Important Terms and Definitions MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Important Terms and Definitions, 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 Important Terms and Definitions 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 Important Terms and Definitions mcq questions that explore various aspects of Important Terms and Definitions problems. Each MCQ is crafted to challenge your understanding of Important Terms and Definitions 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 Important Terms and Definitions MCQs are your pathway to success in mastering this essential IC 92 Actuarial Aspects of Product Development topic.

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Important Terms and Definitions MCQs | Page 4 of 6

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Q31.
What does business insurance primarily provide coverage for?

a.

Protection for individuals against personal risks

b.

Compensation for employees in case of workplace accidents

c.

Benefits to a business entity, such as indemnifying for the loss of services of a key employee

d.

Financial assistance for individuals during unemployment

Discuss
Answer: (c).Benefits to a business entity, such as indemnifying for the loss of services of a key employee Explanation:Business insurance primarily provides coverage of benefits to a business entity, such as indemnifying for the loss of services of a key employee or a partner who becomes disabled.
Q32.
What is a Convertible Whole Life Policy?

a.

A policy that provides coverage for a limited period and then expires

b.

A policy that combines elements of whole life and term life insurance, with the option to convert to an endowment policy after a specified period

c.

A policy that covers multiple individuals under a single plan

d.

A policy that allows the insured to convert to a different insurance company

Discuss
Answer: (b).A policy that combines elements of whole life and term life insurance, with the option to convert to an endowment policy after a specified period Explanation:A Convertible Whole Life Policy provides for very low insurance premiums with maximum risk cover initially, with the option to convert to an endowment policy after a specified period.
Q33.
What does coverage refer to in insurance?

a.

The cost of the insurance policy

b.

The sum of money paid by the policyholder to the insurer

c.

The scope of protection provided under the insurance contract

d.

The duration of the insurance policy

Discuss
Answer: (c).The scope of protection provided under the insurance contract Explanation:Coverage in insurance refers to the scope of protection provided under the insurance contract, encompassing the various risks covered by the policy.
Q34.
What are Double/Triple Cover Plans in insurance?

a.

Plans that offer discounted premiums for multiple policies

b.

Plans that provide coverage for two or three different types of risks

c.

Plans that offer double or triple the sum assured upon the death of the life assured during the policy term

d.

Plans that provide coverage for both life and health insurance

Discuss
Answer: (c).Plans that offer double or triple the sum assured upon the death of the life assured during the policy term Explanation:Double/Triple Cover Plans in insurance offer double or triple the sum assured upon the death of the life assured during the term of the policy, with the basic sum assured paid upon survival to the maturity date.
Q35.
What is an Endowment Policy in insurance?

a.

An insurance contract with only a savings component

b.

An insurance contract with a life insurance protection component but no savings component

c.

An insurance contract with a savings component involving asset accumulation and a life insurance protection component

d.

An insurance contract with no maturity benefits

Discuss
Answer: (c).An insurance contract with a savings component involving asset accumulation and a life insurance protection component Explanation:An Endowment Policy is an insurance contract with a savings component involving asset accumulation and a life insurance protection component. It provides a sum assured payout upon death before maturity and pays out the accumulated amount at maturity.
Q36.
What are Exclusions in insurance policies?

a.

Specific conditions or circumstances for which the policy will provide benefits

b.

Situations where the insurance company is obligated to pay benefits

c.

Conditions that are covered by the insurance policy

d.

Specific conditions or circumstances for which the policy will not provide benefits

Discuss
Answer: (d).Specific conditions or circumstances for which the policy will not provide benefits Explanation:Exclusions in insurance policies refer to specific conditions or circumstances for which the policy will not provide benefits.
Q37.
What is Group Life Insurance?

a.

Life insurance policies that cover only individuals without medical examination

b.

Life insurance policies issued to employers for the benefit of employees or to members of an association without individual certificates

c.

Life insurance policies with guaranteed payouts

d.

Life insurance policies with flexible premium payment options

Discuss
Answer: (b).Life insurance policies issued to employers for the benefit of employees or to members of an association without individual certificates Explanation:Group Life Insurance refers to life insurance usually issued without medical examination, covering a group of people under a master policy, typically issued to an employer for the benefit of employees or to members of an association.
Q38.
What are Guaranteed Policies in insurance?

a.

Policies with flexible premium payment options

b.

Policies with variable payouts

c.

Policies where the payment amount remains fixed

d.

Policies with no maturity benefits

Discuss
Answer: (c).Policies where the payment amount remains fixed Explanation:Guaranteed Policies are insurance policies where the payment amount remains fixed, providing certainty to the policyholder.
Q39.
What is Insurable Interest in insurance?

a.

A condition where insurance is not provided

b.

A condition in which only the insurer benefits from the policy

c.

A condition in which the insured and the beneficiary have no relationship

d.

A condition where the applicant and the beneficiary would suffer emotional or financial loss in the event of a specified event

Discuss
Answer: (d).A condition where the applicant and the beneficiary would suffer emotional or financial loss in the event of a specified event Explanation:Insurable Interest in insurance refers to a condition where the applicant and the beneficiary would suffer emotional or financial loss in the event of a specified event. Without insurable interest, an insurance contract is invalid.
Q40.
What does "Insurability" refer to in insurance terminology?

a.

The likelihood of an individual experiencing a loss covered by the insurance policy

b.

The conditions affecting an individual's health, susceptibility to injury, and life expectancy

c.

The process of purchasing an insurance policy

d.

The duration for which an insurance policy remains in force

Discuss
Answer: (b).The conditions affecting an individual's health, susceptibility to injury, and life expectancy Explanation:"Insurability" refers to all conditions pertaining to individuals that affect their health, susceptibility to injury, and life expectancy, thereby determining their risk profile for insurance purposes.
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