Pricing of Products I MCQs

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

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Pricing of Products I MCQs | Page 6 of 13

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Q51.
What does the shadow policy account value computation involve?

a.

Only premiums and top-up premiums

b.

Only income from investments

c.

Both income elements and debits

d.

Only debits from the policy account

Discuss
Answer: (c).Both income elements and debits Explanation:The computation of the shadow policy account involves all income elements like premiums, top-up premiums, income from investments, and all actual debits.
Q52.
What is the purpose of maintaining the policy account value?

a.

To reduce charges applied to the policy

b.

To ensure compliance with maximum reduction in yield requirements

c.

To increase premiums paid by the policyholder

d.

To calculate additional interest rates for the policy

Discuss
Answer: (b).To ensure compliance with maximum reduction in yield requirements Explanation:The policy account value shall comply with the maximum reduction in yield requirements, which is the purpose of maintaining it.
Q53.
What is the minimum death benefit requirement for non-linked individual life insurance products?

a.

Sum of premium payments

b.

Sum assured on death

c.

Additional benefits only

d.

Sum of sum assured on death and additional benefits

Discuss
Answer: (d).Sum of sum assured on death and additional benefits Explanation:For non-linked individual life insurance products, the minimum death benefit shall not be less than the sum of sum assured on death and additional benefits.
Q54.
What is the minimum death benefit requirement for other than single premium products?

a.

100% of all premiums paid

b.

105% of all premiums paid

c.

Sum assured on death only

d.

Sum of premiums paid and accrued bonuses

Discuss
Answer: (b).105% of all premiums paid Explanation:For other than single premium products, the minimum death benefit shall be at least 105% of all the premiums paid as on death.
Q55.
When is the provision for minimum sum assured on death not applicable?

a.

For all participating products

b.

For reduced paid up policies only

c.

For whole life products and pension products

d.

For pension products and immediate annuity products

Discuss
Answer: (d).For pension products and immediate annuity products Explanation:The provision for minimum sum assured on death shall not be applicable to pension products and all types of immediate annuity products.
Q56.
How is the minimum sum assured calculated for linked insurance products?

a.

Based on the policy term and annualized premium

b.

Based on the policy term and single premium

c.

Based on the age at entry and policy term

d.

Based on the age at entry and annualized premium

Discuss
Answer: (a).Based on the policy term and annualized premium Explanation:For linked insurance products, the minimum sum assured shall be at least equal to a certain calculation involving the policy term (T) and annualized premium (AP).
Q57.
How is the policy term (T) determined for whole life products?

a.

By subtracting age at entry from 70

b.

By adding age at entry to 70

c.

By subtracting age at entry from 100

d.

By adding age at entry to 100

Discuss
Answer: (a).By subtracting age at entry from 70 Explanation:For whole life products, the policy term (T) shall be taken as 70 minus age at entry.
Q58.
What is the minimum policy term stipulated by regulations for individual products?

a.

1 year

b.

3 years

c.

5 years

d.

10 years

Discuss
Answer: (c).5 years Explanation:The minimum policy term for individual products shall be at least five years.
Q59.
What is the minimum premium payment term for individual products, except for single premium payment products?

a.

1 year

b.

3 years

c.

5 years

d.

10 years

Discuss
Answer: (c).5 years Explanation:For all other individual products except for single premium payment products, the premium payment term shall not be less than 5 years.
Q60.
What is the maximum commission or remuneration for brokers during the first year for policies with a premium paying term of 12 and above during the first ten years of a life insurer's business?

a.

30%

b.

35%

c.

40%

d.

45%

Discuss
Answer: (c).40% Explanation:During the first ten years of a life insurer's business, the maximum commission or remuneration for brokers in the first year for policies with a premium paying term of 12 and above shall be 40%.
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