Insurance Questions & Answers

36.

The insured who suffered a loss would be entitled to the amount of compensation payable for the loss under the principle of?

insurable interest

utmost good faith

indemnity

contribution

View answer & explanation

Correct answer is C

Indemnity is a comprehensive form of insurance compensation for damages or loss and, in the legal sense, it may also refer to an exemption from liability for damages. Indemnity is considered to be a contractual agreement between two parties whereby one party agrees to compensate the loss occurred to the other party (indemnity holder) due to the act of the indemnitor or any other party.

37.

The expert who uses statistics to develop the premium payable in a life contract is an

adjuster

actuary

assesor

agent

View answer & explanation

Correct answer is B

An actuary is a business professional who deals with the measurement and management of risk and uncertainty.

38.

The factor which increases the possibility of loss that emanates from the insured attitude is?

physical hazard

moral hazard

uninsured peril

excepted peril

View answer & explanation

Correct answer is B

moral hazard occurs when someone increases their exposure to risk when insured, especially when a person takes more risks because someone else bears the cost of those risks.

39.

which of the following factors is not considered when calculating premium in life assurance policy

expense

mortality

interest

losses

View answer & explanation

Correct answer is A

There are several factors used to determine your life insurance premiums, including the following:

Age is probably the single primary factor that determines your life insurance premiums. ...
Gender.
Physical condition.
Smoking.
Your medical history.
Your family's medical history.
Occupation.

40.

Life policies can be used as a collateral for loan when the policy has?

ceased to be life

been temporary suspended

acquired surrender value

been made paid-up

View answer & explanation

Correct answer is C

A collateral assignment of life insurance is a conditional assignment appointing a lender as the primary beneficiary of a death benefit to use as collateral for a loan. If the borrower is unable to pay, the lender can cash in the life insurance policy and recover what is owed.

'Surrender Value': It is the amount the policyholder will get from the life insurance company if he decides to exit the policy before maturity.

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