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 2 of 17

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Q11.
What is the definition of 'Long Term Insurance Business' in some countries?

a.

Providing insurance coverage for short-term events

b.

Entering into contracts of assurance on human lives for a term dependent on human life

c.

Providing insurance coverage for property damage

d.

Maintaining contracts of assurance on non-human lives

Discuss
Answer: (b).Entering into contracts of assurance on human lives for a term dependent on human life Explanation:'Long Term Insurance Business' refers to the business of entering into or maintaining contracts of assurance on human lives, including contracts whereby the payment of money is assured on death or on the happening of any contingency dependent on human life.
Q12.
Which subclass of 'Long Term Business' typically offers protection against the loss of income if the insured passes away?

a.

Unit Linked Contracts

b.

Inflation Linked Contracts

c.

Annuities

d.

Life insurance

Discuss
Answer: (d).Life insurance Explanation:Life insurance is a subclass of long term business that offers protection against the loss of income if the insured passes away.
Q13.
What distinguishes Unit Linked Contracts from traditional life insurance products?

a.

Benefits are directly linked to the value of underlying investments

b.

Benefits are fixed and do not depend on market performance

c.

Benefits decrease over time

d.

Premiums are not paid for a term dependent on human life

Discuss
Answer: (a).Benefits are directly linked to the value of underlying investments Explanation:Unit Linked Contracts have benefits that are directly linked to the value of the underlying investments, unlike traditional life insurance products.
Q14.
What type of contracts are categorized under 'Permanent health' subclass of long term business?

a.

Contracts for property insurance

b.

Contracts for granting annuities

c.

Contracts providing benefits on incapacity from accident or sickness for a period of more than five years

d.

Contracts providing benefits on death

Discuss
Answer: (c).Contracts providing benefits on incapacity from accident or sickness for a period of more than five years Explanation:'Permanent health' contracts provide specified benefits on incapacity from accident or sickness for a period of more than five years and cannot be cancelled by the insurer.
Q15.
Which subclass of 'Long Term Business' offers benefits that increase with respect to an inflation index or a constant inflation value?

a.

Life insurance

b.

Unit Linked Contracts

c.

Inflation Linked Contracts

d.

Annuities

Discuss
Answer: (c).Inflation Linked Contracts Explanation:Inflation Linked Contracts have benefits that increase in value with respect to an inflation index or a constant inflation value.
Q16.
What distinguishes Participative (with profit) Basis contracts from Non-Participative (without profit) Basis contracts?

a.

Participative contracts offer fixed premiums while non-participative contracts have variable premiums.

b.

Participative contracts provide guaranteed benefits only, while non-participative contracts offer additional bonuses.

c.

Participative contracts allow policyholders to share in the surplus of the company, while non-participative contracts do not.

d.

Participative contracts are issued for shorter terms compared to non-participative contracts.

Discuss
Answer: (c).Participative contracts allow policyholders to share in the surplus of the company, while non-participative contracts do not. Explanation:In Participative (with profit) Basis contracts, policyholders participate in the surplus of the company, while in Non-Participative (without profit) Basis contracts, policyholders do not share in the surplus.
Q17.
What is the percentage of surplus typically allocated to policyholders in Participative (with profit) Basis contracts in India?

a.

80%

b.

90%

c.

10%

d.

20%

Discuss
Answer: (b).90% Explanation:In India, the participative rate in Participative (with profit) Basis contracts is typically 90% for policyholders and 10% for shareholders.
Q18.
Which type of contracts are issued on both Participative (with profit) Basis and Non-Participative (without profit) Basis?

a.

Only traditional contracts

b.

Only unit linked contracts

c.

Both traditional and unit linked contracts

d.

Only single premium contracts

Discuss
Answer: (c).Both traditional and unit linked contracts Explanation:Both traditional and unit linked contracts can be issued on both Participative (with profit) Basis and Non-Participative (without profit) Basis.
Q19.
What are the additional benefits provided in Participative (with profit) Basis contracts?

a.

Fixed sum assured

b.

Variable premiums

c.

Bonuses and cash refunds

d.

Guaranteed benefits only

Discuss
Answer: (c).Bonuses and cash refunds Explanation:In Participative (with profit) Basis contracts, additional benefits such as bonuses and cash refunds can be provided to policyholders.
Q20.
Why is it important for insurers to comply with local laws while designing insurance products?

a.

To increase shareholder profits

b.

To minimize policyholder benefits

c.

To avoid legal penalties and ensure regulatory compliance

d.

To reduce policy premiums

Discuss
Answer: (c).To avoid legal penalties and ensure regulatory compliance Explanation:Insurers must comply with local laws while designing insurance products to avoid legal penalties and ensure regulatory compliance with insurance legislation in that country.
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