Insurance mcqs

Which of the below is an advantage of cash value insurance contracts?

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Returns subject to corroding effect of inflation
Low accumulation in earlier years
Lower yields
Secure investment
✅ The correct answer is D.
Secure investment is an advantage of cash value insurance contracts. Cash value life insurance provides more financial flexibility. Because cash values have the potential to grow inside the policy, you may be able to access the cash value while you are living.

Restructuring of debts refers to

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Swapping less interest loans with more interest loans
Modification of the terms of a loan to debtor who could default on payments
Closing all outstanding loans
Going for more and more borrowings
✅ The correct answer is B.
Debt restructuring refers to modification of the terms of a loan to provide relief to a debtor who could otherwise default on payments. The restructuring may involve extending the period of repayment, reducing the total amount owed, or exchanging a portion of the debt for equity in the debtor company. Also see extension, composition, debt-for-equity swap.

Insurability of women is governed by

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Need for insurance
Capacity to pay premiums
Both A & B
None of the above
✅ The correct answer is C.
Insurability of women is governed by need for insurance and capacity to pay premiums. Thus, insurance companies may decide to grant full insurance only to those who have earned income of their own and may impose limits on other categories of women. Similarly, some conditions may be levied on pregnant women.

What is the standard length of a grace period under a life insurance policy?

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One month not more than 30 days
One month not less than 31 days
One month not more than 31 days
One month not less than 30 days
✅ The correct answer is B.
One month not less than 31 days is the standard length of a grace period under a life insurance policy. The amount of time granted in an insurance grace period is indicated in the insurance policy contract. Paying after the due date may attract a financial penalty from the insurance company.

As per Section 45 of Insurance Act, 1938, an insurance company can reject a claim after 2 years from issuance of policy if the material facts in the proposal are _________ made.

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Innocently
Falsely
Frantically
Fraudulently
✅ The correct answer is D.
As per Section 45 of Insurance Act, 1938, an insurance company can reject a claim after 2 years from issuance of policy if the material facts in the proposal are fraudulently made.

Given below are some events that will trigger survival claims. Identify which of the below statement is incorrect?

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Claim paid on maturity of a term insurance policy
An instalment payable upon reaching the milestone under a money-back policy
Claim paid for critical illnesses covered under the policy as a rider benefit
Surrender value paid on surrender of an endowment policy by the policyholder
✅ The correct answer is A.
Claim paid on maturity of a term insurance policy will trigger survival claims. The payment by the insurer to the insured on the date of maturity is called maturity payment. The amount payable at the time of the maturity includes a sum assured and bonus/incentives, if any.

When does a claim arise under an insurance policy?

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Whenever the policyholder feels the need for money
When the insured events happen
When a premium is not paid
Whenever any of the three things mentioned above happen
✅ The correct answer is B.
A claim arise under an insurance policy When the insured events happen. The indemnity only applies to claims, arising out of accident occurring in the insured premises during the Period of Insurance, first made in writing against the Insured and notified to the Company by the Insured in writing during the Policy Period or applicable extended reporting period.