Unit – 5 – Quiz - Wealth Management Course that Top Wealth Managers Swear By

Question 1 of 25

1. Question

Payment of fraudulent or inflated claims results in __________ to all insured.

No Premiums
Moderate Premiums
Lower Premiums
Higher Premiums

Question 2 of 25

2. Question

Select the expanded form of FPA as used in insurance

Fire Perils Added
Fixed Peripherals Added
Free of Particular Average
Freight Payable Assured

Question 3 of 25

3. Question

What does the term “premium” denote in relation to an insurance policy?

Expenses incurred by an insurer on a policy
Margins of an insurer on a policy
Price paid by an insured for purchasing the policy
Profit earned by the insurer

Question 4 of 25

4. Question

The sum assured under key man insurance policy is generally linked to which of the following?

Inflation Index
Business History
Key man Income
Business Profitability

Question 5 of 25

5. Question

Who among the following is considered as primary stakeholder in insurance claim process?

Insurance Brokers
Customers
Owners
Underwriters

Question 6 of 25

6. Question

Are there any fee / charges that need to be paid for lodging the complaint with the Ombudsman?

10% of the relief sought must be paid as fee
20% of the relief sought must be paid as fee
A fee of Rs 100 needs to be paid
No fee or charges need to be paid

Question 7 of 25

7. Question

Most experts agree that you should keep between __________months worth of your living expenses set aside in your emergency fund.

1-2 months
3-6 months
1- 2 years
4-5 years

Question 8 of 25

8. Question

How much amount of gratuity is payable for each year of completed service to the monthly rated employees?

20 Days Wages
30 Days Wages
15 Days Wages
Half Month Wages

Question 9 of 25

9. Question

In insurance, the contingency insured against is usually the

Loss of profit
Uncertain Financial Loss
Certain Financial Loss
Financial Loss

Question 10 of 25

10. Question

For dependent parents, the least important risk to be covered is through

Disability Cover
Medical
Hospitalization Cover
Life Insurance

Question 11 of 25

11. Question

What refers to those risks which involves the potential loss of income as a result of an individual’s loss of ability to earn an income?

Speculative Risk
Legal Liability
Property Risk
Personal Risk

Question 12 of 25

12. Question

Which of the following intermediaries do not require IRDA’s license/approval to operate in India?

Insurance Agents
Insurance Brokers
Third Party Administrators
All the above intermediaries require IRDA’s license/approval

Question 13 of 25

13. Question

An Actuary is expected to

Find the probability of an insured event to happen in non-life policies
Make a reasonable forecast of the future liabilities of policies
Make an exact forecast of the future liabilities of policies
Calculate the premium required to cover a risk on a long-term basis

Question 14 of 25

14. Question

Which of the below is the most appropriate explanation for the fact that young people are charged lesser life insurance premium as compared to old people?

Mortality is inversely related to age
Young people are mostly dependent
Old people can afford to pay more
Mortality is related to age

Question 15 of 25

15. Question

Human Life Value (HLV) is nothing but the present value
of total monetary surplus available to an individual’s family members excluding

Self maintenance charges incurred by the income earner.
Statutory taxes, i.e. Income Tax, Professional Tax, etc.
Life insurance premium
All of the above are true.

Question 16 of 25

16. Question

According to the principle of indemnity, the insured is paid for

The actual losses irrespective of the sum assured
A fixed amount agreed between both the parties
The sum insured irrespective of the amount actually spent
The actual losses to the extent of the sum insured

Question 17 of 25

17. Question

The underwriting process is completed when

The policy is issued to the proposer after risk selection and pricing
The received information is carefully assessed and classified into appropriate risk categories
All the medical examinations and tests of the proposer are completed
All the critical information related to the health and personal details of the proposer are collected through the proposal form

Question 18 of 25

18. Question

The duty of disclosure arises

There is no such duty
Prior to inception of the policy
After inception of the policy
Prior to inception and continues during the policy

Question 19 of 25

19. Question

Supposing that the risk premium which would be sufficient to provide protection is Rs.200 and the insurer expects to earn 5% p.a. interest on the premium ‘to be charged’ from the insured person, what would be the pure premium?

95.23
92.21
96.34
99.29

Question 20 of 25

20. Question

If expenses are 27% of the gross (office) premium and the Pure premium is Rs. 1,800 then what would be the Office premium

Rs. 2556.75
Rs. 2565.75
Rs. 2456.75
Rs. 2465.75

Question 21 of 25

21. Question

Rakesh Sharma has recently being diagnosed with diabetes. He is only 38 years old. Rakesh is very keen to get insurance cover and is willing pay a high premium. Rakesh Sharma’s main intention in taking out an insurance plan is to transfer the cost of the medical expenses that are likely to occur in the near future to the insurance company. Also, in case he dies, the claim from the life insurance company should be sufficient for his family to maintain a decent lifestyle. If people like Rakesh Sharma are selected by the insurance company in large numbers, this could lead to

Good Selection
Adverse Selection
Worst Selection
Loss of Life

Question 22 of 25

22. Question

A comprehensive health insurance policy of Rs. 3 lakh is purchased by insured person in a given underwriting class. They generate incurred losses and loss adjustment expenses of Rs. 85 lakh within a year. If expenses are 40% of the gross rate, calculate the final gross premium by pure premium method.

47.22
40.12
43.67
51.6

Question 23 of 25

23. Question

One line of business has incurred losses and loss adjustment expenses amounting to Rs. 4 lakh and earned premium of Rs. 6 lakh. Expected loss ratio is 55%. Calculate the rate of change in the existing premium.

0.1378
0.2181
0.2723
0.2917

Question 24 of 25

24. Question

Anirudh Singh has a savings policy. The following are the details of the policy: Policy term 20 years Date of commencement of policy 4 June 2001 Sum insured Rs. 5,00,000 Premium payment mode Annually Last premium paid 4 June 2008 Number of premiums paid 8 Total number of premiums due 20 Vested bonus Rs. 50,000 As seen from the data above, Anirudh Singh stopped premium payment after the Eighth year. The policy will not be fully cancelled. Instead the sum insured will be reduced in proportion to the premiums paid. What is the paid up value.

Rs. 2,10,000
Rs. 2,50,000
Rs. 1,36,500
Rs. 2,34,000

Question 25 of 25

25. Question

Mr. Atul is the MD of Star Investments Ltd. His contribution to the company’s profit is estimated at 40% of the total profit. The shareholders of the company believe that they will get a return of 4% if there is no management. They can place their money in bank deposits at 4% pa., if there is no management. It is also estimated that 5 years term is required to find a comparable replacement for Mr. Atul. Pretax profit and networth for the last 5 years is Rs. 60,00,000 and 2,85,00,000 respectively . Calculate key man value of Mr Atul.