L08 Life Insurance Underwriting MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on L08 Life Insurance Underwriting, 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 L08 Life Insurance Underwriting 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 L08 Life Insurance Underwriting mcq questions that explore various aspects of L08 Life Insurance Underwriting problems. Each MCQ is crafted to challenge your understanding of L08 Life Insurance Underwriting 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 L08 Life Insurance Underwriting MCQs are your pathway to success in mastering this essential IC38 Life Insurance Agent Exam topic.

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L08 Life Insurance Underwriting MCQs | Page 5 of 7

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Q41.
What may be required of an applicant for insurance if their occupation falls under a hazardous category?

a.

A medical examination

b.

Completion of an occupational questionnaire

c.

Payment of higher premiums

d.

None of the above

Discuss
Answer: (b).Completion of an occupational questionnaire Explanation:If the applicant's occupation is considered hazardous, they may need to complete an occupational questionnaire providing details about their job and associated risks.
Q42.
In the context of underwriting, what is a "flat extra" related to an applicant's occupation?

a.

An additional premium charged due to a hazardous occupation

b.

A discount offered for low-risk occupations

c.

A waiver of the medical examination requirement

d.

An occupational questionnaire

Discuss
Answer: (a).An additional premium charged due to a hazardous occupation Explanation:A "flat extra" is an additional premium charged when an applicant's occupation is considered hazardous.
Q43.
What lifestyle and habit factors are considered important in underwriting?

a.

Physical fitness

b.

Social activities

c.

Smoking and tobacco use

d.

Marital status

Discuss
Answer: (c).Smoking and tobacco use Explanation:Smoking and tobacco use are considered important lifestyle factors in underwriting, as they pose health risks.
Q44.
How do insurance companies differentiate between smokers and non-smokers in terms of premiums?

a.

They charge the same premium for both

b.

Smokers pay higher premiums than non-smokers

c.

Non-smokers pay higher premiums than smokers

d.

Premiums are not affected by smoking habits

Discuss
Answer: (b).Smokers pay higher premiums than non-smokers Explanation:Insurance companies typically charge higher premiums to smokers due to the increased health risks associated with smoking.
Q45.
Which of the following is considered a lifestyle risk related to alcohol?

a.

Occasional moderate drinking

b.

Long-term heavy drinking

c.

Abstaining from alcohol

d.

Consuming alcohol for religious reasons

Discuss
Answer: (b).Long-term heavy drinking Explanation:Long-term heavy drinking is considered a lifestyle risk as it can lead to various health issues and other problems.
Q46.
What does "substance abuse" refer to in the context of lifestyle and habit risks?

a.

A healthy lifestyle

b.

Use of prescription medications

c.

Criminal disposition and use of illegal substances

d.

Regular exercise habits

Discuss
Answer: (c).Criminal disposition and use of illegal substances Explanation:Substance abuse refers to the use of various substances, including illegal ones, and is associated with criminal disposition and moral hazard.
Q47.
Which of the following is an example of moral hazard?

a.

Stunt artist dies while performing a stunt

b.

A person drinking copious amounts of alcohol because he is insured

c.

Insured defaulting on premium payments

d.

Proposer misplacing policy document

Discuss
Answer: (b).A person drinking copious amounts of alcohol because he is insured Explanation:Moral hazard refers to situations where individuals alter their behavior because they have insurance coverage, which may increase the likelihood of a loss or claim. In this case, option b) "A person drinking copious amounts of alcohol because he is insured" is an example of moral hazard. This individual may engage in excessive drinking, knowing that they have insurance coverage, and this behavior could lead to health issues or other negative consequences.
Q48.
Which aspect of family history is considered in medical underwriting to assess mortality risk?

a.

Family size

b.

Family heredity

c.

Family occupation

d.

Family income

Discuss
Answer: (b).Family heredity Explanation:Family heredity involves the transmission of certain diseases from one generation to another and can affect an individual's mortality risk.
Q49.
What is one of the key factors evaluated in medical underwriting?

a.

Average family longevity

b.

Family environment

c.

Personal history of diseases

d.

Occupational hazards

Discuss
Answer: (c).Personal history of diseases Explanation:In medical underwriting, personal history of diseases is an essential factor in assessing mortality risk.
Q50.
Why do life insurers need to be cautious when dealing with individuals having adverse family history?

a.

Family environment significantly impacts mortality risk.

b.

Adverse family history indicates potential occupational hazards.

c.

Certain diseases can be inherited, posing risks.

d.

It has no impact on insurance decisions.

Discuss
Answer: (c).Certain diseases can be inherited, posing risks. Explanation:Adverse family history may indicate a higher risk of hereditary diseases, which can influence insurance decisions.
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