Insurance - Study Mode

[#296] State the correct one of the following ones.
Correct Answer

(B) A policy lapses if the premium is not paid within the grace period

Explanation

Solution: A policy lapses if the premium is not paid within the grace period. A policy lapses when you skip paying its premium, not just on the due date but even within the grace period—which is typically a month.

[#297] Identify the correct statement in the following.
Correct Answer

(A) In determination of premium higher the rate of interest assumed the lower is the premium

Explanation

Solution: In determination of premium higher the rate of interest assumed the lower is the premium.

[#298] The amount paid out by the insurer under a 30-year life insurance policy exceeded the sum insured plus revisionary bonuses. The excess is likely to result from?
Correct Answer

(D) A terminal bonus

Explanation

Solution: The amount paid out by the insurer under a 30-year life insurance policy exceeded the sum insured plus revisionary bonuses. The excess is likely to result a terminal bonus. 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. Its value is not guaranteed and will be disclosed only at the time of policy maturity.

[#299] What normally happens to the sum insured under a life insurance policy once the period of the lien expires?
Correct Answer

(B) It increases

Explanation

Solution: The sum insured under a life insurance policy once the period of the lien expires it increases.

[#300] The main protection need of a 19-year-old is most likely to be
Correct Answer

(A) Self-protection

Explanation

Solution: The main protection need of a 19-year-old is most likely to be Self-protection.