C04 Features of Insurance Contracts MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on C04 Features of Insurance Contracts, a fundamental topic in the field of IC38 Life Insurance Agent Exam. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our C04 Features of Insurance Contracts 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 C04 Features of Insurance Contracts mcq questions that explore various aspects of C04 Features of Insurance Contracts problems. Each MCQ is crafted to challenge your understanding of C04 Features of Insurance Contracts principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC38 Life Insurance Agent Exam tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our C04 Features of Insurance Contracts MCQs are your pathway to success in mastering this essential IC38 Life Insurance Agent Exam topic.

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C04 Features of Insurance Contracts MCQs | Page 3 of 5

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Q21.
What is a "Free-Look Period" in insurance?

a.

A period when policyholders can change their personal information on the policy.

b.

A period during which policyholders can cancel the policy and get a refund.

c.

A period for filing claims with the insurance company.

d.

A period when policyholders can review the policy terms and conditions.

Discuss
Answer: (b).A period during which policyholders can cancel the policy and get a refund. Explanation:A "Free-Look Period" in insurance is a period during which policyholders can cancel the policy and get a refund if they are not satisfied with the policy's terms and conditions.
Q22.
How long is the Free-Look Period for Life Insurance and Health Insurance policies?

a.

7 days

b.

15 days

c.

30 days

d.

90 days

Discuss
Answer: (b).15 days Explanation:The Free-Look Period for Life Insurance and Health Insurance policies is typically 15 days.
Q23.
In what type of insurance policies is the Free-Look Period typically available?

a.

All insurance policies

b.

Only Life Insurance policies

c.

Only Health Insurance policies

d.

Life and Health Insurance policies with a tenure of at least one year

Discuss
Answer: (d).Life and Health Insurance policies with a tenure of at least one year Explanation:The Free-Look Period is typically available for Life and Health Insurance policies with a tenure of at least one year.
Q24.
What does the policyholder need to do if they want to cancel the policy during the Free-Look Period?

a.

Make a phone call to the insurer

b.

Visit the nearest insurance branch

c.

Send a written notice to the insurer

d.

Cancel the premium payment

Discuss
Answer: (c).Send a written notice to the insurer Explanation:To cancel the policy during the Free-Look Period, the policyholder needs to send a written notice to the insurer.
Q25.
What happens to the premium if a policy is canceled during the Free-Look Period?

a.

The premium is fully refunded.

b.

The premium is refunded minus the proportionate risk premium and expenses.

c.

The premium is forfeited.

d.

The premium is refunded only for electronic policies.

Discuss
Answer: (b).The premium is refunded minus the proportionate risk premium and expenses. Explanation:If a policy is canceled during the Free-Look Period, the premium is refunded minus the proportionate risk premium and expenses.
Q26.
What is the term used for the proportionate calculation of premium when a policy is canceled, and no claims have been paid?

a.

Premium Refund

b.

Proportional Premium

c.

Pro-rata Premium

d.

Retained Premium

Discuss
Answer: (c).Pro-rata Premium Explanation:The proportionate calculation of premium when a policy is canceled, and no claims have been paid is called Pro-rata premium.
Q27.
How do insurers typically handle premium refunds for annual policies when canceled by the insured?

a.

They calculate pro-rata premiums.

b.

They charge/retain premiums at a higher rate and refund premiums at higher rates.

c.

They charge/retain premiums at a lower rate and refund premiums at lower rates.

d.

They refund the entire premium amount.

Discuss
Answer: (b).They charge/retain premiums at a higher rate and refund premiums at higher rates. Explanation:For annual policies canceled by the insured, insurers usually charge/retain premiums at higher rates and refund premiums at higher rates to prevent anti-selection against the insurers and cover initial expenses.
Q28.
What is the term used for the rates disclosed as part of the insurance contract that defines how premiums are handled when a policy is canceled by the insured?

a.

Premium Scales

b.

Pro-rata Rates

c.

Short Period Scales

d.

Refund Rates

Discuss
Answer: (c).Short Period Scales Explanation:The rates disclosed in the insurance contract that define how premiums are handled when a policy is canceled by the insured are referred to as Short Period Scales.
Q29.
Which of the following does NOT fall under the categories of "Coercion," "Undue Influence," "Fraud," or "Mistake" in contract law?

a.

Inducing another to act on a false belief through deliberate concealment of facts.

b.

Error in one's knowledge or belief leading to a misunderstanding of the contract.

c.

Using one's position to dominate another person's will for undue advantage.

d.

Applying pressure through criminal means to obtain an advantage.

Discuss
Answer: (b).Error in one's knowledge or belief leading to a misunderstanding of the contract. Explanation:Error in one's knowledge or belief leading to a misunderstanding of the contract is categorized under "Mistake" in contract law and is distinct from "Coercion," "Undue Influence," and "Fraud."
Q30.
Why do insurers charge/retain premiums at higher rates and refund premiums at higher rates for canceled annual policies?

a.

To encourage policyholders to cancel their policies.

b.

To simplify premium calculations.

c.

To prevent anti-selection against the insurers and cover initial expenses.

d.

To maximize their profits.

Discuss
Answer: (c).To prevent anti-selection against the insurers and cover initial expenses. Explanation:Insurers charge/retain premiums at higher rates and refund premiums at higher rates for canceled annual policies to prevent anti-selection against the insurers and cover initial expenses.
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