1. A Risk transfer provides a sense of:
Financial instability
Financial distress
Financial security
2. _____________ is an insurer for the insurance company:
IRDA
Reinsurance company
LIC
GIC
3. 3. Mr. Mahesh is a software engineer. He has taken a term insurance for Rs. 30,00,000/- for 30years. This is an example for:
Risk retention
Risk transfer
Risk avoidance
Risk tolerance
4. What is the maximum cover that can be provided in micro-insurance?
5,000
10,000
50,000
1,00,000
5. The Non-Government Organisations (NGOs) help the insurance industry immensely in:
Promotional activities
Drafting new regulations
Linking buyers and sellers
Linking third party administrators (TPAs)
6. …...means before loss what was his financial status and for the same financial status to bring him is called:
An indemnity
material information
utmost goodfaith
none of the above
7. Insurance Agents are
Who work only for insurance company
Who work for customers
Who work for their own interests
Intermediaries
8. Mr. Varun who owns a multi-chain company would like to take an insurance. What will be the best option for him from the following?
He can take Surety insurance
He can take Business Partner insurance
He can take Key-man Insurance
He can take company insurance
9. Insurance c option because:
Policyholder gets advantage of market linked investments
Policyholder gets returns on their investment
Policyholder can withdraw money whenever they need it
Insurance products offer flexibility to the policyholders
10. Amit is looking for term insurance plan for protection of his family he is advised to approach for:
Property Insurance
Life Insurance
Health Insurance
Liability Insurance
11. Which of the following is not a type of insurance organization?
Ombudsman
Life insurance
Non-Life insurance
Reinsurance
12. The constituents who participate in deeper penetration of micro-insurance and awareness of insurance in rural areas are:
The Surveyors
Underwriters
Non- Governmental Organizations
The Regulator IRDA
13. Why is Insurance required?
To Cover Risks of Life
To plan for Future goals
For Savings
All of the above
14. In life insurance business if a person is working in calculating premium rates of insurance products then he is mostly likely a member of:
institutes of actuaries of India
insurance institute of India
Chartered institute of insurance
Insurance institute of risk management
15. Currently, major percentage of insurance sales in India takes place through:
Insurance Brokers
Corporate agents
Banc-assurance channel
Individual insurance agents
16. I.R.D.A was incorporated as a Statutory body in:
Dec-1999
Jun-1994
Apr-2000
Jun-2001
17. What facility do insurers use to cover risks beyond their exposure limits:
Banc-assurance
Re-insurance
Both a & b
Neither a nor b
18. One of the most sought after advantage of Insurance is:
Huge sum received in case of death
Huge sum assured by paying small premium
Tax benefits on payment of premium and all the pay-outs
Can get the surrender value as per the terms and conditions
19. Vinay doesn’t want to take insurance on himself. He feels that his family will survive with the funds available in the bank and monthly rentals received from village. This comes under Risk ______:
Transfer
Control
Retaining
Avoidance
20. The main role of an underwriter in a non-life insurance company is normally to:
assess the acceptability of particular risks
certify a loss when claims are submitted
design the structure of the products to be offered
negotiate with the industry regulator
21. The concept of insurance involves a transfer of:
liability
needs
ownership
risk
22. Akshat is a relatively cautious person. In insurance terms, this will normally increase the likelihood that he will:
be considered an above average insurance risk
be considered a below average insurance risk
require insurance cover
require reinsurance cover
23. How are perils and hazards normally distinguished under term insurance policies?
Perils are medical factors which influence the risk of dying and hazards are lifestyle activities which influence the risk of dying.
Perils are risks that policyholders will die before a specified date and hazards are factors which could influence that risk.
Perils are factors which affect the risk being insured and hazards are the size of the risk being insured.
Perils are factors which could influence an insured event occurring and hazards are the actual events which will trigger a pay-out.
24. In insurance terms, the risk of suffering a disability is best described as what type of risk?
Financial.
Fundamental.
Homogenous.
Speculative.
25. For a household insurance policy, insurable interest need only exist at outset and at what other point?
The date the cancellation period expires.
The date a claim occurs.
The date the policy document is received.
