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Quiz 8
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Q.1
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
Q.2
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
Q.3
Insurability of women is governed by
Need for insurance
Capacity to pay premiums
Both A & B
None of the above
Q.4
Which of the following statements is correct?
Insurance is a kind of investment
Insurance is nothing but a gamble
Insurance is risk transfer through risk pooling
Insurance is a charity
Q.5
What are the reason(s) for increase in health insurance in India?
Health consciousness
Increased longevity
Increase in income
All of the above
Q.6
The sole focus during a client’s fact-find session was healthcare requirements and estate planning. Which main life stage is the most likely to fall into?
Young married
Young married with children
Pre-retirement
Retirement
Q.7
Apart from the salary level, what another key feature of Alok’s job is likely to have a major impact on the level of his 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
Q.8
Which of the following is not correct with regards to insurable interest?
Father taking out insurance policy on his son
Spouses taking out insurance on one another
Friends taking out insurance on one another
Employer taking out insurance on employees
Q.9
Which of the following options is correct?
Premium paid by a client for health cover enjoys income tax deduction under section 80C of the Income Tax Act
Premium paid towards health cover earns income tax rebate under section 80D of the Income Tax Act
Premium paid for a health cover does not qualify for tax benefit under any provision of the Income Tax Act
There is no upper limit to sum assured in a health insurance policy
Q.10
State the incorrect statement of the following ones.
Premium for an MRP as a collateral for a bank loan need not be paid as the bank is expected to pay the same
Keyman life policy can compensate for losses incurred due to stoppage of work, following the absence of the keyman from work
Keyman life policy proceeds can be set off against lost income from lost business
Keyman can provide compensation to protect profits
Q.11
_________ and _________ refer to measures to reduce chance of occurrence and measures to reduce degree of losses.
Loss Prevention, Loss damage
Loss Control, Loss management
Loss advantage, Loss prevention
Loss Prevention, Loss Reduction
Q.12
Cost of the risk would _________ with the probability and amount of loss
Increase
Decrease
Vary
None of the above
Q.13
_________ is the maximum amount an insurance company will pay if an insured asset is deemed a total loss.
Insurance value
Actual value
Replacement value
Guaranteed Replacement Cost
Q.14
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
Q.15
Which of the following statements is not correct?
One should avail potential tax saving opportunities
Purpose of tax saving is to minimize taxes and not to evade them
Tax planning helps to gain maximum advantage of tax laws
Tax planning is illegal in India
Q.16
Insurance works on the principle of
Trust
Sharing
Randomness
All of the above
Q.17
Which of the following statements are correct?
i. In order to be insurable, a risk must be capable of statistical estimation.
ii. In insurance, only economic or financial losses can be compensated.
Statement i is correct
Statement ii is correct
Both statements i and ii are correct
None of the three
Q.18
Which of the below losses are covered under keyman insurance?
Property thef
Losses related to the extended period when a key person is unable to work
General liability
Losses caused due to errors and omission
Q.19
The _________ the premium paid by you towards your life insurance, the _________ will be the compensation paid to the beneficiary in the event of your death.
Higher, higher
Lower, higher
Higher, lower
Faster, slower
Q.20
_________ means that insurer would assess and compensate only the exact amount of loss.
Certainty
Uncertainty
Probability
Indemnity
Q.21
Proximate Cause refer to the _________ cause which set in motion a chain of events producing loss.
Active
Efficient
A & B are correct
None of the above
Q.22
An investor holds a wide range of shares. If the Reserve Bank of India announces a series of significant interest rate increases, the prices of these shares are most likely to
Become volatile
Decrease
Increase
Stagnate
Q.23
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
Q.24
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
Q.25
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 temporarily suspended
It is replaced by a newly-underwritten sum insured
Q.26
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
Q.27
Of 400 houses costing each Rs.20, 000 if on an average 4 houses are damaged in fire causing a total loss of Rs80,000 what should be the annual contribution of each house owner.
Rs.800
Rs.200
Rs.100
Rs.400
Q.28
The losses of a few are shared amongst many through the mechanism of –
Nuclear family
Insurance
Government
All of the above
Q.29
_________ consists of collecting premiums from numerous individuals to compensate the few who may suffer losses.
Pooling
Contract
Guarantee
IRDA
Q.30
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
Q.31
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
Q.32
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
Q.33
When undertaking financial planning for individuals without capital, what savings need is likely to be addressed in every single case?
Emergency funds
Funds for children's savings
Funds for educational costs
House purchase funds
Q.34
Naveen is addressing his income needs by investing directly in corporate bonds. In what form will he receive this income?
Annuity instalments
Dividend payments
Interest payments
Rental payments
Q.35
Which policy referring to policies that provide coverage only for the loss caused by the perils?
Specifies perils
Named Perils
All Risk
All perils
Q.36
Which of the following statements is correct?
Selling is an art, not a science
Selling is a science, not an art
Selling is neither an art nor a science
Selling is both an art and a science
Q.37
Which of the following statements is incorrect?
Consumer disputes involving private insurance companies can be heard by consumer forum or commission
Life insurance does not come under Consumer Protection Act, 1986
Complaints can be lodged against private insurers as well as public sector companies/corporations like LIC
Complaints can be lodged only against life insurance as well as non-life insurance companies
Q.38
A coverage that protects businesses engaged in electronic commerce from losses caused by hackers is termed as _________
Hospital Insurance
Hospital Insurance
Hacker Insurance
Identity theft Insurance
Q.39
Coverage against loss through stealing by individuals not in a position of trust is called _________
Hospital Insurance
Hull Insurance
Group Insurance
Theft Insurance
Q.40
An insurance contract has to fulfill the requirements of the
Insurance Act, 1938
IRDA Act, 1999
LIC Act, 1956
Indian Contract Act, 1872
Q.41
Term insurance is mainly suitable for which of the following needs?
Tax planning
Savings
Disease
Income replacement
Q.42
In case of ULIPs, which of the following statements is correct?
Entire premium is invested in units
Premium less charges are invested
Premium less bonuses are invested in units
Premium less risk charges are invested
Q.43
As per IRDA norms, which of the following non-traditional saving life insurance products are permitted in India?
I. Unit Linked Insurance Plan
II. Variable Insurance Plan
Only I
Only II
Both I and II
Neither I nor II
Q.44
What is the set time limit for completing a claim investigation?
1 month
6 months
1 year
2 years
Q.45
How is a policy loan different from a commercial loan?
There is no legal obligation to repay a policy loan
In case of policy loan, there is no need for a credit check
Both A & B
None of the three
Q.46
Which of the following is incorrect?
Financial planning is for wealthy individuals only
A disciplined approach and dedicated savings are necessary
An unplanned impulsive approach could spell financial distress
An investment should suit one's risk appetite
Q.47
Ajay pays insurance premium for his employees. Which of the following insurance premiums will not be treated deductible as compensation paid to an employee?
I. Health insurance with benefits payable to an employee
II. Keyman life insurance with benefits payable to Ajay
Only I
Only II
Both I and II
Neither I nor II
Q.48
Which of the following statements are false?
I. Policy decisions in an insurance organization mean decisions relating to issue of specific insurance policies.
II. Policy decisions in an insurance organization mean decisions relating to different kind of plans of insurance to be offered to the public.
Only I
Only II
Both I and II
Neither I nor II
Q.49
Who is the person that arranges for a customer to get the necessary insurance?
An agent
A retailer
A broker
An intermediary
Q.50
In which event(s) does availing cashless facility not require a pre-authorisation from the insurer/TPA?
If the hospitalization is to a non-network hospital
Emergency hospitalization
Both A & B
None of the three
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