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 3 of 12

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Q21.
What adverse factors should be checked when assessing a client's medical and insurance history?

a.

Reduced benefits and exclusions

b.

Extra premium charged on account of adverse health

c.

Proposals declined or postponed

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:All of the above factors as adverse factors that should be checked when assessing a client's medical and insurance history.
Q22.
What is a non-medical grid?

a.

A tool for assessing risk in the absence of a medical screening process

b.

A set of norms laid down by an insurance company for underwriting

c.

A tool for assessing a client's medical history

d.

A set of norms laid down by an insurance company for assessing a client's lifestyle and habits

Discuss
Answer: (b).A set of norms laid down by an insurance company for underwriting Explanation:Each insurance company establishes a non-medical grid for each of its insurance products based on which risk can be accepted by underwriters.
Q23.
What is the "MEDICAL-SUM-AT-RISK"?

a.

The total sum assured under all policies and riders (except Premium Waiver Benefit and Accident Benefit) on one life issued by the insurer with whom the client is applying within a period of 24 months

b.

The total face value of the policy

c.

The amount of insurance with other insurance companies

d.

The sum-at-risk of lapsed policies (if any)

Discuss
Answer: (a).The total sum assured under all policies and riders (except Premium Waiver Benefit and Accident Benefit) on one life issued by the insurer with whom the client is applying within a period of 24 months Explanation:The "MEDICAL-SUM-AT-RISK" as the total sum assured under all policies and riders (except Premium Waiver Benefit and Accident Benefit) on one life issued by the insurer with whom the client is applying within a period of 24 months.
Q24.
How is the medical test requirement determined for a client?

a.

Based on the age and the total Medical Sum At Risk (MSAR)

b.

Based on the client's lifestyle and habits

c.

Based on the client's medical history

d.

Based on the client's insurance history

Discuss
Answer: (a).Based on the age and the total Medical Sum At Risk (MSAR) Explanation:To determine whether a proposal is to be underwritten on a non-medical or medical basis, the insurer first evaluates whether the applicant falls under the "mandatory" medical scheme or non-medical norms laid down by an insurance company, i.e., as per the grid, the age of the life to be assured and the total MSAR-Medical-Sum-At-Risk is calculated. The medical test requirement will be based on this medical sum-at-risk.
Q25.
What does an insurance company consider to determine whether a proposal is to be underwritten on a medical or non-medical basis?

a.

The applicant's age and total medical-sum-at-risk

b.

The medical grid and the product applied for

c.

The personal and medical history of the life to be assured

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The insurer evaluates whether the applicant falls under the "mandatory" medical scheme or non-medical norms laid down by an insurance company for the product the individual has applied for. These norms are generally based on the medical grid, the age of the life to be assured, the total medical-sum-at-risk, the product applied for, and the personal and medical history of the life to be assured.
Q26.
Under what circumstances may an underwriter treat a proposal under the medical scheme even if the client falls under the norms applicable for non-medical acceptance according to the non-medical grid?

a.

If the client has some adverse medical history

b.

If the client has a very high or very low BMI

c.

If the underwriting guidelines formulated by the company require it

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:In some cases, even though the client falls under the norms applicable for non-medical acceptance according to the non-medical grid, the underwriter may treat this under the medical scheme if the client has some adverse medical history or very high or very low BMI (body mass index) etc. relating to the underwriting guidelines formulated by the company.
Q27.
What factors and details are an important part of evaluating the risk profile of an individual?

a.

Existing insurance and family history

b.

Lifestyle and personal and medical history

c.

Occupation and residence

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Other factors and details such as the family history, lifestyle, personal and medical history, occupation, residence, moral hazard, etc. are also an important part of evaluating the risk profile of an individual. Existing insurance (including life insurance with all insurance companies) and also the one the individual has applied concurrently are also important parts of the risk-selection process.
Q28.
What is body mass index (BMI)?

a.

A measure of a person's "fatness" or "thinness"

b.

A reliable indicator of body fat for most people

c.

Used to screen for weight categories that may lead to health problems

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:BMI provides a simple numeric measure of a person's "fatness" or "thinness", allowing health or insurance professionals to evaluate whether a person is overweight or underweight. Overweight persons have a higher BMI as compared to the standard values, and conversely, thin persons have a BMI which is on the lower side as compared to the standard values. BMI provides a reliable indicator of body fat for most people and is used to screen for weight categories that may lead to health problems.
Q29.
What have medico-actuarial studies proven about the extra risk associated with being either overweight or underweight?

a.

Being underweight is adverse at younger ages as it may point towards serious infections

b.

Excess weight and obesity have proven to be more harmful at middle or higher ages

c.

Both a and b

d.

None of the above

Discuss
Answer: (c).Both a and b Explanation:Medico-actuarial studies have proven the extra risk associated with a person who is either overweight or underweight. At younger ages, being underweight is seen to be adverse as it may point towards tuberculosis, anemic conditions, or some other serious infections. Excess weight and obesity have proven to be more harmful at middle or higher ages and could potentially lead to hypertension.
Q30.
What is the purpose of build charts and tables?

a.

To predict an individual's mortality rate based on their height and weight

b.

To predict an individual's risk of developing certain diseases

c.

To determine an individual's eligibility for medical treatment

d.

To determine an individual's eligibility for life insurance coverage

Discuss
Answer: (a).To predict an individual's mortality rate based on their height and weight Explanation:Build charts and tables are used as indicators to predict the mortality of individuals based on their height and weight.
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