IC23 APPLICATIONS OF LIFE INSURANCE - 10

Que. 1 : Q1) Which reinsurance accounts are for the type of business are normally rendered on an "Underwriting Year Basis" and the premiums are usually shown net of acquisition costs, agency commission, brokerage and any discount allowed to the insurer?

   1.  a) Fire and accident proportional reinsurance

   2.  b) Marine proportional reinsurance

   3.  

   4.  

Que. 2 : Q2) Which model is also known as agency - a fee driven model?

   1.  a) Al-wakala Model

   2.  b) Non-profit Model

   3.  c) Al-mudaraba Model

   4.  d) None of the above

Que. 3 : Q3) What is refers to the transfer of risk?

   1.  a) Cedant

   2.  b) Cede

   3.  c) Reinsurer

   4.  d) Reinsurance

Que. 4 : Q4) Sundar is a 25 year old individual working as a Finance Trainer for a MNC. Sundar is currently earning Rs.10,00,000 per annum. Sundar's family consists of his wife and retired parents, who are all dependent oh him. The next contribution made by Sundar to his family is Rs.8,00,000 after paying taxes and taking care of his personal expenses. Sundar expects his salary to increase by 3% every year.Discount factor is 6% . Calculate the amount of insurance cover that Sundar should take as per the Human Life Value Method.

   1.  a) approx. 25 lakhs

   2.  b) approx. 50 lakhs

   3.  c) approx. 63 lakhs

   4.  d) approx. 78 lakhs

Que. 5 : Q5) A Takaful company must have which of the following operating principles?

   1.  a) It must operate according to Islamic co-operative principles

   2.  b) The insurance company must maintain two funds

   3.  c) Reinsurance commission may be a paid to, or received from, only Islamic insurance and reinsurance companies