IC02 - LICENTIATE - Practice of Life Insurance 10
IC02 - LICENTIATE - Practice of Life Insurance 10
Q 1. What charges are levied for the administration of ULIPs every month?
A) Premium allocation charges (PA3)
B) Mortality charges
C) Fund management charges (FMC)
D) Policy administration charges
E) Surrender charges
Q 2. Which of the following is a feature specific to traditional plans and NOT applicable to ULIPs?
A) Loans can be taken against the policy surrender value.
B) Profits are received through bonus payments.
C) Premiums are invested in a common life fund.
D) Loss is unlikely as benefits are predetermined.
E) The breakup of charges is transparent to policyholders.
Q 3. What is the maximum reduction in yield allowed for Unit Linked contracts with annualized premiums paid for 8 years?
A) 2.50%
B) 2.75%
C) 3.00%
D) 3.15%
E) 3.30%
Q 4. How does the growth of the life insurance business in India impact the application and acceptance process?
A) It leads to a decrease in the number of people applying for life insurance.
B) It has no impact on the application and acceptance process.
C) It increases the importance of the application and acceptance process.
D) It results in a decrease in underwriting processes and standards.
E) It reduces the need for accurate risk assessment.
Q 5. What is the purpose of Ramesh taking life insurance cover?
A) To protect his property.
B) To ensure his family's good health.
C) To plan for his son's education and marriage.
D) To safeguard his financial position in case of his untimely death.
E) To avoid accidents and injuries.
Q 6. When might a prospect be required to undergo a medical examination during the life insurance application process?
A) When the prospect is older than a certain age threshold
B) When the prospect has disclosed significant medical conditions
C) When the desired coverage amount exceeds a certain limit
D) When the prospect applies for a specific type of policy
E) It depends on the insurer's underwriting guidelines
Q 7. How should the signature of the proposer on the proposal form be witnessed?
A) By an insurance agent
B) By a family member
C) By a notary public
D) By the person completing the form
E) By an attesting third party
Q 8. Why is the proposal a lengthy document?
A) Because it contains extensive questions related to health, habits, and family history
B) Because it includes a summary of the policy terms
C) Because it provides additional details about the insurer's financial position
D) Because it is required by the IRDA regulations
E) Because it is attached to the policy as a separate contract
Q 9. Who has the right and discretion to request additional information through special reports?
A) The proposer
B) The policyholder
C) The insurance agent
D) The underwriter
E) The medical examiner
Q 10. Why does the occupation of the life insured matter in the underwriting process?
A) It helps assess the risk of potential accidents or hazards associated with the occupation
B) It determines the maximum coverage limit for the life insurance policy
C) It has no impact on the underwriting process
D) It helps determine the waiting period before the coverage becomes effective
Q 11. What does it mean to impose a lien in the underwriting decision?
A) It reduces the insurer's liability under the policy for a period of time or under certain conditions
B) It increases the sum assured
C) It extends the policy term
D) It adds additional benefits to the policy
E) None of the above
Q 12. What happens if the underwriter is willing to accept a proposal on modified terms?
A) The proposer must agree to the modified terms before a policy is issued
B) The underwriter adjusts the deposit paid as the first premium
C) The risk commences immediately without any further requirements
D) The first premium is waived
E) None of the above
Q 13. What forms are typically involved in the underwriting process for life insurance?
A) Proposal form, personal statement, agents report, and medical reports
B) Claim form, investment statement, bank statement, and tax return
C) Application form, employment history, credit report, and utility bills
D) Consent form, beneficiary nomination form, policy summary, and premium payment form
E) None of the above
Q 14. What is the purpose of the supplement attached to the policy document?
A) To provide a summary of the main content in simple terms
B) To explain the premium payment options
C) To disclose personal medical information
D) To list the exclusions and limitations of the policy
E) None of the above
Q 15. What does the attestation in a policy document signify?
A) Acceptance of the proposal by the insurer
B) Payment of the first premium
C) Endorsement of additional benefits
D) Exemption from stamp duty
E) None of the above