Deck 11: Insurance Policy Premiums and Related Terminology

Question 1

What Does the Term: "Premium", Denote, in Relation to an Insurance Policy?

A)Profit, Earned by the Insurer.
B)Price, Paid by an Insured, for Purchasing the Policy.
C)Margins of an Insurer, on a Policy.
D)Expenses, incurred by an Insurer, on a Policy.

Answer 1

Price, Paid by an Insured, for Purchasing the Policy.

Question 2

Illustrate the Purpose of Having the Capital-Adequacy Norms for the Insurers.

A)To Increase the Net Interest Income.
B)To Increase the Profitability.
C)To Maintain the Sufficient Reserves, to Address the Present Needs and Future Needs.
D)To Subsidise the Insurance, for the Poor People.

Answer 2

To Maintain the Sufficient Reserves, to Address the Present Needs and Future Needs.

Question 3

What Does, Valuation in Life Assurance, mean?

A)The Process of Arriving at the Profit of a Life Assurance Company.
B)The Process of Determining the Net Premium for a Life Assurance Policy.
C)The Process of Arriving at the Bonus in a Life Assurance Company.
D)The Process, by which, the Value of All the Existing Policies, is ascertained, in a Life Assurance Company.

Answer 3

The Process, by which, the Value of All the Existing Policies, is ascertained, in a Life Assurance Company.

Question 4

Identify the Option, that can be termed as Policy- Withdrawal.

A)Surrender of the Policy, in Return for Acquired Surrender-Value.
B)Dis-Continuation of Premium-Payment by the Policy-Holder.
C)Policy Up-Grade.
D)Policy Down-Grade.

Question 5

All of the Following, are the Components of Unit- Linked Insurance-Plan (U.L.I.P.) Premiums, Except --.

A)Policy-Allocation-Charge
B)Investment-Risk- Premium
C)Mortality-Charge
D)Social Security Charge, to fulfill Rural Obligations of the Insurance Company, as mand ated by Insurance Regulatory and Development Authority of India (I.R.D.A.I.)

Question 6

Formulate a Way of Defining the Surplus, with Regard to Insurance Companies.

A)Excess Value of Cash In- Flow over Cash Out- Flow.
B)Excess Value of Cash Out-Flow over Cash In- Flow.
C)Excess Value of Liabilities over Assets.
D)Excess Value of Assets over Liabilities.

Question 7

In Case of --, an Insurance Company expresses the Bonus, as a Percentage of Basic Benefit and Already Attached Bonuses.

A)Reversionary Bonus
B)Compound Bonus
C)Terminal Bonus
D)Persistency Bonus

Question 8

From the Following Options, Select the One, that is Not a Factor, in Determining the Life Assurance Premium.

A)Mortality
B)Rebate
C)Reserves
D)Management-Expenses

Question 9

Select the True Statements.

A)The Typical Loading to a Net Premium, would have 3 Parts: 1) A Constant Amount for Premiums,2) A Constant Amount for Each '1,000 Sum-Assured', and 3) A Constant Amount per Policy.
B)The Typical Loading to a Net Premium, would have 3 Parts:1) A Percentage of Premiums,2) A Constant Amount for Each '1,000 Sum-Assured', and 3) A Constant Amount per Policy.
C)The Typical Loading to a Net Premium, would have 3 Parts:1) A Percentage of Premiums,2) A Constant Percentage for Each '1,000 Sum-Assured',and 3) A Constant Amount per Policy.
D)The Typical Loading to a Net Premium, would have 3 Parts:1) A Percentage of Premiums,2) A Constant Amount for Each '1,000 Sum-Assured', and 3) A Percentage Amount per Policy.

Question 10

With Regard to Valuation of Assets, by Insurance Companies, What is the Value, at which, the Life Insurer has purchased or acquired its Assets?

A)Discounted Future Value
B)Discounted Present Value
C)Market-Value
D)Book-Value

Question 11

In Which Case, Does, a Company express the Bonus, as a Percentage of Basic Benefit and Already Attached Bonuses?

A)Reversionary Bonus
B)Compound Bonus
C)Terminal Bonus
D)Persistency Bonus

Question 12

Name the Two Policy-Features, on which, Rebates on Premium can be offered by the Insurer.

A)Policy-Plan and Risk- Cover
B)Policy-Plan and Mode of Premiums
C)Sum-Assured and Mode of Premiums
D)Sum-Assured and Policy- Plan

Question 13

Who bears the Mortality-Risk, in Case of Unit-Linked Insurance-Plans (U.L.I.P.s)?

A)Insurer
B)Insured
C)Insured or Insurer, as specified in the Terms of the Policy.
D)Insurer and the Mutual Fund, where, the Money is invested.

Question 14

Discover the Scenario, where-in, the Insurer may charge an Extra Premium, to the Insured.

