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 12 of 12

Discover more Topics under IC22 Life Insurance Underwriting

Q111.
What happens to a proposal after the postponement period?

a.

The proposal is accepted automatically

b.

The underwriter re-evaluates the proposal and requires a second pre-insurance medical screening of the individual

c.

The proposal is declined by the insurance company

d.

The proposal is reviewed by a third party medical professional

Discuss
Answer: (b).The underwriter re-evaluates the proposal and requires a second pre-insurance medical screening of the individual Explanation:After the postponement period, the underwriter re-evaluates the proposal and requires a second pre-insurance medical screening of the individual. Only after the underwriter accepts an individual to be an acceptable risk, through an underwriting process once again, will the proposal be accepted by the insurance company.
Q112.
What is the reason for declining a proposal?

a.

There is no possibility of improvement in the applicant's existing medical conditions

b.

The applicant lives in a city on the restricted list of countries

c.

The applicant has a hazardous occupation

d.

The applicant has a history of two miscarriages

Discuss
Answer: (a).There is no possibility of improvement in the applicant's existing medical conditions Explanation:Proposals can be declined for medical reasons, such as if there is no possibility of improvement in the applicant's existing medical conditions, even if the case is postponed.
Q113.
What happens to the bonus for 'with profit' policies in case of diminishing lien, if the insured dies within the lien period?

a.

No bonus will be paid

b.

A reduced bonus will be paid

c.

Full bonus will be paid on the base sum-assured.

d.

Bonus will not be paid after the lien period.

Discuss
Answer: (c).Full bonus will be paid on the base sum-assured. Explanation:The bonuses are paid in full under a "with-profits" policy and not on the diminished sum-assured .
Q114.
What is life insurance underwriting?

a.

The process of assessing and managing investment risk

b.

The process of assessing, selecting, and managing insurance risk

c.

The process of evaluating and rating customer service

d.

The process of selecting and pricing financial products

Discuss
Answer: (b).The process of assessing, selecting, and managing insurance risk Explanation:Life insurance underwriting is the process of assessing, selecting, classifying, evaluating, measuring, and rating the level of risk associated with an individual and then taking a decision whether to select that risk or not and if selected, also deciding the terms of acceptance.
Q115.
What is the purpose of statistical data in a mortality table?

a.

To show the probability of an individual becoming ill

b.

To show the probability of an individual dying

c.

To show the probability of an individual becoming disabled

d.

To show the probability of an individual having an accident

Discuss
Answer: (b).To show the probability of an individual dying Explanation:Statistical data in a mortality table shows the probability that a certain individual will die before his next birthday on the basis of his age.
Q116.
What is sub-standard risk?

a.

The risk associated with an individual is considered to be low

b.

The risk associated with an individual is considered to be higher than normal

c.

The risk associated with an individual is expected to diminish over a period of time

d.

The risk associated with an individual is substantially high

Discuss
Answer: (b).The risk associated with an individual is considered to be higher than normal Explanation:If the risk associated with an individual is considered to be higher than normal and cannot be insured at standard premium rates by insurance companies, it is known as sub-standard risk.
Q117.
What is the diminishing lien method?

a.

A method used to calculate the probability of an individual dying

b.

A method used in cases where the risk associated with an individual is expected to diminish over a period of time

c.

A method used to assess the probability of an individual becoming disabled

d.

A method used to assess the probability of an individual having an accident

Discuss
Answer: (b).A method used in cases where the risk associated with an individual is expected to diminish over a period of time Explanation:The diminishing lien method is used in cases where the risk associated with an individual is expected to diminish over a period of time.
Q118.
What is the specific exclusions method?

a.

A method used to calculate the probability of an individual dying

b.

A method used in cases where the risk associated with an individual is expected to diminish over a period of time

c.

A method used to accept a proposal by an insurance company with exclusion clause(s)

d.

A method used to decline a proposal by an insurance company

Discuss
Answer: (c).A method used to accept a proposal by an insurance company with exclusion clause(s) Explanation:In the specific exclusions method, a proposal is accepted by the insurance company with exclusion clause(s).
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