unit 2 IRM even sem

What is the primary purpose of life insurance?

• To accumulate savings for retirement.

• To provide financial protection to beneficiaries upon the policyholder's death.

• To provide a tax benefit to the policyholder.

• To cover medical expenses during illness.

Define the term 'premium' in the context of life insurance.

• The premium is the duration of the insurance policy.

• The premium is the total amount of claims paid out.

• The premium is the payment made for life insurance coverage.

• The premium is the age of the policyholder.

What are the basic features of life insurance contracts?

• Death benefit, premium payments, policy term, cash value accumulation, beneficiaries.

• Health insurance coverage

• Investment returns

• Retirement savings plan

Differentiate between traditional and unit-linked policies.

• Traditional policies offer guaranteed benefits and fixed premiums, while unit-linked policies provide investment options with variable returns based on market performance.

• Traditional policies allow for flexible premium payments based on individual choice.

• Traditional policies are solely based on stock market performance.

• Unit-linked policies guarantee fixed returns regardless of market conditions.

What is a group life insurance policy?

• A group life insurance policy is a life insurance plan that covers multiple individuals under one contract, usually provided by an employer or organization.

• A plan that requires individuals to pay for their own insurance separately.

• A type of insurance that only provides coverage for accidents.

• A policy that covers only one individual under multiple contracts.

Explain the concept of 'with profit' policies.

• With profit policies are only available for life insurance products.

• With profit policies are insurance products that share profits with policyholders through bonuses or dividends.

• With profit policies do not provide any bonuses or dividends to policyholders.

• With profit policies guarantee fixed returns regardless of performance.

What are the main types of life insurance policies?

• Health insurance

• Auto insurance

• Travel insurance

• Term life insurance, Permanent life insurance (Whole life, Universal life)

What is the significance of reinsurance in the life insurance industry?

• Reinsurance eliminates all risks for insurance companies.

• Reinsurance increases the cost of life insurance policies.

• Reinsurance is significant in the life insurance industry for risk management, financial stability, and capacity enhancement.

• Reinsurance is only used for property insurance.

How do pension plans differ from annuities?

• Pension plans are employer-funded retirement plans, while annuities are individually purchased financial products.

• Pension plans are only for government employees, while annuities are for everyone.

• Annuities provide a lump sum payment at retirement, while pension plans pay monthly.

• Pension plans are only available in the private sector, while annuities are not tied to employment.

What is double insurance and how does it work?

• Double insurance is when multiple insurers cover different risks for the same policyholder.

• Double insurance refers to having a single insurance policy with higher coverage limits.

• Double insurance is when the same risk is covered by multiple insurance policies, allowing for claims from each insurer but limiting total compensation to the actual loss.

• Double insurance is when an insurer pays out more than the actual loss to the policyholder.