Types of Insurance Products Group MCQs

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

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Types of Insurance Products Group MCQs | Page 1 of 13

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Q1.
What is the primary characteristic of group insurance?

a.

It involves providing insurance to individuals with a common attribute

b.

It offers life insurance protection only to professionals

c.

It is provided through multiple policy contracts

d.

It caters exclusively to weaker sections of society

Discuss
Answer: (a).It involves providing insurance to individuals with a common attribute Explanation:Group insurance involves providing insurance to a group of individuals who share some common attribute, such as employer-employee groups, professionals, cooperatives, etc., through a single policy contract.
Q2.
Which of the following groups may be covered under group insurance policies?

a.

Employer-employee groups

b.

Professionals only

c.

Members of cooperatives exclusively

d.

Only weaker sections of society

Discuss
Answer: (a).Employer-employee groups Explanation:Group insurance policies offer life insurance protection to various groups, including employer-employee groups, professionals, cooperatives, creditor-debtor groups, etc.
Q3.
What are the two types of group insurance plans?

a.

Standard and Premium

b.

Contributory and Non-contributory

c.

Basic and Advanced

d.

Fixed and Variable

Discuss
Answer: (b).Contributory and Non-contributory Explanation:Group insurance plans may be of two types: contributory or non-contributory, depending on whether the employer or employees pay the premiums.
Q4.
In a contributory group insurance plan, who pays the premiums?

a.

The employees

b.

The employer

c.

The insurance company

d.

The weaker sections of society

Discuss
Answer: (a).The employees Explanation:In a contributory plan, the employees contribute to the premiums through payroll deductions, while in a non-contributory plan, the employer pays the premiums.
Q5.
What is a significant advantage of group insurance schemes?

a.

High rates of payable premium

b.

Complex insurability conditions

c.

Difficult administration process

d.

Low rates of payable premium

Discuss
Answer: (d).Low rates of payable premium Explanation:One of the key features of group insurance schemes is the low rates of payable premium, which are based upon various factors such as ages, combinations of members, occupations, and working conditions.
Q6.
Which condition is NOT a requirement for granting a group insurance policy?

a.

Requisite minimum group size

b.

Minimum participation number

c.

Formation of the group solely for insurance purposes

d.

Occupation approval

Discuss
Answer: (c).Formation of the group solely for insurance purposes Explanation:While a requisite minimum group size and a minimum participation number are important conditions for granting a group insurance policy, the group should not be formed solely for insurance purposes.
Q7.
How do group insurance plans benefit individuals in terms of premiums?

a.

They have higher premiums compared to regular policies

b.

They offer no significant difference in premium costs

c.

They provide lower premiums compared to regular policies

d.

They have variable premium rates depending on the individual's occupation

Discuss
Answer: (c).They provide lower premiums compared to regular policies Explanation:Group insurance plans have low premiums compared to regular policies, making them particularly beneficial for individuals who find other policies costlier.
Q8.
Why are insurers able to provide relatively low-cost group coverage?

a.

Due to higher expenses incurred in administering group policies

b.

Because group policies have higher underwriting costs

c.

Because the group policyholder handles clerical duties

d.

Because individual policies are more cost-effective for insurers

Discuss
Answer: (c).Because the group policyholder handles clerical duties Explanation:Insurers can offer low-cost group coverage because the group policyholder often handles many clerical duties, reducing administrative expenses.
Q9.
How do expense savings contribute to the affordability of group insurance?

a.

By increasing underwriting costs

b.

By reducing policy issue costs

c.

By increasing sales costs

d.

By decreasing clerical duties

Discuss
Answer: (b).By reducing policy issue costs Explanation:Expense savings in group insurance policies contribute to affordability by reducing policy issue costs, as the insurer issues a master policy rather than many individual policies.
Q10.
What aspect of group insurance administration helps in cost reduction?

a.

Individual underwriting for each member

b.

Issuing many individual policies

c.

Underwriting the group as a whole

d.

Having separate sales processes for each policy

Discuss
Answer: (c).Underwriting the group as a whole Explanation:Underwriting the group as a whole instead of each individual member helps in reducing costs in group insurance administration.
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