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 9 of 13

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Q81.
What is required for premium payments in level premium policies?

a.

Premium may vary over the term of the policy

b.

Acceptance of any amounts less than the due regular premium

c.

Ad hoc payments treated as regular premiums

d.

Uniform premium payable throughout the premium paying term

Discuss
Answer: (d).Uniform premium payable throughout the premium paying term Explanation:In level premium policies, the premium chosen at the outset shall remain uniform and not vary over the term of the policy, according to the regulations.
Q82.
According to the regulations, how should the maturity benefits be indicated in product literature?

a.

Indicate only the protection-oriented aspects

b.

Clearly indicate whether the product is protection-oriented, savings-oriented, or a combination

c.

Mention only the percentage return of premiums paid

d.

Offer a meager amount in excess of return of premiums paid

Discuss
Answer: (b).Clearly indicate whether the product is protection-oriented, savings-oriented, or a combination Explanation:The product literature should clearly indicate whether the product is protection-oriented, savings-oriented, or a combination of the two, according to the regulations.
Q83.
What does the asset share represent for life insurance policies?

a.

The total premiums paid by the policyholder

b.

The accumulated cashflow in respect of a policy

c.

The sum of benefits paid by the insurer

d.

The expenses incurred by the insurer

Discuss
Answer: (b).The accumulated cashflow in respect of a policy Explanation:At a generic level, the asset share for a life insurance policy represents the accumulated cashflow in respect of that policy, according to the regulations.
Q84.
What is considered an innovative product according to the regulations?

a.

Any product that meets customer needs

b.

Any product not previously approved by the Authority

c.

Any product with complex features

d.

Any product resulting in increased infrastructure costs

Discuss
Answer: (b).Any product not previously approved by the Authority Explanation:An innovative product, according to the regulations, is any product design that has not been previously approved by the Authority.
Q85.
What is a key consideration for the innovativeness of a product design?

a.

Meeting customer needs

b.

Increasing complexity for customers

c.

Decreasing customer satisfaction

d.

Reducing company's infrastructure costs

Discuss
Answer: (a).Meeting customer needs Explanation:The innovativeness in product design should result in meeting customer needs, better customer understanding, and satisfaction, according to the regulations.
Q86.
What should an insurer provide when discussing the product design concept of a proposed innovative product with the Authority?

a.

Detailed financial projections

b.

Market research inputs identifying customer needs

c.

Proof of increased infrastructure costs

d.

Statements from competitors

Discuss
Answer: (b).Market research inputs identifying customer needs Explanation:An insurer should provide market research inputs identifying the specific needs of customers when discussing the product design concept of a proposed innovative product with the Authority, as per the regulations.
Q87.
What should an insurer consider regarding similar products available in other markets?

a.

Replicating the product entirely

b.

Ignoring their existence

c.

Disclosing the general structure and regulations

d.

Patenting the product design

Discuss
Answer: (c).Disclosing the general structure and regulations Explanation:An insurer should disclose the general structure of similar products available elsewhere in other markets, including valuation requirements, market conducts, and specific regulations, according to the regulations.
Q88.
What is the revival period for a discontinued policy due to non-payment of premium?

a.

One year

b.

Three years

c.

Five years

d.

Two consecutive years

Discuss
Answer: (d).Two consecutive years Explanation:The revival period for a discontinued policy due to non-payment of premium is two consecutive years from the date of discontinuance of the policy, according to the regulations.
Q89.
What does the lock-in period refer to?

a.

The period during which premiums cannot be paid

b.

The period during which the policy cannot be revived

c.

The period during which policy proceeds cannot be paid except in certain circumstances

d.

The period during which policyholders can withdraw funds freely

Discuss
Answer: (c).The period during which policy proceeds cannot be paid except in certain circumstances Explanation:The lock-in period refers to the period of five consecutive years from the date of commencement of the policy, during which the proceeds of the discontinued policies cannot be paid by the insurer to the policyholder or insured, except in certain circumstances such as death or other contingencies covered under the policy.
Q90.
How should charges be structured in linked insurance products during the lock-in period?

a.

Charges should increase substantially each year

b.

Charges should remain constant throughout the lock-in period

c.

Charges should be spread evenly during the first five years of the policy contract

d.

Charges should only be applied after the lock-in period ends

Discuss
Answer: (c).Charges should be spread evenly during the first five years of the policy contract Explanation:Charges in linked insurance products during the lock-in period should be spread evenly during the first five years of the policy contract, without wide fluctuations, according to the regulations.
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