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[#476] Which of the following documents is an evidence of the contract between insurer and insured?

(A) Proposal form

(B) Policy document

(C) Prospectus

(D) Claim form

Correct Answer

(B) Policy document

Explanation

Solution: The policy document is the most important document associated with insurance. It is evidence of the contract between the assured and the insurance company.

[#477] If complex language is used to word a certain policy document and it has given rise to an ambiguity, how will it generally be construed?

(A) In favour of insured

(B) In favour of insurer

(C) The policy will be declared as void and the insurer will be asked to return the premium with interest to the insured

(D) The policy will be declared as void and the insurer will be asked to return the premium to the insured without any interest

Correct Answer

(A) In favour of insured

Explanation

Solution: if complex language is used to word a certain policy document and it has given rise to an ambiguity, it will generally be construed in favour of insured.

[#478] Select the option that best describes a policy document.

(A) It is evidence of the insurance contract

(B) It is evidence of the interest expressed by the insured in buying an insurance policy from Co

(C) It is evidence of the policy (procedures) followed by an insurance company when dealing with channel partners like banks, brokers and other entities

(D) It is an acknowledgement slip issued by the insurance company on payment of the first premium

Correct Answer

(A) It is evidence of the insurance contract

Explanation

Solution: Policy document is a detailed document and it is the Evidence of the insurance contract which mentions all the terms and conditions of the insurance. The insured buys not the policy contract, but the right to the sum of money and its future delivery.

[#479] Which of the below statement is correct?

Correct Answer

(C) The First Premium Receipt is the evidence that the policy contract has begun
(F) The typical loading to a net premium would have premiums, parts: a) a percentage of premiums, b) a constant amount for each ‘1000 sum assured ’ and c) a constant amount per policy
(I) Life insurance is sold, not bought

Explanation

Solution: Life insurance policy receipt issued upon payment of the first premium by an applicant. It makes the policy in force before the policy documents are issued, provided the applicant meets all requirements. Also called conditional receipt.

[#480] What is the maximum %age of surrender value that can be granted as loan?

(A) 50 percent

(B) 75 percent

(C) 80 percent

(D) 90 percent

Correct Answer

(D) 90 percent

Explanation

Solution: The maximum 90 percent of surrender value that can be granted as loan.