QUESTION BANK OF NEW IC-33

CHAPTER 1

1.Which among the following is the regulator for the insurance industry in India?I. Insurance Authority of IndiaII. Insurance Regulatory and Development AuthorityIII. Life Insurance Corporation of IndiaIV. General Insurance Corporation of India

2.Which among the following is a secondary burden of risk?I. Business interruption costII. Goods damaged costIII. Setting aside reserves as a provision for meeting potential losses in thefutureIV. Hospitalisation costs as a result of heart attack

3.Which among the following is a method of risk transfer?I. Bank FDII. InsuranceIII. Equity sharesIV. Real estate

4.Which among the following scenarios warrants insurance?I. The sole bread winner of a family might die untimelyII. A person may lose his walletIII. Stock prices may fall drastically

5.Which of the below insurance scheme is run by an insurer and not sponsored bythe Government?I. Employees State Insurance CorporationII. Crop Insurance SchemeIII. Jan ArogyaIV. All of the above

6.Risk transfer through risk pooling is called ________.I. SavingsII. InvestmentsIII. InsuranceIV. Risk mitigation

7.The measures to reduce chances of occurrence of risk are known as _____.I. Risk retentionII. Loss preventionIII. Risk transferIV. Risk avoidance

8.By transferring risk to insurer, it becomes possible ___________.I. To become careless about our assetsII. To make money from insurance in the event of a lossIII. To ignore the potential risks facing our assetsIV. To enjoy peace of mind and plan one’s business more effectively

9.Origins of modern insurance business can be traced to __________.I. BottomryII. LloydsIII. RhodesIV. Malhotra Committee

10.In insurance context ‘risk retention’ indicates a situation where _____.I. Possibility of loss or damage is not thereII. Loss producing event has no valueIII. Property is covered by insuranceIV. One decides to bear the risk and its effects

11.Which of the following statement is true?I. Insurance protects the assetII. Insurance prevents its lossIII. Insurance reduces possibilities of lossIV. Insurance pays when there is loss of asset

12.Out of 400 houses, each valued at Rs. 20,000, on an average 4 houses get burntevery year resulting in a combined loss of Rs. 80,000. What should be the annualcontribution of each house owner to make good this loss?I. Rs.100/-II. Rs.200/-III. Rs.80/-IV. Rs.400/-

13.Which of the following statements is true?I. Insurance is a method of sharing the losses of a ‘few’ by ‘many’II. Insurance is a method of transferring the risk of an individual to anotherindividualIII. Insurance is a method of sharing the losses of a ‘many’ by a fewIV. Insurance is a method of transferring the gains of a few to the many

14.Why do insurers arrange for survey and inspection of the property beforeacceptance of a risk?I. To assess the risk for rating purposesII. To find out how the insured purchased the propertyIII. To find out whether other insurers have also inspected the propertyIV. To find out whether neighbouring property also can be insured

15.Which of the below option best describes the process of insurance?I. Sharing the losses of many by a fewII. Sharing the losses of few by manyIII. One sharing the losses of few IV. Sharing of losses through subsidy

CHAPTER 2

1.How does diversification reduce risks in financial markets?I. Collecting funds from multiple sources and investing them in one placeII. Investing funds across various asset classesIII. Maintaining time difference between investmentsIV. Investing in safe assets

2.Which of the below is not an element of the life insurance business?I. AssetII. RiskIII. Principle of mutualityIV. Subsidy

3.Who devised the concept of HLV?I. Dr. Martin Luther KingII. Warren BuffetIII. Prof. HubenerIV. George Soros

4.Which of the below mentioned insurance plans has the least or no amount ofsavings element?I. Term insurance planII. Endowment planIII. Whole life planIV. Money back plan

5.Which among the following cannot be termed as an asset?I. CarII. Human LifeIII. AirIV. House

6.Which of the below cannot be categorised under risks?I. Dying too youngII. Dying too earlyIII. Natural wear and tearIV. Living with disability

7.Which of the below statement is true?I. Life insurance policies are contracts of indemnity while general insurancepolicies are contracts of assuranceII. Life insurance policies are contracts of assurance while general insurancepolicies are contracts of indemnityIII. In case of general insurance the risk event protected against is certain

IV. The certainty of risk event in case of general insurance increases with time

8.Which among the following methods is a traditional method that can helpdetermine the insurance needed by an individual?I. Human Economic ValueII. Life Term PropositionIII. Human Life ValueIV. Future Life Value

9.Which of the below is the most appropriate explanation for the fact that youngpeople are charged lesser life insurance premium as compared to old people?I. Young people are mostly dependantII. Old people can afford to pay moreIII. Mortality is related to ageIV. Mortality is inversely related to age

10.Which of the below is not an advantage of cash value insurance contracts?I. Safe and secure investmentII. Inculcates saving disciplineIII. Lower yieldsIV. Income tax advantages

11.Which of the below is an advantage of cash value insurance contracts?I. Returns subject to corroding effect of inflationII. Low accumulation in earlier yearsIII. Lower yieldsIV. Secure investment

CHAPTER 3

1. Which among the following is an example of coercion?I. Ramesh signs a contract without having knowledge of the fine printII. Ramesh threatens to kill Mahesh if he does not sign the contractIII. Ramesh uses his professional standing to get Mahesh to sign a contractIV. Ramesh provides false information to get Mahesh to sign a contract

2. Which among the following options cannot be insured by Ramesh?I. Ramesh’s houseII. Ramesh’s spouseIII. Ramesh’s friendIV. Ramesh’s parents

3.Which element of a valid contract deals with premium?I. Offer and acceptanceII. ConsiderationIII. Free consentIV. Capacity of parties to contract

4._____________ relates to inaccurate statements, which are made without anyfraudulent intention.I. MisrepresentationII. ContributionIII. OfferIV. Representation

5.________________ involves pressure applied through criminal means.I. FraudII. Undue influenceIII. CoercionIV. Mistake

6.Which among the following is true regarding life insurance contracts?I. They are verbal contracts not legally enforceableII. They are verbal which are legally enforceableIII. They are contracts between two parties (insurer and insured) as perrequirements of Indian Contract Act, 1872IV. They are similar to wager contracts

