Insurance - Study Mode
[#496] Before the composite licence could be renewed, the applicant needs to undergo renewal training of _________ from an approved institution.
Correct Answer
(C) 35 hours
Explanation
Solution: Before the composite licence could be renewed, the applicant needs to undergo renewal training of 35 hours from an approved institution.
[#497] An insurance contract has to fulfill the requirements of the
Correct Answer
(D) Indian Contract Act, 1872
Explanation
Solution: An insurance contract has to fulfill the requirements of the Indian Contract Act, 1872. It determines the circumstances in which promises made by the parties to a contract shall be legally binding. Under Section 2(h), the Indian Contract Act defines a contract as an agreement which is enforceable by law.
[#498] Term insurance is mainly suitable for which of the following needs?
Correct Answer
(D) Income replacement
Explanation
Solution: Term insurance is mainly suitable for income replacement. Under regular term plans, the amount is paid as lump sum in the event of death of the policyholder. Under income replacement term plans, the sum assured is not paid in lump sum, but as monthly payout for a fixed number of years. This monthly payout takes away the pressure to generate income from your investment.
[#499] In case of ULIPs, which of the following statements is correct?
Correct Answer
(B) Premium less charges are invested
Explanation
Solution: In a Ulip, the entire amount paid as premium is not used to purchase units. The insurers deduct certain charges and fees before allotting units. The remaining premium amount is invested in various asset classes such as debt, equity or both (called fund options) depending on policyholder's choice.
[#500] As per IRDA norms, which of the following non-traditional saving life insurance products are permitted in India? I. Unit Linked Insurance Plan II. Variable Insurance Plan
Correct Answer
(C) Both I and II
Explanation
Solution: As per IRDA norms, both products are permitted in India. A Unit Linked Insurance Plan (ULIP) is a product offered by insurance companies that, unlike a pure insurance policy, gives investors both insurance and investment under a single integrated plan. Variable life insurance is a permanent life insurance policy with an investment component. The policy has a cash value account, which is invested in a number of sub-accounts available in the policy. A sub-account acts similar to a mutual fund, except it's only available within a variable life insurance policy.