Question 1

All of the Following Statements are False, with Respect to Unit-Linked Insurance Plans (U.L.I.P.s), Except:
A)Policy-Holder's Benefits or Returns depend on the Assumptions and Discretion of the Life Assurance Company.
B)Investment-Risk is borne by the Insurer.
C)Unit-Linked Insurance Plans (U.L.I.P.s) are Transperant with Regard to their Term- Component, Expenses- Component, and Savings- Component.
D)Unit-Linked Insurance Plans (U.L.I.P.s) are Bundled Products.

Accepted Answer

Unit-Linked Insurance Plans (ULIPs) are known for their transparency regarding their term component, expenses component, and savings component. This transparency allows policyholders to see where their money is going, how much is being allocated to insurance, and how much is being invested, along with the associated costs.

Question 2

Suggest a Non-Traditional Life Assurance Product.
A)Term Assurance
B)Variable Life Assurance
C)Whole Life Assurance
D)Endowment Assurance

Accepted Answer

Variable Life Assurance is considered a non-traditional life assurance product because it combines life insurance with an investment component, allowing the policyholder to invest the cash value in various investment options, which can lead to variable returns.

Question 3

Non-Traditional Life Assurance Products satisfy a Certain Motive of Many Investors. Select the Most Appropriate Option.
A)Guaranteed Benefits
B)Fixed Returns
C)Wealth-Accumulation
D)Protection of Capital

Accepted Answer

Non-traditional life assurance products often include components aimed at wealth accumulation, such as investment options that allow policyholders to potentially grow their savings alongside having a life cover.

Question 4

Which One of the Following, is Not a Limitation of Traditional Life Assurance Products? Choose the Most Appropriate Option.
A)Difficult to Ascertain the Surrender-Values, At Any Given Point of Time.
B)In-Sufficient Coverage.
C)Cash-Value-Component, Not Well-Defined.
D)Limited Rate-of-Return.

Accepted Answer

In-Sufficient Coverage is not a limitation of traditional life assurance products.

Question 5

Choose the Correct Statement.
A)In Variable Life Assurance, the Monthly or Yearly Premiums can vary, as per the Perference of the Insured.
B)Variable Life Assurance is a Permanent Life Assurance.
C)In a Variable Life Assurance Policy, the Investment-Risk is Borne by the Insurer.
D)The Policy provides Fixed Guaranteed Returns, which are Specified at the Beginning, it-self.

Accepted Answer

Variable Life Assurance is a type of permanent life insurance where the cash value and death benefit can vary based on the performance of investments chosen by the policyholder, distinguishing it from other types of life insurance that offer fixed benefits.

Question 6

Name the Two Areas, Related to Non-Traditional Insurance-Products, where, the Customers can exercise their Choice.
A)Altering the Premium and Benefit-Structure, and Choose: How to Invest the Premium- Proceeds.
B)Alter the Rate-of- Return, and Choose: When to Invest the Premium-Proceeds.
C)Alter the Rate-of- Return, and Choose: How to Invest the Premium-Proceeds.
D)Alter the Rate-of-Return and Premium-Structure.

Accepted Answer

Non-traditional insurance products often allow customers to alter the premium and benefit structure and choose how to invest the premium proceeds, providing flexibility in managing their insurance policies.

Question 7

Where was, Universal Life Assurance, introduced First?
A)United States of America (U.S.A.)
B)England
C)France
D)Germany

Accepted Answer

Universal Life Assurance was first introduced in the United States of America (U.S.A.) in the late 1970s.

Question 8

Expand the Term: U.L.I.P.
A)Unit-Less Insurance Policy
B)Unit-Linked Investment Policy
C)Unit-Linked Insurance Policy
D)Union-Linked Insurance Policy

Accepted Answer

ULIP stands for Unit-Linked Insurance Policy, which is a type of insurance product that combines insurance coverage with investment opportunities.

Question 9

What Does, Un-Bundling of Life Assurance Products, refers to?
A)Correlation of Life Assurance Products with Bonds.
B)Correlation of Life Assurance Products with Equities.
C)Amalgamation of Protection-Element and Savings-Element.
D)Separation of the Protection-Element and Savings-Element.

Accepted Answer

Un-bundling of life assurance products refers to the process of separating the protection element (insurance coverage) from the savings or investment element within a policy. This allows policyholders to understand and manage the insurance and savings components independently.

Question 10

A Policy is effected under Married Women's Property (M.W.P.) Act. If the Policy-Holder does not appoint a Special Trustee to receive and administer the Benefits under the Policy, the Sum, secured under the Policy, becomes Payable to --.
A)Next of Kin
B)Official Trustee of the State
C)Insurer
D)Insured

Accepted Answer

Under the Married Women's Property (M.W.P.) Act, if the policyholder does not appoint a special trustee, the sum secured under the policy becomes payable to the Official Trustee of the State. This ensures that the benefits are properly managed and disbursed to the intended beneficiaries under the act.

Question 11

Which Section of Married Women's Property (M.W.P.) Act, provides for Security of Benefits under a Life Assurance Policy, to the Wife and Children?
A)Section 38
B)Section 39
C)Section 6
D)Section 45

Accepted Answer

Section 6 of the Married Women's Property Act, 1874, specifically provides for the protection and security of life insurance policy benefits for the wife and children, ensuring that such benefits are not subject to the control of the husband or his creditors but are secured for the intended beneficiaries.

