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.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Life Underwriting Principles and Concepts Part 1. 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 Life Underwriting Principles and Concepts Part 1 knowledge to the test? Let's get started with our carefully curated MCQs!

Life Underwriting Principles and Concepts Part 1 MCQs | Page 10 of 12

Discover more Topics under IC22 Life Insurance Underwriting

Q91.
Why is it difficult to administer an increasing extra premium for increasing risk?

a.

It would be necessary to monitor the health of each individual over the term of the policy

b.

Those with good health conditions may cease to pay the premium by walking out on the insurance cover

c.

Those whose medical condition remains bad or showing deterioration would continue forever

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:It would be difficult to administer an increasing extra premium for increasing risk because it would be necessary to monitor the health of each individual over the term of the policy, those with good health conditions may cease to pay the premium by walking out on the insurance cover, and those whose medical condition remains bad or showing deterioration would continue forever.
Q92.
What is diminishing lien?

a.

A method of acceptance used in life insurance policies

b.

A type of investment plan

c.

A method of accepting claims in health insurance

d.

None of the above

Discuss
Answer: (a).A method of acceptance used in life insurance policies Explanation:Diminishing lien is a method of acceptance used in life insurance policies.
Q93.
When is a reduced basic sum assured paid in a policy with a diminishing lien?

a.

If death occurs during lien period

b.

If the policyholder surrenders the policy

c.

If the policyholder stops paying premiums

d.

None of the above

Discuss
Answer: (a).If death occurs during lien period Explanation:A reduced basic sum assured is paid if death occurs during lien period.
Q94.
How does the amount of debt in a policy with a diminishing lien change over time?

a.

It gradually decreases by a certain amount with each passing year

b.

It gradually increases by a certain amount with each passing year

c.

It remains the same throughout the policy period

d.

None of the above

Discuss
Answer: (a).It gradually decreases by a certain amount with each passing year Explanation:The amount of debt in a policy with a diminishing lien gradually decreases by a certain amount with each passing year.
Q95.
When does the debt in a policy with a diminishing lien get fully cancelled?

a.

After a certain pre-determined period specified in the policy schedule

b.

When the policyholder stops paying premiums

c.

When the policyholder surrenders the policy

d.

None of the above

Discuss
Answer: (a).After a certain pre-determined period specified in the policy schedule Explanation:The debt in a policy with a diminishing lien gets fully cancelled after a certain pre-determined period specified in the policy schedule.
Q96.
What happens to the bonuses in a policy with a diminishing lien?

a.

They are paid in full under a "with-profits" policy

b.

They are paid on the diminished sum assured

c.

They are not paid at all

d.

None of the above

Discuss
Answer: (a).They are paid in full under a "with-profits" policy Explanation:Bonuses in a policy with a diminishing lien are paid in full under a "with-profits" policy and not on the diminished sum assured.
Q97.
What happens if death occurs due to accident in a policy with a diminishing lien?

a.

No lien is applied and the claim is paid on the full base sum assured basis

b.

A reduced sum assured is paid

c.

The policy is terminated

d.

None of the above

Discuss
Answer: (a).No lien is applied and the claim is paid on the full base sum assured basis Explanation:If death occurs due to accident in a policy with a diminishing lien, no lien is applied and the claim is paid on the full base sum assured basis.
Q98.
Why is the method of diminishing lien currently not used in India?

a.

It defeats the purpose of full insurance cover if death were to occur in the first few years from commencement

b.

It is too complex for policyholders to understand

c.

It is not profitable for insurance companies

d.

None of the above

Discuss
Answer: (a).It defeats the purpose of full insurance cover if death were to occur in the first few years from commencement Explanation:The method of diminishing lien is currently not used in India because it is felt that it defeats the purpose of full insurance cover if death were to occur in the first few years from commencement while the diminishing lien clause would be effective.
Q99.
What is the lien period in a policy with a 25% diminishing lien for 5 years?

a.

5 years

b.

4 years

c.

3 years

d.

None of the above

Discuss
Answer: (a).5 years Explanation:The lien period in a policy with a 25% diminishing lien for 5 years is 5 years.
Q100.
In which method of acceptance does the insurance company restrict the payout of a claim for the full cover under certain conditions?

a.

Specific exclusions

b.

Diminishing lien

c.

Suicide clause

d.

Free look period

Discuss
Answer: (a).Specific exclusions Explanation:In the method of specific exclusions, the insurance company accepts a proposal with some exclusions that restrict the payout of a claim for the full cover under specified conditions or deny claim payment under certain conditions.
Page 10 of 12