Insurance - Study Mode

[#401] Identify the correct statement from the following:-
Correct Answer

(C) Non-participating policies could be offered in linked or non-linked platform

Explanation

Solution: Non-participating policies could be offered in linked or non-linked platform. Life insurance policy whose policyholders do not receive dividends, because they are not participants in the interest, dividends, and capital gains earned by the insurer on premiums paid.

[#402] In a Return of Premium plan (ROP), what is the quantum of maturity claim payable?
Correct Answer

(C) Return of premiums

Explanation

Solution: ROP plan offers premium refund at maturity if the policyholder survives the tenure.

[#403] The grace period for renewal beyond expiry date of a health insurance policy is
Correct Answer

(C) 30 days

Explanation

Solution: The grace period for renewal beyond expiry date of a health insurance policy is 30 days. The policy will lapse if the premium is not paid within the grace period.

[#404] Policy Allocation Charge would be _________ in the initial years.
Correct Answer

(A) High

Explanation

Solution: Policy Allocation Charge would be high in the initial years. This is deducted from the premium upfront. It is a percentage of the premium appropriated towards charges before allocating the units under the policy. This charge is levied to recover the initial expense incurred towards issuing the policy such as the distributor fee and the cost of underwriting. The balance is the investable amount used to purchase units of the funds chosen by the policyholder. Though the Insurance and Regulatory and Development Authority, or IRDA, has set guidelines that ensure a cap on these charges from the fifth year onwards, the premium allocation charges in the first few years continue to remain significantly high.

[#405] By helping a client in settlement of a claim, the agent earns _________ of the claimant.
Correct Answer

(D) Goodwill

Explanation

Solution: Goodwill is the established reputation of a business and regarded as a quantifiable asset. It is calculated as a part of its value when it is sold.