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 3 of 14

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Q21.
Which factors (other than health related) are included in the 1st phase of assessment by underwriters?

a.

Health related factors

b.

Personal factors

c.

Environmental factors

d.

Hereditary factors

Discuss
Answer: (b).Personal factors Explanation:The factors included in the 1st phase of assessment by underwriters are personal factors such as personal medical history (current and past history), physical build, habits and lifestyle, hobbies/avocations (e.g. bungee jumping, mountaineering etc.).
Q22.
Which factors (other than health related) are included in the 2nd phase of assessment by underwriters?

a.

Health related factors

b.

Personal factors

c.

Environmental factors

d.

Hereditary factors

Discuss
Answer: (c).Environmental factors Explanation:The factors included in the 2nd phase of assessment by underwriters are environmental factors such as occupation (whether hazardous or not), place of residence and occupation (whether living in countries featuring in the list of "restricted countries").
Q23.
Which factors (other than health related) are included in the 3rd phase of assessment by underwriters?

a.

Health related factors

b.

Personal factors

c.

Environmental factors

d.

Hereditary factors

Discuss
Answer: (d).Hereditary factors Explanation:The factors included in the 3rd phase of assessment by underwriters are hereditary factors, which includes ascertaining the medical history of the family members of the applicant (like diabetes, blood-pressure etc).
Q24.
How do underwriters make a numerical or percentage assessment of risk for each phase?

a.

By deducting credit ratings from the base rating for favourable attributes and adding credit ratings for unfavourable attributes

b.

By calculating the extra mortality rating equivalent to the percentage total mortality of the group in which that particular proposer has been classified

c.

By ascertaining the medical history of the family members of the applicant

d.

None of the above

Discuss
Answer: (a).By deducting credit ratings from the base rating for favourable attributes and adding credit ratings for unfavourable attributes Explanation:Underwriters make a numerical or percentage assessment of risk for each phase by deducting credit ratings from the base rating for favourable attributes and adding credit ratings for unfavourable attributes.
Q25.
What are the steps involved in the numerical rating method used by underwriters?

a.

Define value of standard risk

b.

Risk assessment for personal, environmental and heredity factors; Assign numerical ratings based on EMR

c.

Credit the favourable factors and debit the unfavourable factors

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The steps involved in the numerical rating method used by underwriters are: defining the value of standard risk, risk assessment for personal, environmental and heredity factors, assigning numerical ratings based on EMR, and finally, crediting favourable factors and debiting unfavourable factors.
Q26.
What is the value of standard risk?

a.

The maximum level of risk an individual can pose to an insurance company.

b.

The relative value assigned for each factor in relation to the reference point value of 100%.

c.

The value that is assigned to each factor based on extensive medicoactuarial research and mortality studies.

d.

The value that is assigned to an individual who has a perfect health record.

Discuss
Answer: (b).The relative value assigned for each factor in relation to the reference point value of 100%. Explanation:The value of standard risk is the reference point value of 100% assigned by the underwriter for each factor in relation to which the relative value of each factor is assigned.
Q27.
What factors are assessed during the risk assessment phase in the numerical rating method?

a.

Personal factors

b.

Environmental factors

c.

Hereditary factors

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The risk assessment phase in the numerical rating method involves the assessment of personal factors (physical build, medical history, habits, and hobbies), environmental factors (occupation, place of residence), and hereditary factors (family medical history).
Q28.
How are numerical ratings assigned based on EMR?

a.

Credit the unfavourable factors and debit the favourable factors.

b.

Assign numerical ratings based on the individual's age and gender.

c.

Assign numerical ratings based on the individual's occupation and place of residence.

d.

Assign numerical ratings based on the individual's physical build.

Discuss
Answer: (d).Assign numerical ratings based on the individual's physical build. Explanation:Numerical ratings are assigned based on the individual's physical build, including height and weight, during the risk assessment phase in the numerical rating method.
Q29.
What are the steps involved in the Numerical Rating Method for risk assessment?

a.

Assign numerical ratings based on EMR

b.

Define value of standard risk

c.

Risk assessment for personal, environmental and heredity factors

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The Numerical Rating Method involves defining the value of standard risk, risk assessment for personal, environmental and heredity factors, assigning numerical ratings based on EMR, crediting unfavourable factors and debiting favourable factors, and classifying the applicant as Standard Sub-standard or a Highly sub-standard risk.
Q30.
What is the reference point value for each factor in the Numerical Rating Method?

a.

50%

b.

75%

c.

100%

d.

125%

Discuss
Answer: (c).100% Explanation:The reference point value for each factor in the Numerical Rating Method is generally fixed at 100%.
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