Insurance MCQ Questions and Solutions with Explanations | Commerce

The free look period available to cancel a policy is 15 days. The law allows the policyholder 15 days as free-look period from the date of receipt of the policy document. Policyholder is allowed to cancel the policy during this period and get a refund.

Free look period under a policy would commence on the date of receipt of policy bond. A policy holder can return the policy back to the insurer within 15 days from the receipt of the policy documents.

FPR is evidence of commencement of contract/risk cover.

First Premium Receipt and Renewal Premium Receipt both are Premium receipt. Life insurance policy receipt issued upon payment of the first premium by an applicant. It makes the policy in force before the policy documents are issued, provided the applicant meets all requirements. Also called conditional receipt. Renewal premiums are the subsequent premiums that are paid by the insured to the insurer in order to keep the policy in operation and avail the benefits of the policy accordingly.

Policy document is evidence of contract. Policy document is a detailed document and it is the Evidence of the insurance contract which mentions all the terms and conditions of the insurance.

Policy schedule, Standard provisions and Specific provisions are the parts of a policy bond.

Rights/Privileges information is not found in the Policy Schedule.

Specific policy provisions may contain Clause. The clause that contains the basic promise of the life insurance company to pay a specified sum of money to a beneficiary upon the death of the insured.