Question

What are the two primary purposes of underwriting in the context of life insurance?

a.

To assess the risk and determine the premium

b.

To prevent anti-selection and promote fair insurance practices

c.

To maximize insurer profits and minimize policyholder benefits

d.

To advertise insurance products and attract more customers

Posted under IC38 Life Insurance Agent Exam

Answer: (b).To prevent anti-selection and promote fair insurance practices Explanation:Underwriting in life insurance serves the dual purposes of assessing risk and deciding the terms of acceptance while also preventing anti-selection, which is the tendency of individuals to seek insurance when they suspect a high chance of experiencing a loss. By engaging in underwriting, insurance companies aim to maintain fair and sustainable practices.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. What are the two primary purposes of underwriting in the context of life insurance?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What does anti-selection mean in the context of insurance?

View solution

Q. What does anti-selection mean in the context of insurance?In underwriting for life insurance, what does the term "risk" refer to?

View solution

Q. Why is underwriting important in the insurance industry?

View solution

Q. What might happen if an insurance company does not exercise underwriting discretion?

View solution

Q. What is the primary objective of ensuring "equity among risks" in life insurance underwriting?

View solution

Q. What does "risk classification" in underwriting involve?

View solution

Q. Which risk class represents individuals with anticipated mortality that corresponds to standard lives?

View solution

Q. What characterizes "preferred risks" in life insurance underwriting?

View solution

Q. What is the classification for individuals whose impairments and anticipated extra mortality make insurance coverage unaffordable?

View solution

Q. What is the primary role of an agent in the field level underwriting process?

View solution

Q. Why is the agent considered a significant figure in the underwriting process?

View solution

Q. Where does primary underwriting, also known as field level underwriting, typically take place?

View solution

Q. What is the main level of underwriting known as?

View solution

Q. Who is responsible for considering all relevant data and deciding whether to accept a proposal for life insurance at the department level?

View solution

Q. Which underwriting method relies on subjective judgment, especially for complex cases?

View solution

Q. When using the numerical method, what type of points are assigned to negative or adverse factors?

View solution

Q. What is the sum total of positive and negative points, often referred to as?

View solution

Q. In the judgment method, when might an underwriting department seek the expert opinion of a medical doctor?

View solution

Q. What does a higher EMR indicate in underwriting?

View solution

Q. What does "Acceptance at ordinary rates (OR)" mean in underwriting decisions?

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!

IC85 Reinsurance Management

Gear up for success in the Insurance Institute of India (III) examination with IC85...

Genetic Engineering

Unlock the potential of Genetic Engineering with our dedicated category. Explore gene...

Financial Management and Financial Markets

Master the world of finance with our Financial Management and Financial Markets...

Verbal Reasoning

Sharpen your logical thinking and reasoning abilities with our Verbal Reasoning...

Railway Engineering

Embark on a journey through the world of railway systems with our Railway Engineering...

Automotive Engine Design

Embark on a thrilling exploration of Automotive Engine Design, where the intricacies...

Analytical Instrumentation

Dive into the world of precise measurements with our Analytical Instrumentation...

Data Interpretation

Master the art of data analysis and interpretation with our Data Interpretation...

Dairy Engineering

Dive into the world of Dairy Engineering with our specialized category. Explore the...