7.Which of the below is not a valid consideration for a contract?I. MoneyII. PropertyIII. BribeIV. Jewellery

8.Which of the below party is not eligible to enter into a life insurance contract?I. Business ownerII. MinorIII. House wifeIV. Government employee

9.Which of the below action showcases the principle of “Uberrima Fides”?I. Lying about known medical conditions on an insurance proposal formII. Not revealing known material facts on an insurance proposal formIII. Disclosing known material facts on an insurance proposal formIV. Paying premium on time

10.Which of the below is not correct with regards to insurable interest?I. Father taking out insurance policy on his sonII. Spouses taking out insurance on one anotherIII. Friends taking out insurance on one anotherIV. Employer taking out insurance on employees

11.When is it essential for insurable interest to be present in case of life insurance?I. At the time of taking out insuranceII. At the time of claimIII. Insurable interest is not required in case of life insuranceIV. Either at time of policy purchase or at the time of claim

12.Find out the proximate cause for death in the following scenario?Ajay falls off a horse and breaks his back. He lies there in a pool of water andcontracts pneumonia. He is admitted to the hospital and dies because ofpneumonia.I. PneumoniaII. Broken backIII. Falling off a horseIV. Surgery

CHAPTER 4

1.Which among the following would you recommend in order to seek protectionagainst unforeseen eventsI. InsuranceII. Transactional products like bank FD’sIII. SharesIV. Debentures

2.When is the best time to start financial planning?I. Post retirementII. As soon as one gets his first salaryIII. After marriageIV. Only after one gets rich

3.Which among the following is not an objective of tax planning?I. Maximum tax benefitII. Reduced tax burden as a result of prudent investmentsIII. Tax evasionIV. Full advantage of tax breaks

4.An individual with an aggressive risk profile is likely to follow wealth _______investment style.I. ConsolidationII. GiftingIII. AccumulationIV. Spending

5.Which among the following is a wealth accumulation product?I. Bank LoansII. SharesIII. Term Insurance PolicyIV. Savings Bank Account

6.Savings can be considered as a composite of two decisions. Choose them fromthe list below.I. Risk retention and reduced consumptionII. Gifting and accumulationIII. Spending and accumulationIV. Postponement of consumption and parting with liquidity

7.During which stage of life will an individual appreciate past savings the most?I. Post retirementII. EarnerIII. LearnerIV. Just married

8.What is the relation between investment horizon and returns?I. Both are not related at allII. Greater the investment horizon the larger the returnsIII. Greater the investment horizon the smaller the returnsIV. Greater the investment horizon more tax on the returns

9.Which among the following can be categorised under transactional products?I. Bank depositsII. Life insuranceIII. SharesIV. Bonds

10.Which among the following can be categorised under contingency products?I. Bank depositsII. Life insuranceIII. SharesIV. Bonds

11.Which of the below can be categorised under wealth accumulation products?I. Bank depositsII. Life insuranceIII. General insuranceIV. Shares

12.__________ is a rise in the general level of prices of goods and services in aneconomy over a period of time.I. DeflationII. InflationIII. StagflationIV. Hyperinflation

13.Which of the below is not a strategy to maximise discretionary income?I. Debt restructuringII. Loan transferIII. Investment restructuringIV. Insurance purchase

CHAPTER 5

1.Which among the following is an intangible product?I. CarII. HouseIII. Life insuranceIV. Soap

2.The premium paid for whole life insurance is _____________ than the premiumpaid for term assurance.I. HigherII. LowerIII. EqualIV. Substantially higher

3.___________ life insurance pays off a policyholder's mortgage in the event ofthe person's death.I. TermII. MortgageIII. WholeIV. Endowment

4.The ________ the premium paid by you towards your life insurance, the________ will be the compensation paid to the beneficiary in the event of yourdeath.I. Higher, HigherII. Lower, HigherIII. Higher, LowerIV. Faster, Slower

5.Which of the below option is correct with regards to a term insurance plan?I. Term insurance plans come with life-long renewability optionII. All term insurance plans come with a built-in disability riderIII. Term insurance can be bought as a stand-alone policy as well as a rider withanother policyIV. There is no provision in a term insurance plans to convert it into a whole lifeinsurance plan

6.In decreasing-term insurance, the premiums paid ____________ over time.I. IncreaseII. DecreaseIII. Remain constantIV. Are returned

7.Using the conversion option present in a term policy you can convert the sameto __________.

I. Whole life policyII. Mortgage policyIII. Bank FDIV. Decreasing term policy8.What is the primary purpose of a life insurance product?I. Tax rebatesII. Safe investment avenueIII. Protection against the loss of economic value of an individual’s productiveabilitiesIV. Wealth accumulation

9.Who among the following is best advised to purchase a term plan?I. An individual who needs money at the end of insurance termII. An individual who needs insurance and has a high budgetIII. An individual who needs insurance but has a low budgetIV. An individual who needs an insurance product that gives high returns

10.Which of the below statement is incorrect with regards to decreasing termassurance?I. Death benefit amount decreases with the term of coverageII. Premium amount decreases with the term of coverageIII. Premium remains level throughout the termIV. Mortgage redemption plans are an example of decreasing term assurancePlans

11.Which of the below statement is correct with regards to endowment assuranceplan?I. It has a death benefit component onlyII. It has a survival benefit component onlyIII. It has both a death benefit as well as a survival componentIV. It is similar to a term plan

12.Which of the below is an example of an endowment assurance plan?I. Mortgage Redemption PlanII. Credit Life Insurance PlanIII. Money Back PlanIV. Whole Life Plan

CHAPTER 6

1.Which among the following is a non-traditional life insurance product?I. Term assuranceII. Universal life insuranceIII. Endowment insuranceIV. Whole life insurance

2.Which of the below statement is incorrect?I. Variable life insurance is a temporary life insurance policyII. Variable life insurance is a permanent life insurance policyIII. The policy has a cash value accountIV. The policy provides a minimum death benefit guarantee

3.What does inter-temporal allocation of resources refer to?I. Postponing allocation of resources until the time is rightII. Allocation of resources over timeIII. Temporary allocation of resourcesIV. Diversification of resource allocation

