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.

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 2. 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 2 MCQs | Page 12 of 14

Discover more Topics under IC22 Life Insurance Underwriting

Q111.
What is the purpose of the critical illness rider?

a.

To cover all illnesses

b.

To provide a lump sum amount irrespective of the actual expenditure incurred

c.

To cover the insured against critical illnesses that may be diagnosed in the future

d.

None of the above

Discuss
Answer: (c).To cover the insured against critical illnesses that may be diagnosed in the future Explanation:The purpose of the critical illness rider is to cover the insured against critical illnesses that may be diagnosed in the future.
Q112.
What is the role of insurance companies in defining the conditions for which the critical illness rider is payable?

a.

To define the conditions loosely to avoid medicolegal disputes

b.

To define the conditions very accurately and tightly to avoid medicolegal disputes at claim-stage

c.

To define the conditions only after the diagnosis

d.

None of the above

Discuss
Answer: (b).To define the conditions very accurately and tightly to avoid medicolegal disputes at claim-stage Explanation:The definitions of the conditions for which the critical illness rider is payable has to be very accurately and tightly defined by insurance companies to avoid medicolegal disputes at claim-stage.
Q113.
What is the benefit of the critical illness rider?

a.

It pays for all the medical expenses of the insured

b.

It pays a lump sum amount to the insured at the time of diagnosis

c.

It pays a lump sum amount to the insured after the completion of the treatment

d.

It provides a regular income to the insured

Discuss
Answer: (b).It pays a lump sum amount to the insured at the time of diagnosis Explanation:The benefit of the critical illness rider is that it pays a lump sum amount to the insured at the time of diagnosis of a critical illness. This lump sum amount can be used by the insured to cover the medical expenses incurred during the treatment of the illness.
Q114.
What is Premium Loading?

a.

The process of imposing impairments on an insured person's policy

b.

The amount of money an insured person pays for their policy

c.

The element of individual assessment by the underwriter in risk selection

d.

The numerical rating used for risk assessment and classification

Discuss
Answer: (a).The process of imposing impairments on an insured person's policy Explanation:"Premium Loading" refers to the process of imposing impairments on an insured person's policy, which means an additional amount of premium that is charged due to increased risk.
Q115.
What factors determine the amount of premium loading an insurer imposes?

a.

The policyholder's age, medical history, and occupation

b.

The type of policy the policyholder is applying for

c.

The insurer's underwriting guidelines and reinsurance treaty guidelines

d.

The policyholder's financial documents

Discuss
Answer: (c).The insurer's underwriting guidelines and reinsurance treaty guidelines Explanation:The amount of premium loading that an insurer imposes is determined by their underwriting guidelines and reinsurance treaty guidelines. The policyholder's age, medical history, and occupation may also be factors that are considered.
Q116.
What documents are necessary for an underwriter to review for risk selection?

a.

Proposal application form, age-proof, medical reports, personal health records, financial documents

b.

Proposal application form, age-proof, medical reports

c.

Personal health records, financial documents

d.

Proposal application form, medical reports, financial documents

Discuss
Answer: (a).Proposal application form, age-proof, medical reports, personal health records, financial documents Explanation:To review an insured person's risk, the underwriter needs to review a variety of documents, including the proposal application form, age-proof, medical reports, personal health records, and financial documents.
Q117.
When is a proposal referred to reinsurers for their decision?

a.

When the policy amount is very large

b.

When the proposal is highly sub-standard

c.

When the reinsurance treaty mandates certain types of risks to be sent to the reinsurers

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:A proposal may be referred to reinsurers for their decision when it is highly sub-standard, when the policy amount is very large, or when the reinsurance treaty mandates certain types of risks to be sent to the reinsurers.
Q118.
When is a policy issued with extra premium?

a.

When the insured person has a hazardous occupation or hobbies

b.

When the insured person is medically sub-standard

c.

When the country or city of residence of the insured person is risky

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:A policy may be issued with extra premium when the insured person has a hazardous occupation or hobbies, when they are medically sub-standard, or when their country or city of residence is risky.
Q119.
What is a modified terms contract?

a.

A contract that is offered instead of an outright declinature

b.

A contract that imposes exclusions under the policy

c.

A contract that is offered with extra premium

d.

A contract that offers acceptance at ordinary rates

Discuss
Answer: (a).A contract that is offered instead of an outright declinature Explanation:A modified terms contract is a contract that is offered instead of an outright declinature. It may impose exclusions under the policy, but it is a way to offer coverage to an applicant who might otherwise be declined.
Q120.
How are the terms of acceptance communicated to the client?

a.

Through a policy bond

b.

Through a welcome letter and a first premium receipt

c.

Through a medical report

d.

Through the underwriter's recommendations to the reinsurer

Discuss
Answer: (b).Through a welcome letter and a first premium receipt Explanation:The terms of acceptance are communicated to the client through a welcome letter and a first premium receipt. This is in addition to the policy document, which will outline the specifics of the coverage that has been offered.
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