Question 12

Mortgage-Redemption-Insurance (M.R.I.) provides --- Protection, for Home-Loan Borrowers.
A)Social
B)Financial
C)Physical
D)Tangible

Accepted Answer

Mortgage-Redemption-Insurance (M.R.I.) offers financial protection for home-loan borrowers by ensuring the loan is paid off in case of the borrower's death or incapacitation, thus securing the borrower's family from the burden of the loan.

Question 13

Key-Man Insurance is a Term Assurance Policy, where, the Sum-Assured is Linked to --.
A)Business-Profitability of the Company
B)Number of Employees
C)Chief Executive Officer (C.E.O.)'s Personal Income
D)Personal Incomes of All the Employees

Accepted Answer

Key-Man Insurance is linked to the business profitability of the company, as it is designed to compensate the business for financial losses that would arise from the death or extended incapacity of an important member of the business, referred to as the "key man." This type of insurance policy is taken out by a business to insure against the loss of a key employee whose knowledge, work, or overall contribution is considered uniquely valuable to the company.

Question 14

Who is a Key-Man?
A)Person, who has Key to the Office-Lock.
B)Person, Critical to the Business-Operations.
C)Person, Who Left the Business.
D)Person, Willing to Join the Business.

Accepted Answer

A Key-Man (or Key Person) is an individual considered critical to the operations and success of a business due to their skills, knowledge, or contributions. This could include executives, top salespeople, or anyone whose absence would significantly impact the company's performance.

Question 15

Identify the Benefits of taking-out a Key-Man Insurance Policy.
A)Off-Set Business Start- Up Costs.
B)Off-Set the Business- Continuity-Costs.
C)Off-Set the Business- Recovery-Costs.
D)Promote the Worker- Harmony.

Accepted Answer

Key-man insurance policies are designed to offset the financial impact of losing a key employee, such as a business owner or executive, who is essential to the company's success.

Question 16

Categorise Mortgage-Redemption-Insurance, Under One of the Following Options.
A)Increasing, Term Assurance
B)Decreasing, Term Assurance
C)Variable Life Assurance
D)Universal Life Assurance

Accepted Answer

Mortgage-Redemption-Insurance is a type of decreasing term assurance where the coverage amount decreases over the term of the policy, typically in line with the outstanding balance of a mortgage. This ensures that if the policyholder dies, the remaining mortgage debt can be paid off.

Question 17

In Case of a Policy, effected under Married Women's Property (M.W.P.) Act, the Policy-Monies shall be Payable to --.
A)Trustee
B)Appointee
C)Assignee
D)Nominee

Accepted Answer

Under the Married Women's Property (M.W.P.) Act, the policy monies are payable to the trustee(s) named in the policy. If no trustee is named, the policy monies are payable to the legal representatives of the policyholder, but they are meant for the benefit of the wife and children as per the act.

Question 18

Select the Factor, that is Linked to the Sum-Assured under a Key-Man Insurance Policy.
A)Key-Man's Income
B)Business-Profitability
C)Business-History
D)Inflation-Index

Accepted Answer

The answer of Select the Factor, that is Linked to...

Question 19

Select the Loss, covered under Key-Man Insurance.
A)Property-Theft
B)Losses, Related to the Extended Period, when a Key-Person is Unable to Work.
C)Losses, Caused Due to Errors and Omissions.
D)General Liability

Accepted Answer

Key-Man Insurance specifically covers the business for losses related to the extended period when a key person is unable to work, ensuring the company can continue operations or manage the transition period without significant financial strain.

Question 20

What is the Tax-Treatment offered under Key-Man Insurance?
A)Policy-Returns are Tax- Exempt.
B)Premiums are Treated as Business-Expense, and are Tax-Exempt.
C)Premiums are Taxable.
D)Policy-Returns are Heavily Taxable

Accepted Answer

Key-Man Insurance premiums are considered a business expense, making them tax-exempt. This is because the policy is taken out by a business on the life of a key employee whose death would significantly impact the company's financial future.

Quiz 10: Life Assurance Products and Their Features

All of the Following Statements are False, with Respect to Unit-Linked Insurance Plans (U.L.I.P.s) , Except:

Suggest a Non-Traditional Life Assurance Product.

Non-Traditional Life Assurance Products satisfy a Certain Motive of Many Investors. Select the Most Appropriate Option.

Which One of the Following, is Not a Limitation of Traditional Life Assurance Products? Choose the Most Appropriate Option.

Choose the Correct Statement.

Name the Two Areas, Related to Non-Traditional Insurance-Products, where, the Customers can exercise their Choice.

Where was, Universal Life Assurance, introduced First?

Expand the Term: U.L.I.P.

What Does, Un-Bundling of Life Assurance Products, refers to?

A Policy is effected under Married Women's Property (M.W.P.) Act. If the Policy-Holder does not appoint a Special Trustee to receive and administer the Benefits under the Policy, the Sum, secured under the Policy, becomes Payable to --.

Which Section of Married Women's Property (M.W.P.) Act, provides for Security of Benefits under a Life Assurance Policy, to the Wife and Children?

Mortgage-Redemption-Insurance (M.R.I.) provides --- Protection, for Home-Loan Borrowers.

Key-Man Insurance is a Term Assurance Policy, where, the Sum-Assured is Linked to --.

Who is a Key-Man?

Identify the Benefits of taking-out a Key-Man Insurance Policy.

Categorise Mortgage-Redemption-Insurance, Under One of the Following Options.

In Case of a Policy, effected under Married Women's Property (M.W.P.) Act, the Policy-Monies shall be Payable to --.

Select the Factor, that is Linked to the Sum-Assured under a Key-Man Insurance Policy.

Select the Loss, covered under Key-Man Insurance.

What is the Tax-Treatment offered under Key-Man Insurance?