4.Which among the following is a limitation of traditional life insurance products?I. Yields on these policies is highII. Clear and visible method of arriving at surrender valueIII. Well defined cash and savings value componentIV. Rate of return is not easy to ascertain

5.Where was the Universal Life Policy introduced first?I. USAII. Great BritainIII. GermanyIV. France

6.Who among the following is most likely to buy variable life insurance?I. People seeking fixed returnII. People who are risk averse and do not dabble in equityIII. Knowledgeable people comfortable with equityIV. Young people in general

7.Which of the below statement is true regarding ULIP’s?I. Value of the units is determined by a formula fixed in advanceII. Investment risk is borne by the insurerIII. ULIP’s are opaque with regards to their term, expenses and savingscomponentsIV. ULIP’s are bundled products

8.All of the following are characteristics of variable life insurance EXCEPT:I. Flexible premium paymentsII. Cash value is not guaranteedIII. Policy owner selects where savings reserve is investedIV. Minimum Death benefit is guaranteed9.Which of the below is correct with regards to universal life insurance?Statement I: It allows policy owner to vary paymentsStatement II: Policy owner can earn market based rate of return on cash valueI. I is trueII. II is trueIII. I and II are trueIV. I and II are false

10.All of the following is true regarding ULIP’s EXCEPT:I. Unit holder can choose between different kind of fundsII. Life insurer provides guarantee for unit valuesIII. Units may be purchased by payment of a single premium or via regularpremium payments.IV. ULIP policy structure is transparent with regards to the insurance expensesComponent

11.As per IRDA norms, an insurance company can provide which of the below nontraditionalsavings life insurance products are permitted in India?Choice I: Unit Linked Insurance PlansChoice II: Variable Insurance PlansI. I onlyII. II onlyIII. I and II bothIV. Neither I nor II

12.What does unbundling of life insurance products refers to?I. Correlation of life insurance products with bondsII. Correlation of life insurance products with equitiesIII. Amalgamation of protection and savings elementIV. Separation of the protection and savings element

CHAPTER 7

1.Who provides public pensions?I. StateII. EmployersIII. InsurersIV. NGO’s

2.Who bears the investment risk in a fixed benefit annuity?I. InsurerII. InsuredIII. StateIV. Risk pool

3.Which among the below statements is true?Statement I: Every pension is an annuityStatement II: Every annuity is a pensionI. I and II are trueII. I and II are falseIII. I is true and II is falseIV. I is false and II is true

4.Which of the below risk cannot be addressed through pensions?I. Life longevityII. InflationIII. Investment riskIV. Early death

5.With relation to annuities, explain what does “Liquidation period” refer to?I. Period between the purchase of annuity and commencement of paymentsII. Period during which insurer makes annuity paymentsIII. Time taken to build up the corpusIV. Insolvency period

6.Amount of annuity payable depends on which of the following:1. Principal sum of money2. Investment period3. Rate of return4. Duration of annuity paymentsI. 1 and 2II. 1,2 and 3III. 1,3 and 4IV. 1,2,3 and 4

7.Amount of annuity payable is inversely related to which of the following:1. Principal sum of money2. Investment period3. Rate of return4. Duration of annuity paymentsI. 1 onlyII. 2 onlyIII. 3 onlyIV. 4 only

8.What is the basic contingency associated with pensions?I. MortalityII. MorbidityIII. Post-retirement income securityIV. Disability

9.Which of the below best describes an ordinary annuity?I. Equal cash flows at equal time intervals foreverII. Equal cash flows at equal time intervals for a specific time periodIII. Lumpy cash flows at equal time intervals foreverIV. Lumpy cash flows at equal time intervals for a specific time period

10.From the choices mentioned below, select the one that cannot be categorisedas an annuity.I. Rs. 2000 received today, Rs. 2000 received next year and Rs. 2000 receivedin 2 yearsII. Electricity BillIII. Car paymentsIV. Mortgage payments

11.In an ordinary annuity, payments are made or received ___________ of eachperiod.I. At the beginningII. At the endIII. On maturityIV. 6 months before expiry

12.___________ is an annuity with an infinite life and making continuous annualpayments.I. APRII. Amortised loanIII. PerpetuityIV. Principal

13._____________ is a term used to refer pensions that have some level ofGovernment administration.I. Insurance Pension FundII. Public Pension FundIII. Private Pension Fund

IV. Market Pension Fund

CHAPTER 8

1.Health insurance is designed to handle which of the following risks?I. MortalityII. MorbidityIII. InfinityIV. Serendipity

2.IRDA stands for __________.I. International Regulatory & Development AuthorityII. Indian Regulatory & Development AuthorityIII. Insurance Regulatory & Development AuthorityIV. Income Regulatory & Development Authority

3.The term TPA refers to ________.(Answer with regards to health insurance)I. The Primary AssociateII. To Provide AssistanceIII. Third Party AdministratorIV. Third Party Assistance

4.Which of the below group would not be eligible for a group health insurancepolicy?I. Employees of a companyII. Credit card holders of an organisationIII. Professional association membersIV. Group of unrelated individuals formed for the purpose of availing grouphealth insurance

5.Who cannot be covered under a family floater policy?I. ChildrenII. SpouseIII. Parents-in-lawIV. Maternal uncle

6.As per IRDA regulations issued in February 2013, what is the grace periodallowed beyond the expiry date of the policy, for renewal?I. 15 daysII. 30 daysIII. 45 daysIV. 60 days

7.Identify the form of insurance that is depicted in the following scenario.Scenario: Patient pays the health provider and is subsequently reimbursed bythe health insurance company.I. Service BenefitII. Direct contractingIII. IndemnityIV. Casualty8.Moral hazard by health insurance companies can result in _________.I. Community ratingII. Adverse selectionIII. Abuse of health insuranceIV. Risk pooling

9.Primary care can be described as ____________.I. Care provided to patient in an acute settingII. Care provided in hospitalsIII. First point of contact for people seeking healthcareIV. Care provided by Doctors

10.________________ is an insured who undergoes treatment after gettingadmitted in a hospital.I. InpatientII. OutpatientIII. Day patientIV. House patient

11._________ refers to a hospital/health care provider enlisted by an insurer toprovide medical services to an insured on payment by a cashless facility.I. Day care centreII. Network providerIII. Third Party AdministratorIV. Domiciliary

