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 8 of 13

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Q71.
What is the minimum guaranteed surrender value for policies surrendered between the fourth and seventh year of the policy?

a.

40% of the total premiums paid

b.

50% of the total premiums paid

c.

60% of the total premiums paid

d.

70% of the total premiums paid

Discuss
Answer: (b).50% of the total premiums paid Explanation:The regulation stipulates that the minimum guaranteed surrender value for policies surrendered between the fourth and seventh year of the policy is 50% of the total premiums paid less any survival benefits already paid.
Q72.
What is the minimum guaranteed surrender value for policies surrendered during the last two years if the policy term is less than 7 years?

a.

80% of the total premiums paid

b.

85% of the total premiums paid

c.

90% of the total premiums paid

d.

95% of the total premiums paid

Discuss
Answer: (c).90% of the total premiums paid Explanation:According to the regulation, the minimum guaranteed surrender value for policies surrendered during the last two years, if the policy term is less than 7 years, is 90% of the total premiums paid less any survival benefits already paid.
Q73.
What action is required for surrender values beyond the seventh year?

a.

Surrender values must be paid to the policyholder immediately

b.

Insurer must file surrender values under File and Use for clearance

c.

Surrender values must be recalculated using updated formulas

d.

Surrender values must be adjusted based on market conditions

Discuss
Answer: (b).Insurer must file surrender values under File and Use for clearance Explanation:According to the regulation, surrender values beyond the seventh year must be filed by the insurer under File and Use for clearance.
Q74.
What is the minimum guaranteed surrender value for single premium policies surrendered within the third policy year?

a.

60% of the total premiums paid

b.

70% of the total premiums paid

c.

80% of the total premiums paid

d.

90% of the total premiums paid

Discuss
Answer: (b).70% of the total premiums paid Explanation:According to the regulation, the minimum guaranteed surrender value for single premium policies surrendered within the third policy year is 70% of the total premiums paid less any survival benefits already paid.
Q75.
What is the minimum guaranteed surrender value for single premium policies surrendered in the fourth policy year?

a.

80% of the total premiums paid

b.

85% of the total premiums paid

c.

90% of the total premiums paid

d.

95% of the total premiums paid

Discuss
Answer: (c).90% of the total premiums paid Explanation:The regulation stipulates that the minimum guaranteed surrender value for single premium policies surrendered in the fourth policy year is 90% of the total premiums paid less any survival benefits already paid.
Q76.
What action is required for surrender values beyond the fourth year for single premium policies?

a.

Surrender values must be paid to the policyholder immediately

b.

Insurer must file surrender values under File and Use for clearance

c.

Surrender values must be recalculated using updated formulas

d.

Surrender values must be adjusted based on market conditions

Discuss
Answer: (b).Insurer must file surrender values under File and Use for clearance Explanation:According to the regulation, surrender values beyond the fourth year for single premium policies must be filed by the insurer under File and Use for clearance.
Q77.
How is the special surrender value determined for participating (par) policies?

a.

Based on the insurer's discretion

b.

According to the market conditions

c.

Reflecting the asset share as per guidance from the Institute of Actuaries of India

d.

Determined by the policyholder's request

Discuss
Answer: (c).Reflecting the asset share as per guidance from the Institute of Actuaries of India Explanation:For participating (par) policies, the special surrender value is determined based on the asset share, which is determined in accordance with guidance from the Institute of Actuaries of India.
Q78.
What is the maximum surrender charge for fund-based group non-linked products if surrendered within the third renewal?

a.

0.05% of the fund

b.

Rs. 5,00,000

c.

0.5% of the fund

d.

Rs. 50,000

Discuss
Answer: (b).Rs. 5,00,000 Explanation:The maximum surrender charge for fund-based group non-linked products if surrendered within the third renewal is 0.05% of the fund, with a maximum of Rs. 5,00,000.
Q79.
What charges may be levied by the insurer if a linked insurance policy is discontinued?

a.

Surrender charges and premium adjustment fees

b.

Fund management charge and service fees

c.

Only discontinuance charge and Fund management charge

d.

Surrender charge and administration fees

Discuss
Answer: (c).Only discontinuance charge and Fund management charge Explanation:If a linked insurance policy is discontinued, only discontinuance charge and Fund management charge may be levied by the insurer, according to the regulations.
Q80.
When can advance premium collection be allowed according to the regulations?

a.

If premium is collected within the same policy term

b.

If premium is collected within the same calendar year

c.

If premium is collected within the same financial year

d.

If premium is collected on the maturity date

Discuss
Answer: (c).If premium is collected within the same financial year Explanation:According to the regulations, advance premium collection can be allowed if premium is collected within the same financial year, and it shall only be adjusted on the due date of the premium.
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