persons are given medical or surgical treatment by professional doctors. Therefore, according to the definition of hospital, the first option is not correct and the rest are correct.

Term insurance plan is pure risk cover which pays out the sum assured in case of death and does not have any maturity benefits. You do not get any maturity benefits in a pure term plan because it is a pure protection insurance plan.

In a non-medical case, risk can be assessed in the absence of a medical report. No medical report is required in a non-medical case.

To assess the risk for rating purposes. Before acceptance of a risk, the insurer arranges a survey and inspection of the property. Risk transfer through risk pooling is called insurance. Loss prevention measures reduce the chance of occurrence of risk. Insurance provides peace of mind and helps one plan his business effectively.

To make accurate statistical estimates, insurance risks must be handled as per the law of large numbers. In the insurance industry, the law of large numbers produces its own axiom. As the number of exposure units, or policyholders, increases, the probability is higher that the actual loss per exposure unit will equal the expected loss per exposure unit.

The most common underwriting decision is to accept at an ordinary rate.
Acceptance at ordinary rates (OR) is the most common decision. This rating indicates that the risk is accepted at the same rate of premium as would apply to an ordinary or standard life.