Importance of Product Design MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Importance of Product Design, a fundamental topic in the field of IC 92 Actuarial Aspects of Product Development. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Importance of Product Design 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 Importance of Product Design mcq questions that explore various aspects of Importance of Product Design problems. Each MCQ is crafted to challenge your understanding of Importance of Product Design principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 92 Actuarial Aspects of Product Development tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Importance of Product Design MCQs are your pathway to success in mastering this essential IC 92 Actuarial Aspects of Product Development topic.

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Importance of Product Design MCQs | Page 7 of 10

Discover more Topics under IC 92 Actuarial Aspects of Product Development

Q61.
What role does the regulator play in the 'Use and File' system?

a.

Conducts technical analysis before product introduction

b.

Intervenes only upon receiving complaints from the public

c.

Enforces strict restrictions on insurer innovation

d.

Dictates product design and marketing strategies

Discuss
Answer: (b).Intervenes only upon receiving complaints from the public Explanation:In the 'Use and File' system, the regulator intervenes only upon receiving complaints from the public regarding the product, rather than conducting technical analysis before product introduction.
Q62.
What distinguishes the 'Free' system from other regulatory systems?

a.

Insurers design and sell products without any intervention from the regulator

b.

Regulator conducts solvency tests and asset-liability matching before product launch

c.

Regulator imposes strict restrictions on insurer operations

d.

Insurers are required to file products with the regulator before selling them

Discuss
Answer: (a).Insurers design and sell products without any intervention from the regulator Explanation:In the 'Free' system, insurers design and sell products without any intervention from the regulator, distinguishing it from other regulatory systems where regulators may impose restrictions or conduct tests before product launch.
Q63.
What is the underlying philosophy behind the 'Free' system?

a.

Regulator determines product prices

b.

Insurers compete freely in the market

c.

Regulator tightly monitors insurer operations

d.

Insurers have limited freedom in product design

Discuss
Answer: (b).Insurers compete freely in the market Explanation:The underlying philosophy behind the 'Free' system is that insurers compete freely in the market, offering products for sale at prices determined by market forces without regulatory intervention.
Q64.
What is the purpose of the minimum death benefit provision in Indian insurance regulations?

a.

To minimize insurer liabilities

b.

To ensure policyholder protection

c.

To maximize insurer profits

d.

To restrict policyholder benefits

Discuss
Answer: (b).To ensure policyholder protection Explanation:The purpose of the minimum death benefit provision in Indian insurance regulations is to ensure policyholder protection by stipulating a minimum amount payable on death, thereby safeguarding the interests of beneficiaries.
Q65.
How do Indian insurance regulations impact the policy term and premium paying term of insurance products?

a.

They mandate shorter policy terms and premium paying terms

b.

They ensure flexibility in policy and premium durations

c.

They require longer-term products to protect policyholders' interests

d.

They have no impact on policy durations

Discuss
Answer: (c).They require longer-term products to protect policyholders' interests Explanation:Indian insurance regulations stipulate minimum policy terms and premium paying terms for insurance products to ensure that the products remain fairly long term, thereby protecting the interests of policyholders.
Q66.
What is the purpose of regulating commissions or remuneration in Indian insurance regulations?

a.

To increase insurer profits

b.

To ensure fair compensation for distributors

c.

To limit policyholder benefits

d.

To discourage distribution channels

Discuss
Answer: (b).To ensure fair compensation for distributors Explanation:The purpose of regulating commissions or remuneration in Indian insurance regulations is to ensure fair compensation for distributors, thereby maintaining a balance between incentivizing distribution and protecting policyholder interests.
Q67.
How are surrender values calculated according to Indian insurance regulations?

a.

Surrender value is fixed irrespective of policy duration

b.

Surrender value is calculated based on market conditions

c.

Surrender value is the higher of guaranteed surrender value and special surrender value

d.

Surrender value is determined by insurer discretion

Discuss
Answer: (c).Surrender value is the higher of guaranteed surrender value and special surrender value Explanation:According to Indian insurance regulations, surrender value is calculated as the higher of guaranteed surrender value (GSV) and special surrender value (SSV), ensuring policyholders receive the maximum benefit possible.
Q68.
What is the condition for collecting advance premium according to the regulations?

a.

Premium collected must exceed the due amount

b.

Premium must be collected within the same financial year

c.

Premium must be collected after the due date

d.

Premium must be collected before the policy term starts

Discuss
Answer: (b).Premium must be collected within the same financial year Explanation:According to the regulations, advance premium collection is allowed if the premium is collected within the same financial year and is adjusted on the due date of the premium.
Q69.
What is the characteristic of level premiums as per the regulations?

a.

Premiums can vary over the term of the policy

b.

Premium remains the same throughout the premium paying term

c.

Premium can be increased at any time

d.

Premiums are collected only on the due date

Discuss
Answer: (b).Premium remains the same throughout the premium paying term Explanation:According to the regulations, level premiums remain the same throughout the premium paying term of the policy and cannot be altered during the term of the policy.
Q70.
What is the treatment of additional payments made on an ad hoc basis according to the regulations?

a.

They are considered as regular premiums

b.

They are treated as top-up premiums

c.

They are adjusted against future premiums

d.

They are refunded to the policyholder

Discuss
Answer: (b).They are treated as top-up premiums Explanation:Additional payments made on an ad hoc basis are considered as top-up premiums and treated as single premium for the purpose of providing insurance cover according to the regulations.
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