Insurance mcqs

Identify the correct statement.

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A) Closing a sale is the art of persuading the prospect to buy now based on the recommendation of the agent
B) Offering alternatives as to mode of payments will quicken the closing
C) Undue pressure tactics on the prospect are to be always avoided in a close of sales interview
D) All of the above
✅ ANSWER: D
All the statements are correct.
Closing a sale is the art of persuading the prospect to buy now based on the recommendation of the agent, Offering alternatives as to mode of payments will quicken the closing and Undue pressure tactics on the prospect are to be always avoided in a close of sales interview.

Which of the following denotes the underwriter’s role in an insurance company?

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A) Process claims
B) Decide acceptability of risks
C) Product design architect
D) Customer relations manager
✅ ANSWER: B
the underwriter’s role in an insurance company is to decide acceptability of risks. Underwriters work in several insurance categories, including health, life, auto and home. Their job is to review applications for insurance, analyze risks and decide whether the company will offer coverage. Underwriters must approve applications so that the insurance company can collect premiums.

In an ordinary annuity, payments are made or received _________ of each period.

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A) At the beginning
B) At the end
C) On maturity
D) 6 months before expiry
✅ ANSWER: B
An ordinary annuity is a series of equal payments made at the end of consecutive periods over a fixed length of time. While the payments in an annuity can be made as frequently as every week, in practice, ordinary annuity payments are made monthly, quarterly, semi-annually or annually.

Choose the correct statement.

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A) Lower yields are a disadvantage in cash value contracts
B) Discipline in saving is not an advantage in cash value contracts
C) Income Tax advantage is not an advantage in cash value contracts
D) Safe and secure investment is not an advantage in cash value contracts
✅ ANSWER: A
Lower yields are a disadvantage in cash value contracts. Whole life insurance is significantly more expensive. Premiums are often much higher than a term life insurance policy with the same amount of coverage because you’re paying for an insurance policy as well as putting money into the cash value portion of the policy.

Ajay pays insurance premium for his employees. Which of the following insurance premiums will not be treated deductible as compensation paid to an employee? I. Health insurance with benefits payable to an employee II. Keyman life insurance with benefits payable to Ajay

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A) Only I
B) Only II
C) Both I and II
D) Neither I nor II
✅ ANSWER: B
A keyman life insurance policy is a policy that a company purchases on a key executive’s life. The company is the beneficiary of the plan and pays the insurance policy premiums. It is also known as “key man insurance”, “key woman insurance” or “business life insurance.”

If a policy document is lost, then

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A) Claim may be settled on the basis of an indemnity bond
B) An advertisement may have to be placed in a newspaper if the amount to be paid is high
C) Both A & B
D) None of the above
✅ ANSWER: C
If a policy document is lost, then claim may be settled on the basis of an indemnity bond and an advertisement may have to be placed in a newspaper if the amount to be paid is high.

Identify the incorrect statement.

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A) In interview of the prospect agent is knowledge alone is not important
B) Listening is not important as the prospect may not know much about life insurance
C) The agent should avoid being judgmental. It is necessary for the agent to pay
D) Attention to what the prospect says as also to his body language
✅ ANSWER: B
Listening is important as the prospect may not know much about life insurance.

Annuity belongs to

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A) One where the annuity amount is fixed (guaranteed)
B) One where the annuity amount is variable (linked to investment performance)
C) Both A & B
D) None of the above
✅ ANSWER: C
Annuity belongs to one where the annuity amount is fixed (guaranteed) and one where the annuity amount is variable (linked to investment performance).