Free look period enables the insured to return the policy within 30 days of receipt of the policy bond
If the policy is returned as above, no premium is refunded by the insurer
PMLA is not applicable to life insurance
All of the above
Answer is Right!
Answer is Wrong!
The correct answer is: C. PMLA is not applicable to life insurance.
PMLA stands for Prevention of Money Laundering Act. It is an act of the Parliament of India enacted in 2002 to prevent money laundering and to provide for confiscation of property derived from money laundering.
The PMLA applies to all financial institutions, including banks, insurance companies, and stockbrokers. However, there are certain exemptions from the PMLA, including life insurance.
This is because life insurance is considered to be a non-financial product. It is not a product that is used to launder money.
Therefore, the statement “PMLA is not applicable to life insurance” is incorrect.
Here is a brief explanation of each option:
- A. Free look period enables the insured to return the policy within 30 days of receipt of the policy bond. This is a correct statement. The free look period is a period of time, usually 30 days, during which the insured can return the policy for a full refund of the premium.
- B. If the policy is returned as above, no premium is refunded by the insurer. This is also a correct statement. If the insured returns the policy within the free look period, the insurer is not required to refund any of the premium.
- C. PMLA is not applicable to life insurance. This is an incorrect statement. As explained above, the PMLA does apply to life insurance.
- D. All of the above. This is also an incorrect statement. Only option C is incorrect.