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Quiz 5
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Q.1
Risk transfer means
Insuring with an insurance company
Insuring with an insurance company
Insuring with the owner of the company
Risk retention
Q.2
A valuation is done by a life insurer because
It is a statutory requirement
It is necessary to be able to declare dividends to shareholders
It tells the insurer how well it is managing the business
All of the above
Q.3
The reason for charging level premiums is
Risk increases as age increases
It is convenient to the policyholder
It is convenient to the insurer
All of the above
Q.4
What does a premium depend upon?
The place of worship visited by the person to be insured
The state of health of the policyholder
The decision of the underwriter
The report of the agent
Q.5
IRDA has prescribed the design and content of a proposal form through
IRDA (Licensing of Agents) Regulations, 2000
IRDA (Protection of Policyholders' Interests) Regulations, 2002
IRDA (Standard Proposal Form for Insurance) Regulations, 2013
All of the above
Q.6
A policy taken with critical illness rider benefit is being assigned. Which type of assignment would suit the intended purpose because if the life insured is diagnosed with a critical illness, he only should receive the critical illness rider claim?
Absolute assignment
Conditional assignment
Loan assignment
Collateral assignment
Q.7
Which of the following statement is true?
Insurance protects the asset
Insurance prevents its loss
Insurance reduces possibilities of loss
Insurance pays when there is loss of asset
Q.8
Which of the following statements is true?
Insurance is a method of sharing the losses of a ‘few’ by ‘many’
Insurance is a method of transferring the risk of an individual to another individual
Insurance is a method of sharing the losses of a ‘many’ by a few
Insurance is a method of transferring the gains of a few to the many
Q.9
Who bears the investment risk in a fixed benefit annuity?
Insurer
Insured
State
Risk pool
Q.10
Which of the following statements is true?
Life insurance policies are contracts of indemnity, while general insurance policies are contracts of assurance
Life insurance policies are contracts of assurance, while general insurance policies are contracts of indemnity
In case of general insurance, the risk event protected against is certain
The certainty of risk event in case of general insurance increases with time
Q.11
Which of the following statements is incorrect?
Ombudsman is appointed by the Central Government under powers of the Insurance Act 38 and under Redressal of Public Grievance Rules 1998
The recommendations of the Ombudsman are always binding on the insured
The Ombudsman can act as a mediator by mutual agreement between the insurer and the insured
If mediated, the decision of the Ombudsman is final whether to accept or reject the complaint
Q.12
Which of the following is not a phase in retirement planning?
Accumulation
Inflation
Conservation
Distribution
Q.13
While distributing surplus, care has to be taken for
Solvency requirements
Increasing free assets
Both A & B
None of the above
Q.14
What are the charges in a ULIP?
Policy Allocation Charge
Mortality charge
Both A & B
None of the above
Q.15
While prospecting for selling insurance, approaching the members of a caste or community association will be classified under which of the following?
Immediate group
Natural market
Centers of influence
References and introductions
Q.16
Which is not an appropriate reason for a proper financial planning?
Break-up of joint family system
Changing lifestyle
Underwriting
Change in behavioral pattern
Q.17
When is the right time to start financial planning?
Young age
Middle age
Advanced age
First salary
Q.18
Which facility is given to the policyholder to neutralise the bargaining power in adhesion contracts?
Surrender
Loan
Assignment
Free look period
Q.19
The measures to reduce chances of occurrence of risk are known as _________.
Risk retention
Loss prevention
Risk transfer
Risk avoidance
Q.20
By transferring risk to insurer, it becomes possible _________.
To become careless about our assets
To make money from insurance in the event of a loss
To ignore the potential risks facing our assets
To enjoy peace of mind and plan one’s business more effectively
Q.21
Origins of modern insurance business can be traced to _________.
Bottomry
Lloyds
Rhodes
Malhotra Committee
Q.22
Which of the below option best describes the process of insurance?
Sharing the losses of many by a few
Sharing the losses of few by many
One sharing the losses of few
Sharing of losses through subsidy
Q.23
Who devised the concept of HLV?
Dr. Martin Luther King
Warren Buffet
Prof. Hubener
George Soros
Q.24
Which one of the following statements is correct?
People hesitate to buy life insurance because they are not aware of their needs
People hesitate to buy life insurance because they prefer to enjoy the present
Both the statements are correct
Both the statements are wrong
Q.25
State the correct option.
