Insurance mcqs

✅ The correct answer is D.
All of the above are correct with regards to the portfolio method. The portfolio method is an accounting method that credits all funds on the specified current rate of interest, regardless of when the money was placed in the account.

✅ The correct answer is A.
Inflation is responsible for a rise in general price levels of goods and services in a nation’s economy. Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time. It is the constant rise in the general level of prices where a unit of currency buys less than it did in prior periods.

✅ 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.

✅ 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.

✅ 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.

✅ 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.

✅ 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.

✅ The correct answer is B.
Declined life means Life to which insurance cover could not be granted at affordable cost. Its purpose it to protect insurance companies from applicants who may be lying about their current health conditions. Just because you have been previously denied life insurance does not mean you will be denied again.

✅ The correct answer is D.
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.

✅ The correct answer is B.
It is easy to know cash value and savings value components in a traditional plan. Cash value life insurance is a form of permanent life insurance that features a cash value savings component.