IC02 - LICENTIATE - Practice of Life Insurance 49

To More latest Exam Material Click Here 

Q 1. Which types of hazards are taken into account by underwriters when assessing the risk in life insurance?

A) Physical, financial, and moral hazards

B) Physical and financial hazards

C) Physical and moral hazards) Physical and financial hazards C) Physical and moral hazards D) Financial and moral hazards E) None of the above

D) Financial and moral hazards

E) None of the above
 
Q 2. What does risk assessment in life insurance involve?

A) Assessing the premium amount for the policy

B) Assessing the insurable interest of the proposer

C) Assessing the reputation of the insurance company

D) Assessing the individual factors that may affect mortality

E) None of the above
 
Q 3. Which section of a policy document ensures its enforceability in a court of law?

A) Preamble

B) Operative clause

C) Proviso

D) Supplement

E) None of the above
 
Q 4. When are corrections in policies usually done?

A) At the time of policy commencement

B) After the first year of the policy

C) After the policy reaches maturity

D) At the time of a claim

E) None of the above
 
Q 5. What does a policy document represent in the context of life insurance?

A) Legal proof of the policyholder's identity

B) Proof of premium payments

C) Evidence of the policy's value and ownership

D) Confirmation of the policyholder's insurability

E) None of the above
 
Q 6. What is the purpose of the rubber stamp on a duplicate policy document?

A) To indicate its duplicate status

B) To validate the policyholder's claim

C) To signify the document has been lost

D) To differentiate it from the original document

E) None of the above
 
Q 7. What happens if the assessed risk is considered to be very high by the insurer?

A) The insurer provides additional coverage

B) The premium remains the same

C) The insurer declines the proposal

D) The policy is canceled

E) The insurer offers a discounted premium
 
Q 8. What happens if the age of the insured is found to be higher than stated at the proposal stage?

A) The policy remains unchanged

B) The premium is increased

C) The policy is canceled and a new policy is issued

D) The claim is denied

E) The policy coverage is reduced
 
Q 9. Why are rebates or discounts offered for yearly and half-yearly premium payment modes?

A) To increase the overall premium amount

B) To encourage more policyholders to choose those modes

C) To reduce the administrative burden on the insurer

D) To align with industry standards

E) To compensate for inflationary factors
 
Q 10. What is the premium amount for a money-back plan with a sum assured of Rs. 50,000, a half-yearly mode of payment, and a tabular premium rate of Rs. 66.80 per thousand?

A) Rs. 2,800

B) Rs. 3,200

C) Rs. 3,500

D) Rs. 4,000

E) Rs. 4,500
 
Q 11. What is the grace period for Rita to pay her monthly insurance premium?

A) 5 days

B) 10 days

C) 15 days

D) 20 days

E) 30 days
 
Q 12. How does the insurer maintain the funds for paying claims and benefits?

A) By maintaining separate accounts for each policyholder

B) By pooling all revenues into a single life fund

C) By investing in banks and financial institutions

D) By collecting premiums only when claims arise

E) By relying on external sources for claim payments
 
Q 13. What is the minimum guaranteed surrender value promised by LIC policies?

A) Not less than 30% of the total premium paid, excluding premiums for the first year

B) Not less than 50% of the total premium paid, excluding premiums for the first year

C) Not less than 10% of the total premium paid, excluding premiums for the first year

D) Not less than 20% of the total premium paid, excluding premiums for the first year

E) Not less than 40% of the total premium paid, excluding premiums for the first year
 
Q 14. What does the option of automatic advance of future premiums allow?

A) Policy closure without any reduction in benefits

B) Premiums to be paid in advance

C) Loans to be advanced from the surrender value

D) Premiums to be waived

E) Increase in surrender value
 
Q 15. What is the primary disadvantage for the policyholder when a policy lapses?

A) Loss of life insurance cover

B) Loss of future earnings

C) Loss of full benefits

D) Increase in premiums

E) Loss of future revenues

To More latest Exam Material Click Here