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 4 of 14

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Q31.
What are the factors assessed in the risk assessment of an individual?

a.

Height and weight

b.

Age, gender, and medical history

c.

Occupation and place of residence

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The risk assessment of an individual includes factors such as physical build, age, gender, medical history, occupation, place of residence, family medical history, and moral hazard factors.
Q32.
What are mortality rates and how are they used in the Numerical Rating Method?

a.

The ratio of total deaths that occurred in a given population at a certain area over a specified period of time

b.

The ratio of total births that occurred in a given population at a certain area over a specified period of time

c.

The ratio of total deaths that occurred in a given population at a certain area over the entire population

d.

The ratio of total deaths that occurred in a given population at a certain area over the entire population over a specified period of time

Discuss
Answer: (d).The ratio of total deaths that occurred in a given population at a certain area over the entire population over a specified period of time Explanation:Mortality rates refer to the ratio of total deaths that occurred in a given population at a certain area over the entire population over a specified period of time. Mortality rates for all factors are determined, and for each adverse factor, a credit rating is added to the base rating.
Q33.
What is extra mortality rate (EMR) and how is it used in the Numerical Rating Method?

a.

The excess mortality in the case of standard lives

b.

The excess mortality in the case of sub-standard lives

c.

The ratio of total deaths in a given population over a specified period of time

d.

The ratio of total deaths in a given population over the entire population over a specified period of time

Discuss
Answer: (b).The excess mortality in the case of sub-standard lives Explanation:Extra mortality rate or EMR refers to the excess mortality in the case of sub-standard lives. Extra mortality is usually expressed as a percentage of standard mortality.
Q34.
What are the rating guides and manuals based on?

a.

Results of extensive medico-actuarial research and mortality studies

b.

Insurance agent's personal opinion

c.

Legal guidelines

d.

Randomly selected factors

Discuss
Answer: (a).Results of extensive medico-actuarial research and mortality studies Explanation:The manuals are based on the results of extensive medico-actuarial research and mortality studies.
Q35.
What do underwriting manuals contain?

a.

Descriptions of various impairments and medical documentation required to assess the risk-profile of the applicant.

b.

Mortality rates for only a few medical conditions.

c.

Only favourable medical factors.

d.

Only unfavourable medical factors.

Discuss
Answer: (a).Descriptions of various impairments and medical documentation required to assess the risk-profile of the applicant. Explanation:Underwriting manuals contain extra mortality rates for all possible medical conditions. It also contains descriptions of various impairments and medical documentation that would be required to assess the risk-profile of the applicant.
Q36.
What is the purpose of a credit rating in underwriting?

a.

To reduce the mortality rating for favourable factors.

b.

To increase the mortality rating for unfavourable factors.

c.

To increase the mortality rating for favourable factors.

d.

To reduce the mortality rating for unfavourable factors.

Discuss
Answer: (b).To increase the mortality rating for unfavourable factors. Explanation:A credit rating will be added to the base rating of 100 to unfavourable factors such as high blood pressure or diabetes.
Q37.
What is the purpose of a debit rating in underwriting?

a.

To reduce the mortality rating for favourable factors.

b.

To increase the mortality rating for unfavourable factors.

c.

To increase the mortality rating for favourable factors.

d.

To reduce the mortality rating for unfavourable factors.

Discuss
Answer: (a).To reduce the mortality rating for favourable factors. Explanation:A debit rating (deduction) will be made for favourable medical factors such as good physical build, favourable medical history, family history etc.
Q38.
What is the extra mortality rate?

a.

Excess mortality in the case of sub-standard lives.

b.

Mortality rate of the entire population.

c.

Mortality rate for favourable factors.

d.

Mortality rate for only personal factors.

Discuss
Answer: (a).Excess mortality in the case of sub-standard lives. Explanation:Extra mortality rate or EMR refers to the excess mortality in the case of sub-standard lives.
Q39.
What is the purpose of underwriting manuals in insurance and reinsurance?

a.

To formulate rating guides

b.

To perform medico-actuarial research

c.

To study mortality rates

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Underwriting manuals are used to formulate rating guides, perform medico-actuarial research, and study mortality rates to determine the risk profile of applicants.
Q40.
What are mortality rates?

a.

The ratio of total deaths that occurred in a given population at a certain area over a specified period of time

b.

The excess mortality in the case of sub-standard lives

c.

The numerical ratings assigned to different factors

d.

None of the above

Discuss
Answer: (a).The ratio of total deaths that occurred in a given population at a certain area over a specified period of time Explanation:Mortality rates refer to the ratio of total deaths that occurred in a given population at a certain area over a specified period of time.
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