Insurance mcqs

✅ The correct answer is D.
Hazardous occupation, previous policies of the proposer and health are not a material fact. Material fact is a fact that is important, significant or essential to a reasonable person in deciding whether to engage or not to engage in a particular transaction, issue or matter at hand.

✅ The correct answer is B.
Specific policy provisions may contain Clause. The clause that contains the basic promise of the life insurance company to pay a specified sum of money to a beneficiary upon the death of the insured.

✅ The correct answer is B.
Personal history is not a medical factor that influence an underwrititer’s decision. Underwriting factors in health insurance are used to estimate how likely a potential policyholder is to become ill and how much treatment is likely to cost the insurer. Factors include age, height, weight, preexisting conditions and so forth.

✅ The correct answer is B.
Shares is a wealth accumulation product. To build a corpus for long-term goals like buying a house, building a retirement kitty or funding a child’s education, investors must choose products that provide enhanced earning power. This can come in the form of diversified equity funds.

✅ The correct answer is B.
ULIP is a life insurance product which provides risk cover for the policy holder along with investment options to invest in any number of qualified investments such as stocks, bonds or mutual funds.

✅ The correct answer is B.
When the actual experience of an insurance company is better than what it had assumed, the result would be surplus (profit) for the company.

✅ The correct answer is A.
Policy Allocation Charge would be high in the initial years.
This is deducted from the premium upfront. It is a percentage of the premium appropriated towards charges before allocating the units under the policy. This charge is levied to recover the initial expense incurred towards issuing the policy such as the distributor fee and the cost of underwriting. The balance is the investable amount used to purchase units of the funds chosen by the policyholder. Though the Insurance and Regulatory and Development Authority, or IRDA, has set guidelines that ensure a cap on these charges from the fifth year onwards, the premium allocation charges in the first few years continue to remain significantly high.

✅ The correct answer is C.
In decreasing-term insurance, the premiums paid remain constant over time. Decreasing term insurance is renewable term life insurance with coverage decreasing over the life of the policy at a predetermined rate. Premiums are usually constant throughout the contract, and reductions in coverage typically occur monthly or annually.

✅ The correct answer is C.
Dying too early cannot be categorised under risk. Each individual has got a certain financial value attached to his life in the form of his earning potential. If he dies at a young age or during the time when he had an earning potential his family suffers a financial loss in the form of loss of his potential earnings. A lot of his obligations towards the family remain unfulfilled due to his sudden demise. This is called the Risk of Dying too early and it can be protected against by taking life insurance coverage.

✅ The correct answer is A.
The general need for a pension policy results from the existence of anticipated fall in income. Anticipated Income is the amount of income the applicant can reasonably be expected to receive during the calendar year.