Insurance - Study Mode

[#811] According to common law, when should insurable interest be present in a life insurance contract?
Correct Answer

(A) At the time of taking policy

Explanation

Solution: According to common law, At the time of taking policy insurable interest must be present in a life insurance contract. If there was no insurable interest requirement, some people would be tempted to purchase life insurance policies to collect the death benefit by killing the insured. A person is always considered to have an unlimited insurable interest in his own life and health.

[#812] The dividends declared under contribution method can be
Correct Answer

(D) None of the three

Explanation

Solution: The dividends declared under contribution method cannot be any of the above.

[#813] Which of the following statements is correct
Correct Answer

(C) Ethical behavior helps in developing trust between the agent and the insurer

Explanation

Solution: Ethical behavior helps in developing trust between the agent and the insurer. In the trusting relationship, the prospect allocates trust insofar as they found the conduct of the agent as credible and reliable.

[#814] Which of the following could be termed as a transactional product?
Correct Answer

(D) Bank deposits

Explanation

Solution: Bank deposits Transactional marketing is a business strategy that focuses on single "point of sale" transactions. The emphasis is on maximizing the efficiency and volume of individual sales rather than developing a relationship with the buyer.

[#815] Terminal bonus is payable at the time of
Correct Answer

(B) Maturity/death

Explanation

Solution: Terminal bonus is also known as persistency bonus which is paid once, i.e. at the time of maturity of the policy. It is a sort of loyalty bonus given to a policyholder for maintaining the policy till maturity.