A)Insured is Able to Afford the Extra Charge.
B)Insured is a Stand ard Risk.
C)Insured is a Sub- Stand ard Risk.
D)Insured has purchased Other Insurance.

Question 15

--- is an Example of a Stand ard Age-Proof.

A)Ration-Card
B)Horoscope
C)Pass-Port
D)Village Panchayat Certificate

Question 16

The Free-Look Period of a Policy lasts for --- Days.

A)15
B)30
C)45
D)60

Question 17

Money-Laundering is the Process of Bringing --- Money, into an Economy, by Hiding its --- Origin, so that, it appears to be Legally Acquired.

A)Illegal, Illegal
B)Legal, Legal
C)Illegal, Legal
D)Legal, Illegal

Question 18

--- need to be mentioned in the Agent's Report. Choose the Most Appropriate Option.

A)Matters of Health, Habits and Occupation, Income and Family Details
B)Matters, Related to the Heart
C)Matters, Related to Current Affairs
D)Matters, Related to Personal Ambitions

Question 19

--- are recorded and mentioned by the Doctor in His or Her Report, called the Medical Examiner's Report. Choose the Most Appropriate Option.

A)Financial Details
B)Personal Hygiene
C)Details pertaining to Physical Features, like: Height, Weight, Blood- Pressure
D)Details related to Hospitalisation Preferences

Question 20

Identify the Formal Legal Document, used by Insurance Companies, that provides the Details about the Product. Choose the Most Appropriate Option.

A)Proposal-Form
B)Proposal-Quote
C)Information-Docket
D)Prospectus

Question 21

Identify the Feature, that will be checked, in a Medical Examiner's Report.

A)Emotional Behaviour of the Proposer.
B)Height, Weight, and Blood-Pressure.
C)Social Status.
D)Truthfulness.

Question 22

Isolate the Valid Combination: Type of Age-Proofs:
I: Stand ard II: Non-Stand ard Age-Proofs: a: Pass-Port b: Horoscope c: Panchayat Certificate

A)I-b
B)I-c
C)II-a
D)I-a

Question 23

Which One of the Following, is Not a Know-Your- Customer (K.Y.C.) Document?

A)Photograph
B)Age-Proof
C)Address-Proof
D)Horoscope

Question 24

Mr. Mahesh is a Drug-Dealer. He doesn't have a Regular Job. He made Rupees 10 Lakhs, from Sale of Drugs. He can't buy a House or Car, etc., with the Money. If He does, the Government will get Suspicious, and start investigating the Drug-Dealer. So, the Drug-Dealer opens a Bar or Tavern, and pads the Books to show Huge Profits on the Tavern, and pays His Taxes on the Money. This is an Example of --.

A)Fraud
B)Mis-Representation
C)Money-Laundering
D)Tax-Jugglery

Question 25

Look at the Following Scenarios, and Select the Ones, that need to be flagged under an Anti-Money- Laundering (A.M.L.) Programme.
I: A Customer cancels a Transaction, and requests to do a Second Transaction for Less Amount, in order to avoid providing His or Her Identity-Proof.
II: A Customer requests an Un-Usually High Dollar- Transaction, and cannot explain the Reason for the Transaction or the Source of the Cash.
III: A Customer appears Nervous and asks Un-Usual Questions about Your Record-Keeping.IV: A Customer tries to bribe a Teller.

A)I, Only.
B)II, Only.
C)III, Only.
D)I, II, III, and IV.

Question 26

Insurance Regulatory and Development Authority of India (I.R.D.A.I.) has built, into its Regulations, a Consumer-Friendly Provision, called as, Free-Look Period. Describe the Same.

A)A Free-Look Period provides a Window, to the Insured, where, He or She is Not Required to Pay the Premiums.
B)A Free-Look Period provides a Window, to the Insured, where, He or She can Return the Policy, if He or She Does Not Like it.
C)A Free-Look Period provides a Window, to the Insured, where He or She can Submit the Claims.
D)A Free-Look Period provides a Window, to the Insured, where, He or She can Add the Nominations on the Policy.

Question 27

Name the Insurance Regulator in India.

A)Insurance Regulatory and Development Authority of India (I.R.D.A.I.)
B)Institute of Insurance and Risk Management (I.I.R.M.)
C)Insurance Institute of India (I.I.I.)
D)National Insurance Academy (N.I.A.)

Question 28

Identify the Factor, impacting the Risk, in Case of Insurance.

A)Face-Value
B)Moral Hazard
C)Cash Value
D)Policy Document

Question 29

Many Proposals are Underwritten and Accepted for Insurance, without calling for a Medical Examination. This Form of Underwriting, is referred to as --.

A)Healthy Underwriting
B)Non-Medical Underwriting
C)Non-Adverse Underwriting
D)General Underwriting