L07 Life Insurance Documentation MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on L07 Life Insurance Documentation, 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 L07 Life Insurance Documentation 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 L07 Life Insurance Documentation mcq questions that explore various aspects of L07 Life Insurance Documentation problems. Each MCQ is crafted to challenge your understanding of L07 Life Insurance Documentation 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 L07 Life Insurance Documentation MCQs are your pathway to success in mastering this essential IC38 Life Insurance Agent Exam topic.

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L07 Life Insurance Documentation MCQs | Page 2 of 11

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Q11.
How are nominations made after the commencement of the policy made effective?

a.

Nominations are effective immediately

b.

Nominations are not allowed after the policy has commenced

c.

Nominations have to be communicated to the insurers to be effective

d.

Nominations can only be made through a will

Discuss
Answer: (c).Nominations have to be communicated to the insurers to be effective Explanation:Nominations made after the commencement of the policy have to be intimated to the insurers to be effective.
Q12.
According to Section 39(11) of the Insurance Act, who is entitled to the proceeds and benefits of a policy if the policyholder dies after the policy matures but before the proceeds are received?

a.

The insurance company

b.

The legal heirs of the policyholder

c.

The nominee

d.

The appointee

Discuss
Answer: (c).The nominee Explanation:According to Section 39(11) of the Insurance Act, if the policyholder dies after the maturity of the policy but the proceeds and benefits of the policy have not been made to him because of his death, his nominee shall be entitled to the proceeds and benefits of his policy.
Q13.
What is the purpose of Section 39 of the Act in relation to life insurance proposals?

a.

It specifies the premium amounts for life insurance policies

b.

It deals with the provision of nomination for policyholders

c.

It regulates the age requirements for insurance coverage

d.

It outlines the benefits of life insurance policies

Discuss
Answer: (b).It deals with the provision of nomination for policyholders Explanation:Section 39 of the Act pertains to the provision of nomination for policyholders in life insurance proposals.
Q14.
What aspects related to personal financial planning may be asked in a Life Insurance Proposal Form?

a.

Hobbies and interests of the policyholder

b.

Work span and projected income of the insured

c.

Favorite vacation destinations of the proposer

d.

Pet ownership and preferences

Discuss
Answer: (b).Work span and projected income of the insured Explanation:A Life Insurance Proposal Form may ask about the work span, projected income, and expenses of the insured as part of their personal financial planning.
Q15.
Why do life insurers collect age proofs for life insurance applicants?

a.

To promote transparency in insurance contracts

b.

To verify the correct age of the insured

c.

To determine the policy premium amount

d.

To assess the creditworthiness of the applicant

Discuss
Answer: (b).To verify the correct age of the insured Explanation:Age proofs are collected to verify the correct age of the insured, as age is a critical factor for assessing the risk profile.
Q16.
How is assignment of a life insurance policy defined?

a.

The transfer of the policyholder's rights, title, and interest in the policy to another person

b.

The cancellation of the policy

c.

The surrender of the policy for its cash value

d.

The termination of the policy

Discuss
Answer: (a).The transfer of the policyholder's rights, title, and interest in the policy to another person Explanation:Assignment of a life insurance policy is defined as the transfer of the policyholder's rights, title, and interest in the policy to another person.
Q17.
How is assignment of a life insurance policy defined?What is the person who transfers the rights, title, and interest in the policy called in an assignment?

a.

The transfer of the policyholder's rights, title, and interest in the policy to another personThe assignee

b.

The cancellation of the policyThe nominee

c.

The surrender of the policy for its cash valueThe beneficiary

d.

The termination of the policyThe assignor

Discuss
Answer: (b).The transfer of the policyholder's rights, title, and interest in the policy to another personThe assignor Explanation:Assignment of a life insurance policy is defined as the transfer of the policyholder's rights, title, and interest in the policy to another person.The person who transfers the rights, title, and interest in the policy is called the assignor.
Q18.
What is the term for the person to whom the policy rights, title, and interest are transferred in an assignment?

a.

The nominee

b.

The assignor

c.

The beneficiary

d.

The assignee

Discuss
Answer: (d).The assignee Explanation:The person to whom the policy rights, title, and interest are transferred in an assignment is called the assignee.
Q19.
What happens to the nomination when an assignment is made to the insurance company for a policy loan?

a.

The nomination is cancelled

b.

The policyholder can nominate a new beneficiary

c.

The policy continues with the same nomination

d.

The nominee becomes the assignee

Discuss
Answer: (c).The policy continues with the same nomination Explanation:When an assignment is made to the insurance company for a policy loan, the policy continues with the same nomination.
Q20.
What is the main difference between conditional assignment and absolute assignment in life insurance?

a.

Conditional assignment involves the transfer of policy rights without reversion, while absolute assignment allows reversion to the life assured.

b.

Conditional assignment is irrevocable, while absolute assignment can be changed at any time.

c.

Conditional assignment is only used for housing loans, while absolute assignment is for all other purposes.

d.

Conditional assignment requires the consent of the assignor, while absolute assignment does not.

Discuss
Answer: (a).Conditional assignment involves the transfer of policy rights without reversion, while absolute assignment allows reversion to the life assured. Explanation:Conditional assignment involves the transfer of policy rights with the possibility of reversion, while absolute assignment provides that all rights, title, and interest are transferred without reversion.
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