IC02 - LICENTIATE - Practice Of Life Insurance 03
IC02 - LICENTIATE - Practice Of Life Insurance 03
Q 1. What are the steps involved in determining the type of life policy that best suits the prospect's needs?
A) Assess the prospect's financial goals and obligations
B) Evaluate the prospect's current and future income potential
C) Consider the prospect's dependents and their financial needs
D) Analyze the prospect's risk tolerance and investment preferences
E) All of the above
Q 2. Who completes and signs the proposal form in an insurance application?
A) The proposer
B) The insurance agent
C) The insurer
D) The person to be insured
E) The nominee
Q 3. Why does the proposal contain extensive questions related to health, habits, and family history?
A) To assess the risk associated with insuring the individual
B) To determine the premium amount
C) To verify the identity of the proposer
D) To provide a summary of the policy terms
E) To comply with legal requirements
Q 4. What is the purpose of providing a more detailed proposal form and report in non-medical insurance?
A) To compensate for the absence of a medical examination
B) To streamline the underwriting process
C) To increase the number of applicants
D) To reduce the workload for the insurer
E) To comply with regulatory requirements
Q 5. Why is the underwriting process important in the insurance industry?
A) It assesses the risk proposed to be insured
B) It determines the premium charged
C) It helps in deciding whether to accept or decline an offer for insurance
D) All of the above
E) None of the above
Q 6. Why is accepting a life insurance proposal for a shorter term than proposed considered a risk reduction measure?
A) It reduces the tenure of risk
B) It increases the tenure of risk
C) It has no impact on the risk level
D) It decreases the premium charged
E) None of the above
Q 7. What does the term "moral hazard" refer to in underwriting?
A) Potential for trying to gain an advantage
B) Financial instability
C) Pre-existing medical conditions
D) Occupation-related risks
E) None of the above
Q 8. What is an insurable interest in life insurance?
A) Having knowledge about insurance policies
B) Having a financial investment in the insurance company
C) Benefiting from the safety and well-being of the insured person
D) Owning multiple life insurance policies
E) None of the above
Q 9. What is the significance of the operative clause in a policy document?
A) It explains the premium payment schedule
B) It describes the benefits and coverage provided by the policy
C) It provides a summary of the main content in simple terms
D) It lists the exclusions and limitations of the policy
E) None of the above
Q 10. What does the schedule of a policy document identify?
A) The terms and conditions of the insurance contract
B) The proposal that is referred to in the preamble
C) The date of maturity of the policy
D) The additional or special conditions
E) None of the above
Q 11. What is the purpose of restrictive conditions in a life insurance policy?
A) To eliminate risks not considered in determining the premium
B) To provide additional benefits beyond the sum assured
C) To specify conditions for availing accident benefits
D) To cover the extra risk associated with hazardous occupations
Q 12. When are alterations generally not allowed for the first year of a life insurance policy?
A) When there is a correction needed in the policy
B) When there is a change in address
C) When there is a change in nominee
D) When the alterations affect the basic insurance contract
E) None of the above
Q 13. Why might a policyholder require the policy document for an assignment or loan?
A) To prove ownership of the policy
B) To facilitate policy changes
C) To make a claim for policy benefits
D) To provide proof of premium payments
E) None of the above
Q 14. How are alterations typically made to a policy document?
A) By issuing a new policy
B) By obtaining an endorsement on the existing policy
C) By drafting a separate amendment document
D) By reissuing the entire policy document
E) None of the above
Q 15. Which of the following hobbies can influence the insurance premium?
A) Cooking
B) Gardening
C) Mountaineering
D) Reading
E) Painting