Protection of Policyholder Interest MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Protection of Policyholder Interest, 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 Protection of Policyholder Interest 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 Protection of Policyholder Interest mcq questions that explore various aspects of Protection of Policyholder Interest problems. Each MCQ is crafted to challenge your understanding of Protection of Policyholder Interest 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 Protection of Policyholder Interest MCQs are your pathway to success in mastering this essential IC 14 Regulations of Insurance Business topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Protection of Policyholder Interest. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

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Protection of Policyholder Interest MCQs | Page 3 of 8

Discover more Topics under IC 14 Regulations of Insurance Business

Q21.
What is a policy bond?

a.

A legal document setting out the terms and conditions of the insurance contract

b.

A document sent after the free look period ends

c.

A letter informing about the free look period

d.

A document sent before the proposal for insurance is accepted

Discuss
Answer: (a).A legal document setting out the terms and conditions of the insurance contract Explanation:A policy bond is a legal document setting out the terms and conditions of the insurance contract, provided after the proposal for insurance is accepted by the insurer.
Q22.
When does the risk coverage commence in relation to the policy bond?

a.

Before the proposal for insurance is accepted

b.

After the free look period ends

c.

After acceptance of proposal for insurance

d.

During the free look period

Discuss
Answer: (c).After acceptance of proposal for insurance Explanation:The risk coverage commences after the acceptance of the proposal for insurance, and the conditions and privileges of the policy are mentioned in the policy bond.
Q23.
What is the purpose of the free look period in insurance?

a.

To allow customers to return household products

b.

To provide a feature similar to a return policy for insurance products

c.

To encourage impulse purchases

d.

To offer discounts on insurance premiums

Discuss
Answer: (b).To provide a feature similar to a return policy for insurance products Explanation:The purpose of the free look period in insurance is to provide a feature similar to a return policy for insurance products, allowing customers to reconsider their purchase decision if the policy does not meet their requirements.
Q24.
Who mandates the free look period in insurance?

a.

The insurance companies

b.

The Insurance Regulatory and Development Authority ( IRDA )

c.

The government

d.

The policyholders

Discuss
Answer: (b).The Insurance Regulatory and Development Authority ( IRDA ) Explanation:The free look period in insurance is mandated by the Insurance Regulatory and Development Authority (IRDA) in the interest of consumers, ensuring they have the option to review their insurance purchase decision.
Q25.
What does the free-look period option of a life insurance plan allow the customer to do?

a.

Extend the policy duration

b.

Increase the premium amount

c.

Cancel the policy if not satisfied with its terms and conditions

d.

Change the beneficiary of the policy

Discuss
Answer: (c).Cancel the policy if not satisfied with its terms and conditions Explanation:The free-look period option of a life insurance plan allows the customer to cancel the policy if they disagree with or are not comfortable with its terms and conditions.
Q26.
Within what timeframe should the free-look option be exercised after receiving the policy?

a.

30 days

b.

20 days

c.

15 days

d.

10 days

Discuss
Answer: (c).15 days Explanation:The free-look option should be exercised within 15 days of receiving the policy.
Q27.
What deductions are typically made from the premium refund if a policy is canceled during the free-look period?

a.

Charges for policy administration

b.

Cost of medical tests and stamp duty

c.

Commissions paid to the insurance agent

d.

Taxes levied on the premium amount

Discuss
Answer: (b).Cost of medical tests and stamp duty Explanation:The deductions typically made from the premium refund include the cost of medical tests, stamp duty, and the risk premium if the customer was provided cover during the free-look period.
Q28.
How are changes in the net asset value (NAV) of unit-linked insurance plans during the free-look period handled?

a.

They are ignored during the free-look period

b.

They are refunded to the insurance company

c.

They are passed on to the customer through additions to or deductions from the premium

d.

They are refunded to the customer along with the premium refund

Discuss
Answer: (c).They are passed on to the customer through additions to or deductions from the premium Explanation:Changes in the net asset value (NAV) of unit-linked insurance plans during the free-look period are passed on to the customer through additions to or deductions from the premium.
Q29.
What is the duration of the free-look period for a life insurance plan?

a.

10 days

b.

20 days

c.

30 days

d.

15 days

Discuss
Answer: (d).15 days Explanation:The free-look period for a life insurance plan is typically 15 days from the date of receipt of the policy.
Q30.
What opportunity does the free-look period provide to the customer?

a.

To increase the premium amount

b.

To cancel the policy if dissatisfied with its terms and conditions

c.

To change the nominee of the policy

d.

To extend the policy duration

Discuss
Answer: (b).To cancel the policy if dissatisfied with its terms and conditions Explanation:The free-look period provides the customer with the opportunity to cancel the policy if they are dissatisfied with its terms and conditions.
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