L05 Applications of Life Insurance MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on L05 Applications of Life Insurance, 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 L05 Applications of Life Insurance MCQs are designed to help you grasp the core concepts and excel in solving problems.

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L05 Applications of Life Insurance MCQs | Page 2 of 2

Discover more Topics under IC38 Life Insurance Agent Exam

Q11.
What is another common term used for "Mortgage Redemption Insurance"?

a.

Property Protection Policy

b.

Mortgage Repayment Guarantee

c.

Credit Life Insurance policy

d.

Mortgage Security Coverage

Discuss
Answer: (c).Credit Life Insurance policy Explanation:"Mortgage Redemption Insurance" is popularly referred to as a "Credit Life Insurance policy."
Q12.
What is the primary purpose of Mortgage Redemption Insurance (MRI)?

a.

To protect the property against damage or loss

b.

To ensure the home loan borrower's life is insured

c.

To repay the balance on a mortgage loan if the borrower dies

d.

To provide financial assistance for home renovations

Discuss
Answer: (c).To repay the balance on a mortgage loan if the borrower dies Explanation:MRI's primary purpose is to repay the balance on a mortgage loan if the borrower dies before its full repayment.
Q13.
How does the insurance cover in MRI differ from a standard term insurance policy?

a.

MRI has a higher coverage amount

b.

MRI has a lower premium

c.

MRI provides increasing coverage each year

d.

MRI offers decreasing coverage each year

Discuss
Answer: (d).MRI offers decreasing coverage each year Explanation:Unlike a standard term insurance policy, MRI offers decreasing coverage each year.
Q14.
Who is Mortgage Redemption Insurance (MRI) suitable for?

a.

Individuals without any financial dependents

b.

Borrowers who have already repaid their mortgage

c.

People whose dependents may need assistance in clearing their debts in case of the policyholder's unexpected demise

d.

Individuals with large estates and wealth

Discuss
Answer: (c).People whose dependents may need assistance in clearing their debts in case of the policyholder's unexpected demise Explanation:MRI is suitable for people whose dependents may need assistance in clearing their debts in case of the policyholder's unexpected demise.
Q15.
Under which act does Section 6 provide for the security of benefits under a life insurance policy to the wife and children?

a.

Married Women’s Property Act, 1974

b.

Keyman Insurance Act

c.

Mortgage Redemption Insurance Act

d.

Life Insurance Trust Act

Discuss
Answer: (a).Married Women’s Property Act, 1974 Explanation:Section 6 of the Married Women’s Property Act, 1874 provides for the security of benefits under a life insurance policy to the wife and children.
Q16.
What does the Married Women's Property Act ensure regarding a life insurance policy taken under it?

a.

It makes the policy subject to court attachments

b.

It allows creditors to control the policy

c.

It ensures that the policy is beyond the control of court attachments, creditors, and even the life assured

d.

It grants full control of the policy to the husband

Discuss
Answer: (c).It ensures that the policy is beyond the control of court attachments, creditors, and even the life assured Explanation:The Married Women's Property Act ensures that a policy taken under it is beyond the control of court attachments, creditors, and even the life assured.
Q17.
What is the primary purpose of Keyman Insurance?

a.

To provide life insurance for all employees in a business

b.

To offer financial protection for the key person in a business

c.

To protect the property against damage or loss

d.

To guarantee mortgage repayments for homeowners

Discuss
Answer: (b).To offer financial protection for the key person in a business Explanation:The primary purpose of Keyman Insurance is to offer financial protection for the key person in a business.
Q18.
What is the main purpose of Mortgage Redemption Insurance (MRI)?

a.

To protect the property against damage or loss

b.

To ensure the home loan borrower's life is insured

c.

To repay the balance on a mortgage loan if the borrower dies before its full repayment

d.

To provide financial assistance for home renovations

Discuss
Answer: (c).To repay the balance on a mortgage loan if the borrower dies before its full repayment Explanation:The main purpose of Mortgage Redemption Insurance is to repay the balance on a mortgage loan if the borrower dies before its full repayment.
Q19.
What is the objective behind Mortgage Redemption Insurance?

a.

Facilitate cheaper mortgage rates

b.

Provide financial protection for home loan borrowers

c.

Protect value of the mortgaged property

d.

Evade eviction in case of default

Discuss
Answer: (b).Provide financial protection for home loan borrowers Explanation:The primary objective of MRI is to provide financial protection for home loan borrowers by ensuring that the balance on a mortgage loan is repaid if the borrower dies before its full repayment.
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