CHAPTER-91.What is the objective behind Mortgage Redemption Insurance?I. Facilitate cheaper mortgage ratesII. Provide financial protection for home loan borrowersIII. Protect value of the mortgaged propertyIV. Evade eviction in case of default

2.The sum assured under keyman insurance policy is generally linked to which ofthe following?I. Keyman incomeII. Business profitabilityIII. Business historyIV. Inflation index

3.Mortgage redemption insurance (MRI) can be categorised under ________.I. Increasing term life assuranceII. Decreasing term life assuranceIII. Variable life assuranceIV. Universal life assurance

4.Which of the below losses are covered under keyman insurance?I. Property theftII. Losses related to the extended period when a key person is unable to workIII. General liabilityIV. Losses caused due to errors and omission

5.A policy is effected under the MWP Act. If the policyholder does not appoint aspecial trustee to receive and administer the benefits under the policy, the sumsecured under the policy becomes payable to the _____________.I. Next of kinII. Official Trustee of the StateIII. InsurerIV. Insured

6.Mahesh ran a business on borrowed capital. After his sudden demise, all thecreditors are doing their best to go after Mahesh’s assets. Which of the belowassets is beyond the reach of the creditors?I. Property under Mahesh’s nameII. Mahesh’s bank accounts

III. Term life insurance policy purchased under Section 6 of MWP ActIV. Mutual funds owned by Mahesh

7.Which of the below option is true with regards to MWP Act cases?Statement I: Maturity claims cheques are paid to policyholdersStatement II: Maturity claims cheques are paid to trusteesI. I is trueII. II is trueIII. Both I and II are trueIV. Neither I nor II is true8.Which of the below option is true with regards to MWP act cases?Statement I: Death claims are settled in favour of nomineesStatement II: Death claims are settled in favour of trusteesI. I is trueII. II is trueIII. Both I and II are trueIV. Neither I nor II is true

9.Ajay pays insurance premium for his employees. Which of the below insurancepremium will not be treated deductible as compensation paid to employee?Choice I: Health insurance with benefits payable to employeeChoice II: Keyman life insurance with benefits payable to AjayI. I onlyII. II onlyIII. Both I and IIIV. Neither I nor II

10.The practice of charging interest to borrowers who pledge their property ascollateral but leaving them in possession of the property is called_____________.I. SecurityII. MortgageIII. UsuryIV. Hypothecation

11.Which of the below policy can provide protection to home loan borrowers?I. Life InsuranceII. Disability InsuranceIII. Mortgage Redemption InsuranceIV. General Insurance

CHAPTER 10

1.What does a policy lapse mean?I. Policyholder completes premium payment for a policyII. Policyholder discontinues premium payment for a policyIII. Policy attains maturityIV. Policy is withdrawn from the market

2.Who bears the investment risk in case of ULIPs?I. InsurerII. InsuredIII. StateIV. IRDA

3.What does the term “premium” denote in relation to an insurance policy?I. Profit earned by the insurerII. Price paid by an insured for purchasing the policyIII. Margins of an insurer on a policyIV. Expenses incurred by an insurer on a policy

4.Which of the below is not a factor in determining life insurance premium?I. MortalityII. RebateIII. ReservesIV. Management expenses

5.What is a policy withdrawal?I. Discontinuation of premium payment by policyholderII. Surrender of policy in return for acquired surrender valueIII. Policy upgradeIV. Policy downgrade

6.Which of the below is one of the ways of defining surplus?

I. Excessive liabilitiesII. Excessive turnoverIII. Excess value of liabilities over assetsIV. Excess value of assets over liabilities

7.Which of the below is not a component of ULIP premiums?I. Policy allocation chargeII. Investment risk premiumIII. Mortality chargeIV. Social security charge

8.Life insurance companies may offer rebate to the buyer on the premium that ispayable on the basis of ___________.I. Sum assured chosen by the buyerII. Type of policy chosen by the buyerIII. Term of the plan chosen by the buyerIV. Mode of payment (cash, cheque, card) chosen by the buyer

9.Interest rates are one of the important components used while determining thepremium. Which of the below statement is correct with regards to interestrates?I. Lower the interest rate assumed, lower the premiumII. Higher the interest rate assumed, higher the premiumIII. Higher the interest rate assumed, lower the premiumIV. The interest rates don’t affect premiums

10.Which of the below statement is correct?I. The typical loading to a net premium would have 3 parts: a) a constantamount for premiums b) a constant amount for each ‘1000 sum assured’ andc) a constant amount per policyII. The typical loading to a net premium would have 3 parts: a) a percentageof premiums b) a constant amount for each ‘1000 sum assured’ and c) aconstant amount per policyIII. The typical loading to a net premium would have 3 parts: a) a percentageof premiums b) a constant percentage for each ‘1000 sum assured’ and c) aconstant amount per policyIV. The typical loading to a net premium would have 3 parts: a) a percentageof premiums b) a constant amount for each ‘1000 sum assured’ and c) apercentage amount per policy

11.With regards to valuation of assets by insurance companies, __________ is thevalue at which the life insurer has purchased or acquired its assets.I. Discounted future valueII. Discounted present valueIII. Market valueIV. Book value

12.In case of __________, a company expresses the bonus as a percentage of basicbenefit and already attached bonuses.

