L04 Life insurance products Non Traditional MCQs

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L04 Life insurance products Non Traditional MCQs | Page 2 of 5

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Q11.
What are the key features of Universal Life policies?

a.

Fixed premiums and fixed death benefits

b.

Flexible premiums and death benefit amounts

c.

Guaranteed cash value

d.

Strict limitations on premium payments

Discuss
Answer: (b).Flexible premiums and death benefit amounts Explanation:Universal Life policies offer flexible premiums and allow policyholders to determine the amount of premiums they want to pay.
Q12.
Which of the following is an example of a non-traditional life insurance product?

a.

Term Life Insurance

b.

Whole Life Insurance

c.

Universal Life Insurance

d.

Endowment Insurance

Discuss
Answer: (c).Universal Life Insurance Explanation:Universal Life Insurance is a non-traditional product with features like flexible premiums and death benefit amounts.
Q13.
What is the distinguishing feature of Variable Life insurance?

a.

Fixed death benefit and premiums

b.

Cash value that remains constant

c.

Fluctuating death benefit and cash value based on investment performance

d.

Limited investment options

Discuss
Answer: (c).Fluctuating death benefit and cash value based on investment performance Explanation:Variable Life insurance's death benefit and cash value fluctuate based on the performance of a special investment account.
Q14.
Why were Universal Life and Variable Life policies discontinued in India?What makes Universal Life and Variable Life insurance policies non-traditional?

a.

Lack of popularity in the Indian marketThey have fixed premiums and death benefits

b.

High premiums and fixed death benefitsThey are not available in the United States

c.

Introduction of IRDAI (ULIP) Regulations in 2019They offer guaranteed cash value

d.

Limited investment options in these policiesThey provide flexibility in premium payments and death benefits

Discuss
Answer: (b).Introduction of IRDAI (ULIP) Regulations in 2019They provide flexibility in premium payments and death benefits Explanation:These policies were discontinued in India due to the introduction of IRDAI (ULIP) Regulations in 2019.Universal Life and Variable Life insurance policies are considered non-traditional because they offer flexibility in premium payments and death benefits.
Q15.
Why were Universal Life and Variable Life policies discontinued in India?

a.

Lack of popularity in the Indian market

b.

High premiums and fixed death benefits

c.

Introduction of IRDAI (ULIP) Regulations in 2019

d.

Limited investment options in these policies

Discuss
Answer: (c).Introduction of IRDAI (ULIP) Regulations in 2019 Explanation:These policies were discontinued in India due to the introduction of IRDAI (ULIP) Regulations in 2019.
Q16.
What are Unit Linked Plans (ULIPs)?

a.

Traditional insurance policies

b.

Investment vehicles without insurance components

c.

Policies that overcome the limitations of traditional plans

d.

Premiums that are invested into funds separately

Discuss
Answer: (c).Policies that overcome the limitations of traditional plans Explanation:Unit Linked Plans (ULIPs) are described as policies designed to overcome the limitations of traditional insurance products.
Q17.
How are the premiums paid by policyholders in Unit Linked Insurance divided?

a.

Into two equal portions

b.

Into insurance and investment components

c.

Into fixed savings and investment amounts

d.

Into premium and deductible portions

Discuss
Answer: (b).Into insurance and investment components Explanation:The premiums in Unit Linked Insurance are divided into two major portions: one for insurance cover and the other for investment in a chosen fund.
Q18.
What determines the benefits under Unit Linked Insurance contracts?

a.

Fixed premiums

b.

Value of units credited to the policyholder's account

c.

The insurance company's policies

d.

Market interest rates

Discuss
Answer: (b).Value of units credited to the policyholder's account Explanation:The benefits under Unit Linked Insurance contracts are determined by the value of units credited to the policyholder's account.
Q19.
How do Unit Linked contracts differ from traditional savings policies?

a.

They offer higher premiums

b.

They are less transparent in structure

c.

They have bundled charges

d.

They are unbundled and transparent in structure

Discuss
Answer: (d).They are unbundled and transparent in structure Explanation:Unit Linked contracts are unbundled and have transparent structures, with specified charges for insurance and expenses.
Q20.
How have Unit Linked policies been positioned in many markets?

a.

As traditional insurance products

b.

As entirely investment-oriented with no insurance component

c.

As vehicles for saving only

d.

As bundled insurance products

Discuss
Answer: (b).As entirely investment-oriented with no insurance component Explanation:In many markets, Unit Linked policies have been positioned as investment vehicles with an attached insurance component.
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