Insurance - Study Mode

[#601] State which is a correct statement of the following.
Correct Answer

(B) Cashless facility means a facility extended by an insurer to the insured where payments are made directly by the insurer to the network provider subject to preauthorisation

Explanation

Solution: Cashless facility means a facility extended by an insurer to the insured where payments are made directly by the insurer to the network provider subject to preauthorisation. Cashless policies mean that the health insurance company settles the bill directly with healthcare provider, whether a hospital or a nursing home.

[#602] In a keyman’s policy
Correct Answer

(D) All of the above

Explanation

Solution: In a keyman’s policy the premium paid by the employer is treated as an allowable business expense, in a death claim the policy money is payable to the company and death claim proceeds are treated as taxable income of the employer.

[#603] Which of the following statement is correct?
Correct Answer

(C) Term Insurance has little or no saving element

Explanation

Solution: Term Insurance has little or no saving element. In term policies if you stop paying the premium the risk cover ceases and the policy ends. Nothing is payable to you as there is no savings element in the policy.

[#604] Choose the incorrect sentence out of the following ones.
Correct Answer

(A) Life Insurance policies are contracts of indemnity

Explanation

Solution: A policy of insurance on one's own life is not an indemnity because it is merely a contract to pay a certain sum in the event of death.

[#605] Which is an advantage in cash value contracts?
Correct Answer

(D) Secure and safe investment

Explanation

Solution: Secure and safe investment is an advantage in cash value contracts. Cash value life insurance provides more financial flexibility.