Life Underwriting Principles and Concepts Part 2 MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Life Underwriting Principles and Concepts Part 2, 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 2 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 2 mcq questions that explore various aspects of Life Underwriting Principles and Concepts Part 2 problems. Each MCQ is crafted to challenge your understanding of Life Underwriting Principles and Concepts Part 2 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 2 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 2 MCQs | Page 1 of 14

Discover more Topics under IC22 Life Insurance Underwriting

Q1.
What are the two methods of underwriting?

a.

Decision and evaluation method

b.

Numerical and non-numerical method

c.

Judgment and numerical rating method

d.

Professional and personal judgment method

Discuss
Answer: (c).Judgment and numerical rating method Explanation:The two methods of underwriting are judgment method and numerical rating method.
Q2.
Which method of underwriting depends on the personal judgment of the underwriter?

a.

Numerical rating method

b.

Risk classification method

c.

Judgment method

d.

Professional method

Discuss
Answer: (c).Judgment method Explanation:The judgment method depends on the personal judgment of the underwriter based on their experience.
Q3.
What is the rating process in the judgment method of underwriting?

a.

Numerical ratings

b.

Statistical ratings

c.

Professional ratings

d.

Subjective ratings

Discuss
Answer: (d).Subjective ratings Explanation:In the judgment method of underwriting, the individual (proposer) is assigned ratings on the basis of subjective judgment of the underwriter.
Q4.
Why is the judgment method of underwriting not widely used today?

a.

It is too scientific and not practical

b.

It is consistent and reliable

c.

It depends on personal judgment and can be inconsistent

d.

It is too expensive and time-consuming

Discuss
Answer: (c).It depends on personal judgment and can be inconsistent Explanation:The judgment method of underwriting is not widely used today as it depends on personal judgment and can be inconsistent, depending on the expertise of the underwriter.
Q5.
What is the biggest advantage of the numerical rating method?

a.

It ensures consistency in risk classification

b.

It is a subjective method

c.

It is inconsistent

d.

It relies on personal judgment of the underwriter

Discuss
Answer: (a).It ensures consistency in risk classification Explanation:The biggest advantage of the numerical rating method is that it ensures consistency in risk classification.
Q6.
What is the basis of selection and classification of lives in the numerical rating method?

a.

Personal information of an individual's past, current and genetic health situation

b.

Personal judgment of the underwriter

c.

Business volumes

d.

Inconsistency

Discuss
Answer: (a).Personal information of an individual's past, current and genetic health situation Explanation:In the numerical rating method, mortality ratings are employed by underwriters for taking decisions to accept or decline the risk. The mortality risk of an individual is determined by personal information of an individual's past, current and genetic health situation and various other factors.
Q7.
What affects one's mortality in either a positive or negative way in the numerical rating method?

a.

Business volumes

b.

Consistency in risk classification

c.

Health factors

d.

Inconsistency

Discuss
Answer: (c).Health factors Explanation:Health factors are considered individually and can affect one's mortality in either a positive or negative way in the numerical rating method.
Q8.
What are credit or debit points in the numerical rating method?

a.

Assignments of personal ratings to individuals

b.

Assignments of numerical ratings to individuals

c.

Assignments of numerical values to certain attributes or factors

d.

Assignments of subjective ratings to individuals

Discuss
Answer: (c).Assignments of numerical values to certain attributes or factors Explanation:In the numerical rating method, applicants are classified according to certain factors and assigning credit or debit points to each of these attributes or factors, based on underwriting guidelines.
Q9.
What is the difference between standard risk and sub-standard risk?

a.

Standard risk is insurable at standard premium rates, while sub-standard risk is not.

b.

Standard risk is risk associated with an individual with good health, while sub-standard risk is risk associated with an individual with poor health.

c.

Standard risk is low-risk, while sub-standard risk is high-risk.

d.

None of the above.

Discuss
Answer: (a).Standard risk is insurable at standard premium rates, while sub-standard risk is not. Explanation:Standard risk is the risk associated with an individual that is considered to be insurable at standard premium rates by insurance companies, while sub-standard risk is the risk associated with an individual that is considered to be higher than normal and cannot be insured at standard premium rates.
Q10.
Which method of underwriting is rarely used in present times?

a.

Judgment method

b.

Numerical rating method

c.

Both a and b

d.

None of the above

Discuss
Answer: (a).Judgment method Explanation:The judgment method is rarely used in underwriting in present times.
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