The termination date.
26. Rahul is employed by Sunny. In respect of this employment, Rahul automatically has insurable interest in Sunny’s life up to what limit, if any?
Rahul’s monthly salary.
Rahul’s pension fund value.
Sunny’s annual profit.
There is no limit.
27. Arun started a 20-year term insurance policy. Once established, when, if at all, is the insurer next entitled to ask him for proof of continuing good health?
At no point.
After the end of the first 12 months.
At the point when he changes occupation or retires.
When a lapsed policy is revived.
28. The concept of indemnity is based on the key principle that policyholders should be prevented from:
insuring existing losses.
making false insurance claims.
paying excessively for insurance cover.
profiting from insurance.
29. Once an absolute assignment is effected under a life insurance policy, who will be the titleholder(s) of this policy?
The assignor in all cases.
The assignee in all cases.
Either the assignor or assignee depending on the type of policy involved.
The assignor and assignee jointly.
30. How long is the free look-in period under a term insurance policy from the date of receipt of the policy document?
5 days.
10 days.
15 days.
20 days.
31. A life insurer issued a quotation on 10 February, guaranteed for 14 days, which was accepted by the customeron day 10. Consequently, the insurer can only decline this risk if the:
customer submits a second quotation request.
insurer increases its underlying premium rates.
market place experiences a significant downturn.
material facts change.
32. A policy document for a money-back policy includes the statement ‘the proposal and declaration signed by the proposer form the basis of the contract’. In which main section of the policy document will this normallyappear?
Attestation.
Operative clause.
Preamble.
Terms and conditions.
33. A life insurance policy can only be made paid up if what policy feature exists?
Indexing contribution.
Nomination facility.
Rider benefits.
Savings element.
34. The main reason why a life insurance proposal form often asks for the proposer’s height is to enable a reasonable comparison with the proposer’s:
age.
gender.
occupation.
weight.
35. Where annually increasing flexible premiums operate under a life insurance policy, what
rate of increase will generally apply?
2.5%
3.0%
5.0%
7.5%
36. The amount paid out by the insurer under a 30-year life insurance policy exceeded the sum insured plus revisionary bonuses. The excess is likely to result from?
charges refunded.
a frequency loading.
a tax rebate.
a terminal bonus.
37. What normally happens to the sum insured under a life insurance policy once the period of the lien expires?
It reduces.
It increases.
It is suspended.
It is replaced by a newly-underwritten sum insured.
38. The main protection need of a 19-year-old is most likely to be:
self-protection.
home loan protection.
protection of dependants.
protection of children’s future.
39. Raunak recently arranged a life insurance policy under which he is classed as the master policyholder. This addresses his role as:
a creditor.
a debtor.
an employee.
an employer.
40. The need for investment advice from an insurance agent normally results from what overriding key factor?
Absence of any long-term goals.
Inability to prioritise future financial needs.
Lack of market knowledge.
Shortage of available funds.
41. When undertaking financial planning for individuals without capital, what savings need is likely to beaddressed in every single case?
Emergency funds.
Funds for children’s savings.
Funds for educational costs.
House purchase funds.
42. Naveen is addressing his income needs by investing directly in corporate bonds. In what form will he receivethis income?
Annuity instalments.
Dividend payments.
Interest payments.
Rental payments.
43. Nikhil is looking for tax-efficient savings methods for his disposable income. He is considering an equity-linked savings scheme, national savings certificates and an endowment insurance policy. Premiums for which of these investments are allowed to be deducted from his taxable income?
The national savings certificates only.
The equity-linked savings scheme and the national savings certificates only.
The national savings certificates and the endowment insurance policy only.
The equity-linked savings scheme, the national savings certificates and the endowment insurance policy.
44. An investor holds a wide range of shares. If the Reserve Bank of India announces a series of significantinterest rate increases, the prices of these shares are most likely to
become volatile.
decrease.
increase.
stagnate.
45. The main purpose of the guaranteed insurability rider benefit is to give the policyholder the right to
cancel a health-based exclusion after a symptom-free period.
include his parents under the policy.
increase cover when a key life event occurs.
maintain cover despite a fall in investment value.
