Question

Why did life insurers start the practice of offering "With Profit" policies?

a.

To reduce the premiums charged to policyholders

b.

To create a financial buffer to keep them solvent in adverse situations

c.

To offer higher cash values to policyholders

d.

To increase the policy's sum assured

Posted under IC38 Life Insurance Agent Exam

Answer: (b).To create a financial buffer to keep them solvent in adverse situations Explanation:Life insurers started the practice of offering "With Profit" policies to create a financial buffer to keep them solvent even in adverse situations.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. Why did life insurers start the practice of offering "With Profit" policies?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What does a policy lapse mean?

View solution

Q. What is the key difference between "surplus" in life insurance and "profit" in a firm?

View solution

Q. What is the primary purpose of periodic valuation of assets and liabilities in a life insurance company?

View solution

Q. What is the key difference between "surplus" and "strain" in life insurance?

View solution

Q. In the context of life insurance, how is "profit" generally defined for a firm?

View solution

Q. What is the formula to calculate surplus in life insurance?

View solution

Q. What is the primary purpose of distributing surplus in the context of life insurance?

View solution

Q. What is the most common type of bonus in life insurance that is received only at the time of a claim by death or maturity?

View solution

Q. What is a "Terminal Bonus" in the context of life insurance?

View solution

Q. How is the Compound Bonus expressed in life insurance?

View solution

Q. Which method of surplus distribution is adopted in North America, where surplus is declared and distributed as dividends?

View solution

Q. How are dividends typically distributed in the Contribution Method?

View solution

Q. What is the primary focus of Unit Linked Policies in life insurance?

View solution

Q. Which method of surplus distribution is more commonly used in North America?

View solution

Q. In the context of insurance, what does the term "premium" refer to?

View solution

Q. Which of the following factors is not considered in the process of setting the premium for life insurance policies?

View solution

Q. What is the Gross premium in the context of life insurance?

View solution

Q. What does a "lapse" mean in the context of insurance?

View solution

Q. What is the primary reason for the emergence of surplus in the context of life insurance?

View solution

Q. How can surplus be allocated in the life insurance industry?

View solution
View All MCQs on IC38 Life Insurance Agent Exam

Recommended Subjects

Are you eager to expand your knowledge beyond IC38 Life Insurance Agent Exam? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Textile Engineering

Explore the dynamic world of Textile Engineering with our specialized category. Delve...

Bioinformatics

Unlock the power of data analysis in biology with our Bioinformatics category....

Cognitive Radio

Step into the dynamic world of Cognitive Radio, where wireless communication meets...

Chemistry

Unlock the mysteries of chemistry with our Chemistry category. Delve into the...

IC90 Human Resource Management

Prepare for success in the Insurance Institute of India (III) examination with IC90...

Biology

Dive into the realm of life sciences with our Biology category. Explore the wonders...

Heat Transfer

Explore the fascinating world of heat transfer with our Heat Transfer category....

Logical Reasoning

Enhance your logical thinking and decision-making abilities with our Logical...

IC38 Life Insurance Agent Exam

Prepare for success in the Insurance Institute of India (III) IC38 IRDA examination...