WAEC Insurance Past Questions & Answers - Page 7

31.

The type of life insurance policy where the premium goes towards the policy with no interest element is

A.

endowment policy

B.

whole life insurance

C.

annuity policy

D.

term insurance

Correct answer is A

Endowment life insurance policies do not have investment risk or interest rate risk.  an endowment policy does not earn any interest throughout the term.

32.

The part of a policy that describes the event that led to  a loss is

A.

operative clause

B.

recital clause

C.

heading

D.

schedule

Correct answer is A

The Operative clause in an insurance policy sets outs the circumstances that must be present before an insurance company will pay out any claims to insured parties.

33.

which of the following professionals is an operator in the reinsurance market?

A.

agent

B.

consultant

C.

broker

D.

adjuster

Correct answer is C

An insurance broker is a specialist in insurance and risk management. Brokers act on behalf of their clients and provide advice in the interests of their clients.

34.

A policy that covers a trader against the risk of payment default by customer is

A.

stock insurance

B.

trade insurance

C.

fidelity insurance

D.

credit insurance

Correct answer is C

Fidelity Guarantee Insurance provides insurance against direct financial loss to companies arising out of the dishonesty of their employees.

35.

A life policy that pays the sum assured if the policy holder dies anytime within the policy period is

A.

term assurance

B.

pure endowment

C.

whole life insurance

D.

personal accident insurance

Correct answer is A

A term assurance policy will be set up to last for a certain period of time (usually a specific number of years or until you reach a certain age): this is known as the term of the policy. A payment will only be made in the event of your death during that period.