Insurance Questions and Answers for Interview
1) How many types of insurance coverage?
Insurance policies are divided into two parts.
a) General or Non-Life Insurance
b) Life insurance
2) What is meant by "insurance coverage"?
The term 'insurance coverage' means, that when a person takes an insurance policy, the insured will be covered by an insurance company for a specified amount for himself or for the things he has taken the insurance policy, for which he will pay a premium. Insurance companies. The insurance company will pay the insured in case of loss or claim of the insured as per their "insurance coverage".
3) What is the premium?
It is the amount paid to the insurance company for the insurance contract. It is the amount that a person pays monthly, quarterly, or annually as per his plan, in exchange for the coverage he has taken from the insurance company.
4) What do you understand by the terms 'Insurer' and 'Insured'?
The insured is the person who holds the policy and the insurer is the company that covers the insured.
5) Who are the beneficiaries?
A beneficiary is a person whom you have nominated for the sum assured in case of your death.
6) What is the period of contestation in an insurance policy?
The 'contestable period' is usually 1 or 2 years, during which the insurance company retains all rights to investigate the policy and decide whether or not to pay the insured.
7) Why difference between "Revocable Beneficiary" and "Irrevocable Beneficiary"?
The designation 'revocable beneficiary' gives the right to change the name of the beneficiary without the consent of the named beneficiary. The policyholder must obtain the consent of the beneficiary before changing the name while in 'Impossible Beneficiary'.
8) What is No-Claim Bonus?
No Claim Bonus is not a benefit for those who have not made an insurance claim in the previous year of cover. This will lower the premium for the following year.
9) What is the 'declaration page' in an insurance policy?
The 'declaration page' in an insurance policy carries all the information like the policyholder's name, address, vehicle details, type of coverage, and loss payee information.
10) What is meant by 'Loss Payee'?
A loss payee is a person or organization (bank) that pays the insurance money for damage to the property or vehicle you own. This is a legal definition used to cover other party investments or a bank you own. For example, you have a car loan and you have insurance for that car. Now you've had an accident, and your car is a total loss (ie completely damaged beyond repair). Your bank still owes you money when you make an insurance claim; The insurance company will pay directly to the bank or the person you owe. Here the bank is the recipient of the loss.
11) What is meant by 'deductible'?
The deductible is one of several clauses that insurance companies use as policy payment thresholds for health insurance or travel insurance. The deductible is a fixed amount that you have to pay out of pocket when making an insurance claim. For example, if you have a deductible of $500, and you have insurance coverage for $2000, you are responsible for paying $500, and the remaining amount of $1500 will be paid by the insurance company.
12) What is co-insurance?
The term co-insurance is commonly referred to as a health insurance company. In this type of policy, you share the coverage with the insurance company at a percentage of the policy value after deductibles or co-payments. This is the division of insurance coverage between you and the insurance company; Generally, the split will be 80/20% where you are liable to pay 20% and the remaining amount to the insurance company. For example, for a health policy, you claim $200, the policy clause requires you to pay the deductible, say $100, now the remaining amount after the deductible is $100, and now you have a co-insurance split of 80/20%. . So you will pay $20 of the $100 out of pocket while $80 will be paid by the co-insured (ie the insurance company).
13) What do you understand by the term "Anniversary"?
An annuity is a term used for a regular amount paid by the insurance company to the insured after a certain period of time. Payments can be monthly or quarterly, often to supplement income after retirement.
14) What is the surrender value?
Surrender value is the amount when you stop paying the premium and withdraw the full amount. As soon as you withdraw, the policy is terminated and the insured loses all its returns.
15) What is the price paid?
Paid value is something when the insured stops paying the premium but does not withdraw the amount. The sum assured is proportionally reduced by the insurance company depending on when an insured stop paying the premium. At the end of the term, you will get the amount.
16) How can advisable to replace the policy with another policy?
If the policy you purchased is not for the long term, you can replace the policy. But in other cases, it is not advisable as you will lose all the benefits of the previous policy and the premium will be higher as you age. Also, the two-year tenure of the competition will also resume.
17) How to claim the policy?
To claim the policy, you need to fill out the claim form and contact your financial advisor from whom you purchased the policy. You need to complete all required documents like the original payment receipt to your insurance company. If everything goes well, you will be paid within seven days of claiming the policy.
18) What happens if you fail to make the required premium payments?
