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 2 of 13

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Q11.
Why are sales costs lower for group insurance policies?

a.

Because group policies have higher underwriting costs

b.

Because individual policies have lower administrative expenses

c.

Because group policies require separate sales processes

d.

Because one group policy covers multiple individuals

Discuss
Answer: (d).Because one group policy covers multiple individuals Explanation:Sales costs are lower for group insurance policies because one group policy covers multiple individuals, reducing the need for separate sales processes for each policy.
Q12.
What contributes to the lower underwriting and policy issue costs in group insurance?

a.

Underwriting each individual member separately

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 rather than each individual member contributes to lower underwriting and policy issue costs in group insurance.
Q13.
How does group insurance differ from individual insurance in terms of the contract?

a.

Individual insurance contracts involve multiple parties

b.

Group insurance contracts are voluntary

c.

Individual insurance contracts involve only the insurer and the individual

d.

Group insurance contracts require appraisal of individual risk

Discuss
Answer: (c).Individual insurance contracts involve only the insurer and the individual Explanation:Individual insurance contracts are between the individual and the insurance company, while group insurance contracts cover a group of lives and involve a legal entity like an employer or trustees.
Q14.
What determines the terms of insurance cover in group insurance?

a.

Individual characteristics

b.

The insurer's appraisal of risk

c.

Group characteristics

d.

The insured's preferences

Discuss
Answer: (c).Group characteristics Explanation:In group insurance, the terms of insurance cover depend upon the characteristics of the group as a whole, rather than individual characteristics.
Q15.
What document defines the terms and conditions of a group insurance contract?

a.

Individual policy documents

b.

Master Policy

c.

Insurance proposal form

d.

Underwriting guidelines

Discuss
Answer: (b).Master Policy Explanation:A Master Policy is issued in group insurance, which incorporates the contract between the insurance company and a legal entity defining the group of lives to be covered, benefits, contributions, and terms and conditions.
Q16.
What is the underwriting unit in group insurance?

a.

Each individual member

b.

The insurer

c.

The group of lives

d.

The legal entity

Discuss
Answer: (c).The group of lives Explanation:In group insurance, the underwriting unit is the group of lives, meaning there is a group selection of risks rather than underwriting each individual member separately.
Q17.
What factor determines the amount of cover in group insurance?

a.

Individual preferences

b.

Appraisal of individual risk

c.

A predetermined formula

d.

Insurance company's decision

Discuss
Answer: (c).A predetermined formula Explanation:The amount of cover in group insurance is determined based on a formula, not by individual preferences or the insurer's decision.
Q18.
How are premium rates adjusted in group insurance schemes?

a.

Based on individual claims experience

b.

Periodically, on the basis of group experience

c.

On the insurer's discretion

d.

Using fixed rates throughout the policy period

Discuss
Answer: (b).Periodically, on the basis of group experience Explanation:Premium rates in group insurance schemes are adjusted periodically based on the group's experience, a feature known as 'Experience Rating.'
Q19.
What role does the group serve in group insurance?

a.

Administrative

b.

Underwriting unit

c.

Sales

d.

Claims processing

Discuss
Answer: (b).Underwriting unit Explanation:The group is treated as an underwriting unit in group insurance.
Q20.
What is a crucial requirement regarding the formation of the group for group insurance?

a.

The group must be formed solely for insurance purposes

b.

The group must have multiple administrative bodies

c.

The group must primarily focus on obtaining insurance

d.

The group must have a central administrative machinery

Discuss
Answer: (d).The group must have a central administrative machinery Explanation:The group must have a single central administrative machinery to act on behalf of all members for group insurance.
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