Insurance - Study Mode
[#616] According to common law, when should insurable interest be present in a general insurance contract?
Correct Answer
(C) Both A & B
Explanation
Solution: Insurable interest should be present at both the times, i.e. at the time of taking policy as well as at the time of claim.
[#617] Insurance is not gambling because of the presence of
Correct Answer
(B) Insurable interest
Explanation
Solution: Insurance is not gambling because of the presence of Insurable interest. Without an insurable interest, it would be wagering, contract. Thus, this principle clearly distinguishes the insurance contract from the gambling.
[#618] In Variable insurance plan, the policy reserves are placed in _________ fund which do not form part of its general investment account.
Correct Answer
(B) Separate
Explanation
Solution: In Variable insurance plan, the policy reserves are placed in Separate fund which do not form part of its general investment account.
[#619] In which type of policy, death benefits and cash value varied with investment experience?
Correct Answer
(D) Variable life ins
Explanation
Solution: In Variable life insurance policy, death benefits and cash value varied with investment experience. A variable life insurance policy does offer a guaranteed death benefit, which will not fall below a minimum amount even if the invested assets devalue significantly. The variable death benefit is equal to the cash value at the time of death, plus the face value of the insurance.
[#620] In respect of Traditional plans, which of the following statement is correct?
Correct Answer
(C) Both A & B
Explanation
Solution: Both the statements are correct in respect of traditional plans. Policyholder’s bonus depend on periodic valuation of Assets & Liabilities and Bonus did not directly reflect the value of assets of the insurer.