Author name: Administrator

2852. During the revival of a lapsed policy, which of the below aspect is considered most significant by the insurance company? Choose the most appropriate option.

Evidence of insurability at revival
Revival of the policy leading to increase in risk for the insurance company
Payment of unpaid premiums with interest
Insured submitting the revival application within a specified time frame
✅ The correct answer is A.
During the revival of a lapsed policy, Evidence of insurability at revival is considered most significant by the insurance company. A lapsed policy means that the benefit of insurance will not be available to protect the financial interest of the dependants in the event of the death of the insured.

2853. In time value of money, periodic rate is

not shown on timeline
shown on timeline
multiplied on timeline
divided on timeline
✅ The correct answer is B.
In time value of money, periodic rate is shown on timeline. A periodic interest rate can be charged on a loan or realized on an investment over a specific period of time.

2854. Surrender value is a percentage of

Investment value excluding interest
Loan value
Paid-up value
Capital invested
✅ The correct answer is C.
Surrender value is a percentage of paid-up value of the insurance policy. If a policyholder decides to terminate the policy before maturity, the amount which the insurance company will pay to the policyholder is known as surrender value.

2855. Mortgage redemption insurance (MRI) can be categorised under _________.

Increasing term life assurance
Decreasing term life assurance
Variable life assurance
Universal life assurance
✅ The correct answer is B.
Mortgage redemption insurance (MRI) can be categorised under decreasing term life assurance. It is basically a decreasing term life insurance policy taken by a mortgagor to repay the balance on a mortgage loan if he/she dies before its full repayment.

2856. Cost of idle time arising due to non availability of raw material is _______.

charged to costing profit and loss account
charged to financial profit and loss account
charged to factory overhead
recovered by inflating the wage rate
✅ The correct answer is A.
Cost of idle time arising due to non availability of raw material is charged to costing profit and loss account. The cost of idle facilities for reasons such as trade depression, shortage of demand, etc. should be written off to Costing Profit and Loss Account.

2838. An increasing in interest rate leads to decline in value of

junk bonds
outstanding bonds
standing bonds
premium bonds
✅ The correct answer is B.
An increasing in interest rate leads to decline in value of outstanding bonds. Outstanding Bonds means all Previously Issued Bonds, which remain outstanding as of the first interest and/or principal payment date following the current Fiscal Year excluding Bonds to be redeemed at a later date with proceeds of prior prepayments of Maximum Special Taxes.

2840. The amount of the temporary working capital __________.

keeps on fluctuating from time to time
remains constant for all times
financed through long term services
none of the above.
✅ The correct answer is A.
The amount of the temporary working capital keeps on fluctuating from time to time. Temporary working capital (TWC) is the temporary fluctuation of networking capital over and above the permanent working capital.

2841. Which of the following statements is true?

Insurance is a method of sharing the losses of a ‘few’ by ‘many’
Insurance is a method of transferring the risk of an individual to another individual
Insurance is a method of sharing the losses of a ‘many’ by a few
Insurance is a method of transferring the gains of a few to the many
✅ The correct answer is A.
Insurance pays when there is loss of asset. Insurance is a method of sharing the losses of a ‘few’ by ‘many’. property to assess the risk for rating purposes.

2851. State which of the following statements is correct

In ULIPs the insurance cover must be a minimum multiple of the premium
ULIPs can be surrendered after two years
Both the above statements are correct
Both the above statements are wrong
✅ The correct answer is A.
In ULIPs the insurance cover must be a minimum multiple of the premium. ULIPs determine the cover as a multiple of the annual premium. If you are looking for an investment avenue, choose a plan with the lowest Sum Assured because a higher cover means a higher mortality charge.
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