Insurance - Study Mode

[#186] Choose the correct statement.
Correct Answer

(B) A complaint can be launched against a private insurer and a public insurer
(H) The agent has to show his licence to his prospect-customer on demand
(I) Lower yields are a disadvantage in cash value contracts

Explanation

Solution: Complaints can be lodged against any Insurer both in Public Sector and Private Sector in both Life and Non-Life sectors.

[#187] The most common form of bonus is
Correct Answer

(D) Reversionary bonus

Explanation

Solution: Reversionary bonus is the bonus declared every year as a percentage of (Guaranteed Maturity Benefit/Sum Assured + Earlier Reversionary Bonuses). It is payable on death of the life assured or maturity of the policy.

[#188] Which of the following statements is incorrect?
Correct Answer

(B) Insurance agent should share the commission by way of rebate
(G) Product is an end by itself
(J) Term insurance cannot be taken as a rider
(N) The recommendations of the Ombudsman are always binding on the insured
(R) Life insurance does not come under Consumer Protection Act, 1986
(V) An agent can only be a trained individual for working for an insurance company
([) An agent today can work for more than one life insurance company
(^) Life Insurance Company will return the entire premium under free look provisions

Explanation

Solution: All the options are correct, except option 3. Sharing commission with a client is illegal.

[#189] _________ means every party to an insurance contract must disclose all material information.
Correct Answer

(D) Uberrima fides

Explanation

Solution: Uberrima fides means every party to an insurance contract must disclose all material information.

[#190] In which of the following cases does insurable interest not exist?
Correct Answer

(C) Tenant

Explanation

Solution: This principle is an important element within a contract of insurance. It means that the insured must have an interest in the subject matter of the insurance. In a practical sense, this means that the insured must suffer a financial or economic loss. This also means that the interest in the property must be a real one and not a contrived one. A tenant is a person who occupies land or property rented from a landlord. So, 'insurable interest' does not lie with the person.