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 5 of 14

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Q41.
What is extra mortality rate or EMR?

a.

The excess mortality in the case of sub-standard lives

b.

The numerical ratings assigned to different factors

c.

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

d.

None of the above

Discuss
Answer: (a).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.
Q42.
What is the concept of favourable and unfavourable factors in risk assessment?

a.

Favourable factors earn debits (reduction in mortality rating) and unfavourable factors mandate credits (addition/enhancement of mortality ratings).

b.

Favourable factors mandate credits (addition/enhancement of mortality ratings) and unfavourable factors earn debits (reduction in mortality rating).

c.

Both favourable and unfavourable factors mandate credits (addition/enhancement of mortality ratings).

d.

None of the above

Discuss
Answer: (a).Favourable factors earn debits (reduction in mortality rating) and unfavourable factors mandate credits (addition/enhancement of mortality ratings). Explanation:Favourable factors earn debits (reduction in mortality rating) and unfavourable factors mandate credits (addition/enhancement of mortality ratings) in risk assessment.
Q43.
What is the value range of a standard life in risk assessment?

a.

50% - 75%

b.

75% - 100%

c.

100% - 125%

d.

125% - 150%

Discuss
Answer: (b).75% - 100% Explanation:A standard life is one with a minimum extra mortality score (E.M.R.). In life insurance, an individual can be categorized as standard risk if his assessment value falls in the range of 75% - 125%.
Q44.
How are credit ratings used in risk classification?

a.

To add to the base rating for unfavourable medical factors and deduct for favourable medical factors

b.

To add to the base rating for favourable medical factors and deduct for unfavourable medical factors

c.

To determine the applicant's creditworthiness

d.

To calculate the probability of the applicant experiencing an event that would require insurance coverage

Discuss
Answer: (a).To add to the base rating for unfavourable medical factors and deduct for favourable medical factors Explanation:Credit ratings are added to the base rating for unfavourable medical factors and deducted for favourable medical factors.
Q45.
What does an extra mortality rating of 100% imply?

a.

The individual is likely to face double the mortality risk than an individual who has been accepted on standard terms

b.

The individual is likely to face 100% more mortality risk than an individual who has been accepted on standard terms

c.

The individual has a 100% chance of experiencing an event that would require insurance coverage

d.

The individual is in perfect health and poses no risk to the insurance company

Discuss
Answer: (a).The individual is likely to face double the mortality risk than an individual who has been accepted on standard terms Explanation:An extra mortality rating of 100% implies that the individual is likely to face double the mortality risk than an individual who has been accepted on standard terms.
Q46.
What is the final rate based on which the applicant is classified in the risk classification process?

a.

Total accumulation of debit and credit

b.

Unfavourable attributers and their rates

c.

Total favourable attributes and their ratings

d.

Number of credits and debits

Discuss
Answer: (a).Total accumulation of debit and credit Explanation:The final rate is based on the total accumulation of debit and credit.
Q47.
How is the total accumulation of debit and credit rounded off in the risk classification process?

a.

To the nearest 10%

b.

To the nearest 25%

c.

To the nearest 50%

d.

To the nearest 100%

Discuss
Answer: (b).To the nearest 25% Explanation:The total accumulation of debit and credit is rounded off to the nearest 25%.
Q48.
In the risk classification process, how are the ratings for unfavourable factors treated?

a.

They are added to the base rating of 100

b.

They are deducted from the base rating of 100

c.

They are not considered in the risk classification process

d.

They are rounded off to the nearest 25%

Discuss
Answer: (a).They are added to the base rating of 100 Explanation:The ratings for unfavourable factors are added to the base rating of 100.
Q49.
What is a standard life in the risk classification process?

a.

One with a minimum extra mortality score (E.M.R.)

b.

One with a maximum extra mortality score (E.M.R.)

c.

One with no favourable or unfavourable attributes

d.

None of the above

Discuss
Answer: (a).One with a minimum extra mortality score (E.M.R.) Explanation:A standard life is one with a minimum extra mortality score (E.M.R.).
Q50.
What is the range of assessment values for an individual to be categorized as standard risk in life insurance?

a.

0% - 25%

b.

25% - 50%

c.

75% - 125%

d.

125% - 150%

Discuss
Answer: (c).75% - 125% Explanation:An individual can be categorized as standard risk if their assessment value falls in the range of 75% - 125%.
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