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 7 of 13

Discover more Topics under IC22 Life Insurance Underwriting

Q61.
Who can be the beneficiary under the MWP Act?

a.

The husband alone

b.

The wife and one or more children jointly

c.

One or more children (both natural and adopted)

d.

All of the above

Discuss
Answer: (c).One or more children (both natural and adopted) Explanation:Under the MWP Act, the beneficiary can be the wife alone, one or more children (both natural and adopted), or the wife and one or more children jointly.
Q62.
Can the beneficiaries of policies taken under the MWP Act be changed by the proposer at any time?

a.

Yes

b.

No

c.

Depends on Insurer

d.

None of the above

Discuss
Answer: (b).No Explanation:The beneficiaries of policies taken under the MWP Act once declared cannot be changed at any time by the proposer.
Q63.
Who can claim the benefits of policies taken under the MWP Act?

a.

The legal heirs of the life assured

b.

The creditors of the life assured

c.

The employer of the life assured

d.

None of the above

Discuss
Answer: (d).None of the above Explanation:The policies taken under the MWP Act cannot be claimed by the other legal heirs or the husband's creditors, nor can the husband claim any benefit. The beneficiaries declared at the time of policy issuance are the only ones entitled to the benefits.
Q64.
What is the difference in beneficiary specification for Mohammedan and Non-Mohammedan proposers under the MWP Act?

a.

Non-Mohammedan proposers can only take up named policies, while Mohammedan proposers can specify the beneficiaries as a class or as a named policy.

b.

Mohammedan proposers can only take up named policies, while Non-Mohammedan proposers can specify the beneficiaries as a class or as a named policy.

c.

Both Mohammedan and Non-Mohammedan proposers can specify the beneficiaries as a class or as a named policy.

d.

Neither Mohammedan nor Non-Mohammedan proposers can specify the beneficiaries as a class or as a named policy.

Discuss
Answer: (b).Mohammedan proposers can only take up named policies, while Non-Mohammedan proposers can specify the beneficiaries as a class or as a named policy. Explanation:Non-Mohammedan proposers can specify the beneficiaries as a class or as a named policy and provide that the benefit should go to them jointly or to the survivors according to the specified percentages. However, Mohammedan proposers can only take up named policies.
Q65.
Can children take insurance for their parents?

a.

Yes, it is allowed

b.

No, it is not allowed and is considered a moral hazard

c.

It depends on the insurance company

d.

None of the above

Discuss
Answer: (b).No, it is not allowed and is considered a moral hazard Explanation:Parents can take insurance for their children, but children buying insurance cover (except pension plans) for their parents are not allowed and is taken as a moral hazard.
Q66.
What can be considered as valid insurable interest under common law?

a.

Self

b.

Spouse

c.

Parents-children

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Common law recognizes self, spouse, parents-children, and assets as valid insurable interest.
Q67.
Can an individual take life insurance for themselves of any amount?

a.

Yes

b.

No

c.

Depends on the insurance company's underwriting criteria

d.

None of the above

Discuss
Answer: (a).Yes Explanation:A person has unlimited insurable interest in his/her own life, and can take life insurance for themselves of any amount.
Q68.
What can an insurance company do if a person's proposed insurance amount exceeds their premium paying capacity?

a.

Issue a life insurance policy for the requested amount

b.

Suggest a life insurance policy for a reduced amount

c.

Reject the request for the life insurance policy in its requested form

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:An insurance company may issue a life insurance policy for the requested amount, suggest a life insurance policy for a reduced amount, or reject the request for the life insurance policy in its requested form, based on the amount of life insurance applied for by the person and after evaluating their premium paying capacity from their financials.
Q69.
How can the cover amount for a policy issued under the MWP Act be determined?

a.

By using an income multiple approach or a need analysis method

b.

By using a credit rating approach

c.

By using a collateral analysis method

d.

By using an actuarial table

Discuss
Answer: (a).By using an income multiple approach or a need analysis method Explanation:As the policy issued under the MWP Act covers the life of an individual with beneficiaries as mentioned above, it needs to be treated as personal insurance cover for the purpose of financial underwriting. An income multiple approach or a need analysis method can be used to arrive at the cover amount.
Q70.
What is the starting point for financial underwriting?

a.

Financial questionnaire from the client

b.

Memorandum of Association

c.

Application form

d.

Articles of Association

Discuss
Answer: (c).Application form Explanation:The starting point for financial underwriting is the application form.
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