46. The changes in healthcare costs over recent years has had what general impact on healthcare insurance?
A fall in average premium levels.
A reduction in underwriting requirements.
A rise in the need for cover.
A strengthening of the insurable interest rules.
47. The general need for a pension policy results from the existence of what key problem?
Anticipated fall in income.
Lack of employment opportunities.
Likely deterioration in health.
Uncertainty over investment performance.
48. Yash pays health insurance premiums for himself, his wife and his two children aged 13 and 8. Premiums for which of these individuals will qualify as deductible from Yash’s taxable income?
Yash only.
Yash and his wife only.
Yash, his wife and his oldest child.
Yash, his wife and both his children.
49. The sole focus during a client’s fact-find session was healthcare requirements and estate planning. Which main life stage is he most likely to fall into?
Young married.
Young married with children.
Pre-retirement.
Retirement.
50. Apart from the salary level, what other key feature of Alok’s job is likely to have a major impact on the level ofhis pension, life insurance and health insurance needs?
Whether the job is office or field-based.
The normal retirement age in relation to the job.
Whether the job is in the public or private sector.
Whether the job is manual or non-manual.
51. In the context of financial planning, how is the difference between real needs and perceived needs bestdescribed?
Real needs are financial needs and perceived needs are non-financial needs.
Real needs are actual needs and perceived needs are based on a client’s thoughts and desires.
Real needs are identified by the insurance agent and perceived needs are identified by the client.
Real needs are needs which satisfy an objective and perceived needs are needs which do not satisfy anobjective.
52. To fulfil the ‘know your customer’ procedures, at what stage in the financial planning process is theinsurance agent most likely to request a copy of the customer’s photograph?
At the end of the fact-find meeting.
At the end of the presentation meeting.
As soon as the application is accepted by the insurer.
As soon as the insurer is ready to issue the policy document.
53. An agent has recommended an investment product with non-guaranteed benefits. The benefit illustration passed to his client will therefore use assumed annual growth rates of:
5% and 8%
5% and 10%
6% and 8%
6% and 10%
54. The main purpose of including commission details in the documentation to clients is to increase:
competitiveness.
efficiency.
flexibility.
transparency.
55. A client has been recommended a low-risk investment product by his insurance agent, but the client insiststhe agent arranges for the money to be invested in a higher risk product. What action should the agent take?
Carry out these instructions, but document that this contradicts the recommendation.
Conduct a new fact-find.
Invest a reduced amount of money in this product.
Refuse to act for the client.
56. An insurance agent has advised a client to surrender an existing investment product and start a newinvestment product. What key indicator should be used to determine whether this advice was ethical?
The best interests of the client.
The difference in potential income and capital growth between the two products.
The flexibility of the new product compared to the old one.
The views expressed by the client.
57. What key impact will low persistency levels have on insurance policyholders?
An enhancement in product choice.
An improvement in investment performance.
An increase in insurance cover.
A reduction in benefits.
58. Raju died 5 years before the end of his 30-year endowment insurance policy. What factor most likely causedthe insurer to investigate the claim using the early death claim procedures?
He paid the most recent premium during the period of grace.
His cover was originally accepted with a premium loading on medical grounds.
His death resulted from a recently acquired sudden illness.
The policy had lapsed and was revived shortly before he died.
59. A claim under a term insurance policy is submitted by an individual who has substantially understated his age.As an alternative to paying out the full claim the insurer is most likely to take what action?
Deduct the underpaid premiums from the sum insured.
Make the policy paid up.
Pay out the surrender value.
Reject the claim on the grounds of misrepresentation.
60. On the maturity of an endowment policy, a reduced sum insured is paid out. What is the most likely reasonfor this?
The instalments were commuted by the policyholder.
The policyholder’s health seriously deteriorated during the policy term.
The policy was made paid up during the policy term.
The policy was subject to a lien.
61. What key event is most likely to prevent insurers from ensuring that each insured person brings a fairpremium to the pool for the risk presented?
A fraudulent claim.
A policy assignment.
A steep rise in inflation.
A sudden illness.
