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!

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Life Underwriting Principles and Concepts Part 1 MCQs | Page 11 of 12

Discover more Topics under IC22 Life Insurance Underwriting

Q101.
What is the purpose of the specific exclusion clause in an insurance policy?

a.

To restrict the payout of a claim for the full cover under specified conditions

b.

To limit the sum assured payable to the nominees

c.

To increase the premium amount

d.

To extend the policy term

Discuss
Answer: (a).To restrict the payout of a claim for the full cover under specified conditions Explanation:The purpose of the specific exclusion clause in an insurance policy is to restrict the payout of a claim for the full cover under specified conditions or deny claim payment under certain conditions.
Q102.
If the insured dies due to a condition that has been excluded from the policy, what does the insurance company do?

a.

Denies payment of the claim to the nominee(s)

b.

Pays the claim in full

c.

Increases the premium amount

d.

Cancels the policy

Discuss
Answer: (a).Denies payment of the claim to the nominee(s) Explanation:If the insured dies due to a condition that has been excluded from the policy, the insurance company denies payment of the claim to the nominee(s).
Q103.
What could be the consequence of issuing policies with specific exclusions and assigning them to mortgage loans?

a.

Legal battles between the beneficiaries and the insurance company

b.

Higher premiums for the policyholders

c.

Longer policy term

d.

Increased policy benefits

Discuss
Answer: (a).Legal battles between the beneficiaries and the insurance company Explanation:Issuing policies with specific exclusions and assigning them to mortgage loans could lead to legal battles between the beneficiaries and the insurance company if the death claim is denied.
Q104.
In which scenario would an insurance company not pay any claim if the person dies in an air-crash?

a.

If the person is executing his aviation duties as a fighter-pilot

b.

If the person is traveling as a regular fare-paying passenger

c.

If the person dies due to natural causes

d.

If the person dies due to an accident other than an air-crash

Discuss
Answer: (a).If the person is executing his aviation duties as a fighter-pilot Explanation:If a policy has a special exclusion imposed, such as not paying any claim if the person dies in an air-crash while executing his aviation duties as a fighter-pilot, the insurance company would not pay any claim under those circumstances.
Q105.
What is the Postponement of acceptance of risk in the insurance industry?

a.

Accepting the risk at the policy commencement stage

b.

Declining the proposal in case of uninsurable health conditions

c.

Deferring the risk cover for a specified period

d.

Accepting the risk automatically after the specified period of postponement

Discuss
Answer: (c).Deferring the risk cover for a specified period Explanation:The Postponement of acceptance of risk is when the risk cover is deferred or postponed for a specified period to benefit both the client and insurer, with the proposal re-evaluated by the underwriter after the postponement period through a second pre-insurance medical screening of the individual.
Q106.
In what scenario can an underwriter take a decision to postpone a proposal?

a.

When the client is insurable

b.

When the client's health condition is uninsurable

c.

When the client is a high-risk profile

d.

When the client is a regular fare-paying passenger

Discuss
Answer: (b).When the client's health condition is uninsurable Explanation:An underwriter can take a decision to postpone a proposal when the health condition of a client is uninsurable at the time of application, e.g., if the client has been advised to undergo a cardiac surgery and post-operative treatment.
Q107.
How is the proposal evaluated after the postponement period in the underwriting process?

a.

Through a medical screening of the individual

b.

Automatically accepted by the insurance company

c.

Without any re-evaluation

d.

None of the above

Discuss
Answer: (a).Through a medical screening of the individual Explanation:The proposal is re-evaluated after the postponement period by the underwriter, which requires a second pre-insurance medical screening of the individual.
Q108.
What is the benefit of postponement of acceptance of risk to the client and insurer?

a.

The client pays a higher premium charged at the policy commencement stage

b.

The insurer accepts a very high-risk profile at the policy commencement stage

c.

The client gets a fair premium charged to him after the change in his health into a favourable one

d.

The insurer declines the proposal in case of uninsurable health conditions

Discuss
Answer: (c).The client gets a fair premium charged to him after the change in his health into a favourable one Explanation:The benefit of postponement of acceptance of risk is that both the client who gets a fair premium charged to him after the change in his health into a favourable one, and the insurer is absolved from accepting a very high-risk profile at the policy commencement stage.
Q109.
When can the acceptance of risk be postponed for a female applicant in the insurance industry?

a.

If she has a policy with other insurer

b.

If she is a regular air-travelling passenger

c.

If she is pregnant and has a history of repeated miscarriages

d.

If she is a high-risk profile due to her hazardous occupation

Discuss
Answer: (c).If she is pregnant and has a history of repeated miscarriages Explanation:If a female applicant who is pregnant at the time of application and also has a history of two miscarriages in the past, the insurance proposal needs to be postponed till her delivery, in view of the extra risk that she brings to the portfolio, by way of her adverse past medical history of repeated mis-carriages.
Q110.
What is the benefit of postponing the acceptance of risk?

a.

The client can get a fair premium charged to him after the change in his health into a favourable one

b.

The insurer can accept a high risk profile at the policy commencement stage

c.

The risk cover is accepted automatically after the specified period of postponement

d.

The client can receive the policy immediately after the postponement period

Discuss
Answer: (a).The client can get a fair premium charged to him after the change in his health into a favourable one Explanation:Postponing the acceptance of risk benefits the client who gets a fair premium charged to him after the change in his health into a favourable one, and the insurer, who is absolved from accepting a very high risk profile at the policy commencement stage.
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