Question

How can the cover amount for a policy issued under the MWP Act be determined?

a.

By using an income multiple approach or a need analysis method

b.

By using a credit rating approach

c.

By using a collateral analysis method

d.

By using an actuarial table

Posted under IC22 Life Insurance Underwriting

Answer: (a).By using an income multiple approach or a need analysis method Explanation:As the policy issued under the MWP Act covers the life of an individual with beneficiaries as mentioned above, it needs to be treated as personal insurance cover for the purpose of financial underwriting. An income multiple approach or a need analysis method can be used to arrive at the cover amount.

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Q. How can the cover amount for a policy issued under the MWP Act be determined?
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