Types of Insurance Products Individual MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Types of Insurance Products Individual, 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 Individual 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 Individual mcq questions that explore various aspects of Types of Insurance Products Individual problems. Each MCQ is crafted to challenge your understanding of Types of Insurance Products Individual 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 Individual 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 Individual MCQs | Page 14 of 17

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Q131.
What is the key characteristic of future bonuses in insurance contracts?

a.

Future bonuses are guaranteed in advance.

b.

Future bonuses are known at the time of policy issuance.

c.

Future bonuses are expected to be at least equal to the current year's bonus.

d.

Future bonuses are calculated based on the policyholder's investment choices.

Discuss
Answer: (c).Future bonuses are expected to be at least equal to the current year's bonus. Explanation:Future bonuses in insurance contracts are expected to be at least equal to the current year's bonus, although they are not guaranteed in advance.
Q132.
What is the primary purpose of participating contracts in insurance?

a.

To provide cash dividends to policyholders

b.

To reduce the premium amount payable by the policyholder

c.

To encourage policyholders to participate in investment decisions

d.

To provide a good return on investment to policyholders

Discuss
Answer: (d).To provide a good return on investment to policyholders Explanation:The primary purpose of participating contracts in insurance is to provide a good return on investment to policyholders by allowing them to share in the profits of the insurance company through bonuses or dividends.
Q133.
How are future bonuses typically related to the current year's bonus?

a.

Future bonuses are always higher than the current year's bonus.

b.

Future bonuses are always lower than the current year's bonus.

c.

Future bonuses are expected to be at least equal to the current year's bonus.

d.

Future bonuses are unrelated to the current year's bonus.

Discuss
Answer: (c).Future bonuses are expected to be at least equal to the current year's bonus. Explanation:Future bonuses in insurance contracts are typically expected to be at least equal to the current year's bonus, although there is no guarantee.
Q134.
What is the main difference between participating and non-participating insurance contracts in terms of premiums?

a.

Participating contracts have lower premiums than non-participating contracts.

b.

Non-participating contracts have higher premiums than participating contracts.

c.

Participating contracts include a bonus element in the premiums.

d.

Non-participating contracts provide cash dividends to policyholders.

Discuss
Answer: (c).Participating contracts include a bonus element in the premiums. Explanation:Participating contracts include a bonus element in the premiums, resulting in higher premiums compared to non-participating contracts, which do not include this feature.
Q135.
Which condition must be met for a policy to be eligible for receiving bonuses?

a.

The policy must be surrendered.

b.

The policy must be in-force for with profits.

c.

The policy must be issued for a specific term.

d.

The policy must be endorsed by the policyholder.

Discuss
Answer: (b).The policy must be in-force for with profits. Explanation:Bonuses are typically attached to policies that are in-force for with profits, meaning they are eligible to receive bonuses based on the insurer's profitability.
Q136.
Under what circumstance would the condition of keeping the policy in force for a certain period not apply?

a.

Upon policy surrender

b.

Upon policy issuance

c.

Upon policy endorsement

d.

Upon policy maturity

Discuss
Answer: (a).Upon policy surrender Explanation:The condition of keeping the policy in force for a certain period typically does not apply upon policy surrender. Bonuses may still be payable in some cases, subject to policy terms.
Q137.
How are vested bonuses typically paid out?

a.

Separately from the Sum Assured

b.

After the policy has lapsed

c.

Only upon policy surrender

d.

Along with the Sum Assured

Discuss
Answer: (d).Along with the Sum Assured Explanation:Vested bonuses are typically attached to and payable along with the Sum Assured upon policy maturity or death of the policyholder.
Q138.
When are bonuses usually declared?

a.

If there are losses in the company

b.

If there are no profits available for distribution

c.

If there are profits available for distribution after taxes

d.

If there is an increase in policy premiums

Discuss
Answer: (c).If there are profits available for distribution after taxes Explanation:Bonuses are usually declared if there are profits available for distribution after taxes, indicating the company's profitability.
Q139.
What is the guarantee regarding future bonuses in insurance policies?

a.

Future bonuses will always be higher than the current bonus rates.

b.

Future bonuses will be guaranteed at the current bonus rates.

c.

Future bonuses may be higher, lower, or equal to the current bonus rates.

d.

Future bonuses will be equal to the Sum Assured.

Discuss
Answer: (c).Future bonuses may be higher, lower, or equal to the current bonus rates. Explanation:There is no guarantee that future bonuses will be maintained at the current bonus rates. Future bonuses may be higher, lower, or equal to the current bonus rates depending on various factors.
Q140.
What distinguishes unit linked contracts from traditional insurance contracts?

a.

Unit linked contracts have fixed benefits.

b.

Unit linked contracts do not involve investment risks.

c.

Unit linked contracts transfer investment risk to the purchasers.

d.

Unit linked contracts do not provide savings benefits.

Discuss
Answer: (c).Unit linked contracts transfer investment risk to the purchasers. Explanation:Unit linked contracts transfer investment risk to the purchasers, unlike traditional insurance contracts where the insurer bears various risks such as fluctuating interest rates.
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