Insurance MCQ Questions and Solutions with Explanations | Commerce

Claim rejection is not an underwriting decision. If an insurance company has reason to believe that any information pertaining to these parameters was suppressed, it can reject the claim.

Horoscope is not a standard age proof. A horoscope is an astrological chart or diagram representing the positions of the Sun, Moon, planets, astrological aspects and sensitive angles at the time of an event, such as the moment of a person's birth.

Banned substance abuse condition will affect a person’s insurability negatively.

Under Numerical rating method of underwriting does an underwriter assign positive rating points for all negative or adverse factors (negative points for any positive or favourable factors). In such situations, the department may get the expert opinion of a medical doctor who is also called a medical referee.

Under risk classification, Standard lives consist of those whose anticipated mortality corresponds to the standard lives represented by the mortality table. Mortality tables are the most important basis for charging the premium.

Mahesh, aged 50 years, working in a coal mine is not likely to qualify under non-medical underwriting.

Sheena is suffering from acute diabetes. She has applied for an insurance plan. In this case the underwriter is most likely to use Judgment method for underwriting. The judgment method is generally used where a single factor is to be considered or where the decision for acceptance or rejection is to be taken.

Santosh has applied for a term insurance policy. His anticipated mortality is significantly lower than standard lives and hence could be charged a lower premium. Under risk classification, Santosh will be classified under Preferred risks. A preferred risk is a policyholder who is considered significantly less likely to file claims. Therefore, insurance companies prefer it over a standard or higher risk because the former represent a better chance to make more profit. For the insurer, fewer claims equates to more money taken in and less money paid out.

In money-back policy, the claim payment is made in the form of periodic payments. Money back plan simply means that money comes back to the life insured after a specific interval of time as survival benefit. The money back is guaranteed on the survival of the policyholder. However, in case of death of the policyholder, the nominee gets the sum assured and accrued bonuses, if any.

Inquest Report document is an additional document required to be submitted in case of accidental death as compared to natural death. In general, a court inquiry (sometimes with the aid of specially chosen jury) into a specific matter. In particular, an inquiry by a coroner into the death of person who died under suspicious circumstances or in police custody.