TOP Insurance Interview Questions and Answers
What is ‘group life’ insurance?
‘Group life insurance’ is a single policy that covers an entire group. Such policy is taken by an employer for thebigger organization to cover their employee, as anindividual policy holder, it may cost more than a group policy.
What in case if my house completely damagein, fire or flood,and if I stay in a rented house, will insurance company bear all my additional living expenses?
If your policy has Additional Living Expenses coverage, then sure the insurance company will pay you additional expense that you require, to maintain your normal standard of living.
What do you mean by ‘Deductible’?
Deductible is one of the several types of clause that are used by the insurance company as a threshold for policy payment for health insurance or travel insurance. Deductible is a decided amount that you have to pay from your pocket while claiming the insurance. For example, you have a deductible of $500, and you have insurance coverage for $2000, then you are responsible for paying for $500 and the remaining amount $1500 will be paid by insurance company.
Can an individual take two policies and claim for both of them?
Yes,an individual can take two policies and claim for both.
Does beneficiary have to pay tax on the proceeding of life insurance policy?
Generally, the benefits on the life insurance policy are tax free and the beneficiary is not liable to pay any tax after the death of the policy holder. But if you are changing your beneficiary for monetary gain or other purposes then the beneficiary has to pay tax on it.
To claim your personal property in a ‘Home insurance’ policy, how important is to keepinventory list?
Incase of fire or natural calamities, if your house is completely damaged and if you want to claim your personal property to insurance company, inventory list is very important. The insurance company will only pay you for those items where you are able to show the evidence that the damaged items belong to you. So, it is advisable to keep a list of inventory in a safe place
What is Co-insurance?
Co-insurance term is usually referred to health insurance companies. In this type of policy, you share the coverage with, the insurance company in percentage of the policy value, after paying deductible or co-payment. It is the split of insurance coverage between you and insurance company; usually the split would be 80/20 % where you are liable to pay 20% and the remaining amount by the insurance company. For example, for health policy you have claimed for $200, according to policy clause you have to pay deductible, let say $100, now after paying deductible the remaining amount is $100, now you have a co-insurance which is split into 80/20%. So you will pay $20 out of $100 from your pocket while the $80 will be paid by co-insurance(meaning the insurance company).
What do you mean by ‘Additional Insured’?
‘Additional Insured’ is the status associated mainly with property insurance and liability insurance. The additional insured will be protected under the main policy holder. For example a vehicle insurance policy which covers all the members of family and not only the owner.
Is it possible to convert a part of term life insurance into permanent life insurance?
Yes, it is possible to convert as far as you are having a convertible life insurance policy. But there is a deadline that has to be taken care of, for converting term life insurance into permanent life insurance. Also, your premium will rise soon you convert your policy.
What do you mean by term “Annuity”?
An annuity is the term used for the regular amount paid by the insurance company to the insured, after a certain period of time. The payment can be monthly or quarterly, this is often done to supplement income after retirement.
What is General Insurance policy? What does it cover?
General Insurance is basically an insurance policy that protects you from losses and damages other than covered by life insurance. For example it covers
a) Personal property such as car or house
b) Accident and health Insurance
c) Liability Insurance – legal Liabilities
d) Property against natural calamities like flood, fire, earthquake etc.
e) Burglary and theft
f) Coverage on transport vehicles carrying goods like Cargo Ship
g) Coverage against machinery breakdown
What is third party Insurance?
An insurance policy that covers the damage caused by another person or party is known as third party Insurance. In this type of insurance, the insured is the first party, insurance company is the second party while the damage done by another is referred as thethird party. This type of Insurance policy is purchased for vehicles, so that in case of theaccident they can claim it.
What are the different types of Insurance Coverage?
Insurance policy is categorised into two
a) General or Non-life Insurance
b) Life Insurance
What is the Surrender Value?
Surrender Value is the amount when you stop paying the premium and withdraw the entire amount. The policy ceases as soon as you withdraw the money, and the insured will lose out all the returns on it.