Banking Financial Awareness · General Awareness

Insurance Policies and Claims

1,580 Questions

Insurance policies provide financial protection against specific perils, involving concepts like deductibles, premiums, and claim settlements. Banking and insurance aspirants need a solid grasp of policy types, coverage limits, and claim procedures. Practice these questions to understand how different insurance principles apply in real scenarios.

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Insurance Policies and Claims Questions

Multiple choice general knowledge

Name the provision which allows the policy owner to examine the policy

  1. Misstatement of Age or Sex Provision

  2. Free Look Provision

  3. Entire Contract Provision

  4. Incontestability Provision
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The free look provision allows a policy owner to examine the policy for a specified period (typically 10-30 days) after purchase. During this time, the policy can be returned for a full refund if the owner is not satisfied.

Multiple choice general knowledge

Claim costs for each benefit is calculated by Insurance company as

  1. Claim costs = hospital expenses + surgical expenses+physicians fees + major medical expenses

  2. Claim costs = frequency of expected claim * average amount of each claim

  3. Claim Costs = (hospital expenses + Board Expenses ) * frequency of claims

  4. None of the Above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Insurance actuaries calculate expected claim costs by multiplying claim frequency (how often claims occur) by severity (average claim amount). This fundamental formula (frequency × average claim) underlies all premium calculations. Option A incorrectly lists specific expense categories without the frequency multiplication that drives risk assessment.

Multiple choice general knowledge

What is long-term care insurance?

  1. A policy couples should purchase when they have children.

  2. Insurance policies adult children should take out on their older parents to cover dependent care expenses.

  3. Policies individuals over 65 are required to purchase

  4. An individual insurance policy to help when you are unable to care for yourself due to prolonged illness or disability
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Long-term care insurance provides coverage for extended custodial or medical care when individuals cannot perform basic daily activities (bathing, dressing, eating) due to chronic illness, disability, or cognitive impairment. It covers nursing homes, assisted living, or home care, services Medicare typically excludes. LTC is most relevant for older adults but isn't mandatory.

Multiple choice general knowledge

In almost all medical insurance policies I have seen, there is an "exclusion" for "pre-existing conditions." What does this mean?

  1. When an insurance company decides they don’t like you, they can "exclude" you. Saying "pre-existing condition" makes it official.

  2. There are no benefits for a condition for which you are receiving treatment or have been advised to receive treatment

  3. It means the company will not pay claims for a condition that runs in your family

  4. Both A and C are possible reasons for an exclusion.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Pre-existing condition exclusions deny coverage for medical conditions for which you received treatment or medical advice before policy enrollment. This prevents individuals from waiting until diagnosis to purchase insurance. The Affordable Care Act significantly restricted these exclusions for individual and group plans, but the term still exists in other insurance contexts.

Multiple choice general knowledge

What is a blanket policy?

  1. Accounts offered by employers to let employees set aside pretax dollars to pay for insurance premiums

  2. A health insurance contract that protects all members of a certain group against a specific hazard

  3. The warmest of all insurance policies

  4. Alliances between physicians and hospitals to help providers attain market share
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A blanket policy is a type of insurance contract that covers all members of a specific group (like employees of a company or students at a school) against specific risks without requiring individual applications for every person.

Multiple choice general knowledge

SCP is

  1. Special coverage premium

  2. Special coverage plan

  3. Special class premium

  4. surgical coverage plan
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

SCP stands for Special Class Premium, which is a rating classification in insurance that applies to groups or individuals with specific characteristics that warrant different premium pricing. The other options (Special Coverage Premium, Special Coverage Plan, surgical coverage plan) are not standard insurance abbreviations.

Multiple choice general knowledge

What is disability insurance?

  1. Health insurance that pays a monthly income to the policyholder when he is unable to work because of illness or accident

  2. Medical cost-sharing that requires an insured person to pay a percentage of medical expenses after the deductible

  3. When the employer contracts with another organization to assume financial responsibility for the enrollees’ medical claims

  4. A plan that reimburses the patient and/or provider as expenses are incurred
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Disability insurance provides income replacement when illness or accident prevents you from working. The other options describe coinsurance (B), self-insurance/ASO (C), and reimbursement plans (D). Disability insurance specifically protects your earning capacity, not medical expenses.

Multiple choice general knowledge

A professional in the pension and insurance company responsible for calculating risks and premiums is referred as

  1. Actuary

  2. Aggregator

  3. Evaluator

  4. Analyser
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An actuary is a trained professional who analyzes financial risks using mathematics, statistics, and financial theory. In pension and insurance companies, actuaries calculate premiums and assess risk probabilities to ensure financial stability.

Multiple choice softskills leadership

beneficiary

  1. connection

  2. person entitled to benefits or proceeds of an insurance policy or will

  3. enclose

  4. one of a family of mammals that nurse their offspring in a pouch(pocket of skin or leather)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Beneficiary is a person entitled to receive benefits, proceeds from an insurance policy, will, or other arrangement. The '-ary' suffix indicates 'a person connected with'. Distractors: nexus is connection; enclose means surround; marsupial is a pouch-bearing mammal.

Multiple choice softskills communication

n. supplementary charge; additional charge; amount paid for insurance; reward

  1. occupancy

  2. premium

  3. recharge

  4. due
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Premium is the correct answer as it directly means an amount paid for insurance, and can refer to a supplementary or additional charge, as well as a reward or bonus in certain contexts. Occupancy refers to living in or using a property, recharge means to refill, and due refers to something owed or payable.