Generally, the insurance company gives a grace period of 10-15 days to the insured if he fails to pay the premium before the due date. Further, if you fail to pay the premium, your policy will be canceled. You can revive your policy by paying the outstanding premium along with interest, calculated from the date of cancellation of the policy. Different insurance companies have different rules for policy revival.
However, if your policy is in force for more than 2-3 years, and if you fail to pay the premium, the insurance company will deduct the premium amount from your deposited funds, especially in permanent life insurance. This will continue till there is an available fund after which your policy will be closed.
19) Is it safe to pay a premium through an insurance agent?
It is safe to pay premiums through your agent as long as you are paying by check in the name of the insurance company and receive all receipts for the payment.
20) Is it possible to get full payment if the new policy is canceled during the free look period?
'Free Look Period' is a period during which the insured can cancel their newly purchased policy within a specified period from the date of issue of the policy without any penalty or surrender charge.
Yes, it is possible to receive full payment during the free look period; You can cancel your new policy within 15 days by returning the policy to the life insurance company after receiving all the policy-related documents.
21) What is the difference between participating and non-participating policies?
The participating policy is a policy, where the profit or benefit of the insurance company is shared with the insured in the form of a dividend or retrospective bonus. A non-participating policy, however, does not share its profits with the insured.
22) Is it possible to limit the premium payment for years less than the policy period?
A certain insurance company has a limited premium payment provision, whereby you can pay the premium over 3, 5, 7 or 10 years depending on your income and still get coverage for the entire policy term.
23) Can the beneficiary claim the policy if the insured person is missing or missing for several years?
A claim is possible if the beneficiary has a court declaration stating that the insured person is missing or legally dead (missing for more than 7 years).
24) Can a person take two policies and claim for both?
Yes, a person can take two policies and claim for both.
25) What do you mean by 'additional insured'?
'Additional insured' is a condition mainly related to property insurance and liability insurance. The additional insured will be protected under the original policyholder. For example, a car insurance policy that covers all family members and not just the owner.
26) What is a general insurance policy? What does it cover?
General insurance is basically an insurance policy that protects you against losses and damages other than those covered by life insurance. For example, it covers
- Personal property such as a car or house
- Accident and Health Insurance
- Liability Insurance – Legal Liability
- Property against natural calamities like flood, fire, earthquake, etc.
- Theft and Theft
- Coverage of transport vehicles carrying goods like cargo ships
- Coverage against equipment breakdown
27) What is the meaning of the word 'Indemnity'?
The term 'indemnity' in insurance is used to cover loss or damage claimed by another person. For example, a gym owner has indemnity insurance to protect his customers, in case of injury or accident, and to avoid financial loss due to lawsuits.
28) What do you understand by the term 'double indemnity?
'Double indemnity is a provision made by certain insurance companies, where under their policy they are liable to pay double indemnity in case of death by accidental means or homicide. Such policies do not cover suicide and death due to the gross negligence of the insured. For example, a person who dies of natural causes including heart disease or cancer, murder or conspiracy by a beneficiary, or death due to injuries caused by mere negligence.
29) What is subrogation?
'Expectation' refers to the process of seeking reimbursement from the responsible party for a claim that they have already paid. For example, if you have an accident where your car is damaged, and you have car insurance, the insurance company will pay you. But if the insurance company comes to know that the accident is due to the fault of the other party, now they will claim the money from the other party which is known as 'settlement'.
30) What do you understand by the term 'cash value?
'Cash value is the cash amount paid to the policyholder on cancellation of the policy, where a portion of the premium paid goes to the savings plan. It is also referred to as surrender price. This term is commonly used for life insurance contracts.
31) What happens to the cash value after the policy is paid in full?
After the policy is paid in full, the company plans to use the cash value to pay your premiums until you die. If you take out the cash value, the insurer must pay you a premium or reduce the death benefit amount to support the remaining cash value.
32) What are the different types of life insurance?
There are two types of life insurance
a) Term Life Insurance:
Term life insurance is a type of life insurance that provides coverage for a fixed rate of premium for a limited period of time. Term insurance can cover you for a period of one or two years.
b) Permanent Life Insurance:
Permanent life insurance covers a person for life; People usually take permanent life insurance for around 25-30 years. The premium is slightly higher than term life insurance.
33) What is the elimination period of insurance?
