Principles and Practice of Life Insurance MCQ Questions and Answers Part – 1
Principles and Practice of Life Insurance MCQ Questions and Answers Part – 2
Principles and Practice of Life Insurance MCQ Questions and Answers Part – 3
51. The insurance plays a role in the economic development of the country in following Ways ___________.
A. Releases capital for new investments.
B. The job potential increases.
C. Money collected is invested in infrastructure.
D. All of the above.
ANSWER: D
52. On the death of the bread-earner, two losses occur in the family one is loss of human life and the other is __________.
A. earning power of family.
B. loss of insurance.
C. loss of investment.
D. loss of bank deposits.
ANSWER: A
53. Valuation in life insurance means ___________.
A. the process of arriving at the profit of a life insurance company.
B. the process of determining the net premium for a life insurance policy.
C. the process of arriving at the bonus in a life insurance company.
D. the process by which the value of all the existing policies is ascertained in a life insurance company.
ANSWER: D
54. Notification of Alteration in Risk is a condition _____________.
A. precedent to liability.
B. subsequent to liability.
C. precedent to the contract.
D. subsequent to the contract.
ANSWER: D
55. The whole-life plans in India ___________.
A. pay death benefits only whenever it occurs.
B. pay death benefits after retirement.
C. pay policy benefits after the person attains a certain age, say 80-85 years.
D. pay death benefits after payment of first premium.
ANSWER: A
56. What are with-profit policies?
A. Insurance policies, which can be sold at a profit.
B. Policies which can be pledged to avail loan.
C. Policies under which bonus is paid.
D. Money back plans.
ANSWER: C
57. Name the Indian insurance organisation which for the first time started charging normal rates of premium on Indian ________.
A. Bombay Mutual Life Assurance society.
B. Oriental Life Assurance Company.
C. New India Assurance Company.
D. Hindustan C-operating Insurance Society.
ANSWER: A
58. In case a business firm sets up a private fund to pay out the losses if happens, then that is called as ___________.
A. Individual insurance.
B. family insurance
C. Self-insurance.
D. group insurance
ANSWER: C
59. Group insurance is ideally suited for covering _______.
A. affluent person in the society.
B. weaker sections of the society.
C. employer-employee groups.
D. both (2) and (3).
ANSWER: D
60. Master policy is issued for ___________.
A. term insurance schemes.
B. permanent insurance.
C. group insurance schemes
D. individual policy.
ANSWER: C
61. For the introduction of a group scheme, we need a _________.
A. homogeneous group.
B. insured group.
C. small group of persons.
D. large group.
ANSWER: A
62. The doctrine of Caveat Emptor governs ________.
A. Marine insurance contracts.
B. Commercial contracts.
C. Group insurance contracts.
D. All general insurance contracts.
ANSWER: B
63. What is floating policy?
A. A standard fire policy.
B. Policy covering the fixed sum assured stock.
C. A policy that covers stocks located in various godowns under a single policy.
D. A renewable marine policy.
ANSWER: C
64. Claim forms are not compulsorily used in ________.
A. fidelity guarantees.
B. marine cargo.
C. machinery breakdown.
D. Others.
ANSWER: B
65. For settlement of claims, Insurer requires proper knowledge of ___________.
A. law, principles and practice of insurance.
B. law only.
C. principles and practice of insurance.
D. Law, principles, practice of insurance, terms and conditions of policies, extensions and modifications.
ANSWER: D
66. The burden of proof of the loss within the scope of policy is upon the __________.
A. Insurer.
B. Insured.
C. Surveyor.
D. Defence Lawyer.
ANSWER: B
67. As the age increases risk on the life _______.
A. Increases.
B. Decreases.
C. does not change.
D. Moderate.
ANSWER: A
68. If the interest rates in the market are higher, then cost of insurance _________.
A. Increases.
B. moderate.
C. Decreases.
D. no change.
ANSWER: C
69. The expenses which do not vary with the amount of business written are called _________.
A. Direct expenses.
B. Overhead expenses.
C. Indirect expenses.
D. Trading expenses.
ANSWER: B
70. Brokers Association of India was granted recognition by IRDA on _________.
A. Dec 11, 2001.
B. Dec 11, 2002.
C. Dec 11, 1999.
D. Dec 11, 2003.
ANSWER: A
71. Foreign equity participation is allowed in insurance sector up to a limit of ____ percent.
A. 80.
B. 73.
C. 49.
D. 26 .
ANSWER: D
72. ________ provides guidelines to decide whether the loss is caused by an insured peril or an expected peril.
A. Indemnity.
B. Proximate clause.
C. Standard claims.
D. Trip sheet.
ANSWER: B
73. _______ means those risks which involve a situation where there is a possibility of gain.
A. Personal risk.
B. Speculative risk.
C. Liability risk.
D. Other risk.
ANSWER: B
74. _________ is concerned with the conversion of a firms asset and earning power against risks of accidental loss.