I. Reversionary bonusII. Compound bonusIII. Terminal bonusIV. Persistency bonus

CHAPTER-11

1.During the _________ period, if the policyholder has bought a policy and doesnot want it, he / she can return it and get a refund.I. Free evaluationII. Free lookIII. CancellationIV. Free trial

2.Which of the below is an example of standard age proof?I. Ration cardII. HoroscopeIII. PassportIV. Village Panchayat certificate

3.Which of the below can be attributed to moral hazard?I. Increased risky behaviour following the purchase of insuranceII. Increased risky behaviour prior to the purchase of insuranceIII. Decreased risky behaviour following the purchase of insuranceIV. Engaging in criminal acts post being insured

4.Which of the below features will be checked in a medical examiner’s report?I. Emotional behaviour of the proposerII. Height, weight and blood pressureIII. Social statusIV. Truthfulness

5.A __________ is a formal legal document used by insurance companies thatprovides details about the product.I. Proposal formII. Proposal quoteIII. Information docketIV. Prospectus

6.The application document used for making the proposal is commonly known as

the __________.I. Application formII. Proposal formIII. Registration formIV. Subscription form

7.From the below given age proof documents, identify the one which is classifiedas non-standard by insurance companies.I. School certificateII. Identity card in case of defence personnelIII. Ration cardIV. Certificate of baptism

8.Money laundering is the process of bringing _______ money into an economy byhiding its _______ origin so that it appears to be legally acquired.I. Illegal, illegalII. Legal, legalIII. Illegal, legalIV. Legal, illegal

9.In case the policyholder is not satisfied with the policy, he / she can return thepolicy within the free-look period i.e. within ________of receiving the policydocument.I. 60 daysII. 45 daysIII. 30 daysIV. 15 days

10.Which of the below statement is correct with regards to a policy returned by apolicyholder during the free look period?I. The insurance company will refund 100% of the premiumII. The insurance company will refund 50% of the premiumIII. The insurance company will refund the premium after adjusting forproportionate risk premium for the period on cover, medical examinationexpenses and stamp duty chargesIV. The insurance company will forfeit the entire premium

11.Which of the below is not a valid address proof?I. PAN CardII. Voter ID CardIII. Bank passbookIV. Driving licence

CHAPTER-12

1.What does a first premium receipt (FPR) signify? Choose the most appropriateoption.I. Free look period has endedII. It is evidence that the policy contract has begunIII. Policy cannot be cancelled nowIV. Policy has acquired a certain cash value

2.Which of the following documents is an evidence of the contract betweeninsurer and insured?I. Proposal formII. Policy documentIII. ProspectusIV. Claim form

3.If complex language is used to word a certain policy document and it has givenrise to an ambiguity, how will it generally be construed?I. In favour of insuredII. In favour of insurerIII. The policy will be declared as void and the insurer will be asked to returnthe premium with interest to the insuredIV. The policy will be declared as void and the insurer will be asked to returnthe premium to the insured without any interest

4.Select the option that best describes a policy document.I. It is evidence of the insurance contractII. It is evidence of the interest expressed by the insured in buying an insurancepolicy from the companyIII. It is evidence of the policy (procedures) followed by an insurance companywhen dealing with channel partners like banks, brokers and other entitiesIV. It is an acknowledgement slip issued by the insurance company on payment

of the first premium

5.Which of the below statement is correct?I. The proposal form acceptance is the evidence that the policy contract hasbegunII. The acceptance of premium is evidence that the policy has begunIII. The First Premium Receipt is the evidence that the policy contract hasbegunIV. The premium quote is evidence that the policy contract has begun

6.For the subsequent premiums received by the insurance company after the firstpremium, the company will issue __________.I. Revival premium receiptII. Restoration premium receiptIII. Reinstatement premium receiptIV. Renewal premium receipt7.What will happen if the insured person loses the original life insurance policydocument?I. The insurance company will issue a duplicate policy without making anychanges to the contractII. The insurance contract will come to an endIII. The insurance company will issue a duplicate policy with renewed terms andconditions based on the current health declarations of the life insuredIV. The insurance company will issue a duplicate policy without making anychanges to the contract, but only after a Court order.

8.Which of the below statement is correct?I. The policy document has to be signed by a competent authority but neednot be compulsorily stamped according to the Indian Stamp Act.II. The policy document has to be signed by a competent authority and shouldbe stamped according to the Indian Stamp Act.III. The policy document need not be signed by a competent authority butshould be stamped according to the Indian Stamp Act.IV. The policy document neither needs to be signed by a competent authoritynor it needs to be compulsorily stamped according to the Indian Stamp Act.

9.Which of the below forms the first part of a standard insurance policydocument?I. Policy scheduleII. Standard provisionsIII. Specific policy provisionsIV. Claim procedure

10.In a standard insurance policy document, the standard provisions section willhave information on which of the below?I. Date of commencement, date of maturity and due date of last premiumII. Name of nomineeIII. The rights and privileges and other conditions, which are applicable under

the contractIV. The signature of the authorised signatory and policy stamp

11. “A clause precluding death due to pregnancy for a lady who is expecting at thetime of writing the contract” will be included in which section of a standardpolicy document?I. Policy scheduleII. General provisionsIII. Standard provisionsIV. Specific policy provisions

CHAPTER-13

1.Under what circumstances would the policyholder need to appoint anappointee?I. Insured is minorII. Nominee is a minorIII. Policyholder is not of sound mindIV. Policyholder is not married

2.Which of the below statement is false with regards to nomination?I. Policy nomination is not cancelled if the policy is assigned to the insurer inreturn for a loanII. Nomination can be done at the time of policy purchase or subsequentlyIII. Nomination can be changed by making an endorsement in the policyIV. A nominee has full rights on the whole of the claim

3.In order for the policy to acquire a guaranteed surrender value, for how longmust the premiums be paid as per law?I. Premiums must be paid for at least 2 consecutive yearsII. Premiums must be paid for at least 3 consecutive yearsIII. Premiums must be paid for at least 4 consecutive yearsIV. Premiums must be paid for at least 5 consecutive years

4.When is a policy deemed to be lapsed?I. If the premiums are not paid on due dateII. If the premiums are not paid before the due dateIII. If the premium has not been paid even during days of graceIV. If the policy is surrendered

5.Which of the below statement is correct with regards to grace period of aninsurance policy?

I. The standard length of the grace period is one month.II. The standard length of the grace period is 30 days.III. The standard length of the grace period is one month or 30 days.IV. The standard length of the grace period is one month or 31 days.

