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 2 of 14

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Q11.
How are applicants classified in the numerical rating method?

a.

According to their age

b.

According to their gender

c.

According to certain factors and assigning credit or debit points to each of these attributes or factors, based on underwriting guidelines.

d.

None of the above

Discuss
Answer: (c).According to certain factors and assigning credit or debit points to each of these attributes or factors, based on underwriting guidelines. 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.
Q12.
What are the limitations of the judgment method?

a.

It is inconsistent and very subjective

b.

The method of risk classification was found to be inconsistent and not scientific

c.

Both a and b

d.

None of the above

Discuss
Answer: (c).Both a and b Explanation:The limitations of the judgment method are that it was found to be inconsistent and very subjective, depending on the expertise of the underwriter, and the method of risk classification was found to be inconsistent and not scientific.
Q13.
How are individuals grouped in the numerical rating method?

a.

Into mortality classes using a numerical rating system.

b.

Into specific occupations.

c.

Into age groups.

d.

Into geographic locations.

Discuss
Answer: (a).Into mortality classes using a numerical rating system. Explanation:The numerical rating method groups individuals into mortality classes using a numerical rating system.
Q14.
What factors are evaluated in the underwriting manual?

a.

Physical condition, build, family history, personal history, personal habits, place of residence, avocations, occupation, and moral hazard.

b.

Education level, income, and marital status.

c.

Age and gender.

d.

None of the above.

Discuss
Answer: (a).Physical condition, build, family history, personal history, personal habits, place of residence, avocations, occupation, and moral hazard. Explanation:The underwriting manual evaluates physical condition, build, family history, personal history, personal habits, place of residence, avocations, occupation, and moral hazard, among other factors.
Q15.
What are rating guides and manuals used for in the insurance industry?

a.

To assess the profitability of an insurance company

b.

To determine the level of risk associated with an applicant

c.

To establish standard rates for insurance premiums

d.

To provide legal guidelines for the insurance industry

Discuss
Answer: (b).To determine the level of risk associated with an applicant Explanation:Rating guides and manuals are used to assess the risk-profile of an applicant and to determine the level of risk associated with insuring them.
Q16.
What is the basis of underwriting guidelines in the numerical rating method?

a.

Medical documentation of the applicant

b.

Statistical mortality rates

c.

Personal history of the applicant

d.

Physical condition of the applicant

Discuss
Answer: (b).Statistical mortality rates Explanation:The numerical rating method uses statistical mortality rates as the basis for underwriting guidelines.
Q17.
Which of the following is not one of the factors evaluated in the underwriting process?

a.

Physical condition of the individual

b.

Place of birth

c.

Family history

d.

Occupation

Discuss
Answer: (b).Place of birth Explanation:Place of birth is not one of the factors evaluated in the underwriting process.
Q18.
How are favourable attributes and unfavourable attributes treated in the underwriting process?

a.

Favourable attributes earn credit ratings while unfavourable attributes earn debit ratings

b.

Favourable attributes earn debit ratings while unfavourable attributes earn credit ratings

c.

Favourable attributes earn points which are added to the base rating while unfavourable attributes earn points which are deducted from the base rating

d.

Favourable attributes and unfavourable attributes are treated the same in the underwriting process

Discuss
Answer: (a).Favourable attributes earn credit ratings while unfavourable attributes earn debit ratings Explanation:Favourable attributes earn credit ratings while unfavourable attributes earn debit ratings in the underwriting process.
Q19.
What is the final extra mortality rating based on in the numerical rating method?

a.

The total number of credits earned by the applicant

b.

The total number of debits earned by the applicant

c.

The percentage total mortality of the group in which the applicant has been classified

d.

The value of the standard life

Discuss
Answer: (c).The percentage total mortality of the group in which the applicant has been classified Explanation:The final extra mortality rating in the numerical rating method is equivalent to the percentage total mortality of the group in which the applicant has been classified.
Q20.
What are the different factors used for assessment by underwriters?

a.

Health related factors

b.

Personal factors and environmental factors

c.

Hereditary factors

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The different factors used for assessment by underwriters include health related factors, personal factors (such as personal medical history, physical build, habits and lifestyle, hobbies/avocations) and environmental factors (such as occupation, place of residence and hereditary factors).
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