A. Risk retention.
B. Risk control .
C. Risk management.
D. Risk identification.
ANSWER: C
75. __________ is a contract between the insurer and the insured under which the insurer undertakes to compensate the insured for the loss arising from the risk.
A. Insurance.
B. Agreement.
C. Indemnity.
D. Proximate clause.
ANSWER: A
76. The authorized capital of GIC is __________.
A. 35 Crore.
B. 50 Crore.
C. 75 Crore.
D. 80 Crore.
ANSWER: C
77. __________ is the appointing of a nominee under the policy.
A. Nomination.
B. Election.
C. Justification.
D. Assignment.
ANSWER: A
78. The ________ has the right to receive the amount assured in the event of death of the insured.
A. Employer.
B. Nominee.
C. Friend.
D. third party.
ANSWER: B
79. Nomination can be done at the inception of the policy by providing details of nominee in the _________.
A. white paper.
B. proposal form.
C. premium receipt.
D. promissory note.
ANSWER: B
80. Nomination can be done only by a _________ who is a major holding Policy Bond in his own name.
A. Employer.
B. legal advisor.
C. insurance company.
D. policy holder.
ANSWER: D
81. Under Nomination, the Nominee gets only the right to receive the policy money in the ___________ of the policyholder.
A. event of sickness.
B. event of death.
C. event of credit.
D. event of happiness.
ANSWER: B
82. ________ is a means whereby the beneficial interest, right and title under a policy gets transferred from the assignor to the assignee.
A. Nomination.
B. Selection.
C. Election.
D. Assignment.
ANSWER: D
83. ________ is the policyholder who transfers the title of the policy.
A. Assignee.
B. Nominee.
C. Assignor.
D. Consignee.
ANSWER: C
84. ______ is the person who derives the title from the assignor.
A. Assignee.
B. Nominee.
C. Assignor.
D. Consignee.
ANSWER: A
85. ________ can be done by mere endorsement on the policy or by a separate duly stamped deed.
A. Nomination.
B. Election.
C. Justification.
D. Assignment.
ANSWER: D
86. A life insurance policy from LIC may be assigned only after a period of ________.
A. 10 years.
B. 5 years.
C. 3 years.
D. 1 year.
ANSWER: B
87. The total number of branch offices of LIC is _________.
A. 800.
B. 950.
C. 1000.
D. 2048.
ANSWER: D
88. How many zonal offices are functioning under LIC?
A. 5 zonal offices.
B. 8 zonal offices.
C. 10 zonal offices.
D. zonal offices.
ANSWER: B
89. LICs _________ office is to perform the activities relating to investments, framing and administering the ules and regulations of corporation.
A. Zonal.
B. Divisional.
C. Central.
D. Branch.
ANSWER: C
90. In LICs ______ office almost 90% of the functions relate to policy holders.
A. Zonal.
B. Central.
C. Divisional.
D. branch.
ANSWER: D
91. The LICs Zonal office and Divisional office are established on the basis of ________.
A. number of agents.
B. number of policyholders
C. geographical areas.
D. fund allocation.
ANSWER: C
92. The document which contains the terms and conditions of the life insurance contract is termed as the __________.
A. Cover note.
B. Life insurance policy.
C. Agreement.
D. Other document.
ANSWER: B
93. The person to whom the policy proceeds will be paid in the event of the death of the insured is known as
_______.
A. Assignee.
B. Nominee.
C. Consignee.
D. Beneficiary.
ANSWER: D
94. A ________ is the person who sends the proposal form for taking an insurance policy and pays the premium.
A. Proposer.
B. Nominee.
C. legal advisor.
D. employer.
ANSWER: A
95. The cash value of the policy, paid by the company upon the surrender of a policy before it becomes payable by maturity is known as __________.
A. Premium.
B. Cash surrender value.
C. Consideration.
D. Commission.
ANSWER: B
96. One who shares the risk under an insurance policy or policies is known as __________.
A. Assurer.
B. Insurer.
C. Co-insurer.
D. Agent.
ANSWER: C
97. A policy protecting a group of persons, usually employees of a firm generally called as ___________.
A. Fire insurance policy.
B. Group insurance policy.
C. Marine insurance.
D. Automobile insurance.
ANSWER: B
98. The period of time for which the policy will normally remain in existence is known as _______.
A. Policy term.
B. Policy note.
C. Proposed time.
D. Grace time.
ANSWER: A
99. What is meant by a claim under an insurance policy?.
A. Any demand made by the policyholder on the insurer.
B. A demand to fulfil the policyholder’s obligation.
C. A demand to fulfil the insurers obligations.
D. A demand to fulfil the third party.
ANSWER: C
100. If a life insured has died a few days before the date of maturity, but after signing discharge from, to whom should the claim be paid?.
A. Surviving heirs.
B. Nominee.
C. The policy holders bank account.
D. Any of the above three above mentioned.
ANSWER: B
