Preview Questions Insurance Advisor | Role Specific Skill

Question 1: How should an insurance advisor address a situation where the policy terms and conditions conflict with a client's expectations?

Which action should you take?

Choose only one option

Ignore the discrepancy and proceed with the policy sale

Offer the most expensive policy instead to compensate

Advise the client about exact policy details and recommend changes based on their needs

Try to modify the terms without consulting the client

Question 2: In an advisory role, how should an insurance advisor assess a client's needs over time?

Which action should you take?

Choose only one option

By only discussing policy renewals once the client contacts you

By offering additional coverage without considering the client's needs

By assuming that the client's initial policy will always meet their needs

By periodically reviewing the client's financial situation and adjusting their policies accordingly

Question 3: For evaluating the credit risk of corporate bonds held within an insurer's general account, which method surpasses basic credit ratings to incorporate dynamic credit spreads, default correlations, and macroeconomic stress scenarios?

Which action should you take?

Choose only one option

Ignoring macroeconomic factors and relying solely on historical default averages

Using only static credit ratings provided by agencies

Applying a uniform probability of default across all bonds regardless of industry

Implementing a credit portfolio model (e.g., Merton structural model or CreditRisk+) with correlated default simulation and scenario testing

Question 4: How does a flexible premium annuity differ from a fixed premium annuity?

Which action should you take?

Choose only one option

It guarantees a fixed monthly payout

It has a higher guaranteed interest rate

It allows for irregular contributions while maintaining a fixed rate of return

It offers a death benefit in case of the annuitant's death

Question 5: In a traditional endowment policy, how is the maturity benefit calculated?

Which action should you take?

Choose only one option

The sum assured minus early withdrawal penalties

The sum of sum assured plus any bonuses accrued over the policy term

The premium paid, plus a fixed interest rate

The total premiums paid minus any outstanding loans

Question 6: What role does trust play in retaining clients for long-term insurance relationships?

Which action should you take?

Choose only one option

Trust ensures that clients never switch providers

Trust makes clients more likely to buy add-on products

Trust leads to client loyalty, increasing retention and referrals

Trust ensures higher premiums from clients