In a policy document, it is now compulsory to indicate the address of the local Ombudsman
Address of the insured is optional in the policy document
The address of the IRDA is also necessarily shown in the policy document
Either the local Ombudsman's address or that of the IRDA needs to be shown in the policy
Q.26
Before the composite licence could be renewed, the applicant needs to undergo renewal training of _________ from an approved institution.
25 hours
50 hours
35 hours
75 hours
Q.27
The limit of the National Consumer Disputes Commission is
Rs. 75 lakh
Rs. 100 lakh
Rs. 150 lakh
No limit
Q.28
Which of the following is not an element of the life insurance business?
Asset
Risk
Principle of mutuality
Subsidy
Q.29
Which of the following defines a proposal form?
IRDA Act, 1999
IRDA (Licensing of Agents) Regulations, 2000
Insurance Act, 1938
IRDA (Protection of Policyholders' Interests) Regulations, 2002
Q.30
What are the two distinct phases of a deferred annuity?
Waiting and Starting phases
Loading and Unloading phases
Accumulation and Payout phases
Commutation and Continuation phases
Q.31
Bank deposit addresses which type of need?
Uncertainties
Wealth creation
Savings
Contingencies
Q.32
From the below given age proof documents, identify the one which is classified as non-standard by insurance companies.
School certificate
Identity card in case of defence personnel
Ration card
Certificate of baptism
Q.33
The sum insured under a health insurance policy would primarily depend on the
Age
Health condition
Affordability
Income
Q.34
Section 45 of Insurance Act, 1938 speaks about rejecting a claim after _________ of taking a policy.
1 year
3 years
5 years
7 years
Q.35
In group insurance, risk of individuals is not assessed.
TRUE
FALSE
Partly true
Partly false
Q.36
In a money back plan, what is the maturity claim payable?
Sum insured
Sum insured less survival benefits paid already
Bonuses
Nothing is payable
Q.37
Which of the following statements are correct?
i. The sum assured under group insurance is not fixed by the individual member.
ii. A person whose proposal is declined under individual scheme can get insurance under group policy.
Statement i is correct
Statement ii is correct
Both statements are correct
None of the three
Q.38
A policy can be surrendered only if it has acquired
Legal value
Money value
Policy value
Paid-up value
Q.39
Which actuarial aspect(s) are taken into account while fixing the premium?
I. Mortality
II. Interest assumption
III. Office expenses
Only I
Only I and II
Only I, II and III
Only II and III
Q.40
In which type of products were protection and saving elements separated?
Traditional cash value plans
Non-traditional plans
Both A & B
None of the above
Q.41
Which of the following statements is correct?
The policy document has to be signed by a competent authority, but need not be compulsorily stamped according to the Indian Stamp Act
The policy document has to be signed by a competent authority and should be stamped according to the Indian Stamp Act
The policy document need not be signed by a competent authority, but should be stamped according to the Indian Stamp Act
The policy document neither needs to be signed by a competent authority nor it needs to be compulsorily stamped according to the Indian Stamp Act
Q.42
Which of the following statements best describes an ordinary annuity?
Equal cash flows at equal time intervals forever
Equal cash flows at equal time intervals for a specific time period
Lumpy cash flows at equal time intervals forever
Lumpy cash flows at equal time intervals for a specific time period
Q.43
If the proponent has no insurable interest in the insured, the underwriter will
Accept with reduced sum assured
Reject the proposal
Accept with lien
Accept with extra premium
Q.44
In respect of payment of Reversionary Bonuses, which of the following is incorrect?
Payable on maturity
Payable on death
Both A & B
Payable at any time during the term of a policy
Q.45
Why does an officer conduct special enquiry in the case of death claim which arose after 4 years?
On suspicion of suppression of facts
As a precaution
As a routine
For large sum assured
Q.46
Which of the following cannot be categorised under risk?
Dying too young
Dying too early
Natural wear and tear
Living with disability
Q.47
What is the meaning of the term non-medical underwriting?
Taking health insurance
Buying a medical insurance without medical exam
Buying a life insurance without medical exam
None of the three
Q.48
In respect of nomination, which of the following statements are correct?
More than one person can be nominated
Nomination can be done either at the time of commencement or later
Nomination can be changed by making an endorsement
All of the above
Q.49
What is the special feature of a Family Floater policy?
The total sum insured floats amongst the family members
Husband/wife, children and parents/parents-in-law can be covered
Both A & B
None of the three
Q.50
Which special feature of Unit Linked Policy allowed change from one fund to another?
Transfer
Switching
Assignment
Loan
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