IC02 - LICENTIATE - Practice Of Life Insurance 06
IC02 - LICENTIATE - Practice Of Life Insurance 06
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Q 1. What is the "pay-as-you-go" method of gratuity payment?
A) Payment of gratuity when it falls due, using current revenues
B) Payment of gratuity in advance, before it falls due
C) Payment of gratuity in installments over a period of time
D) Payment of gratuity based on the employee's performance
E) None of the above
Q 2. What is the eligibility requirement for an employee to receive gratuity payment?
A) Completion of 5 years of continuous service in the organization
B) Being on the direct payroll of the company
C) Holding a specific designation or grade
D) Joining the organization after a medical check-up
E) None of the above
Q 3. What is a disadvantage of a defined benefit scheme?
A) The pension amount is unknown and can vary based on investment returns.
B) The employer has to bear the burden of any deficit in case of lower-than-expected returns on investments.
C) The employee may not receive a pension for the entire duration of their life.
D) The employer has no control over the investments and cannot influence the pension amount.
E) None of the above.
Q 4. What additional benefit can be provided through a group leave encashment scheme?
A) Group term insurance cover for employees.
B) Group superannuation scheme for employees.
C) Group gratuity scheme for employees.
D) Group pension scheme for employees.
E) None of the above.
Q 5. What is the purpose of the Social Security Fund created by LIC?
A) To provide insurance cover to the economically weaker sections of society
B) To generate funds through levies and taxation
C) To offer free medical care to the elderly
D) To ensure social security for all citizens
E) None of the above
Q 6. Why does Arnab's family emphasize investing in an insurance plan?
A) Insurance plans offer higher returns than mutual funds.
B) Insurance plans have lower investment risks.
C) Insurance plans provide capital market growth.
D) Insurance plans offer protection against eventualities.
E) None of the above
Q 7. What happens to the charge for the risk cover in an integrated benefit ULIP over time?
A) It decreases
B) It remains the same
C) It increases
D) It depends on the policyholder's age
E) None of the above
Q 8. If the top-up amount is more than 25% of the regular premium paid up-to-date, how does the life cover change?
A) Life cover decreases
B) Life cover remains the same
C) Life cover increases by 1.25 times the excess top-up amount
D) Life cover increases by 25% of the top-up amount
E) None of the above
Q 9. Are top-up premiums permitted during the last 5 years of the ULIP contract?
A) Yes, they are allowed
B) No, they are not allowed
C) It depends on the insurance company
D) Only with special permission from the regulator
E) None of the above
Q 10. What is the offer price in ULIPs?
A) The price at which a policyholder can purchase additional units
B) The price at which a new policyholder is allotted units
C) The price at which units are redeemed by an existing policyholder
D) The price at which units are switched from one fund to another
E) None of the above
Q 11. Which charges are levied for the management of funds offered by insurance companies as investment options in a ULIP?
A) Premium allocation charges (PA3)
B) Mortality charges
C) Fund management charges (FMC)
D) Policy administration charges
E) Surrender charges
Q 12. Which of the following is a difference in the withdrawal process between ULIPs and traditional plans?
A) Surrender charges are higher in traditional plans.
B) ULIPs offer guaranteed withdrawals, while traditional plans do not.
C) Withdrawals in ULIPs depend on the NAV, while traditional plans have fixed withdrawal amounts.
D) Traditional plans allow partial withdrawals, while ULIPs do not.
E) Both ULIPs and traditional plans have the same withdrawal process.
Q 13. What is the maximum amount that can be commuted as a lump sum at the time of vesting in unit linked pension/annuity products?
A) One-fourth of the accumulated value
B) One-third of the accumulated value
C) Half of the accumulated value
D) Two-thirds of the accumulated value
E) The entire accumulated value
Q 14. Which factor may pose a risk to the solvency of insurers in the life insurance business during a period of growth in India?
A) Slowed growth in the life insurance business.
B) Improved underwriting processes and standards.
C) Increased emphasis on accurate risk assessment.
D) Payment of claims for policies not initially accepted.
E) Decreased emphasis on the application and acceptance process.
Q 15. Why is it in Ramesh's interest to take medical/health insurance?
A) To protect himself from unexpected illnesses.
B) To safeguard his property.
C) To ensure his family's well-being.
D) To plan for his retirement.
E) To avoid loss of pay due to sickness.