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.

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Pricing of Products I MCQs | Page 7 of 13

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Q61.
What is the maximum commission or remuneration for brokers in the subsequent years for all premium paying terms during the first ten years of a life insurer's business?

a.

5%

b.

10%

c.

15%

d.

20%

Discuss
Answer: (a).5% Explanation:In the subsequent years for all premium paying terms during the first ten years of a life insurer's business, the maximum commission or remuneration for brokers shall be 5%.
Q62.
What is the maximum commission or remuneration for pension products in case of single premium payment?

a.

5%

b.

7.5%

c.

10%

d.

15%

Discuss
Answer: (a).5% Explanation:For pension products in case of single premium payment, the maximum commission or remuneration is 2% of the single premium.
Q63.
What is the maximum commission or remuneration for pension products in case of other than single premium payment?

a.

5% of the first year's premium and 2% of each renewal premium

b.

7.5% of the first year's premium and 2% of each renewal premium

c.

10% of the first year's premium and 5% of each renewal premium

d.

15% of the first year's premium and 7.5% of each renewal premium

Discuss
Answer: (b).7.5% of the first year's premium and 2% of each renewal premium Explanation:For pension products in case of other than single premium payment, the maximum commission or remuneration is 7.5% of the first year's premium and 2% of each renewal premium.
Q64.
What is the maximum commission or remuneration for fund-based group products with respect to all premium payment modes, except direct marketing, during the first year?

a.

2% of the premiums paid during the year

b.

5% of the premiums paid during the year

c.

10% of the premiums paid during the year

d.

15% of the premiums paid during the year

Discuss
Answer: (a).2% of the premiums paid during the year Explanation:For fund-based group products, the maximum commission or remuneration during the first year is 2% of the premiums paid during the year.
Q65.
In which scenario is no commission payable?

a.

Single premium group term insurance

b.

One year renewable group term insurance

c.

One year Group Health Insurance

d.

Direct marketing

Discuss
Answer: (d).Direct marketing Explanation:No commission shall be payable for policies procured by direct marketing.
Q66.
What is the higher surrender value considered in most cases, according to the regulation?

a.

Guaranteed surrender value

b.

Special surrender value

c.

Accumulated surrender value

d.

Variable surrender value

Discuss
Answer: (b).Special surrender value Explanation:The regulation states that in most cases, the surrender value considered is the higher of guaranteed surrender value (GSV) and special surrender value.
Q67.
When does a policy acquire a guaranteed surrender value for products with a Premium Paying Term (PPT) of 10 years or more?

a.

After one year of premium payment

b.

After two consecutive years of premium payment

c.

After three consecutive years of premium payment

d.

After four consecutive years of premium payment

Discuss
Answer: (c).After three consecutive years of premium payment Explanation:According to the regulation, for products with a Premium Paying Term (PPT) of 10 years or more, a policy acquires a guaranteed surrender value after three consecutive years of premium payment.
Q68.
Which products acquire a guaranteed surrender value after at least two consecutive years of premium payment?

a.

Non-linked life insurance products

b.

Pure protection products

c.

Health insurance products

d.

Products with a Premium Paying Term of less than 10 years

Discuss
Answer: (d).Products with a Premium Paying Term of less than 10 years Explanation:The regulation specifies that for products with a Premium Paying Term (PPT) of less than 10 years, a policy acquires a guaranteed surrender value after at least two consecutive years of premium payment.
Q69.
Which products are exceptions to acquiring a guaranteed surrender value and special surrender value?

a.

Non-linked pension products

b.

Term insurance

c.

Health insurance

d.

Immediate annuities

Discuss
Answer: (b).Term insurance Explanation:The regulation mentions that pure protection products such as term insurance are exceptions to acquiring a guaranteed surrender value and special surrender value.
Q70.
What is the minimum guaranteed surrender value for policies surrendered between the second and third year of the policy?

a.

20% of the total premiums paid

b.

30% of the total premiums paid

c.

40% of the total premiums paid

d.

50% of the total premiums paid

Discuss
Answer: (b).30% of the total premiums paid Explanation:According to the regulation, the minimum guaranteed surrender value for policies surrendered between the second and third year of the policy is 30% of the total premiums paid less any survival benefits already paid.
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