62. An insurance agent served an insurer continually and exclusively for 20 years, after which he retired fromwork. In accordance with Section 44 of the Insurance Act 1938, renewal commission due to him after the termination of his agency can only be withheld if:
he ceases to remain a resident of India for tax purposes.
he survives beyond the age of 75.
there has been a change in regulator.
there is fraud involved.
63. Legislation gives which body the power to specify a code of conduct for surveyors and loss assessors?
Institute of Insurance and Risk Management.
Insurance Regulatory and Development Authority.
Life Insurance Council.
Securities and Exchange Board of India.
64. What key legacy has been left by the activities of the Tariff Advisory Committee?
A central compensation fund.
Customer classification status.
Illustrative projection rates.
Standard policy wordings.
65. Apart from conducting a comprehensive fact-find, the other main action that an insurance agent can take atoutset to minimise the risk of subsequently receiving a customer complaint is to:
ask for referrals.
offer commission rebates.
provide detailed disclosures.
register with the Insurance Ombudsman.
66. An award made by the Insurance Ombudsman will only be binding on the insurer if the:
complainant accepts this decision.
Consumer Forum is involved in the case.
insurer signs a disclaimer.
value of the award is less than 2 lakhs.
67. A policyholder asked his insurance agent for guidance on submitting a claim for the maturity benefit under hislife insurance policy. Due to pressure of work, the agent declined to assist. Consequently, this action is deemed to be a breach of the:
General Insurance Council’s guidelines.
Insurance Regulatory and Development Authority’s Code of Conduct.
Insurance Ombudsman’s protocols.
Insurance Brokers Association of India’s membership rules.
68. During the process of applying for life insurance, the customer discloses confidentially to the insurance agentthat he had a mild stroke four months ago, however this was NOT mentioned on the application form. In accordance with the Insurance Regulatory and Development Authority’s Code of Conduct, how should the insurance agent deal with this information?
Ask the policyholder’s doctor to send details to the insurer.
Notify the insurer of this matter.
Refuse to act for the customer in this case.
Respect this confidentiality by not discussing it with anyone else.
69. Which of the following cannot be insured?
Financial risk
Particular risk
Pure risk
Speculative risk
70. Mr. Kunal used to participate in Car race. While taking up the Insurance policy he disclosed this information. What kind of hazard does it refers to:
Occupational Hazard
Fraudulent representation
Moral hazard
Peril
71. On 6thAugust, there was a typhoon. Mr.Augustin who had insurance died in typhoon. Now how willthe insurance company categorise this risk?
Under the category of Pure risk
Under the category of peril risk
Under the category of speculative risk
Under the category of dynamic risk
72. Law of large numbers is worked out by which of the following?
Pooling of risk
Maintaining insurable interest
With utmost good faith
Randomness
73. Insurance companies apply law of _________ to determine the cost of total annual claims:
Universe
Large numbers
Average
All Above
74. Pure risks are those risks where there is:
Loss or no loss
Gain or no gain
Possibility of any benefits occurring
No Possibility of Gain
75. The type of risk that can be insured against is:
Speculative Risk
Pure Risk
Pure & Speculative risk
Non Financial Risk
76. Mr. Kunal used to participate in Car race. While taking up the Insurance policy he disclosed this information. What kind of hazard does it refers to:
Physical hazard or Occupational Hazard
Fraudulent representation
Moral hazard
Peril
77. Which statement is correct?
lung cancer is peril and smoking is a hazard
smoking is peril and lung cancer is hazard
Both the statement is correct
Both the statement is incorrect
78. There are two different groups of 100 people. The first group isbetween 30-39 years of age. Of these one person dies before the age26 Probability of death in this case is 1%. The second group is aged60-69 years of these 15 die before the age of 61. The probability of death in this case is 15%.
