Life Underwriting Principles and Concepts Part 1 MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Life Underwriting Principles and Concepts Part 1, 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 Life Underwriting Principles and Concepts Part 1 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 Life Underwriting Principles and Concepts Part 1 mcq questions that explore various aspects of Life Underwriting Principles and Concepts Part 1 problems. Each MCQ is crafted to challenge your understanding of Life Underwriting Principles and Concepts Part 1 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 Life Underwriting Principles and Concepts Part 1 MCQs are your pathway to success in mastering this essential IC22 Life Insurance Underwriting topic.

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Life Underwriting Principles and Concepts Part 1 MCQs | Page 1 of 12

Discover more Topics under IC22 Life Insurance Underwriting

Q1.
What is life insurance underwriting?

a.

The process of assessing and classifying individuals for health insurance

b.

The process of evaluating and pricing the risk associated with providing life insurance

c.

The process of selling life insurance policies to individuals

d.

The process of managing life insurance claims

Discuss
Answer: (b).The process of evaluating and pricing the risk associated with providing life insurance Explanation:The life insurance underwriting is defined as "the process of evaluating and pricing the risk associated with providing life insurance."
Q2.
What factors are considered in the underwriting process?

a.

Age, gender, and occupation

b.

Medical history and family health history

c.

Mortality tables and expected lifespan

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:There are several factors that are considered in the underwriting process, including age, gender, occupation, medical history, family health history, mortality tables, and expected lifespan.
Q3.
What is the role of underwriters in the underwriting process?

a.

To sell life insurance policies to individuals

b.

To evaluate and price the risk associated with providing life insurance

c.

To manage life insurance claims

d.

To assess the health and medical history of individuals

Discuss
Answer: (b).To evaluate and price the risk associated with providing life insurance Explanation:The insurance companies hire professionals called underwriters to evaluate and price the risk associated with providing life insurance.
Q4.
What is the main goal of life insurance underwriting?

a.

To provide insurance coverage to as many people as possible

b.

To minimize the risk of providing life insurance

c.

To maximize profits for the insurance company

d.

To evaluate and price the risk associated with providing life insurance

Discuss
Answer: (d).To evaluate and price the risk associated with providing life insurance Explanation:The main goal of life insurance underwriting is to evaluate and price the risk associated with providing life insurance.
Q5.
What is the purpose of mortality tables in the underwriting process?

a.

To predict an individual's expected lifespan

b.

To evaluate an individual's medical history

c.

To determine the amount of insurance coverage needed

d.

To identify potential risks associated with an individual

Discuss
Answer: (a).To predict an individual's expected lifespan Explanation:The underwriters use mortality tables to make estimations about an individual's mortality and to make decisions about accepting or declining a risk based on how long an individual is expected to live.
Q6.
What is the role of underwriters in the process of underwriting?

a.

To classify the risk related to an individual

b.

To rate the risk associated with an individual proposal

c.

To decide whether to accept or reject a particular risk

d.

To gather information for assessing the risk

Discuss
Answer: (c).To decide whether to accept or reject a particular risk Explanation:The underwriters are professionals hired by insurance companies to perform the task of underwriting. Their role is to decide whether to accept or reject a particular risk.
Q7.
What is the first step that an underwriter follows in life insurance underwriting?

a.

Gathering information for assessing the risk

b.

Measuring the level of risk associated with an individual proposal

c.

Classifying the risk related to an individual

d.

Taking a decision on the risk

Discuss
Answer: (c).Classifying the risk related to an individual Explanation:The first step that an underwriter follows in life insurance underwriting is to classify the risk related to an individual based on the information collected from different sources.
Q8.
Which of the following sources can underwriters use to gather information for assessing the risk?

a.

Proposal form

b.

Insurance agent's confidential report

c.

Medical history and medical examinations reports of the life proposed

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Underwriters can gather information for assessing the risk from various sources such as proposal form, insurance agent's confidential report, medical history and medical examinations reports of the life proposed, and income statements.
Q9.
How does the underwriter measure the level of risk associated with an individual proposal?

a.

By comparing the ratings to the mortality tables

b.

By classifying the risk related to an individual

c.

By gathering information from different sources

d.

By deciding whether to accept or reject a particular risk

Discuss
Answer: (a).By comparing the ratings to the mortality tables Explanation:The underwriter measures the level of risk associated with an individual proposal by comparing the ratings to the mortality tables.
Q10.
What decision is taken if the predictive mortality does not deviate too much from that indicated in the mortality table provided by the actuaries?

a.

Accept the risk

b.

Accept the risk with special terms

c.

Postpone the risk

d.

Decline the risk

Discuss
Answer: (a).Accept the risk Explanation:If the predictive mortality does not deviate too much from that indicated in the mortality table provided by the actuaries, then the risk is accepted by the underwriter.
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