Page 46 - Insurance Times November 2019

b. A contract of indemnity 18. Level premium is where
c. Applicable to assets other than human life a. The premium amount doesn't increase with age.
d. A financial asset. b. The policy generates surplus in initial years.
c. The law of average is applied to calculate the premium
12. Which is the most appropriate statement(s) vis-a-vis payable.
HLV d. All are correct
a. Mr. A's annual earning is Rs.1.5 lacs and has proposed
for a life cover of Rs.5 crore on his life. 19. Level premium is
b. Mr. B is a student and has proposed for a life cover of 25 a. Not favourable for the policyholder's who take good care
lacs on his life. of their health.
c. Both are appropriate b. Is always a costlier proposition for the policyholder's in
d. Both are not appropriate general
c. Both a and b are correct.
13. Which of the following statement(s) is correct, vis-a-vis d. Both a and b are incorrect.
Life insurance contracts
a. Principle of indemnity doesn't apply. 20. Level premiums have the following components.
b. The amount payable at death is fixed at the beginning a. Protection element b. Cash value element
of the policy c. Residual value element d. A and C.
c. The ultimate beneficiary may not be the policyholder.
d. All of the above statements are correct 21. The premium which remains constant though-out the
term of the policy is called
14. Which of the following statement's is/are true ? a. Level premium b. Fixed premium
a. The General Insurance contracts protects against uncer- c. Constant premium d. Flexible premium
tainty.
b. Life insurance policies protects against certain event. 22. A policy with no cash value element is called
c. Both are correct. a. Protection policy b. Term policy
d. Both are wrong. c. Savings policy d. None of the above.

15. Which of the following statement(s) is/are correct ? 23. "Reserve" in Life insurance policies can be defined as
a. In Life insurance policies, the risk is constant. a. Life insurance cover payable to the policyholder(s)
b. In Life insurance policies, the coverage is against the time b. Premiums collected in the early years of the policy.
of death c. Amount kept aside to cater to the expenses
c. In Life insurance policies, the actual loss is compensated d. Amount kept aside to pay bonus under the polices.
for.
d. All are correct. 24. "Life Fund" in life insurance policies refer to
a. Excess of the premiums collected under the policies
16. Mortality charges would be least in which of the follow- b. Fund kept aside to pay the claims
ing c. Fund apportioned to meet the expenses of the insurance
a. A person in the age group of 35-40 years company
b. A person in the age group of 30-35 years d. The fund formed out of the interest earned on the
c. A person in the age group of 21-25 years amount invested.
d. A person in the age group of 40-45 years
25. Which one of the following is not a risk associated with
17. Mortality charges Life insurance
a. Increase with increase in age a. Dying to early b. Living to long
b. Are not affected by the health of the prospect. c. Disability d. Accident
c. Are constant throughout the policy term
d. Will be same for all males of 25 years of age.
Ans. on page 50
46 The Insurance Times, November 2019