This shows that frequency of death is high in younger group
This shows that frequency of death is low in higher age-groups
This shows that frequency of death is high in higher age
This shows that frequency of death is same in any age groups
79. Insurance contract is valid because?
Gives revenue for govt
helps the destitute
wagering contract
Contract enforceable by law
80. Which of the following types of insurances is not a contract of indemnity:
Fire Insurance
Mediclaim (Health Insurance)
Motor Insurance
Life Insurance
81. Ajay does not consume alcohol for a month to not detect during medical test is:
Concealment of a material fact
Fraudulent misrepresentation
Innocent misrepresentation
None of the above
82. Amit is illiterate. He wants to take policy his friend Surya help him in knowing the question and filling the proposal form. What extra requirement is required in this case:
Amit’s photograph
Amit’s thumb impression only
policy document need to be registered Left thumb Impression of Amit along with a declaration of his friend
83. Mr. Josh was filling the proposal form but as his mother was sitting beside him even though hedrinks and smokes he ticked “NO” in smoking & drinking column of proposal form. This indicates?
He has breached the non-disclosure of the fact
He has breached the duty of disclosure by concealing the facts
He has breached the company by fraudulent information
He had done an innocent misrepresentation
84. Which of the following is not a type of bonus?
Simple reversionary bonus
Inception bonus
Compound reversionary bonus
Terminal bonus
85. The most important features of a Valid contract are:
Offer and acceptance and capacity to contract
Offer and acceptance and consideration
Consideration and capacity to contract
Consideration and legality of object
86. Mr. Nikhil makes an offer of Rs 20 lacs SA to Insurance Co. XYZ. Inresponse to this Insurance co. XYZ offers a SA to the tune of max. Rs10 lacs (counter offer). At this stage Nikhil and Company X can enterinto a valid contract?
Yes Nikhil and Insurance Co. can enter into a valid contract
Nikhil and Insurance Co. can enter into a valid contract if Nikhil unconditionally accepts the offer.
Nikhil and Insurance company can enter into a valid contractif he sends a request to the Ombudsman
87. Policy taken by husband and wife jointly is called as…..:
Group Insurance Policy
Family Floater policy
Joint life policy
Joint Account policy
88. Mr.Akash filled the proposal form but before submitting to the company he discussed with theagent that he is not sure whether he can pay for 15 years. This attitude affects which part of thecontract?
Consideration in the contract
Capacity to contract
Consensus ad idem
Offer and Acceptance in the contract
89. Human life is exposed to different type of risks. Which of these risks is not currently covered by Indian insurers?
Early death
Illness
Living too long
Unemployment not caused by disability
90. Rishabh Agarwal is a 40 years businessman. He leads a healthylifestyle. Every morning he practices yoga and abstains from smoking tobacco and alcohol. There is a family history of diabetes and both hisparents suffer from it. But Rishabh himself is not diagnosed withdiabetes. Based on this case which of the following statement is true?
He can be given insurance as he maintains a healthy lifestyle
He cannot be insured as his parents are diagnosed with diabetes
He cannot be insured as he is 40 years old
He can be given insurance with premium loading
91. The type of risk that can be insured against is:
Speculative Risk
Pure Risk
Pure & Speculative risk
Non Financial Risk
92. Which category of insurance has nature of low frequency but high severity?
Marine Insurance
Crop Insurance
Airline Insurance
Life Insurance
93. Law of large numbers is worked out by which of the following?
Pooling of risk
Maintaining insurable interest
With utmost good faith
Randomness
94. Which of the following cannot be insured?
Financial risk
Particular risk
Pure risk
Speculative risk
95. If a person consumes alcohol regularly and does not disclose the same in proposal form - what is the type of hazard?
Moral
Physical
Both are correct
Both are wrong
96. In insurance terms the risk of suffering a disability is best described as what type of risk?
Financial.
Fundamental
Homogenous.
Speculative
97. Akshat is a relatively cautious person. In insurance terms this will normally increase the likelihood that he will:
be considered an above average insurance risk
be considered a below average insurance risk
require insurance cover
require reinsurance cover
98. Level of risk is determined by:
The probability of the occurrence of a certain event and the extent of losses likely to be suffered due to the occurrence of the event.
Needs of the people for various types of protections.
The various types of risks to which the subject matter of insurance is exposed to
The experience of a company in a particular region.
