Insurance - Study Mode

[#441] In the initial years of a ULIP, the value of the benefits would be
Correct Answer

(B) Low

Explanation

Solution: In the initial years of a ULIP, the value of the benefits would be low.

[#442] As per Section 45 of Insurance Act, 1938, an insurance company can reject a claim after 2 years from issuance of policy if the material facts in the proposal are _________ made.
Correct Answer

(D) Fraudulently

Explanation

Solution: As per Section 45 of Insurance Act, 1938, an insurance company can reject a claim after 2 years from issuance of policy if the material facts in the proposal are fraudulently made.

[#443] Which of the following types of life insurance policies pays the full sum assured to the beneficiaries if the insured dies during the policy term or to the policyholder on the maturity of the policy if he/she survives the term?
Correct Answer

(B) Endowment

Explanation

Solution: Endowment plan is a type of life insurance plan, which is a combination of insurance and savings. A certain amount is kept for life cover – insurance, while the rest is invested by the life insurance company. In an endowment plan, if the life assured outlives the policy term, the insurance company offers him the maturity benefit. Moreover, endowment plans may offer bonuses periodically, which are paid either on maturity or to the nominee under death claim. On death, the death benefit is payable to the nominee. Endowment plans are commonly known as traditional life insurance, although, there is an investment component the risk is lower than the other investment products and so are the returns.

[#444] Which of the new guidelines for traditional products is not true?
Correct Answer

(C) Such a bonus is called Terminal Bonus

Explanation

Solution: For participating policies, bonus is linked to performance of the fund. Bonus once announced becomes a guarantee. Such a bonus is called Simple Reversionary Bonus.

[#445] The method in which Profits of the ins.co. could be shared in the form of dividends are
Correct Answer

(C) Both A & B

Explanation

Solution: The method in which Profits of the ins.co. could be shared in the form of dividends are Portfolio method and Current money method. An income portfolio focuses on making money through dividends or other types of distributions to stakeholders. An income portfolio should generate positive cash flow. A cash dividend is funds or money paid to stockholders generally as part of the corporation's current earnings or accumulated profits.