6.What will happen if the policyholder does not pay the premium by the due dateand dies during the grace period?I. The insurer will consider the policy void due to non-payment of premium bythe due date and hence reject the claimII. The insurer will pay the claim and waive off the last unpaid premiumIII. The insurer will pay the claim after deducting the unpaid premiumIV. The insurer will pay the claim after deducting the unpaid premium alongwith interest which will be taken as 2% above the bank savings interest rate

7.During the revival of a lapsed policy, which of the below aspect is consideredmost significant by the insurance company? Choose the most appropriate option.I. Evidence of insurability at revivalII. Revival of the policy leading to increase in risk for the insurance companyIII. Payment of unpaid premiums with interestIV. Insured submitting the revival application within a specified time frame

8.For an insurance policy nomination is allowed under _________ of the InsuranceAct, 1938.I. Section 10II. Section 38III. Section 39IV. Section 45

9.Which of the below statement is incorrect with regards to a policy against whicha loan has been taken from the insurance company?I. The policy will have to be assigned in favour of the insurance companyII. The nomination of such policy will get cancelled due to assignment of thepolicy in favour of the insurance companyIII. The nominee’s right will affected to the extent of the insurer’s interest inthe policyIV. The policy loan is usually limited to a percentage of the policy’s surrenderValue

10.Which of the below statement is incorrect with regards to assignment of aninsurance policy?I. In case of Absolute Assignment, in the event of death of the assignee, thetitle of the policy would pass to the estate of the deceased assignee.II. The assignment of a life insurance policy implies the act of transferring therights right, title and interest in the policy (as property) from one person toanother.III. It is necessary that the policyholder must give notice of assignment to theinsurer.IV. In case of Absolute Assignment, the policy vests absolutely with the assignee

till maturity, except in case of death of the insured during the policytenure, wherein the policy reverts back to the beneficiaries of the insured.

11.Which of the below alteration will be permitted by an insurance company?I. Splitting up of the policy into two or more policiesII. Extension of the premium paying termIII. Change of the policy from with profit policy to without profit policyIV. Increase in the sum assured

CHAPTER 14

1.Which of the following cases is likely to be declined or postponed by a life?insurer?I. Healthy 18 year oldII. An obese personIII. A person suffering from AIDSIV. Housewife with no income of her own

2.Which of the following is an example of moral hazard?I. Stunt artist dies while performing a stuntII. A person drinking copious amounts of alcohol because he is inuredIII. Insured defaulting on premium paymentsIV. Proposer lying on policy document

3.Why is heredity history of importance in medical underwriting?I. Rich parents have healthy kidsII. Certain diseases can be passed on from parents to childrenIII. Poor parents have malnourished kidsIV. Family environment is a critical factor

4.Which of the following denotes the underwriter’s role in an insurance company?I. Process claimsII. Decide acceptability of risksIII. Product design architectIV. Customer relations manager

5.Which of the following is not an underwriting decision?I. Risk acceptance at standard ratesII. Declinature of risk

III. Postponement of riskIV. Claim rejection

6.Which of the following is not a standard age proof?I. PassportII. School leaving certificateIII. HoroscopeIV. Birth certificate

7.Which of the following condition will affect a person’s insurability negatively?I. Daily jogsII. Banned substance abuseIII. Lazy natureIV. Procrastination

8.Under what method of underwriting does an underwriter assign positive ratingpoints for all negative or adverse factors (negative points for any positive orfavourable factors)?I. JudgmentII. ArbitraryIII. Numerical ratingIV. Single step

9.Under risk classification, ___________ consist of those whose anticipatedmortality corresponds to the standard lives represented by the mortality table.I. Standard livesII. Preferred risksIII. Sub-standard livesIV. Declined lives

10.Amruta is pregnant. She has applied for a term insurance cover. Which of thebelow option will be the best option to choose for an underwriter to offerinsurance to Amruta? Choose the most likely option.I. Acceptance at ordinary ratesII. Acceptance with extra premiumIII. Decline the proposalIV. Acceptance with a restrictive clause

11.Which of the below insurance proposal is not likely to qualify under non-medicalunderwriting?I. Savita, aged 26 years, working in an IT company as a software engineerII. Mahesh, aged 50 years, working in a coal mineIII. Satish, aged 28 years, working in a bank and has applied for an insurancecover of Rs. 1 croreIV. Pravin, aged 30 years, working in a departmental store and has applied foran endowment insurance plan for a tenure of 10 years

12.Sheena is suffering from acute diabetes. She has applied for an insurance plan.In this case the underwriter is most likely to use ____________ for underwriting.Choose the most appropriate option.I. Judgment methodII. Numerical methodIII. Any of the above method since an illness like diabetes does not play a majorrole in the underwriting processIV. Neither of the above method as diabetes cases are rejected outright

13.Santosh has applied for a term insurance policy. His anticipated mortality issignificantly lower than standard lives and hence could be charged a lowerpremium. Under risk classification, Santosh will be classified under___________.I. Standard livesII. Preferred risksIII. Substandard livesIV. Declined lives

CHAPTER 15

1.Which of the below statement best describes the concept of claim? Choose themost appropriate option.I. A claim is a request that the insurer should make good the promise specifiedin the contractII. A claim is a demand that the insurer should make good the promise specifiedin the contractIII. A claim is a demand that the insured should make good the commitmentspecified in the agreementIV. A claim is a request that the insured should make good the promise specifiedin the agreement

2.Given below is a list of policies. Identify under which type of policy, the claimpayment is made in the form of periodic payments?I. Money-back policyII. Unit linked insurance policyIII. Return of premium policyIV. Term insurance policy

3.Mahesh has bought a life insurance policy with a critical illness rider. He hasmade absolute assignment of the policy in favour of Karan. Mahesh suffers aheart attack and there is a claim of Rs. 50,000 under the critical illness rider.To whom will the payment be made in this case?I. MaheshII. KaranIII. The payment will be shared equally by Mahesh and Karan

IV. Neither of the two because Mahesh has suffered the heart attack but thepolicy is assigned in favour of Karan.

4.Praveen died in a car accident. The beneficiary submits documents for deathclaim. Which of the below document is an additional document required to besubmitted in case of accidental death as compared to natural death.I. Certificate of burial or cremationII. Treating physician’s certificateIII. Employer’s certificateIV. Inquest Report

5.Which of the below death claim will be treated as an early death claim?I. If the insured dies within three years of policy durationII. If the insured dies within five years of policy durationIII. If the insured dies within seven years of policy durationIV. If the insured dies within ten years of policy duration

6.Given below are some events that will trigger survival claims. Identify which ofthe below statement is incorrect?I. Claim paid on maturity of a term insurance policyII. An instalment payable upon reaching the milestone under a money-backpolicyIII. Claim paid for critical illnesses covered under the policy as a rider benefitIV. Surrender value paid on surrender of an endowment policy by thePolicyholder

