L03 Life Insurance Products Traditional MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on L03 Life Insurance Products Traditional, 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 L03 Life Insurance Products Traditional MCQs are designed to help you grasp the core concepts and excel in solving problems.

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Q31.
What is the key difference between Participating (Par) and Non-Participating (Non-Par) life insurance products?

a.

Par products offer higher returns

b.

Non-Par products provide guaranteed sums at the beginning

c.

Par products provide a share in the insurer's profits

d.

Non-Par products have lower premiums

Discuss
Answer: (c).Par products provide a share in the insurer's profits Explanation:Participating (Par) products allow policyholders to receive a share in the insurer's profits, while Non-Par products provide guaranteed sums at the beginning.
Q32.
What is the main characteristic of Non-participating (Non-Par) products?

a.

They have flexible benefit options

b.

They provide high returns linked to an index

c.

They offer guaranteed benefits stated at the outset

d.

They have lower premium rates

Discuss
Answer: (c).They offer guaranteed benefits stated at the outset Explanation:Non-participating (Non-Par) products offer guaranteed benefits stated at the outset, and their returns are not linked to an index or benchmark.
Q33.
What is the minimum death cover required for all non-linked individual life insurance products according to IRDAI regulations?

a.

5 times the annualized premium

b.

7 times the annualized premium for regular premium products

c.

2 times the annualized premium

d.

1.25 times the single premium for single premium products

Discuss
Answer: (b).7 times the annualized premium for regular premium products Explanation:As per IRDAI regulations, the minimum death cover for all non-linked individual life insurance products should be at least 7 times the annualized premium for regular premium products.
Q34.
What are the two variants of life insurance products concerning death benefits?

a.

Basic and Advanced plans

b.

Participating and Non-participating plans

c.

Guaranteed and Variable plans

d.

Term and Whole Life plans

Discuss
Answer: (b).Participating and Non-participating plans Explanation:The two variants of life insurance products concerning death benefits are Participating and Non-participating plans.
Q35.
What is the key characteristic of a "defined benefit plan" in the context of pension plans?

a.

A fixed sum is invested and available at retirement age

b.

A fixed sum is paid regularly to a person

c.

Payouts depend on the investment performance of the fund

d.

It is offered only to high-income earners

Discuss
Answer: (b).A fixed sum is paid regularly to a person Explanation:In a "defined benefit plan" for pension, a fixed sum is paid regularly to a person, typically after their retirement.
Q36.
What does an occupational or employer pension refer to?

a.

A pension created by an employer for the benefit of an employee

b.

A self-funded retirement plan

c.

A government-mandated retirement fund

d.

A plan for high-income individuals

Discuss
Answer: (a).A pension created by an employer for the benefit of an employee Explanation:An occupational or employer pension is a pension created by an employer for the benefit of an employee.
Q37.
What is the primary purpose of an annuity in the context of retirement planning?

a.

To provide a lump sum payment at retirement

b.

To protect against outliving one's income in retirement

c.

To offer high-risk investment opportunities

d.

To provide short-term financial assistance

Discuss
Answer: (b).To protect against outliving one's income in retirement Explanation:The primary purpose of an annuity in the context of retirement planning is to protect against outliving one's income by providing periodic payments that can last for life.
Q38.
How is a pension typically provided to individuals upon retirement?

a.

Through a lump sum payment

b.

By purchasing an annuity

c.

By taking out a loan

d.

By investing in stocks and bonds

Discuss
Answer: (b).By purchasing an annuity Explanation:A pension is typically provided to individuals upon retirement by purchasing an annuity, which offers regular income payments.
Q39.
What is the "vesting date" in the context of pension plans?

a.

The date of retirement

b.

The date of lump sum contribution

c.

The desired age or date when one starts receiving a pension

d.

The date of annuity purchase

Discuss
Answer: (c).The desired age or date when one starts receiving a pension Explanation:The "vesting date" in the context of pension plans is the desired age or date when one starts receiving a pension.
Q40.
What is an "immediate annuity" in the context of pension plans?

a.

A plan that offers annuity payments after a long waiting period

b.

A lump sum payment upon retirement

c.

A plan that allows for lump-sum contributions

d.

A plan that provides annuity payments from the very next month of purchase

Discuss
Answer: (d).A plan that provides annuity payments from the very next month of purchase Explanation:An "immediate annuity" in the context of pension plans provides annuity payments from the very next month of purchase.
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