Directions: Read the following questions carefully and choose the right answer.
Important for :
1
This is the field of science which deals with mathematics and statistics to determine the risks assessment in finance?
» Explain it
A
Actuarial Science is that branch of study of science which utilizes mathematical and statistical methods in order to assess the risks associated with insurance, finance, investment banking etc. The person who is proficient in this and is employed by the insurance companies to decide the magnitude of risk associated and the premium is decided accordingly.

Hence, option A is correct.
2
A policy in which all the benefits have ceased for non-payment of premium is known as -
» Explain it
A
If an insurance policy ceases to exist because of non-payment of premium on time, it is a lapsed policy. A policy lapses if the premium is not paid within the grace period also. It can be revived by payment of premium and penalty as decided by the insurer.

Hence, option A is correct.
3
Which among the following is known as a Paid-up Policy?
» Explain it
D
Paid-up policy is such that the policyholder has stopped the payment of premium and the insurer pays only a reduced value if the policyholder surrenders a paid-up policy. It is to be noted that a policy can only be considered as a paid-up policy after three continuous years of payment of premium to the insurance company.

Hence, option D is correct.
4
If a loss occurs by chance and not by the intention of any person it is known as -
» Explain it
C
If any loss is because of chance and not for the intention of anybody the same is known as fortuitous loss. Insurance policies cover against any loss that is accidental and the insured is not in control of the cause of such accident.

Hence, option C is correct.
5
The insurers maintain _______ in order to make provisions for future payments towards losses.
» Explain it
B
Loss reserves are maintained by the insurers in order to make sure that the future losses reported to the company are taken care of. These reserves comprise of liquid assets, and they allow the insurer to cover against claims in policies underwritten by the insurer.

Hence, option B is correct.