Deck 2: Insurance Terminology and Concepts

Question 1

Explain the Concept of Surrender-Value.

A)Maximum Compensation, Available Under Policy.
B)Cash-Value, Associated with the Policy, in Case, the Premiums have been Paid, for 3 Years, at least.
C)Minimum Compensation, Available Under the Policy.
D)Compensation, Available Under the Policy, At Any Given Point of Time.

Answer 1

Cash-Value, Associated with the Policy, in Case, the Premiums have been Paid, for 3 Years, at least.

Question 2

How Many Persons, can be nominated under a Policy? Choose the Most Appropriate Option.

A)Exactly One
B)Exactly Two
C)Exactly Three
D)One or More Than One

Answer 2

One or More Than One

Question 3

Describe the Purpose of Nomination.

A)To Transfer the Rights of the Policy.
B)To Appoint a Person, to Receive the Policy- Monies, in the Event of the Life-Assured's Death.
C)To Surrender the Policy.
D)To Create an Estate.

Answer 3

To Appoint a Person, to Receive the Policy- Monies, in the Event of the Life-Assured's Death.

Question 4

Describe the Purpose of Assignment.

A)To Transfer the Rights of the Policy.
B)To Appoint a Person, to Receive the Policy- Monies, in the Event of the Life-Assured's Death.
C)To Surrender the Policy.
D)To Create an Estate.

Question 5

Illustrate the Process involved in Ordinary Revival of Policy.

A)Write a New Policy, whose Date-of- Commencement is Within Two Years of the Original Date-of- Commencement of the Lapsed Policy.
B)Payment of Arrears, With Interest.
C)Get a Loan on the Lapsed Policy, as a Consideration for Revival-Purposes.
D)Pay the Premium- Arrears, in Instalments.

Question 6

Which One of the Following Documents, is not accepted as a Stand ard Age-Proof Document?

A)School-Leaving Certificate
B)Pass-Port
C)Horoscope
D)Employer's Certificate

Question 7

Which One of the Following Statements, is Correct, with Regard to 'Anti-Selection'?

A)Anti-Selection is the Process, used by the Insurance Company, to ensure, it does not end- up selecting Un-Ethical Agents.
B)Anti-Selection is the Tendency of People, Who suspect or know that, their Chance of Experiencing a Loss is High, to seek-out the Insurance, Eagerly; and to gain in the Process.
C)Anti-Selection is the Process, used by the Insurance Company, to ensure, it does not end- up launching the Insurance Products, that are Not Suitable for the Prospective Policy- Holders.
D)Anti-Selection is the Process, used by the Insurance Company, to ensure, it does not end- up selecting the Wrong Investment-Products, for deploying the Premiums, collected from the Policy-Holders.

Question 8

Who among the Following Individuals, are considered as High-Risk by Insurance Companies? Choose the Most Appropriate Option.

A)Individuals, who, regularly consume 'Paan Masala (??? ?????)'.
B)Teetotaller
C)Individuals, who are Under the Influence of Sedatives and Other Stimulants.
D)Individuals, who consume Non- Vegetarian Food, Regularly.

Question 9

Who among the Following, is Likely to be Exposed to Health-Hazard, in His or Her Occupation?

A)Yoga-Instructor
B)Film-Stunt-Artist
C)Dancer in a Night-Club
D)Person, Exposed to Mining Dust

Question 10

Who among the Following, is Likely to be Exposed to Accidental Hazard, in His or Her Occupation? Choose the Most Appropriate Option.

A)Medical-Professional
B)Tourist-Guide
C)Demolition-Experts
D)Marketing-Executive, Who is regularly on the Field.

Question 11

--- implies that if the Life-Assured dies from a Specified Cause, within a Given Period, Only a Decreased Amount of Death-Benefit may be Payable.

A)Mortality-Rate
B)Lien
C)Anti-Selection
D)Mortgage

Question 12

Which One of the Following Statements, is In-Correct, with Regard to Numerical Rating Method of Underwriting?

A)Under this Method, Underwriters assign the Positive Rating-Points for All Negative or Adverse Factors.
B)Under this Method, Underwriters assign the Positive Points for Any Positive or Favourable Factors.
C)Under this Method, the Total Number of Points, so assigned, will decide How Much Extra- Mortality-Rating (E.M.R.), it has been given.
D)Under this Method, if the Extra-Mortality- Rating (E.M.R.) is Very High, Insurance may even be declined.

Question 13

Which One of the Following Statements, is In-Correct, with Regard to Judgement Method of Underwriting?

A)Under this Method, Subjective Judgement is used.
B)This Method is especially used in Case of Complex Cases.
C)In this Method, the Company may seek Expert Opinion of Medical Doctor.
D)In this Method, the Underwriter assign Positive or Negative Rating-Points to the Adverse Factors.

Question 14

Mr. Vimal is a 32-Years' Old, Healthy, Non-Smoker, Teetotaller Individual; Who applies for Life Assurance from ABC Limited Insurance Company. Which One of the Following Statements, will Hold True, with Regard to Risk-Acceptance by the Insurance Company?

A)Risk will be Accepted at Ordinary Rates.
B)Risk will be Accepted With an Extra, Over the Tabular Rate of Premium.
C)Risk will be Accepted, With a Lien on Sum- Assured.
D)Risk will be Accepted, With a Restrictive Clause.

Question 15

If, Mr. Brijesh, a 40-Years' Old Individual, is perceived as a 'Sub-Stand ard Risk', by the Insurance Company, then, Which One of the Following Statements, will Hold True, with Regard to Risk-Acceptance by the Insurance Company?

