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Quiz 19
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Q.1
The major appeal for non-traditional products was in terms of
Inflation beating returns
Direct linkage with investment gains
Flexibility & Higher surrender value
All of the above
Q.2
Which was the major motive for people going for nontraditional products?
Flexibility
Wealth accumulation
Transparency
All of the above
Q.3
Universal life insurance policy provides for partial withdrawals. This partial withdrawal was made from the policy’s _________
Loan value
Surrender Value
Paid up value
Cash value
Q.4
In respect of Universal life insurance, which of the following statement is correct:-
The partial withdrawal once taken need not be repaid
Policy was kept in force even if premiums are not paid provided there were adequate investment returns
Both A & B
None of the above
Q.5
Pick out the incorrect statement.
Life insurance is sold, not bought
Selling is neither a science nor an art
In prospecting for life insurance, members of a community association will be classified as a natural market
Loss assessment is not part of sales process
Q.6
Insurance needed by a person can be determined by
Human Life Value method
Life Term proposition method
Future Life value method
Human Economic value method
Q.7
State the incorrect statement of the following ones.
In a term insurance the benefits are fixed throughout the duration
In an MRI the insurance benefit on account of cover will decrease year after year
There is no material difference between a term insurance policy and an MRI as far as benefits are concerned
MRI is suitable for a loan sought from a bank as a mortgage cover
Q.8
Which of the following statements is incorrect?
A product can be differentiated, but a commodity cannot
Products are need satisfiers
Product is an end by itself
The appropriateness of a product would depend on its features
Q.9
Endowment assurance does not possess which of the following property?
Savings benefit
Death benefit
Survival Benefit
Bonus benefit
Q.10
In traditional cash value policies, the policy reserve form part of a _________
Special investment account
General investment account
Both A & B
None of the above
Q.11
In Variable insurance policies, the policy reserve form part of a _________
Special investment account
General investment account
Both A & B
None of the above
Q.12
Universal life insurance is characterized by
Flexible premiums
Flexible face amount
Death benefit
All of the above
Q.13
In Universal life products, larger the size of the premium,_________ the coverage provided and _________ the policy cash value.
Smaller, larger
Larger, smaller
Smaller, Smaller
Larger, larger
Q.14
Under Universal life products, there was facility of completely flexible premiums after how many years?
One
Two
Three
Four
Q.15
Which is not a capacity to enter into contract?
Minor
Major
Sound mind
Not disqualified under law
Q.16
As per IRDA, which of the following non-traditional products are permitted to be sold?
Variable insurance plans
Unit Linked insurance plans
Both A & B
None of the above
Q.17
State which of the following ones is a transactional product.
Bank Deposit
Life Insurance
Shares in stock market
Bonds and debentures
Q.18
Which of the new guidelines for traditional products is not true?
For participating policies, bonus is linked to performance of the fund
Bonus once announced becomes a guarantee
Such a bonus is called Terminal Bonus
For Non-par policies, returns are disclosed at the beginning of the policy
Q.19
The method in which Profits of the ins.co. could be shared in the form of dividends are
Portfolio method
Current money method
Both A & B
None of the three
Q.20
With reference to Inflation, which of the following statement is not correct?
Inflation leads to rise in prices
Inflation means more purchasing power
Inflation means erosion of money value
Inflation plays havoc
Q.21
Of late, changing lifestyles of people lead to more _________
Savings
Investments
Insurance
Borrowings
Q.22
Endowment insurance is a combination of which of the following 2 features:-
A decreasing term insurance with decreasing investment element
An increasing term insurance with decreasing investment element
A increasing term insurance with increasing investment element
A decreasing term insurance with increasing investment element
Q.23
Which of the following statement is correct in respect of Endowment policy?
Shorter the policy term, lesser the investment element
Shorter the policy term, larger the investment element
Longer the policy term, larger the investment element
Term and investment element do not bear any relationship
Q.24
Inter temporal allocation of resources means allocation of resources across _________
Needs
Sectors
Space
Time
Q.25
In respect of Traditional cash value plans, which is incorrect:-
Bonuses do not reflect the investment performance of the insurer
The method for arriving at surrender value is not easily visible
Cash value component is well defined
None of the above
Q.26
Which is not a part of Cash planning exercise?
Managing income and expenditure flow
Creating surplus for capital investment
Predicting future expenses
Buying less insurance
Q.27
Estate planning would take care of devolution of one’s estate soon after his
Illness
Birth
Marriage
Death
Q.28
Which of the following could be termed the need of an individual?
Specific transaction needs
General transaction needs
Meeting contingencies
All of the above
Q.29
Identify the correct statement from the following:-
Par policies do not participate in the profits of the insurance companies
Under Traditional plans, investments are made without any regulatory supervision
Non-participating policies could be offered in linked or non-linked platform
Non-par policies are with profit policies
Q.30
Which of the following could be classified as Nondisclosure?
Inadvertent omission of information
Intentional suppression of information (Concealment)
A & B are correct
None of the above
Q.31
Which of the following could be termed Misrepresentation?
Innocent misrepresentation
Fraudulent misrepresentation
A & B are correct
None of the above
Q.32
Material facts are those that would help the insurer to decide :
The acceptability of risk
The rate of premium to be charged
Both A & B
None are correct
Q.33
Which of the following is not a material fact?
Hazardous occupation
Previous policies of the proposer
Health
None of the above
Q.34
Non-traditional products are also known as
Unbundled plans
Bundled plans
ULIP
Annuity
Q.35
If any condition is put by the Insurer then it is
Acceptance
Offer
Counter offer
Conditional acceptance
Q.36
Which is the ‘consideration’ from the insurer in an insurance contract?
Premium
Promise to indemnify
Policy bond
Proposal
Q.37
Consent is not said to be free when it is caused by
Coercion
Fraud
Misrepresentation
All of the above
Q.38
Which of the following process does not cover Estate planning?
Surrender
Nomination
Assignment
Writing a will
Q.39
HLV concept helps to determine the _________ limit beyond which life insurance could be speculative.
Upper
Lower
Middle
All of the above
Q.40
Life Insurance covers the risk of -
Dying too early
Living too longer
Both A & B
None of the above
Q.41
Which is not a contract of indemnity?
Personal Accident
Fire
Marine
Motor
Q.42
With increase in premium with age, healthy people tended to withdraw leaving unhealthy people. This lead to development of
Gross premiums
Single premiums
Advance premiums
Level premiums
Q.43
Which of the following is correct?
A. Life insurance is a long term contract
B. General insurance is a short term contract
A is correct
B is correct
Both A & B
None of the above
Q.44
Which of the following is a Contingency product?
Bank deposits
Real Estate
Postal savings
Insurance
Q.45
Contingency products typically address which type of need?
Cash requirements
Against uncertainties
Wealth creation
All of the above
Q.46
When an insurance contract can be declared void?
Innocent misrepresentation
Fraudulent misrepresentation
A & B are correct
None of the above
Q.47
Why insurance contract is an Adhesion Contract?
Insurance Co. has all the bargaining power
Client has also great bargaining power
Both A & B
None of the three
Q.48
Which of the following is not a long term goal of an individual?
Education/marriage of child
Retirement provision
Buying a TV set
All of the above
Q.49
Which of the following material facts need not be disclosed?
Matters of law
Fact which proposer was not aware
Fact which could have been discovered by reasonable diligence
All of the above
Q.50
Duty to disclose arises in which of the following instances?
At the time of taking the policy
At the time of revival of lapsed ins
Both A & B
None of the above situations
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