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 4 of 8

Discover more Topics under IC 14 Regulations of Insurance Business

Q31.
What is the primary objective of offering a free look period?

a.

To increase the profits of the insurance company

b.

To make the process of buying insurance transparent and fulfilling for the customer

c.

To minimize the customer's options

d.

To compel the customer to stick with the policy for a longer period

Discuss
Answer: (b).To make the process of buying insurance transparent and fulfilling for the customer Explanation:The primary objective of offering a free look period is to make the process of buying insurance transparent and fulfilling for the customer.
Q32.
Why is a free look period advantageous for insurance companies?

a.

It encourages customers to make premature exits from their policies

b.

It allows the company to earn higher profits

c.

It helps retain customers for a longer period

d.

It discourages customers from studying the policy in detail

Discuss
Answer: (c).It helps retain customers for a longer period Explanation:A free look period is advantageous for insurance companies because it helps retain customers for a longer period by allowing them to thoroughly study the policy before making a decision to continue with it.
Q33.
What is the timeframe for sending the original documents and cancellation application to the insurance company during the free-look period?

a.

Within 30 days of policy receipt

b.

Within 10 days of policy receipt

c.

Within 15 days of policy receipt

d.

Within 20 days of policy receipt

Discuss
Answer: (c).Within 15 days of policy receipt Explanation:The original documents and cancellation application must be sent to the insurance company within 15 days of policy receipt during the free-look period.
Q34.
What deductions are typically made by the insurance company when a policy is canceled during the free-look period?

a.

Charges for policy administration

b.

Cost pertaining to medical tests, stamp duty, and risk premium

c.

Tax deductions

d.

Deductions for agent commission

Discuss
Answer: (b).Cost pertaining to medical tests, stamp duty, and risk premium Explanation:When a policy is canceled during the free-look period, the insurance company typically deducts costs related to medical tests, stamp duty, and risk premium from the premium paid by the customer.
Q35.
In unit-linked insurance plans, how are changes in the net asset value (NAV) during the free-look period handled?

a.

Changes in NAV are not passed on to the customer

b.

Changes in NAV are fully refunded to the customer

c.

Changes in NAV are adjusted through additions to or deductions from the premium

d.

Changes in NAV are borne by the insurance company

Discuss
Answer: (c).Changes in NAV are adjusted through additions to or deductions from the premium Explanation:In unit-linked insurance plans, changes in the net asset value (NAV) during the free-look period are typically adjusted through additions to or deductions from the premium paid by the customer.
Q36.
What details should be clearly stated in a life insurance policy according to regulatory requirements?

a.

The name of the insurance agent

b.

The terms and conditions of the rider

c.

The address of the policyholder

d.

The benefits payable, premium details, contingencies, and policy requirements

Discuss
Answer: (d).The benefits payable, premium details, contingencies, and policy requirements Explanation:Regulatory requirements mandate that a life insurance policy should clearly state details such as benefits payable, premium details, contingencies, and policy requirements, among others.
Q37.
How should the insurer inform the insured about the free look period?

a.

Through a separate email sent after policy issuance

b.

By including it in the policy document

c.

Through a text message

d.

In the covering letter with the policy

Discuss
Answer: (d).In the covering letter with the policy Explanation:The insurer should inform the insured about the free look period in the covering letter accompanying the policy.
Q38.
What additional right does the insurer have in respect of unit-linked policies upon cancellation?

a.

The right to withhold premium refunds

b.

The right to repurchase the units at the price on the date of cancellation

c.

The right to increase the premium

d.

The right to cancel the policy without refund

Discuss
Answer: (b).The right to repurchase the units at the price on the date of cancellation Explanation:In addition to other deductions, in respect of unit-linked policies, the insurer is entitled to repurchase the units at the price on the date of cancellation.
Q39.
What obligation does the insurer have regarding the insured's age in policies where premium depends on age?

a.

The insurer must not admit the insured's age until after policy issuance

b.

The insurer should ignore the insured's age

c.

The insurer must ensure that the insured's age is admitted before policy issuance

d.

The insurer must adjust the premium based on the insured's age after policy issuance

Discuss
Answer: (c).The insurer must ensure that the insured's age is admitted before policy issuance Explanation:In policies where the premium depends on age, the insurer must ensure that the insured's age is admitted as far as possible before issuance of the policy document.
Q40.
How often should the insurer inform the insured regarding claim procedures?

a.

Annually

b.

Biennially

c.

Periodically

d.

Only once at the time of policy issuance

Discuss
Answer: (c).Periodically Explanation:The insurer should inform the insured periodically regarding requirements for lodging a claim and the procedures to be followed for settling a claim early.
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