A)Risk will be Accepted at Ordinary Rates.
B)Risk will be Accepted at Lower Rates.
C)Risk will be Accepted With an Extra, Over the Tabular Rate of Premium.
D)Risk will be Declined.

Question 16

What is meant by 'Risk-Classification'? Choose the Most Appropriate Option.

A)The Process, in which, Individual Lives are Categorised and Assigned to Different Risk-Classes, Depending on the Degree of Risks, they Pose.
B)The Tendency of People, Who suspect or know that, their Chance of Experiencing a Loss is High, to seek-out the Insurance, Eagerly; and to gain in the Process.
C)The Process of Evaluating Each Proposal for Life- Assurance in Terms of the Degree of Risk, it represents; and then Deciding: Whether or Not to Grant the Insurance, and on What Terms.
D)The Process, in which, the Applicants, Who are Exposed to Similar Degrees of Risk, are Placed in the Same Premium-Class.

Question 17

--- means that, the Applicants, Who are exposed to Similar Degrees of Risk, must be placed in the Same Premium-Class.

A)Selection of Risk
B)Anti-Selection
C)Moral Hazard
D)Equity

Question 18

Which One of the Following Statements, is Correct, with Regard to 'Sub-Stand ard Lives', under Risk- Classification? Choose the Most Appropriate Option.

A)Sub-Stand ard Lives consist of those Individuals, whose Anticipated Mortality corresponds to the Stand ard Lives, represented by the Mortality-Table.
B)Sub-Stand ard Lives consist of those Individuals, whose Anticipated Mortality is Significantly Lower Than the Stand ard Lives, and hence, could be charged a Lower Premium.
C)Sub-Stand ard Lives consist of those Individuals, whose Anticipated Mortality is Higher Than the Average Lives or Stand ard Lives, but, are still considered to be Insurable.
D)Sub-Stand ard Lives consist of those Individuals, whose Impairments and Anticipated Extra Mortality are So Great, that, they could not be provided the Insurance- Coverage, at an Affordable Cost.

Question 19

Which One of the Following Statements, is Correct, with Regard to 'Declined Lives', under Risk- Classification?

A)'Declined Lives' consist of those Individuals, whose Anticipated Mortality corresponds to the Stand ard Lives, represented by the Mortality-Table.
B)'Declined Lives' consist of those Individuals, whose Impairments and Anticipated Extra Mortality are So Great, that they could not be provided Insurance- Coverage, at an Affordable Cost.
C)'Declined Lives' consist of those Individuals, whose Anticipated Mortality is Higher Than the Average Lives or Stand ard Lives, but are still considered to be Insurable.
D)'Declined Lives' consist of those Individuals, whose Anticipated Mortality is Significantly Lower Than Stand ard Lives, and hence, could be charged a Lower Premium.

Question 20

If an Insurance Company accepts a Risk, with a Lien on Sum-Assured, then What Does this imply?

A)Lien implies that, if the Life-Assured Dies from a Specified Cause, Within a Given Period, Only a Decreased Amount of Death-Benefit may be Payable.
B)Lien implies that, the Risk is Being Accepted, by the Company, for a Limited Period.
C)Lien implies that, the Insurance Company is Accepting the Risk, at Lower Rate of Premium, as compared to the Tabular-Rate.
D)Lien implies that, the Insurance-Proposal is Postponed, till a Specified Period.

Question 21

When the Insurer promises to pay the Insured, a Specified Amount at the End of the Term, if the Insured survives the Plan's Entire Term, then the Claim will be known as --.

A)Survival-Benefit Payment
B)Surrender of Policy
C)Death-Claim
D)Maturity-Claim

Question 22

If Insurance Company makes Periodical Payments, to the Insured, at Specified Intervals, During the Term of the Policy, then, these Payments are being made as per --.

A)Survival-Benefit Payments
B)Surrender-Value
C)Rider-Benefit
D)Conditional Assignment

Question 23

A Life Assurance Company paid the Treatment Costs to the Insured, During the Event of Hospitalisation of the Insured, During the Policy-Term. This is an Example of --.

A)Survival-Benefit Payments
B)Surrender-Value
C)Rider-Benefit
D)Conditional Assignment

Question 24

ABC Insurance Company has offered an Insurance-Plan to Mr. Krishna, with a Provision of Survival-Claim. How will the Company ascertain the Survival-Claim? Choose the Most Appropriate Option.

A)Claim will be ascertained, as per the Conditions, stipulated in the Policy.
B)Claim will be ascertained, based on the Dates, which are determined, at the Beginning of the Contract, it-self.
C)Claim will occur, when the Policy-Holder decides to cancel the Contract.
D)Claims will be ascertained, based on the Medical and Other Records, provided by the Policy-Holder, in Support of His Claim.

Question 25

Ms. Kavita purchases a Critical Illness (C.I.) Rider, along with, a Term Assurance Plan, from ABC Insurance Company. How Will, the Company ascertain the Claim for the Critical Illness (C.I.) Rider? Choose the Most Appropriate Option.

A)Claim will be ascertained, as per the Conditions, stipulated in the Policy.
B)Claim will be ascertained, based on the Dates, which are determined, at the Beginning of the Contract, it-self.
C)Claim will occur, when the Policy-Holder decides to cancel the Contract.
D)Claims will be ascertained, based on the Medical and Other Records, provided by the Policy-Holder, in Support of Her Claim.