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.

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Types of Insurance Products Individual MCQs | Page 8 of 17

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Q71.
What is an Immediate Annuity?

a.

An annuity where payments increase over time

b.

An annuity where payments are made until the survival of the policyholder in return for a single advance payment

c.

An annuity where payments are made until the death of the policyholder, usually in the form of a lump sum

d.

An annuity where payments are made until the survival of the policyholder without any deferred period

Discuss
Answer: (d).An annuity where payments are made until the survival of the policyholder without any deferred period Explanation:An Immediate Annuity is a contract where level payments are made until the survival of the policyholder without any deferred period.
Q72.
What is a characteristic of Increasing Annuity?

a.

Annuity payments remain constant over time

b.

Annuity payments decrease over time

c.

Annuity payments increase over time

d.

Annuity payments are made as a lump sum

Discuss
Answer: (c).Annuity payments increase over time Explanation:Increasing Annuity is a contract where annuity payments increase by a specified amount until the survival of the policyholder.
Q73.
What is the feature of Decreasing Annuity?

a.

Annuity payments remain constant over time

b.

Annuity payments decrease over time

c.

Annuity payments increase over time

d.

Annuity payments are made as a lump sum

Discuss
Answer: (b).Annuity payments decrease over time Explanation:Decreasing Annuity is a contract where annuity payments decrease by a specified amount until the survival of the policyholder.
Q74.
What is an annuity-certain policy?

a.

An annuity payable for a fixed number of years, whichever is shorter

b.

An annuity payable for life or for a fixed number of years, whichever is longer

c.

An annuity payable until the death of the policyholder

d.

An annuity payable until the death of the second person in a couple

Discuss
Answer: (b).An annuity payable for life or for a fixed number of years, whichever is longer Explanation:An annuity-certain policy is an annuity payable for life or for a fixed number of years, whichever is longer.
Q75.
What is a Last Survivor Annuity?

a.

An annuity payable until the death of the first person in a couple

b.

An annuity payable until the death of the second person in a couple

c.

An annuity payable until the death of both persons in a couple

d.

An annuity payable until the death of the policyholder

Discuss
Answer: (b).An annuity payable until the death of the second person in a couple Explanation:Last Survivor Annuity is an annuity payable until the death of the second person in a couple, with the annuity payment to the second life being a percentage of the annuity payment to the first life.
Q76.
What is the primary characteristic of term insurance contracts?

a.

They offer both death and survival benefits.

b.

They provide benefits only upon the death of the insured.

c.

They guarantee a return of premiums paid.

d.

They offer increasing benefits over time.

Discuss
Answer: (b).They provide benefits only upon the death of the insured. Explanation:Term insurance contracts offer death benefits only, providing financial protection to the beneficiaries in the event of the insured's death within the policy term.
Q77.
Which type of insurance contract allows the policyholder to pay premiums until a certain age, after which the cover continues until death without further premium payments?

a.

Term assurance with return of premium

b.

Whole life assurance

c.

Deferred annuity with life cover

d.

Increasing annuity

Discuss
Answer: (b).Whole life assurance Explanation:Whole life assurance contracts allow policyholders to pay premiums until a certain age, after which the coverage continues until death without further premium payments.
Q78.
What is the distinguishing feature of a decreasing annuity contract?

a.

Annuity payments increase over time.

b.

Annuity payments decrease over time.

c.

Annuity payments are fixed for life.

d.

Annuity payments are made in advance.

Discuss
Answer: (b).Annuity payments decrease over time. Explanation:In a decreasing annuity contract, the annuity payments decrease over time until the survival of the policyholder.
Q79.
What type of annuity ensures payments as long as both annuitants are alive and ceases upon the death of either?

a.

Joint life annuity

b.

Reversionary annuity policy

c.

Last survivor annuity

d.

Immediate annuity in arrears

Discuss
Answer: (a).Joint life annuity Explanation:A joint life annuity ensures payments as long as both annuitants are alive and ceases upon the death of either.
Q80.
Which type of annuity allows the policyholder to choose between a lump sum payment or an immediate annuity at the vesting date?

a.

Deferred annuity with life cover

b.

Deferred annuity with options at the vesting date

c.

Ordinary deferred annuity

d.

Immediate annuity with ROC

Discuss
Answer: (b).Deferred annuity with options at the vesting date Explanation:Deferred annuity with options at the vesting date allows the policyholder to choose between a lump sum payment or an immediate annuity at the vesting date.
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