Insurance - Study Mode

[#701] Which of the below is not an advantage of cash value insurance contracts?
Correct Answer

(C) Lower yields

Explanation

Solution: Lower yields is not an advantage of cash value insurance contracts. Cash value insurance is permanent life insurance because it provides coverage for the policyholder's life. Traditionally, cash value insurance has higher premiums than term insurance because of the cash value element.

[#702] Which of the below is an advantage of cash value insurance contracts?
Correct Answer

(D) Secure investment

Explanation

Solution: Secure investment is an advantage of cash value insurance contracts. Cash value life insurance provides more financial flexibility. Because cash values have the potential to grow inside the policy, you may be able to access the cash value while you are living.

[#703] Which element of a valid contract deals with premium?
Correct Answer

(B) Consideration

Explanation

Solution: Consideration of a valid contract deals with premium. A consideration is an exchange of money for the guarantee of an act preformed or another benefit provided. In the context of insurance, the insurance company gives the consideration of coverage for losses as long as premiums are paid.

[#704] _________ involves pressure applied through criminal means.
Correct Answer

(C) Coercion

Explanation

Solution: Coercion involves pressure applied through criminal means. When a person who is able to dominate the will of another, uses her position to obtain an undue advantage over the other.

[#705] Which among the following is true regarding life insurance contracts?
Correct Answer

(C) They are contracts between two parties (insurer and insured) as per requirements of Indian Contract Act, 1872

Explanation

Solution: They are contracts between two parties (insurer and insured) as per requirements of Indian Contract Act, 1872 is true about life insurance contracts.