7.A payment made under a money-back policy upon reaching a milestone will beclassified under which type of claim?I. Death claimII. Maturity claimIII. Periodical survival claimIV. Surrender claim

8.Shankar bought a 10 year Unit Linked Insurance Plan. If he dies before thematurity of the policy which of the below will be paid?I. Lower of sum assured or fund valueII. Higher of sum assured or fund valueIII. Premiums paid will be returned with 2% higher interest rate as compared toa bank’s savings depositIV. Surrender value

9.Based on classification of claims (early or non-early), pick the odd one out?I. Ramya dies after 6 months of buying a term insurance planII. Manoj dies after one and half years of buying a term insurance planIII. David dies after two and half years of buying a term insurance planIV. Pravin dies after five and half years of buying a term insurance plan

10.Given below is a list of documents to be submitted for a normal death claim byall beneficiaries in the event of death of life insured. Pick the odd one outwhich is additionally required to be submitted only in case of death by accident.I. Inquest reportII. Claim formIII. Certificate of burial or cremationIV. Hospital’s certificate

11.As per IRDA (Protection of Policyholders Interests) Regulations, 2002, a claimunder a life policy shall be paid or be disputed, within 30 days from the date ofreceipt of all relevant papers and clarifications required.I. 7 daysII. 15 daysIII. 30 daysIV. 45 days

CHAPTER-16

1.Which of the below statements is correct?I. The prime purpose of insurance regulation is to protect the insurancecompaniesII. The prime purpose of insurance regulation is to protect the policyholderIII. The prime purpose of insurance regulation is to protect the insuranceintermediariesIV. The prime purpose of insurance regulation is to protect the Government

2.Which of the below statement is correct?I. If agent loses the licence, then no duplicate licence is issued. The agent hasto wait till the time of renewal, when another copy is issuedII. If agent loses the licence, then the Authority may issue a duplicate licencefree of cost.III. If agent loses the licence, then the Authority may issue a duplicate licenceonly after a FIR is lodged and a waiting period of 30 days.IV. If the agent loses the licence, then the Authority may issue a duplicatelicence on payment of a fee of rupees fifty.

3.Applicant shall complete ______ hours training to become an insurance agent.I. 50II. 100III. 30IV. 25

4.Insurance agent represents the __________.I. Insurance companyII. Sub-agentIII. Co-agentIV. Broker

5.Licence to work as an insurance agent is issued by __________.I. General Insurance Corporation (GIC)II. Insurance Regulatory & Development Authority (IRDA)III. State Bank of India (SBI)IV. Post office

6.Agent’s licence is to be renewed __________.I. Every yearII. After 5 yearsIII. After 3 yearsIV. After 15 years

7.Identify the statement which is not correct. Insurance agent should __________.I. Indicate the scale of commission if asked by the customerII. Share the commission by way of rebateIII. Disclose his licence on demandIV. Indicate the premium to be charged

8.__________ is the fees payable to the Authority for issue / renewal of licence toAct as an insurance agent or composite insurance agent.I. 250II. 150III. 520IV. 100

9.The Authority may issue duplicate licence in case it is ____________.I. LostII. DestroyedIII. MutilatedIV. All of the above

10.If an agent is found guilty of criminal misappropriation the designated personwill ____________.I. Cancel the licenceII. Issue a duplicate licenceIII. Renew the existing licenceIV. Take some fees from the agent

11.Minimum qualification required for insurance agent is _______ pass.I. GraduateII. 10th

III. Post-graduateIV. 7th

12.___________ may deal with more than one life insurance company or generalinsurance company or both.I. AgentII. SurveyorIII. Composite agentIV. None of the above

CHAPTER 17

1.Which of the below statements is incorrect?I. An individual insurance agent is a representative of the insurance companyand is governed by the agent-principal relationship.II. An individual insurance agent's primary relationship and responsibility is tothe insurance buyer and not the insurance company.III. Insurance broker, who represents the insured, generally does not have anycontractual agreement to exclusively serve any one insurance companyIV. Insurance broker is expected to represent the customer’s interest whenchoosing the right product and company that would best fit the customer’sparticular needs.

2.In 1964, Harvard Business Review published a study on “What makes a goodsalesman”. The authors came up with an interesting insight. They found that agood salesman should have two basic qualities. Which are those two qualities?I. Affection and zeal to succeedII. Patience and pro-activenessIII. Empathy and ego driveIV. Hunger for growth and self-confidence

3.Proportion of policies remaining in force at the end of the period out of the

total policies in force at the beginning of the period is referred to as___________.I. PersistencyII. ConsistencyIII. UniformityIV. Reliability

4.An insurance agent is typically a representative of ______________.I. CustomerII. Insurance companyIII. GovernmentIV. IRDA

5.Direct marketing involves which of the below?I. TelemarketingII. Insurance agentsIII. BancassuranceIV. All of the above

6. “Hurt not others with that which pains yourself”. This golden rule of ethics isgiven in the teaching of which religion?I. BuddhismII. ChristianityIII. HinduismIV. Judaism

7.When an applicant is seeking license for the first time, he / she is supposed toundergo ________of practical training (from an approved institution) in lifeinsurance.I. 25 hoursII. 50 hoursIII. 75 hoursIV. 100 hours

8.The license issued to the agent is valid for _________.I. One yearII. Two yearsIII. Three yearsIV. Five years

9.As per Section 182 of the Indian Contract Act, _____ is a person employed to doany act for another or to represent another in dealing with a third person.I. Principal OfficerII. ProxyIII. MediatorIV. Agent

10.An insurance broker represents _______.I. Insurance companyII. InsuredIII. Association of insurance companiesIV. Community of people who have already taken insurance

11.Which of the below reflects Principle 2 of the Insurance Marketplace StandardsAssociation (IMSA) principles?I. To provide competent and customer-focused sales and service.II. To engage in active and fair competition.III. To provide for fair and expeditious handling of customer complaints anddisputes.IV. To maintain a system of supervision and review that is reasonably designedto achieve compliance with these principles of ethical market conduct

