LIFE INSURANCE PRODUCTS – I
(1) ___________ life insurance pays off a policyholder's mortgage in the event of
the person's death.
I. Term
II. Mortgage
III. Whole
IV. Endowment
Answer: II. Mortgage
(2) The ________ premium paid by you towards your life insurance, the
________ will be the compensation paid to the beneficiary in the event of your
death.
I. Higher, Higher
II. Lower, Higher
III. Higher, Lower
IV. Faster, Slower
Answer: I. Higher, Higher
(3) Which of the below option is correct with regards to a term insurance plan?
I. Term insurance plans come with life-long renewability option
II. All term insurance plans come with a built-in disability rider
III. Term insurance can be bought as a stand-alone policy as well as a rider with
another policy
IV. There is no provision in a term insurance plans to convert it into a whole life
insurance plan
Answer: III. Term insurance can be bought as a stand-alone policy as well as a rider with another policy
(4) In decreasing-term insurance, the premiums paid ____________ over time.
I. Increase
II. Decrease
III. Remain constant
IV. Are returned
Answer: III. Remain constant
(5) Using the conversion option present in a term policy you can convert the same
to __________.
I. Whole life policy
II. Mortgage policy
III. Bank FD
IV. Decreasing term policy
Answer: I. Whole life policy
(6) What is the primary purpose of a life insurance product?
I. Tax rebates
II. Safe investment avenue
III. Protection against the loss of economic value of an individual’s productive
abilities
IV. Wealth accumulation
Answer: III. Protection against the loss of economic value of an individual’s productive abilities
(7) Who among the following is best advised to purchase a term plan?
I. An individual who needs money at the end of insurance term
II. An individual who needs insurance and has a high budget
III. An individual who needs insurance but has a low budget
IV. An individual who needs an insurance product that gives high returns
Answer: III. An individual who needs insurance but has a low budget
(8) Which of the below statement is incorrect with regards to decreasing term
assurance?
I. Death benefit amount decreases with the term of coverage
II. Premium amount decreases with the term of coverage
III. Premium remains level throughout the term
IV. Mortgage redemption plans are an example of decreasing term assurance
Plans
Answer: II. Premium amount decreases with the term of coverage
(9) Which of the below statement is correct with regards to endowment assurance
plan?
I. It has a death benefit component only
II. It has a survival benefit component only
III. It has both a death benefit as well as a survival component
IV. It is similar to a term plan
Answer: III. It has both a death benefit as well as a survival component
(10) Which of the below is an example of an endowment assurance plan?
I. Mortgage Redemption Plan
II. Credit Life Insurance Plan
III. Money Back Plan
IV. Whole Life Plan
Answer: III. Money Back Plan
(11) Which among the following is an intangible product?
I. Car
II. House
III. Life insurance
IV. Soap
Answer: III. Life insurance
(12) The premium paid for whole life insurance is _____________ than the premium
paid for term assurance.
I. Higher
II. Lower
III. Equal
IV. Substantially higher
Answer: I. Higher
