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 6 of 12

Discover more Topics under IC22 Life Insurance Underwriting

Q51.
What happens if the premium to be charged comes to a higher value than what the client applied for through the quote?

a.

The policy contract is cancelled

b.

The client is asked to pay the difference in premium

c.

The premium is set to the initial quote generated at the pre-underwriting stage

d.

A new quote is generated and the client is asked to consent to the revised rates

Discuss
Answer: (d).A new quote is generated and the client is asked to consent to the revised rates Explanation:If the premium to be charged comes to a higher value than when the client applied for through the quote, a consent for the revised rates through a new quote along with the requisite additional premium with leviable taxes thereon will be called for from the client.
Q52.
Why might the final premium over-ride the initial quote generated at the pre-underwriting stage?

a.

To cover extra risk that the client brings to the portfolio

b.

Due to sub-standard health of the client

c.

Certain hazardous occupations of the client

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The final premium may sometimes over-ride the initial quote generated at the pre-underwriting stage if a counteroffer needs to be issued on grounds of sub-standard health, certain hazardous occupations, country of residence etc.
Q53.
What happens if the client does not agree to the terms of the counter-offer suggested by the insurer?

a.

The insurer cancels the policy

b.

The initial premium money paid by the client is refunded

c.

The client is asked to pay an extra premium

d.

None of the above

Discuss
Answer: (b).The initial premium money paid by the client is refunded Explanation:In case the client does not agree to the terms of counter-offer suggested by the insurer, the initial premium money paid by the client is refunded as per rules.
Q54.
What is a green channel underwriting in life insurance?

a.

A manual underwriting process that takes several days to complete

b.

An automated rules-engine underwriting process that takes only a single day to complete

c.

A process where proposals are declined or deferred without proper evaluation

d.

A process where insurance companies charge extra premiums without proper justification

Discuss
Answer: (b).An automated rules-engine underwriting process that takes only a single day to complete Explanation:A green channel underwriting in life insurance is an automated rules-engine underwriting process that allows the underwriters to concentrate on bigger and financially or medically complicated proposals. This process can be completed in as low as a single day for cases meeting certain criteria.
Q55.
When does the final premium for a life insurance policy get set?

a.

At the pre-underwriting stage

b.

After the policy contract is issued to the client

c.

During the underwriting process

d.

After the completion of the medical examination

Discuss
Answer: (c).During the underwriting process Explanation:The final premium for a life insurance policy gets set during the underwriting process. If a counteroffer needs to be issued on grounds of sub-standard health, hazardous occupations, country of residence, etc., the final premium may override the initial quote generated at the pre-underwriting stage.
Q56.
How do insurance companies reduce the processing time for underwriting?

a.

By increasing the number of underwriters

b.

By outsourcing the underwriting process

c.

By using automated rules-engine or "green channel" underwriting for certain cases

d.

By reducing the number of documents required for the underwriting process

Discuss
Answer: (c).By using automated rules-engine or "green channel" underwriting for certain cases Explanation:Insurance companies reduce the processing time for underwriting by using automated rules-engine or "green channel" underwriting for certain cases.
Q57.
What is the automated rule engine used for in the insurance underwriting process?

a.

Underwriting medical proposals

b.

Underwriting complicated proposals

c.

Underwriting non-medical proposals

d.

Underwriting proposals with a limited amount of sum assured

Discuss
Answer: (c).Underwriting non-medical proposals Explanation:The automated rule engine is used to automate the underwriting process for non-medical proposals.
Q58.
What is the Jet unit underwriting method used for in the insurance underwriting process?

a.

Underwriting complicated proposals

b.

Underwriting proposals with a limited amount of sum assured

c.

Underwriting medical proposals

d.

Underwriting proposals that involve huge sums assured

Discuss
Answer: (b).Underwriting proposals with a limited amount of sum assured Explanation:The Jet unit underwriting method is used for proposals with a limited amount of sum assured.
Q59.
Why do insurance companies use the automated rule engine for underwriting?

a.

To reduce the processing time for underwriting

b.

To underwrite medical proposals

c.

To underwrite complicated proposals

d.

To underwrite proposals with a limited amount of sum assured

Discuss
Answer: (a).To reduce the processing time for underwriting Explanation:Insurance companies use the automated rule engine to reduce the processing time for underwriting non-medical proposals.
Q60.
Who takes the final underwriting decision in the insurance underwriting process?

a.

The insurance office directly

b.

The reinsurers

c.

The TPA

d.

Either a or b

Discuss
Answer: (d).Either a or b Explanation:The final underwriting decision is taken either by the insurance office directly or through the reinsurers depending on the automatic and facultative limits as set in the treaty arrangements between the insurers and the reinsurers.
Page 6 of 12