Life Insurance Revision

An insurance policy for which premium is payable for the lifetime of the assured and under which money becomes payable on the death of the assured is called.......?

• Annuity insurance

• Endowment insurance

• Whole life insurance

Life insurance is a type of indemnity insurance.

• True

• False

In life insurance, the insurable interest must exist at ------

• At the time of taking the policy only

• At the time of taking the policy and at the time of loss/ event insured against happening

• At the time of loss/ happening of the event insured against

• None of the above

There can be over valuation and under valuation in life insurance

• Yes

• No

Answer explanation

Insurable interest here is incapable of exact valuation. The concepts of under/ over valuation pertain to marine and fire insurance.

What is the Beresford's Rule?

• If death is caused by felonious suicide, the policy can be avoided by the insurer.

• If death of the insured occurs, the policy becomes payable irrespective of whether or not the cause of death is felonious suicide.

• The effect of policy in case of felonious suicide will be as per the terms of the policy concerned.

In Northern India Insurance Co v Kanhaya Lal, what did the court say about applying the Beresford's rule in India?

• It is applicable in India

• It is not applicable in India

• Court did not comment upon it.

If you were an insurer, which of the following would you consider to be a matter affecting the risk, regarding a prospective insured person approaching you for a life insurance policy?

• The insured is a smoker

• The insured enjoys classical music

• The insured drinks tea every morning

Who among the following is not entitled to receive payments under a life insurance policy?

• Assignee

• Executor/ administrator

• The assured

• None of the above

If the insurer is presented with conflicting claims for money by different heirs/ relatives of the insured and there is insufficiency of proof of title presented by all of them, what can the insurer do?

• Keep the money to themselves and use it for their purposes

• Treat the policy as voidable

• Apply to the court for depositing the money with the court

Answer explanation

Refer to S 47 of the Insurance Act 1938

Which of the following statements is true about a nominee?

• Nominee can give a valid discharge to the insurer

• Nominee cannot give a valid discharge to the insurer

• Nominee can give a valid discharge to the insurer subject to an approval by court