Policyholder Rights of Assignment,Nomination and Transfer MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Policyholder Rights of Assignment,Nomination and Transfer, a fundamental topic in the field of IC 14 Regulations of Insurance Business. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Policyholder Rights of Assignment,Nomination and Transfer MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Policyholder Rights of Assignment,Nomination and Transfer mcq questions that explore various aspects of Policyholder Rights of Assignment,Nomination and Transfer problems. Each MCQ is crafted to challenge your understanding of Policyholder Rights of Assignment,Nomination and Transfer principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 14 Regulations of Insurance Business tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Policyholder Rights of Assignment,Nomination and Transfer MCQs are your pathway to success in mastering this essential IC 14 Regulations of Insurance Business topic.

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Policyholder Rights of Assignment,Nomination and Transfer MCQs | Page 7 of 11

Discover more Topics under IC 14 Regulations of Insurance Business

Q61.
What protection does Section 45 of the Insurance Act provide to policyholders and claimants?

a.

It allows policyholders to adjust policy terms based on new information.

b.

It prevents insurance companies from calling policies into question based on inaccurate statements after two years from policy inception.

c.

It mandates insurance companies to request proof of age from policyholders.

d.

It ensures insurance companies cannot adjust policy terms without policyholder consent.

Discuss
Answer: (b).It prevents insurance companies from calling policies into question based on inaccurate statements after two years from policy inception. Explanation:Section 45 of the Insurance Act provides protection to policyholders and claimants by preventing insurance companies from questioning the validity of a life insurance policy based on inaccurate statements made in the proposal or related documents after two years from the date of policy inception.
Q62.
What must an insurance company prove to avoid liability under a life insurance policy after two years from the policy's inception?

a.

That the policyholder failed to disclose any medical conditions.

b.

That the policyholder made unintentional errors in the proposal.

c.

That the policyholder intentionally suppressed material facts with the intent to defraud the insurer.

d.

That the policyholder changed personal details without informing the insurer.

Discuss
Answer: (c).That the policyholder intentionally suppressed material facts with the intent to defraud the insurer. Explanation:To avoid liability under a life insurance policy after two years from the policy's inception, an insurance company must prove that the policyholder intentionally suppressed material facts with the intent to defraud the insurer, as per Section 45 of the Insurance Act.
Q63.
What is the onus of proof regarding the conditions outlined in Section 45 of the Insurance Act?

a.

It lies on the policyholder.

b.

It lies on the insurance company.

c.

It lies on both the policyholder and the insurance company.

d.

It lies on the regulatory authority overseeing insurance matters.

Discuss
Answer: (b).It lies on the insurance company. Explanation:The onus of proof regarding the conditions outlined in Section 45 of the Insurance Act lies solely on the insurance company. They must demonstrate that the policyholder intentionally suppressed material facts with the intent to defraud the insurer to avoid liability under the policy.
Q64.
What happens if a life insurance policy lapses due to non-payment of premiums and is subsequently revived?

a.

The policy is automatically terminated.

b.

The insurance company must cancel the policy.

c.

The provisions of Section 45 are no longer applicable.

d.

The policyholder must reapply for insurance.

Discuss
Answer: (c).The provisions of Section 45 are no longer applicable. Explanation:When a life insurance policy lapses due to non-payment of premiums and is subsequently revived, the legal provision of Section 45 is silent. This means that the provisions of Section 45, which protect policyholders and claimants, may not apply in such cases.
Q65.
How do life insurers treat the revival of a lapsed policy?

a.

They consider it as a continuation of the original contract.

b.

They treat it as a new contract, applying the provisions of Section 45 of the Insurance Act.

c.

They cancel the policy and issue a new one.

d.

They extend the policy term without any changes.

Discuss
Answer: (b).They treat it as a new contract, applying the provisions of Section 45 of the Insurance Act. Explanation:Life insurers treat the revival of a lapsed policy as a new contract and apply the provisions of Section 45 of the Insurance Act to cases where the death of the policyholder occurs within two years from the date of revival.
Q66.
What changes does the Law Commission recommend regarding the repudiation of life insurance policies under Section 45?

a.

Policies can only be repudiated within two years from the date of issuance.

b.

No policies can be repudiated after five years from the date of issuance.

c.

Policies can be repudiated at any time, with or without cause.

d.

Policies can only be repudiated if the insured fails to disclose material facts.

Discuss
Answer: (b).No policies can be repudiated after five years from the date of issuance. Explanation:The Law Commission recommends that after five years from the date of issuance, no life insurance policies can be repudiated on any ground whatsoever, providing a sufficient period for insurers to verify the accuracy of the details provided by the insured.
Q67.
Under the Law Commission's recommendations, in what instances can an insurer repudiate a policy before the expiry of five years?

a.

Only if the policyholder fails to pay premiums.

b.

Only if the policyholder dies within two years of policy issuance.

c.

Only if the insured commits fraud.

d.

Only if the insured fails to disclose material facts.

Discuss
Answer: (c).Only if the insured commits fraud. Explanation:Under the Law Commission's recommendations, an insurer can repudiate a policy before the expiry of five years only if the insured commits fraud. The insurer must communicate the grounds and materials for such a decision in writing to the insured or their legal representatives, nominees, or assignees.
Q68.
Under what circumstances can an insurer repudiate a policy of life insurance before the expiry of five years?

a.

If the insured fails to pay premiums.

b.

If the policyholder dies within two years of policy issuance.

c.

If the insured makes a misstatement or suppresses a material fact.

d.

If the policyholder cancels the policy.

Discuss
Answer: (c).If the insured makes a misstatement or suppresses a material fact. Explanation:The insurer can repudiate a policy of life insurance within five years from the date of the policy, commencement of risk, revival of the policy, or the addition of a rider, whichever is later, if the insured makes a misstatement or suppresses a material fact that is crucial to the assessment of the risk.
Q69.
What happens if a life insurance policy is repudiated due to the insured making a misstatement or suppressing a material fact?

a.

The insured forfeits both the policy amount and the premium amounts collected.

b.

The insured forfeits the policy amount but retains the premium amounts collected.

c.

The insured retains both the policy amount and the premium amounts collected.

d.

The insurer forfeits both the policy amount and the premium amounts collected.

Discuss
Answer: (b).The insured forfeits the policy amount but retains the premium amounts collected. Explanation:If a life insurance policy is repudiated due to the insured making a misstatement or suppressing a material fact, the insured forfeits the policy amount but retains the premium amounts collected up to the date of repudiation.
Q70.
How is the materiality of a misstatement or suppression of fact determined?

a.

By the insured's intentions.

b.

By the insurer's discretion.

c.

By its direct bearing on the risk undertaken by the insurer.

d.

By the policyholder's understanding.

Discuss
Answer: (c).By its direct bearing on the risk undertaken by the insurer. Explanation:The materiality of a misstatement or suppression of fact is determined by its direct bearing on the risk undertaken by the insurer, not by the insured's intentions or the insurer's discretion.
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