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 8 of 13

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Q71.
What aspect of group insurance product design helps avoid anti-selection by individuals within a group?

a.

Providing disability provisions for all employees.

b.

Offering a wide range of product options and features.

c.

Making the determination of benefits per member discretionary for the employer.

d.

Automatically determining the level of coverage per employee based on objective criteria.

Discuss
Answer: (d).Automatically determining the level of coverage per employee based on objective criteria. Explanation:Automatically determining the level of coverage per employee based on objective criteria helps avoid anti-selection by individuals within a group. When the level of coverage is determined automatically, employees cannot selectively choose higher levels of coverage based on their health status or other personal factors. Instead, the coverage is standardized and applied uniformly to all eligible employees, reducing the risk of adverse selection and ensuring fairness in the insurance scheme.
Q72.
What information is typically required to be provided under the heading "Reinsurance" when filing a group term product with IRDA of India?

a.

Description of the product's features and target market.

b.

Financial projections and pricing assumptions used by the Appointed Actuary.

c.

Reinsurance arrangement, retention limits, terms of reinsurance, and name of reinsurer(s).

d.

Proposal form and sales literature.

Discuss
Answer: (c).Reinsurance arrangement, retention limits, terms of reinsurance, and name of reinsurer(s). Explanation:Under the heading "Reinsurance," insurers are typically required to provide information about the reinsurance arrangement for the group term product. This includes details such as retention limits of the insurers, terms of reinsurance (including premium rates and commissions), and the name of the reinsurer(s). Additionally, any recapture provision related to reinsurance may also need to be described. This information is important for understanding the reinsurance structure and its impact on the group term product.
Q73.
Which of the following parameters is typically included in the financial projections section when filing a group term product with IRDA of India?

a.

Rates of mortality assumptions and rates of morbidity.

b.

Description of reinsurance arrangement and retention limits.

c.

Proposal form and sales literature.

d.

Bonus rates and guaranteed cash values.

Discuss
Answer: (a).Rates of mortality assumptions and rates of morbidity. Explanation:The financial projections section typically includes parameters such as rates of mortality assumptions and rates of morbidity. These assumptions are crucial for pricing the group term product and projecting its financial performance over time. They provide insights into the expected mortality and morbidity experience of the insured group, which directly impacts the insurer's claims experience and financial results.
Q74.
Which of the following statements regarding the submission of policy terms and conditions to IRDA of India is accurate?

a.

Policy terms and conditions are required to be submitted only for certain types of insurance products.

b.

Insurers are no longer required to submit policy terms and conditions to IRDA of India.

c.

Policy terms and conditions must be submitted along with the proposal form and sales literature.

d.

Policy terms and conditions are subject to review and certification by the CEO & MD.

Discuss
Answer: (b).Insurers are no longer required to submit policy terms and conditions to IRDA of India. Explanation:Insurers are no longer required to submit policy terms and conditions to IRDA of India. This requirement has been discontinued, although insurers may still be required to maintain and provide policy terms and conditions to policyholders upon request. This change in regulation aims to streamline the filing process and reduce administrative burden on insurers.
Q75.
What types of occupations are typically included in Class 1 of the occupation classification?

a.

Light manufacture and assembly workers.

b.

Senior Management and Professionals with no exposure to outside office.

c.

Maintenance workers and janitorial staff.

d.

Retail business and professional salespersons.

Discuss
Answer: (b).Senior Management and Professionals with no exposure to outside office. Explanation:Class 1 of the occupation classification typically includes Senior Management and Professionals such as Chairman, Directors, MDs, CFOs, SVPs, VPs, AVPs, Senior Managers, Partners, Associates, doctors, dentists, lawyers, accountants, actuaries, engineers, and teachers, who have no exposure to outside office.
Q76.
Which occupation class may include skilled craftsmen and tradesmen whose duties involve only light manual work?

a.

Class 1

b.

Class 2

c.

Class 3

d.

Class 4

Discuss
Answer: (d).Class 4 Explanation:Class 4 occupation typically includes skilled craftsmen and tradesmen whose duties involve only light manual work, such as electricians, plumbers, carpeting, home appliance repairs, maintenance workers, janitorial workers, and those in chemical manufacturing.
Q77.
Which occupation class may include auto and auto-related manufacturing, assembly, service and repair workers, along with farmers and long and short haul truck drivers?

a.

Class 1

b.

Class 2

c.

Class 3

d.

Class 5

Discuss
Answer: (d).Class 5 Explanation:Class 5 occupation may include auto and auto-related manufacturing, assembly, service and repair workers, farmers, long and short haul truck drivers, firemen, policemen, workers in steel manufacturing, supervisors in primary metal industries, and other semi-skilled, manual, and process workers in light and primary industries.
Q78.
How is the pure risk premium calculated for a group?

a.

Sum assured multiplied by the expected mortality rate

b.

Sum assured divided by the expected mortality rate

c.

Expected claim cost divided by sum assured

d.

Expected mortality rate divided by sum assured

Discuss
Answer: (a).Sum assured multiplied by the expected mortality rate Explanation:The pure risk premium for a group is calculated by multiplying the sum assured by the expected mortality rate. This gives an estimate of the expected claim cost for the group.
Q79.
What does the gross premium include?

a.

Expected claim costs only

b.

Expected claim costs plus investment income on reserves

c.

Expected claim costs loaded for expenses, commissions, taxes, and profit margin

d.

Expected claim costs minus investment income on reserves

Discuss
Answer: (c).Expected claim costs loaded for expenses, commissions, taxes, and profit margin Explanation:The gross premium includes the expected claim costs loaded for expenses, commissions, taxes, required risk and profit margin, and may include a discount for investment income on reserves or cash flow.
Q80.
How are expenses handled in the calculation of gross premium for group insurance?

a.

Expenses are not considered in the calculation

b.

Expenses are fixed and do not vary with group size

c.

Expenses vary depending on the size and specific needs of each group

d.

Expenses are amortized over a number of years

Discuss
Answer: (c).Expenses vary depending on the size and specific needs of each group Explanation:Expenses in the calculation of gross premium for group insurance vary depending on the size and specific needs of each group. They may include various costs such as actuarial support, accounting, underwriting, claims investigations, and marketing, among others.
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