Financial Underwriting MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Financial Underwriting, a fundamental topic in the field of IC22 Life Insurance Underwriting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Financial Underwriting 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 Financial Underwriting mcq questions that explore various aspects of Financial Underwriting problems. Each MCQ is crafted to challenge your understanding of Financial Underwriting principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC22 Life Insurance Underwriting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Financial Underwriting MCQs are your pathway to success in mastering this essential IC22 Life Insurance Underwriting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Financial Underwriting. 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 Financial Underwriting knowledge to the test? Let's get started with our carefully curated MCQs!

Financial Underwriting MCQs | Page 12 of 13

Discover more Topics under IC22 Life Insurance Underwriting

Q111.
What can be used to arrive at the estimated annual income of the life assured?

a.

Salary certificates and salary slips

b.

Bank statements and CA certificates

c.

Audited profit and loss account and balance sheet

d.

Home loan repayment records and rent receipts

Discuss
Answer: (b).Bank statements and CA certificates Explanation:In case the applied sum assured is not justifiable on the basis of income documents, bank statements, CA certificates, agricultural receipts, mutual fund statements, vehicle registration papers, home loan repayment records, rent receipts, etc., can be used to arrive at the estimated annual income of the life assured.
Q112.
What are the standard documents required for Keyman insurance?

a.

Addendum and bio-data of the key person

b.

Copy of board resolution and partnership questionnaire

c.

Detailed analysis and copy of income tax returns

d.

Keyman questionnaire and memorandum of association

Discuss
Answer: (d).Keyman questionnaire and memorandum of association Explanation:The standard documents required for Keyman insurance are Keyman questionnaire duly signed and stamped by the authorised signatory of the company and countersigned by the key person, bio-data of the key person, detailed analysis explaining how the life to be assured is a Keyman for the organisation, memorandum of association and articles of association of the company, audited profit and loss account and balance sheet of the proposing company, details of the latest shareholding pattern of the company, copy of the board resolution passed by the company duly signed and stamped by the authorised signatory having details of the name of the key personls and the corresponding sum assured to be applied, and copy of income tax returns of the proposing company and life assured.
Q113.
What are the standard documents required for Partnership insurance?

a.

Audited profit and loss account and balance sheet

b.

Partnership questionnaire and copy of income tax returns

c.

Addendum and bio-data of the key person

d.

Copy of board resolution and deed of partnership

Discuss
Answer: (b).Partnership questionnaire and copy of income tax returns Explanation:The standard documents required for Partnership insurance are copy of deed of partnership duly attested by the partner authorised to sign the insurance proposal, audited profit and loss account and balance sheet of the partnership firm along with a schedule of the partners' capital account, copy of income tax returns of the partnership firm, and partnership questionnaire duly signed and stamped by the authorised signatory of the partnership firm and countersigned by the life to be assured.
Q114.
What are the standard documents required for Married Women Property Act?

a.

Addendum duly signed by the proposer

b.

Copy of board resolution duly signed and stamped by the authorised signatory of the employer

c.

Salary slips of the employee

d.

None of the above

Discuss
Answer: (a).Addendum duly signed by the proposer Explanation:The standard documents required for Married Women Property Act include an addendum duly signed by the proposer.
Q115.
What is financial underwriting?

a.

The process of determining the amount of insurance cover that is justified for a person with regards to his/her income and needs

b.

The process of determining the financial stability of an insurance company

c.

The process of determining the amount of premium to be paid by an insured person

d.

The process of determining the age and health of an insured person

Discuss
Answer: (a).The process of determining the amount of insurance cover that is justified for a person with regards to his/her income and needs Explanation:Financial underwriting is the process of determining the amount of insurance cover that is justified for a person with regards to his/her income and needs.
Q116.
Who should have an insurable interest in the life of the insured?

a.

Policy beneficiary

b.

Insurance agent

c.

Insurance company

d.

None of the above

Discuss
Answer: (a).Policy beneficiary Explanation:Policy beneficiary should have an insurable interest in the life of the insured.
Q117.
According to common law, who has insurable interest in a person's life?

a.

The person himself/herself

b.

The person's spouse, children, parents, and assets

c.

The insurance company

d.

None of the above

Discuss
Answer: (b).The person's spouse, children, parents, and assets Explanation:According to common law, a person has insurable interest in his own life, spouse's life, children's life, parent's life, and his assets.
Q118.
Who has insurable interest in the life of employees in a company?

a.

The employees themselves

b.

The company

c.

The insurance company

d.

The policy beneficiary

Discuss
Answer: (b).The company Explanation:An employer has insurable interest in the life of the employees; the company has insurable interest in the life of the keyman, and partners have insurable interest in each other's lives.
Q119.
What is the human life value method of calculating insurance cover?

a.

Takes into account the present value of the future earning potential of an individual

b.

Takes into account the value of financial liabilities and responsibilities of an individual

c.

Takes into account the age and income of the individual

d.

None of the above

Discuss
Answer: (a).Takes into account the present value of the future earning potential of an individual Explanation:The human life value method of calculating insurance cover takes into account the present value of the future earning potential of an individual.
Q120.
What is the needs analysis method of calculating insurance cover?

a.

Takes into account the present value of the future earning potential of an individual

b.

Takes into account the value of financial liabilities and responsibilities of an individual

c.

Takes into account the age and income of the individual

d.

None of the above

Discuss
Answer: (b).Takes into account the value of financial liabilities and responsibilities of an individual Explanation:The needs analysis method of calculating insurance takes into account the value of financial liabilities and responsibilities of an individual.
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