In disability income insurance or loss of income insurance, the elimination period is the time you have to wait before benefits are paid. In other words, it is the period of time between the start of the injury and the benefit you are awarded. Longer the exclusion period the lower the premium and vice versa.
34) What is 'endowment policy?
An endowment policy is a combination of savings with risk cover. This type of policy is specially designed to accumulate wealth and cover your life at the same time. In this type of policy, the insured will pay a regular premium for a specified period. And in case of death, the money will be paid to the beneficiary but, if you end the policy term, you will get the sum assured along with the deposit bonus.
35) What does the company mean when it says "no physical examination"?
This type of insurance company says, "No Physical Examination" gives the policyholder the freedom to take the policy and is exempt from the physical examination mandated by certain life insurance companies. Generally, such an insurance company is more expensive and the insured has to pay a higher premium on their policy.
36) What is 'Group Life Insurance?
'Group life insurance is a single policy that covers an entire group. For larger organizations where employers take out such policies to cover their employees, as an individual policyholder, it may cost more than a group policy.
37) Does the beneficiary have to pay tax on the proceeds of the life insurance policy?
Generally, the benefits of a life insurance policy are tax-free and the beneficiary is not liable to pay any tax after the death of the policyholder But if you change your beneficiary for financial gain or other purposes then the beneficiary will have to pay tax on it.
38) Is it possible to convert a portion of term life insurance into permanent life insurance?
Yes, conversion is possible as long as you are doing a convertible life insurance policy. But there is a time limit to converting term life insurance to permanent life insurance that needs to be taken care of. Also, your premium will increase as you convert your policy.
39) What is third-party insurance?
An insurance policy that covers damage caused by another person or party is known as third-party insurance. In this type of insurance, the insured is the first party, the insurance company is the second party and the injured party is the third party. This type of insurance policy is bought for cars so that they can claim it in case of an accident.
40) What is a personal accident cover? Does it cover anywhere in the world?
Personal accident insurance is for your personal vehicle and covers any fatal accident to you or your family other than the driver. Most insurance companies offer coverage anywhere in the world.
41) In what cases can you not claim on your personal accident insurance?
- If your injuries are the result of illness or disease
- If your injuries were self-inflicted or attempted suicide
- Stress fractures, sprains, and strains
- The injury occurred during the commission of the offense
- Willfully cause a car accident
42) What is 'gap insurance?
GAP insurance is also known as Guaranteed Auto Protection. It covers the difference between the actual cash value of the vehicle and the balance still owed on the financing, such as a loan. The amount of GAP insurance is usually paid in advance.
43) What is the difference between 'single limit liability coverage' and 'split liability coverage?
'Single limit liability coverage' covers a single person for bodily injury and property damage, for example, only one person will be covered in an accident, regardless of how many people are injured. While under 'split liability coverage' each person is covered separately.
44) What are 'Collision Coverage' and 'Comprehensive Coverage' in Auto Insurance?
Collision coverage covers when you collide with another object or vehicle while comprehensive coverage covers a vehicle other than your vehicle in a collision when your vehicle is not in use.
45) What does 'PLPD' insurance stand for?
PLPD stands for 'personal liability and property damage. Personal liability covers property damage when a person injures others in an accident and when the property is damaged. In both cases, the injured party or a third party will claim the insurance money from the criminal's insurance company.
46) If I have 'home insurance' does it cover silver or gold ornaments?
You can cover your valuables like silver or gold ornaments in home insurance but your premium and policy amount will increase accordingly.
47) What is the difference between 'all perils' and 'specific perils' coverage in home insurance coverage?
In-home insurance coverage, 'All Perils' protects you against general risks as well as a wide range of risks while 'Specific Perils' will cover only the general risks listed in your policy.
48) What is the 'loss schedule' in home insurance?
A loss schedule is a document submitted to the insurance company for policy claims; It gives information about damaged or lost items such as model number, when it was purchased, price of the item, etc.
49) If my home is totally damaged, by fire or flood and I live in a rental home, will the insurance company cover all of my excess living expenses?
If your policy has excess living expense coverage, make sure the insurance company pays you the extra expenses you need to maintain your normal standard of living.
50) To claim your personal property on a 'home insurance policy, how important is it to keep an inventory list?
In the event of a fire or natural disaster, if your home is a total loss and you want to claim your personal property from the insurance company, an inventory is very important. The insurance company will only pay you for items where you can show proof that the damaged items are yours. Hence, it is advisable to keep the inventory in a safe place.
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