Underwriting Process and Structure MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Underwriting Process and Structure, 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 Underwriting Process and Structure 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 Underwriting Process and Structure mcq questions that explore various aspects of Underwriting Process and Structure problems. Each MCQ is crafted to challenge your understanding of Underwriting Process and Structure 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 Underwriting Process and Structure 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 Underwriting Process and Structure. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

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Underwriting Process and Structure MCQs | Page 12 of 12

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Q111.
Why is the availability of trained underwriters a challenge?

a.

There is a shortage of qualified candidates

b.

The job is not well-compensated

c.

The work is too difficult

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The availability of trained underwriters is a challenge worldwide, but does not specify the reasons for this challenge.
Q112.
What is centralised processing of underwriting?

a.

Processing of policy issuance done at regional or branch offices

b.

Processing of policy issuance done at the head office of an insurance company

c.

A process used for identifying clients for insurance companies

d.

A type of underwriting that doesn't require medical checkups

Discuss
Answer: (b).Processing of policy issuance done at the head office of an insurance company Explanation:Centralised processing of underwriting refers to the process where most of the processing related to policy issuance is done at the head office of the insurance company.
Q113.
What does KYC stand for in the insurance industry?

a.

Know Your Claim

b.

Know Your Customer

c.

Know Your Company

d.

Know Your Coverage

Discuss
Answer: (b).Know Your Customer Explanation:KYC stands for Know Your Customer norms, which are prescribed by the Insurance Regulatory and Development Authority (IRDA) for client identification process.
Q114.
Why are non-medical underwritten products priced higher than medically underwritten products?

a.

Non-medical underwriting is considered to be riskier

b.

Medically underwritten products have higher premiums

c.

Non-medical underwriting requires medical checkups

d.

Medically underwritten products are considered to be riskier

Discuss
Answer: (a).Non-medical underwriting is considered to be riskier Explanation:Non-medical underwriting is considered to be riskier as insurance cover is provided to the insured without any medical checkups, and hence, these products are priced higher.
Q115.
What is a non-medical grid?

a.

A type of DNA-based test

b.

A function of age and sum assured

c.

A process used for identifying clients for insurance companies

d.

A type of policy document

Discuss
Answer: (b).A function of age and sum assured Explanation:For non-medical underwriting, each insurance company establishes a non-medical grid for each of its insurance products based on which risk can be accepted by underwriters.
Q116.
What happens once the life insurance underwriter approves the proposal?

a.

The policyholder has to undergo medical checkups

b.

The policy bond/policy contract is issued

c.

The policyholder receives the claim benefits

d.

The policyholder has to pay the premium

Discuss
Answer: (b).The policy bond/policy contract is issued Explanation:Once the life insurance underwriter approves the proposal for life insurance, the insurance company issues a life insurance policy document, also called the policy bond/policy contract.
Q117.
What is the underwriting philosophy used for in the insurance industry?

a.

To define the underwriting strategy and guidelines of the insurance company

b.

To identify clients for insurance companies

c.

To establish risk capital with the company

d.

To set premiums for insurance products

Discuss
Answer: (a).To define the underwriting strategy and guidelines of the insurance company Explanation:The underwriting philosophy of an insurance company is used to define the underwriting strategy and guidelines of the insurance company, which have to be formulated in sync with the reinsurers.
Q118.
How do underwriting guidelines impact insurance products?

a.

They impact the product-pricing and the extent of substandard risks that a company decides to undertake relating to each of its products

b.

They impact the premiums paid by policyholders

c.

They impact the claim benefits paid by insurance companies

d.

They impact the coverage offered by insurance products

Discuss
Answer: (a).They impact the product-pricing and the extent of substandard risks that a company decides to undertake relating to each of its products Explanation:The underwriting guidelines impact the product-pricing and the extent of substandard risks that a company decides to undertake relating to each of its products.
Q119.
What is risk appetite in the insurance industry?

a.

A type of policy document

b.

A type of medical test

c.

A process used for identifying clients for insurance companies

d.

The level of risk an insurance company is willing to accept

Discuss
Answer: (d).The level of risk an insurance company is willing to accept Explanation:Risk appetite refers to the level of risk an insurance company is willing to accept, and is defined by actuaries and senior management of insurance company.
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