CHAPTER 10

1) The main characteristics of all professions are

Committed to behaving ethically towards clients
Adhere to a professional code of conduct
Adhere to minimum standards of professional competence
All above
2) The name of _________ is to identify prospective clients for the insurance company perform
need analysis to identify different needs
Agent
Insurance company
IRDA
Reinsurance company
3) A life insurance agent receives his remuneration by way of _________
Salary
Commission
Perks

Stipends

4) A life insurance agent receives his remuneration as per Insurance Act

1937
1938
1939

1936

5) As per Insurance act, an agent can receive maximum of ______% as first years premium
25
30
35
40
6) All Insureres have to disclose agents commission in the benefit illustration document for ____
Term Assurance
Endowment Assurance
Whole life
ULIP
7) _________ involves reminding theclient of the needs that were agreed during the fact-finding
process
Checking the clients commitment to the needs
Checking the clients commitment to the needs
Acceptance or rejection of the recommendation
Churning and Product switching
8) ____________ should be taken at each stage of the recommendation
Client feedback
Client suggestion
Client confirmation

Client problem

9) The client is not satisfied with the recommended products. In this case
agent can ask client to contact at future date
Agent need to review the product
Agent should ask fill the proposal form
Agent should client to pay premium
10) The clients decision to act differently from the agents recommendations may emerge at
Presentation
Filling proposal form
Paying premium
Undergoing medical
11) If the client ignore a large protection need want to invest into a savings plan then the agent need
To start fact finding process again
To neglect the cleitns view
Try to convince the client
To fill up proposal form

12) Repeatedly encouraging clients to switch policies or investments form one to another is known
as
Fact finding
Presentation
Submission
Churning
13) The agent ask Mr. Samir to surrender his existing insurance policy take new endowment policy.
This is case of insurance churning as
Agent did nto tell Mr. Samir higher premium because of higher sum assured
Agent did not tell Mr. Samir higher premium because of higher age
Mr. Samir need to bear the surrender charges for existing policy
All above
14) There will sometimes be situations where clients have been mis-sold policies that do not match
their needs. Then the agent can gave advice of ______to client
Revival
Maturity
Switching
Paidup
15) _________ refers to the amount of business that insurance companies are successful in retaining
without lapse or surrender of the policy
Cancellations
Foreclosure
Persistency
Inactive
16) A low persistency ratio means that a large number of policies have lapsed or have been
surrendered, resulting in a loss of profits and a reduction in the accumulation of reserves for ___
Client
Agent
Insurance company
IRDA
17) A low persistency ratio means fewer benefits than originally expected and a loss of insurance
cover for_____
Client
Agent
Insurance company
IRDA
18) A low persistency ratio means the loss of renewal commission for _________
Client
Agent
Insurance company
IRDA
19) Keeping policy in force till maturity helps ______ to achieve the ultimate goal
Client
Agent
Insurance company
IRDA
20) Higher persistency helps _______ in earning higher revenue maintaining profitability
Client
Agent
Insurance Company
IRDA
21) Factors that affects persistency
Product design
Role of agent

Policy servicing

All Above

22) It is the duty of _________ to review clients financial needs planning periodically to build long
term relationship
Insurance company
Agent
IRDA
Reinsurance company
23) A periodically financial review is required because of
Marriage
Change in job
Child birth

All above

24) ___________ helps the company in maintaining profitability reduces administrative costs
Low persistency
Higher persistency
Switching
Product churning

25) The circumstances where policy surrender can be recommended are as follows
Where clients have been took policies that donot match their needs
Where clients are holding products that are not good value
When clients are facing financial difficulties
All Above