Insurance Product MCQs

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

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

So, are you ready to put your Insurance Product knowledge to the test? Let's get started with our carefully curated MCQs!

Insurance Product MCQs | Page 2 of 8

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Q11.
What is insurance primarily used for?

a.

Investment purposes

b.

Risk distribution

c.

Saving goods

d.

Increasing wealth

Discuss
Answer: (b).Risk distribution Explanation:Insurance is fundamentally a method to distribute risk among a group to mitigate the financial impact on any one individual or entity in the event of a loss. This concept is illustrated through the analogy of insurance being a fire extinguisher for the smoldering coal of risk.
Q12.
Who were among the first to employ methods of risk distribution?

a.

The Babylonians

b.

The Indians

c.

The Chinese

d.

The Egyptians

Discuss
Answer: (c).The Chinese Explanation:The Chinese traders redistributed their wares across many ships to limit losses, exemplifying an early form of risk distribution to prevent total loss in the event of a single ship capsizing.
Q13.
Where was the first written insurance policy found?

a.

On a Roman tablet

b.

On a Babylonian obelisk monument

c.

In ancient Greek manuscripts

d.

In Egyptian hieroglyphs

Discuss
Answer: (b).On a Babylonian obelisk monument Explanation:The first documented insurance policy was discovered on a Babylonian obelisk monument, indicating the long history of insurance practices dating back to ancient civilizations.
Q14.
How does an insurance product contribute to a person's financial security?

a.

By satisfying hunger and basic needs

b.

By providing immediate entertainment

c.

By restoring financial status after untoward events

d.

By offering short-term monetary compensation

Discuss
Answer: (c).By restoring financial status after untoward events Explanation:An insurance product contributes to a person's financial security by providing monetary compensation in the event of certain untoward events, such as death or accidents. This compensation can help restore the financial status of the insured or their beneficiaries to some extent, alleviating the financial burden caused by unexpected circumstances.
Q15.
What financial problems may arise for the family in the event of the death of the life assured?

a.

Funeral expenses and hospital bills

b.

Loss of regular income and loan repayment concerns

c.

Legal expenses and medical treatment costs

d.

Education expenses and marriage costs

Discuss
Answer: (b).Loss of regular income and loan repayment concerns Explanation:In the event of the death of the life assured, the family may face the financial problems of funeral expenses and the cessation of regular income, leading to difficulties in meeting living expenses. Additionally, there may be outstanding loans that need to be repaid, potentially resulting in the sale of assets and further distress for the family.
Q16.
What financial problem does old age pose?

a.

Higher chances of falling ill and increased medical expenses

b.

Loss of regular income and funeral expenses

c.

Legal expenses and hospital bills

d.

Increased education expenses and marriage costs

Discuss
Answer: (a).Higher chances of falling ill and increased medical expenses Explanation:Old age presents the financial problem of a decreased flow of regular income and the potential need for increased medical expenses due to a higher likelihood of falling ill. Additionally, funeral expenses may arise in the event of death due to old age, adding to the financial burden.
Q17.
How do insurers address other financial needs?

a.

By providing immediate monetary benefits upon the occurrence of specific events

b.

By offering survival benefits and partial withdrawals/surrenders during the contract period

c.

By covering all financial needs through comprehensive insurance policies

d.

By reimbursing all medical and funeral expenses directly to the insured

Discuss
Answer: (b).By offering survival benefits and partial withdrawals/surrenders during the contract period Explanation:Insurers address other financial needs by offering survival benefits and partial withdrawals/surrenders during the contract period. These provisions provide liquidity to the customer at certain intervals, allowing them to meet various needs such as education expenses, marriage costs, or the purchase of capital items needed for the family.
Q18.
What does political utility refer to in the context of product utilities?

a.

The financial power granted by a product

b.

The sensory appeal of a product

c.

The social power granted by a product

d.

The social benefit granted by a product

Discuss
Answer: (c).The social power granted by a product Explanation:Political utility of a product refers to the social power it grants, such as improving the social acceptance of the owner, as exemplified by a costly car enhancing the owner's status.
Q19.
Which type of utility refers to the financial power granted by a product?

a.

Political utility

b.

Economic utility

c.

Social utility

d.

Philosophical utility

Discuss
Answer: (b).Economic utility Explanation:Economic utility pertains to the financial power granted by a product, such as increasing the financial stability of an individual, as demonstrated by gold ornaments and diamonds.
Q20.
What defines the philosophical utility of a product?

a.

The sensory appeal of the product

b.

The social morality surrounding the product

c.

The social power granted by the product

d.

The financial power granted by the product

Discuss
Answer: (b).The social morality surrounding the product Explanation:Philosophical utility of a product is determined by social morality, as illustrated by the example of a bottle of wine having less philosophical utility compared to a religious book.
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