1. What is a proposal?
- A request for an insurance cover
- An offer to enter into a contract
- Both a request and an offer to enter an insurance contract *
- None of the above
2. Which one of the following statements is correct?
- Selection is the same as underwriting *
- The underwriter guarantees that the policy monies will be paid
- Both the statements above are correct
- Both the statements above are wrong
3. Which one of the following statements is correct?
- The underwriter assesses the risk
- No policy can be issued without the underwriter’s decision
- Both the statements above are correct *
- Both the statements above are wrong
4. Which one of the following statements is correct?
- For a first class life, the premium charged is less than in the tabular rates
- For a first class life, the vested bonus will be more than in other cases
- Both the statements above are correct
- Both the statements above are wrong *
5. Which one of the following statements is correct?
- The underwriter determines the premium to be charged
- The underwriter is an employee of the insurer
- Both the statements above are correct *
- Both the statements above are wrong
6. Which one of the following statements is correct?
- An underwriter acts in the interests of the policyholders as a whole
- An underwriter acts in the interests of the insurance company
- Both the statements above are correct *
- Both the statements above are wrong
7. Which one of the following statements is correct?
- An underwriter charges extra premium for physical hazards *
- An underwriter charges extra premium for moral hazards
- Both the statements above are correct
- Both the statements above are wrong
8. Which one of the following statements is correct?
- A physical hazard affects the probability of death
- Body measurements may indicate physical hazards
- Both the statements above are correct *
- Both the statements above are wrong
9. Financial underwriting is done to evaluate
- The probability of the policy lapsing in future
- The possibility of moral hazard *
- Both lapse and moral hazard probabilities
- Neither lapse nor moral hazard
10. The underwriter’s assessment will include
- The genuineness of the need for insurance
- The intentions of the proposer in applying for insurance
- Both genuineness and intentions *
- Neither genuineness nor intentions
11. Moral hazard may be suspected in cases where
- The life to be insured is old
- The insurance is for a very large amount
- In both the above cases *
- In neither of the above cases
12. Which one of the following statements is correct?
- Moral hazard exists if the proposed SA is ten times or more of the annual income
- It is possible to quantify the extent of moral hazard and charge extra premium
- Both the statements above are correct
- Both the statements above are wrong *
13. Which one of the following statements is correct?
- An underwriter is an actuary
- An underwriter uses financial and medical data *
- Both the statements above are correct
- Both the statements above are wrong
14. Which one of the following statements is correct?
- A medical referee is an underwriter
- The medical examination at the stage of the proposal is done by a medical referee
- Both the statements above are correct
- Both the statements above are wrong *
15. Which one of the following statements is correct?
- A medical referee examines the life to be insured
- The medical referee only sees the reports received by the insurer *
- Both the statements above are correct
- Both the statements above are wrong
16. Which one of the following statements is correct?
- The underwriter makes his decision only after the medical referee sees the case
- The medical referee usually sees only cases for large SA *
- Both the statements above are correct
- Both the statements above are wrong
17. Which one of the following statements is correct?
- A medical referee is an employee of the insurer
- A medical referee is an underwriter
- Both the statements above are correct
- Both the statements above are wrong *
18. Which one of the following statements is correct?
- In some cases, the underwriter consults the reinsurers before deciding *
- The numerical method of underwriting is the best method
- Both the statements above are correct
- Both the statements above are wrong
19. Which one of the following statements is correct?
- If the underwriter feels that the risk is more, he will accept at OR
- If the underwriter feels that the risk is more, he may impose a lien *
- Both the statements above are correct
- Both the statements above are wrong
20. A ‘lien’ may be imposed by the underwriter if
- The additional risk is expected to wear off in course of time *
- The proposer is unlikely to agree to pay a higher premium
- In both the above cases
- In neither of the above cases
21. Which one of the following statements is correct?
- A ‘clause’ restricts the benefits under the policy *
- A clause is the same as a rider
- Both the statements above are correct
- Both the statements above are wrong
22. Which one of the following statements is correct?
- A ‘lien’ operates for a specific period
- A ‘clause’ excludes specific risks
- Both the statements above are correct *
- Both the statements above are wrong
23. Which one of the following statements is correct?
- Underwriting is done only when there is a medical examination
- Medical examination is necessary before a policy can be issued
- Both the statements above are correct
- Both the statements above are wrong *
24. The system of non – medical underwriting is introduced because
- Medical examiners are not available in all areas
- Most of the cases are found to be standard lives acceptable at OR
- Of both the above reasons *
- Of some other reasons
25. Under the system of non-medical underwriting
- There is no restriction on age
- There is no restriction on SA
- There is restriction on both the SA and age *
- Only some towns are covered
26. Which one of the following statements is correct?
- Working women are treated on par with men
- Educated women are treated on par with men
- Both the statements above are correct *
- Both the statements above are wrong
27. Which one of the following statements is correct?
- Underwriters are more cautious while considering cases on female lives *
- Underwriters are more cautious while considering cases of educated women
- Both the statements above are correct
- Both the statements above are wrong
28. Which one of the following statements is correct?
- The agent is expected to make his report commenting on the risk factors
- The agent’s report is important for the underwriter
- Both the statements above are correct *
- Both the statements above are wrong
29. Which one of the following statements is correct?
- By writing a truthful report, the agent is helping the insurer
- By writing a truthful report, the agent is helping the life to be insured
- Both the statements above are correct *
- Both the statements above are wrong
30. Which one of the following statements is correct?
- Smoking is a hazard inviting additional premium
- Drinking is a hazard inviting additional premium
- Both the statements above are correct *
- Both the statements above are wrong
31. Which one of the following statements is correct?
- Underwriting standards are changing *
- The underwriting standards of all insurers are the same
- Both the statements above are correct
- Both the statements above are wrong
32. Which one of the following statements is correct?
- Underwriting is the process of verifying the level of risk of each new entrant *
- Working ladies are charged extra premium, even if there are no impairments
- Both the statements above are correct
- Both the statements above are wrong
33. Which one of the following statements is correct?
- Standard life, normal life, average life, all mean the same thing *
- The underwriter can definitely detect all attempts at adverse selection
- Both the statements above are correct
- Both the statements above are wrong
34. Which one of the following statements is correct?
- A ‘clause’ restricts the benefits under the policy
- A lien operates for a specific period
- Both the statements above are correct *
- Both the statements above are wrong
35. Which one of the following statements is correct?
- In the case of a lien, the amount payable on death will vary from year to year *
- A lien operates till the policy matures
- Both the statements above are correct
- Both the statements above are wrong
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