99. Which of the following risks are insurable?
Financial Risk
Non-financial Risk
Both are correct
None of them
100. Insurance Companies provide cover only for:
Specified Risks
Unspecified risks
Excluded risks
Speculative risks
101. Insurance relates to:
Avoidance of risk
Pooling of risk
Protection of economic value of assets
Minimisation of risk
102. Loss of Life needs:
To provide for any medical expenses that might arise
To provide for children�s higher education
To provide a steady source of income to dependants after death
None of the above
103. A hazard can be defined as:
A specific event which might cause a loss
The chance of damage or loss
A condition that either increases the chance of a peril happening or cause its effect to be worse
Uncertainty of an event happening.
104. Which of the following is individual’s assets?
His properties
Family properties
public properties
none of the above
105. Policy document is:
Contract
Legal contract
Void contract
Evidence of contract
106. In life insurance which principle does not apply?
Principle of utmost good faith
Insurable interest
Principle of indemnity
Principle of Non-disclosure
107. Kailash is working with an MNC and has a co-worker Ramesh who helps him in his work. In the absence of Ramesh Kailash’s work would suffer significantly and he has to work on his own to complete his assignments. Which of the statement is true with regard to
Insurable Interest exists between Kailash and Ramesh
Insurable Interest does not exist between Kailash and Ramesh
Kailash has unlimited insurable interest in life of Ramesh
Ramesh has unlimited insurable interest in life of Kailash
108. What amount of insurable interest does an individual have in his own life?
20,000
50,000
Up to the sum assured taken in the plan
Unlimited
109. The insurance company issues ________________ after accepting proposal
First Premium Receipt
Renewal Premium Receipt
Deposit Receipt
None of the above
110. Even though the insurer may avoid the contract entirely “ab initio” for the reason of misrepresentation or non-disclosure the Insurance Act 1938 gives a protection to the policy holder making the policy in disputable after 2 years (excepting for fraud)
Sec.131 of the Insurance Act 1938
Sec. 38 of the Insurance Act 1938
Sec. 45 of the Insurance Act 1938
Sec. 41 of the Insurance Act 1938
111. Shamsher has a health insurance policy of 1,00,000 individually and from his company for 2,00,000. He falls sick and got hospitalized. His hospital bill ran to 50,000. He claimed this amountfrom his individual policy. Also, he placed the request with his company. His company has rejected the claim. What type of contract is this?
Indemnity contract.
Value contract.
Deemed contract
Rolling contract.
112. The __________ of the policy states that the proposal declaration signed by the proposer forms the basis of contract:
Preamble
Attestation
Operative Clause
Proviso
113. Certificate from the village panchayat:
Will be considered as standard age proof
Will be considered as non-standard age proof
Will not be accepted
All are wrong
114. What are the 2 types of Age proof documents?
Normal & Abnormal
Standard & Non-Standard
Important & Unimportant
Actual & Theoretical
115. Who fills up proposal form?
Applicant
Proposer
Agent
Policyholder
116. When the life assured and the policyholder are one and the same how the policy will be known?
Policy taken by another life
Policy taken on own life by another
Policy on another life
Policy on own life
117. ______________ refers to the transfer of the title rights interest of the insurance policy
Nomination
Assignment
Surrender
None of the above
118. Appointee's role
Signature on the proposal
Medical exams
insurable interest
when Nominee is Minor
119. Nomination can be in favor of how many people?
One person
Two persons
Three persons
It can be any number
120. Insurable Interest is deemed to exist in which of the following relationship?(i) Husband and wife (ii) Parent and children (iii) Employer and employees(iv) Brother and Sister.
(i) (ii) and (iv)
(i) (iii) and (iv)
(ii) (iii) and (iv)
(i), (ii) and (iii)
121. If a policy holder is not satisfied with terms and conditions of the policy which she/he has received, then there is an option to return policy for cancellation within...days from the date of receipt for policy by policyholder.
15Days
20 Days
25 Days
10 Days
122. Types of assignment:
Absolute
Term assignment
Conditional
Absolute & Conditional
123. Material facts are those:
That are specified to be so in the proposal
That are considered to be so by the proposer
That would influence the decision of the underwriter in accepting the risk
That are specified so in the Insurance Act 1938
Nikhil and Insurance Co. cannot enter into valid contract.
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