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.
Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Types of Insurance Products Group. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!
So, are you ready to put your Types of Insurance Products Group knowledge to the test? Let's get started with our carefully curated MCQs!
Types of Insurance Products Group MCQs | Page 5 of 13
Discover more Topics under IC 92 Actuarial Aspects of Product Development
Q41.
What was a driving factor behind the development of group insurance?
Answer: (b).Employers' parental approach towards their employees' welfare
Explanation:The development of group insurance was significantly influenced by some employers' parental approach towards their employees. These employers recognized the need to support the families of employees who passed away early in their careers, at a time when the employees might not have had the opportunity to save sufficiently. Providing life insurance coverage as a lump sum amount offered financial rescue to the bereaved family members, illustrating the compassionate foundation upon which group insurance was established.
Q42.
What is the primary purpose of providing certificates of insurance to individual group members in a group life insurance scheme?
Answer: (b).To outline the specific details of the insurance cover provided
Explanation:Certificates of insurance are provided to individual group members in a group life insurance scheme to outline the specific details of the insurance coverage they are entitled to under the master policy. This certificate serves as a summary of the coverage provided and ensures that each member is aware of the benefits and terms of their insurance, without acting as a separate contract between the insurer and the individual member.
Q43.
Why might an insurer impose a simple insurability condition on members joining an employer-employee group insurance scheme?
Answer: (c).To avoid selection against the insurer by the sponsor
Explanation:An insurer might impose a simple insurability condition, such as requiring a new member not to be on sick leave when joining the scheme, to avoid selection against the insurer by the sponsor. This is known as avoiding anti-selection. The rationale behind this condition is to prevent a situation where the insurer faces higher than expected mortality rates because individuals with known health issues join the scheme, thereby increasing the risk to the insurer without adequate compensation through premiums.
Q44.
What characterizes the one-year renewable term life assurance (OYRGTA) typically used in group insurance schemes?
Answer: (b).It offers a fixed benefit to nominees upon the employee's death, with few exclusions.
Explanation:One-year renewable term life assurance (OYRGTA) in group insurance schemes is characterized by offering a fixed benefit to the nominees upon the death of the employee, with very few exclusions (e.g., suicide in the first year of coverage). This type of insurance automatically renews at the end of each coverage year without requiring employees to provide evidence of insurability, although premiums may be revised based on the group's overall risk profile. It's focused on providing death benefits rather than savings or investment returns.
Q45.
What happens at the end of the coverage year in a group insurance scheme using OYRGTA?
Answer: (c).The insurance automatically renews without requiring further evidence of insurability.
Explanation:At the end of the coverage year in a group insurance scheme using one-year renewable term life assurance (OYRGTA), the insurance automatically renews without the need for employees to provide further evidence of insurability. This feature is designed to ensure continuous coverage for group members, simplifying administration and maintaining protection without the need for annual health assessments or individual evaluations by the insurer. However, the premium paid may be revised based on the overall risk profile and claims experience of the group.
Q46.
What is the primary purpose of adding riders to a base life insurance policy in a group scheme?
Answer: (c).To enhance the value and attractiveness of the group scheme to employees
Explanation:Riders are added to a base life insurance policy in a group scheme primarily to enhance the value and attractiveness of the scheme to employees. These riders provide additional coverage options, such as accidental death cover, critical illness cover, and disability benefits, which can make the insurance plan more comprehensive and tailored to the needs of the employees. The availability of such supplementary riders allows employees to benefit from a wider range of protections under the same group policy, making the scheme more valuable and appealing to them.
Q47.
According to IRDA regulations, what is the maximum percentage of the basic premium that the critical illness (CI) rider premium can constitute?
Answer: (c).100%
Explanation:According to the IRDA (Protection of policyholders’ interests) Regulations, 2002, the premium for a critical illness (CI) rider attached to a life policy cannot exceed 100% of the basic premium. This regulation ensures that the cost of adding a CI rider to the policy remains within a reasonable limit in relation to the cost of the base policy, making it feasible for policyholders to opt for additional coverage without the premium becoming prohibitively expensive.
Q48.
Which type of additional coverage in a group life insurance scheme might offer benefits as a lump sum or over several years for total and permanent disability?
Answer: (c).Accident only or accident-and-sickness Total and Permanent Disability (TPD) cover
Explanation:Accident only or accident-and-sickness Total and Permanent Disability (TPD) cover in a group life insurance scheme can provide benefits either as a lump-sum payment or over several years. This type of rider offers financial protection to the insured in case they suffer from a total and permanent disability, which is often defined strictly, such as being unable to earn any income for the remainder of their lifetime. The flexibility of receiving benefits either as a lump sum or in installments allows for better financial planning and support for the insured under such circumstances.
Q49.
How is dependent insurance in a group life insurance scheme typically characterized in terms of coverage levels compared to the employee?
Answer: (c).Coverage levels for dependents are typically lower than for the employee.
Explanation:Dependent insurance in a group life insurance scheme typically features coverage levels that are generally lower than for the employee. This type of insurance allows an employee's spouse and children to also be covered under the group scheme, providing them with a certain level of financial protection. However, due to factors such as the increased risk of anti-selection and the voluntary nature of dependent coverage, the insurance coverage levels provided to dependents are usually set lower than those available to the primary insured employee.
Q50.
What is the primary reason employer-employee group insurance schemes can offer a Free Cover Limit (FCL) without requiring individual evidence of insurability for coverage up to a certain level?
Answer: (c).Employers may require health screenings before offering permanent employment, indicating employees are generally healthier.
Explanation:The primary reason employer-employee group insurance schemes can offer a Free Cover Limit (FCL) without requiring individual evidence of insurability up to a certain level is that employees are generally healthier than the general population. This healthiness comes from requirements such as being fit enough to work full-time and undergoing health screenings or medical examinations before being offered permanent employment. These factors significantly reduce the risk of adverse selection and justify the provision of FCL, making the underwriting process more efficient and less costly.