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 3 of 8

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Q21.
What was a major goal of the Life Insurance Corporation Act passed in 1956?

a.

To privatize the insurance industry

b.

To regulate premium rates

c.

To spread life insurance widely, especially in rural areas

d.

To create a monopoly of foreign insurance companies

Discuss
Answer: (c).To spread life insurance widely, especially in rural areas Explanation:The Life Insurance Corporation of India was created with the objective of spreading life insurance more broadly, particularly to the rural areas, aiming to reach all insurable persons in the country with adequate financial cover at a reasonable cost.
Q22.
What significant event took place in the Indian insurance sector on 1st September 1956?

a.

The introduction of the first insurance policy

b.

The establishment of the first Indian insurance company

c.

The nationalization of the life insurance industry

d.

The passing of the Insurance Act 1938

Discuss
Answer: (c).The nationalization of the life insurance industry Explanation:On 1st September 1956, the life insurance industry in India was nationalized, marking a pivotal moment in the sector's history. This move led to the creation of the Life Insurance Corporation of India, aiming to expand life insurance coverage across the country.
Q23.
How did the Insurance Act of 1938 impact the Indian insurance sector?

a.

It encouraged the establishment of more insurance companies.

b.

It provided strict state control over both life and non-life insurance.

c.

It nationalized the insurance industry.

d.

It introduced insurance for the rural population.

Discuss
Answer: (b).It provided strict state control over both life and non-life insurance. Explanation:The Insurance Act of 1938 was a crucial piece of legislation that governed not only life insurance but also non-life insurance, introducing strict state control over the insurance business to ensure its sound operation and protect policyholders.
Q24.
Which was the first life insurance company to start functioning on Indian soil?

a.

Bharat Insurance Company

b.

Bombay Mutual Life Assurance Society

c.

Oriental Life Insurance Company

d.

Life Insurance Corporation of India

Discuss
Answer: (c).Oriental Life Insurance Company Explanation:Oriental Life Insurance Company, established in 1818, holds the distinction of being the first life insurance company to begin operations on Indian soil, marking the commencement of structured life insurance services in India.
Q25.
What was the significant contribution of Bombay Mutual Life Assurance Society in 1870?

a.

It was the first to offer life insurance to Indians at normal rates.

b.

It introduced the concept of mutual insurance in India.

c.

It was the first foreign insurance company in India.

d.

It nationalized the life insurance sector.

Discuss
Answer: (a).It was the first to offer life insurance to Indians at normal rates. Explanation:Bombay Mutual Life Assurance Society, founded in 1870, was significant for being the first Indian life insurance company, offering life insurance to Indians at normal rates, thereby democratizing access to life insurance across different sections of the society.
Q26.
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.
Q27.
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.
Q28.
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.
Q29.
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.
Q30.
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.
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