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!

So, are you ready to put your Underwriting Process and Structure knowledge to the test? Let's get started with our carefully curated MCQs!

Underwriting Process and Structure MCQs | Page 2 of 12

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Q11.
What is the purpose of a reference call made by one of the insurance company representatives to the customer?

a.

To verify the information submitted

b.

To answer the queries of the prospective customer

c.

To inform the customer about the medical examination process

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:A reference call made by one of the insurance company representatives to the customer helps to verify the information submitted, answer the queries of the prospective customer, and inform the customer about the medical examination process.
Q12.
What is a 'proposal form' in the context of life insurance?

a.

A document that needs to be signed by the customer before submitting the KYC documents

b.

A document that contains detailed information about the customer, including the amount of insurance cover applied for

c.

A document that insurance agents use to sell insurance policies

d.

A document that insurance companies use to carry out KYC norms

Discuss
Answer: (b).A document that contains detailed information about the customer, including the amount of insurance cover applied for Explanation:A 'proposal form' is a detailed document that needs to be filled and signed by the proposer (customer) and contains information about the customer, including the amount of insurance cover applied for.
Q13.
What is the main purpose of KYC norms in the insurance industry?

a.

To identify and assess the risk of the customer

b.

To ensure that the customer is aware of the insurance policy's terms and conditions

c.

To establish the source of funds for large single premiums

d.

To ensure that the insurance company's financial underwriting guidelines are followed

Discuss
Answer: (a).To identify and assess the risk of the customer Explanation:The main purpose of KYC norms in the insurance industry is identification and risk assessment of the customer at the time of initial issuance of the policy contract.
Q14.
What are the rules that have been recommended for high risk profile persons?

a.

The insurance companies need to implement KYC and underwriting procedures with higher levels of verification and counter checks for such clients

b.

They need to submit financial documents to justify the amount of insurance applied for

c.

They need to submit additional proof of identity documents

d.

The amount of insurance cover applied for by such clients cannot exceed a certain limit

Discuss
Answer: (a).The insurance companies need to implement KYC and underwriting procedures with higher levels of verification and counter checks for such clients Explanation:Insurance companies need to implement KYC and underwriting procedures with higher levels of verification and counter checks for high risk profile persons such as politically exposed persons, non-residents, high net worth individuals (HNI) etc.
Q15.
What is the purpose of KYC norms in the insurance industry?

a.

To determine and document the true identity of all its customers.

b.

To determine the medical history of customers.

c.

To determine the occupation and place of residence of customers.

d.

To determine the lifestyle and habits of customers.

Discuss
Answer: (a).To determine and document the true identity of all its customers. Explanation:The main purpose of the KYC norms is identification and risk assessment of the customer at the time of initial issuance of the policy contract.
Q16.
What is the process of medical underwriting in insurance?

a.

Using health related information through a pre-insurance medical screening to take a decision regarding acceptance or rejection of the application.

b.

Providing insurance cover to the prospects on a non-medical basis.

c.

Assessing factors such as body mass index, personal medical history, and family medical history to take a decision on accepting or rejecting the risk.

d.

Verifying the identity and financial documents of the customer.

Discuss
Answer: (a).Using health related information through a pre-insurance medical screening to take a decision regarding acceptance or rejection of the application. Explanation:Medical underwriting refers to the underwriting process whereby underwriters use health related information through a pre-insurance medical screening of a prospect to take a decision regarding acceptance or rejection of the application, or the amount of insurance cover to be provided to the insured.
Q17.
What is non-medical underwriting in insurance?

a.

Providing insurance cover to the prospects on a non-medical basis.

b.

Using health related information through a pre-insurance medical screening to take a decision regarding acceptance or rejection of the application.

c.

Assessing factors such as body mass index, personal medical history, and family medical history to take a decision on accepting or rejecting the risk.

d.

Verifying the identity and financial documents of the customer.

Discuss
Answer: (a).Providing insurance cover to the prospects on a non-medical basis. Explanation:Non-medical underwriting refers to the underwriting process where the insurance companies provide insurance cover to the prospects on a non-medical basis.
Q18.
What documents are required as proof of address for KYC norms in insurance?

a.

Passport, electricity and other utility bills, letter from the employer or housing society etc.

b.

Driving license, PAN card, Voter ld card, or passport.

c.

Recent color photograph and mandatory documents such as proof of identity and financial documents.

d.

Financial documents to justify the amount of insurance applied for.

Discuss
Answer: (a).Passport, electricity and other utility bills, letter from the employer or housing society etc. Explanation:Proof of address documents such as Passport, electricity and other utility bills, letter from the employer or housing society etc. can be submitted as valid proof of address for KYC norms in insurance.
Q19.
What is the role of insurance agents in the life insurance proposal process?

a.

To determine and document the true identity of all its customers.

b.

To collect a recent color photograph and mandatory documents such as proof of identity and financial documents.

c.

To ensure that the proposal form is correctly and completely filled and signed by the customer, and collect KYC documents.

d.

To use health related information through a pre-insurance medical screening to take a decision regarding acceptance or rejection of the application.

Discuss
Answer: (c).To ensure that the proposal form is correctly and completely filled and signed by the customer, and collect KYC documents. Explanation:The insurance agents ensure that the proposal form is correctly and completely filled and signed by the customer, and collect KYC documents from the customer along with the proposal form.
Q20.
What is the Agent's Confidential Report (ACR)?

a.

A report by agent used to assess a client's medical history

b.

A report by agent used to assess a client's insurance history

c.

A report by agent used to assess a client's risk in the absence of medical screening

d.

A report by agent used to evaluate a client's lifestyle and habits

Discuss
Answer: (c).A report by agent used to assess a client's risk in the absence of medical screening Explanation:Agent's Confidential Report (ACR) is an important tool for assessing risk in the absence of a medical screening process.
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