Insurance MCQ Questions and Solutions with Explanations | Commerce

Selling is both an art and a science.
To correctly answer the question of whether selling is an art or a science, one must first understand that the foundation of selling is influence. The activities that a sales person engages in (such as pre-call planning, discovering prospect needs, presenting product or service and closing the sale) are done for the purpose of more capably influencing prospects. Influence is essential to selling because information alone will rarely persuade a person to act. What moves people is not merely information, but how that information is presented. This is supported by hundreds of scientific studies that have conclusively proven that a person's perception and interpretation of a persuasive message is shaped by how that message is conveyed. In the last few decades, there have been thousands of scientific studies focused on obtaining an exact understanding of what enables and creates influence. The conclusions of this mountain of research revolutionized what scientists know about how influence occurs. There is now a consensus within the scientific community regarding the behaviors and mindsets that support and enhance influence. This has transformed the process of influencing another from an art to a proven science.

From 1 April 2011, the Consumer Protection Act (“CPA”) provides protection to these consumers against such suppliers. The CPA applies to an agreement concluded between a consumer and supplier in the ordinary course of business. A consumer buys or uses goods, or receives services from a supplier.

An insurance contract has to fulfill the requirements of the Indian Contract Act, 1872. It determines the circumstances in which promises made by the parties to a contract shall be legally binding. Under Section 2(h), the Indian Contract Act defines a contract as an agreement which is enforceable by law.

Term insurance is mainly suitable for income replacement.
Under regular term plans, the amount is paid as lump sum in the event of death of the policyholder. Under income replacement term plans, the sum assured is not paid in lump sum, but as monthly payout for a fixed number of years. This monthly payout takes away the pressure to generate income from your investment.

Financial planning has nothing to do with how much money you already have. Financial Planning is a process achieving your financial life goals by aligning your finances with them. It means that you create a roadmap for your life which includes your goals.

In a Ulip, the entire amount paid as premium is not used to purchase units. The insurers deduct certain charges and fees before allotting units. The remaining premium amount is invested in various asset classes such as debt, equity or both (called fund options) depending on policyholder's choice.

As per IRDA norms, both products are permitted in India.
A Unit Linked Insurance Plan (ULIP) is a product offered by insurance companies that, unlike a pure insurance policy, gives investors both insurance and investment under a single integrated plan.
Variable life insurance is a permanent life insurance policy with an investment component. The policy has a cash value account, which is invested in a number of sub-accounts available in the policy. A sub-account acts similar to a mutual fund, except it's only available within a variable life insurance policy.

A keyman life insurance policy is a policy that a company purchases on a key executive's life. The company is the beneficiary of the plan and pays the insurance policy premiums. It is also known as "key man insurance", "key woman insurance" or "business life insurance."

Policy decisions in an insurance organization doesnt mean decisions relating to issue of specific insurance policies. A policy is a deliberate system of principles to guide decisions and achieve rational outcomes. A policy is a statement of intent, and is implemented as a procedure or protocol.

There is an Ombudsman for defined territorial limits.