Premium Bases Persistency Rates MCQs

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

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Premium Bases Persistency Rates MCQs | Page 6 of 7

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Q51.
How can withdrawal risk be primarily controlled in insurance?

a.

By offering various premium payment options

b.

By implementing need-based selling strategies

c.

By providing comprehensive agent training

d.

By running promotional campaigns

Discuss
Answer: (b).By implementing need-based selling strategies Explanation:Withdrawal risk in insurance can be primarily controlled by implementing need-based selling strategies, ensuring that products are sold based on the actual needs of policyholders.
Q52.
What approach can be used to incentivize agents to promote persistency?

a.

Offering higher commissions for new policy sales

b.

Penalizing agents for lower persistency levels

c.

Providing cash bonuses for overall sales volume

d.

Rewarding agents based on levels of persistency achieved

Discuss
Answer: (d).Rewarding agents based on levels of persistency achieved Explanation:Agents can be incentivized to promote persistency by rewarding them based on the levels of persistency achieved, thereby encouraging them to focus on maintaining policies over the long term.
Q53.
How can insurance companies encourage regular premium payments?

a.

By increasing policy surrender values

b.

By reducing the frequency of premium payments

c.

By providing various premium payment options

d.

By offering discounts on premium payments

Discuss
Answer: (c).By providing various premium payment options Explanation:Insurance companies can encourage regular premium payments by providing various premium payment options, such as ECS payment, to ensure easy payment by customers.
Q54.
Which statement accurately describes persistency in life insurance policies?

a.

Persistency of a life insurance policy indicates whether the customer is renewing his or her policy each year or quitting it midway.

b.

Persistency rates are calculated as 1 minus withdrawal rates.

c.

Persistency rates impact profits and therefore the premium to be charged for the product.

d.

Profit will depend upon the asset share vs. surrender value at the time of renewal.

Discuss
Answer: (a).Persistency of a life insurance policy indicates whether the customer is renewing his or her policy each year or quitting it midway. Explanation:Persistency of a life insurance policy indicates whether the customer is renewing his or her policy each year or quitting it midway.
Q55.
How are withdrawal rates related to persistency rates?

a.

Withdrawal rates are opposite of persistency rates and are calculated as 1 minus persistency rates.

b.

Withdrawal rates are directly proportional to persistency rates.

c.

Withdrawal rates and persistency rates are interchangeable terms.

d.

Withdrawal rates have no relation to persistency rates.

Discuss
Answer: (a).Withdrawal rates are opposite of persistency rates and are calculated as 1 minus persistency rates. Explanation:Withdrawal rates are opposite of persistency rates and are calculated as 1 minus persistency rates.
Q56.
What impact do withdrawal rates have on profits in insurance?

a.

Withdrawal rates have no impact on profits.

b.

Withdrawal rates decrease profits.

c.

Withdrawal rates increase profits.

d.

Withdrawal rates impact profits and therefore the premium to be charged for the product.

Discuss
Answer: (d).Withdrawal rates impact profits and therefore the premium to be charged for the product. Explanation:Withdrawal rates impact profits and therefore the premium to be charged for the product.
Q57.
What is withdrawal risk in insurance?

a.

The risk of policyholders withdrawing their policies before the maturity date

b.

The risk of policyholders renewing their policies each year

c.

The risk of policyholders upgrading their policies

d.

The risk of policyholders paying premiums on time

Discuss
Answer: (a).The risk of policyholders withdrawing their policies before the maturity date Explanation:Withdrawal risk refers to the risk of policyholders withdrawing their policies before the maturity date.
Q58.
How is withdrawal risk mainly controlled in insurance?

a.

By offering discounts on premium payments

b.

By implementing need-based selling strategies

c.

By reducing policy surrender values

d.

By increasing the frequency of premium payments

Discuss
Answer: (b).By implementing need-based selling strategies Explanation:Withdrawal risk is mainly controlled by choosing a well-defined sales strategy, designed to ensure need-based selling of products.
Q59.
If actual profits from withdrawal are more than the expected profit without withdrawals, then this policy will impact profit…..

a.

Negatively

b.

Positively

c.

No impact

d.

Any impact is possible

Discuss
Answer: (b).Positively Explanation:Actual profit more than expected profits will impact profits positively.
Q60.
Which of the following is a factor to determine the rate of withdrawal?

a.

Life table

b.

Underwriting expenses

c.

Financial knowledge of the client

d.

Color of skin

Discuss
Answer: (c).Financial knowledge of the client Explanation:Financial knowledge of the client affects the withdrawal rates.
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