12.Before the composite licence could be renewed, the applicant needs to undergorenewal training of ________ from an approved institution.I. 25 hoursII. 50 hoursIII. 35 hoursIV. 75 hours

13.IRDA has decided to implement guidelines on persistency from _______.I. 1st July 2011II. 1st July 2012III. 1st July 2013IV. 1st July 2014

CHAPTER 18

1.Which of the below statement best describes a “testimonial”?I. An endorsement from a satisfied customerII. Test result for a product in a benchmarking testIII. List of tests that a product must passIV. Money required to test a product

2.The key to successful closing lies in helping the prospect to say ________.I. NoII. Don’t knowIII. YesIV. Maybe

3.Which of the following is not part of sales process?I. ProspectingII. Sales interviewIII. Loss assessmentIV. Closing

4.Prospecting in an insurance sale is ___________.I. Gathering the names of people who may be interested in insuranceII. Preparing a list of all the persons in the cityIII. Enlisting all the policyholders of the branch officeIV. Preparing list of all the agents in the neighbourhood

5.In insurance, need-gap analysis involves _____________.I. Identifying the areas where the prospect needs insurance protectionII. Identifying people to work as insurance agentsIII. Identifying how much assets a prospect hasIV. Identifying the poverty level of the prospects

6.Cold Calling is ___________.I. Meeting customers in winterII. Meeting customers when they are suffering from coldIII. Meeting people unannouncedIV. Meeting customer after fire was extinguished

7.________ as a profession refers to the act of inducing a commercial transactionthrough inducing the purchase of a product or service, such act being carriedout with the intent of earning remuneration.I. MarketingII. SellingIII. AdvertisingIV. Promotion

8.Which of the below statement is correct?I. Life insurance is sold, not boughtII. Life insurance is bought, not soldIII. Life insurance is neither bought nor sold; it is a necessity and hence shouldbe bought by every individual.IV. None of the above

9.Which of the below statement is correct?I. Selling is an art and not a scienceII. Selling is a science and not an artIII. Selling is neither an art or a scienceIV. Selling is both an art and a science

10.While prospecting for selling insurance, approaching the members of a caste orcommunity association will be classified under which category?I. Immediate groupII. Natural marketIII. Centres of influenceIV. References and introductions

11.Identify the incorrect statement with regards to a ‘qualified’ prospect.I. A qualified prospect is one who can pay for insuranceII. A qualified prospect is one who can be approached on a favourable basisIII. A qualified prospect is one who is academically well qualified to buyinsurance

IV. A qualified prospect is one who can pass the company underwritingRequirements

CHAPTER-191.What is meant by customer lifetime value?I. Sum of costs incurred while servicing the customer over his lifetimeII. Rank given to customer based on business generatedIII. Sum of economic benefits that can be achieved by building a long termrelationship with the customerIV. Maximum insurance that can be attributed to the customer

2.In a customer’s mind, there are two types of feelings and related emotions thatarise with each service failure on part of the insurance company. These feelingsareI. Confusion and empathyII. Dishonesty and revengeIII. Ignorance and sympathyIV. Sense of unfairness and hurt ego

3.Which among the following is not an element of active listening?I. Paying good attentionII. Being extremely judgmentalIII. Empathetic listeningIV. Responding appropriately

4.____________ is not a tangible good.I. HouseII. InsuranceIII. Mobile PhoneIV. A pair of jeans

5.____________ is not an indicator of service quality.I. ClevernessII. ReliabilityIII. EmpathyIV. Responsiveness

6.In customer relationship the first impression is created:I. By being confidentII. By being on timeIII. By showing interestIV. By being on time, showing interest and being confident

7.Select the correct statement:I. Ethical behaviour is impossible while selling insuranceII. Ethical behaviour is not necessary for insurance agentsIII. Ethical behaviour helps in developing trust between the agent and theinsurerIV. Ethical behaviour is expected from the top management only

8.Active listening involves:I. Paying attention to the speakerII. Giving an occasional nod and smileIII. Providing feedbackIV. Paying attention to the speaker, giving an occasional nod and smile andproviding feedback

9._________ refers to the ability to perform the promised service dependably andAccurately.I. ReliabilityII. ResponsivenessIII. AssuranceIV. Empathy

10.___________ relate to one’s ability to interact effectively with other workersand customers, both at work and outside.I. Hard skillsII. Soft skillsIII. Negotiating skills

11. Which of the below elements promote trust?

I. Communication, assertiveness and being presentII. Politeness, affirmation and communicationIII. Attraction, communication and being presentIV. Affirmation, assertiveness and attraction

12. Which of the below tips are useful for making a good first impression?I. Being on time alwaysII. Presenting yourself appropriatelyIII. Being open, confident and positiveIV. All of the above

13.___________ is reflected in the caring attitude and individualised attentionprovided to customers.I. AssuranceII. EmpathyIII. ReliabilityIV. Responsiveness

CHAPTER 20

1. The ______________ has jurisdiction to entertain complaints, where value ofthe goods or services and the compensation claimed is up to Rs.20 lakhs.I. District ForumII. State CommissionIII. Zilla ParishadIV. National Commission

2. Expand the term IGMS.I. Insurance General Management SystemII. Indian General Management SystemIII. Integrated Grievance Management SystemIV. Intelligent Grievance Management System

3. Which of the below consumer grievance redressal agencies would handleConsumer disputes amounting between Rs. 20 lakhs and Rs. 100 lakhs?I. District ForumII. State CommissionIII. National CommissionIV. Zilla Parishad

4. Which among the following cannot form the basis for a valid consumerComplaint?I. Shopkeeper charging a price above the MRP for a product

II. Shopkeeper not advising the customer on the best product in a categoryIII. Allergy warning not provided on a drug bottleIV. Faulty products

5. Which of the below will be the most appropriate option for a customer to lodgean insurance policy related complaint?I. PoliceII. Supreme CourtIII. Insurance Ombudsman

6.Which of the below statement is correct with regards to the territorialjurisdiction of the Insurance Ombudsman?I. Insurance Ombudsman has National jurisdictionII. Insurance Ombudsman has State jurisdictionIII. Insurance Ombudsman has District jurisdictionIV. Insurance Ombudsman operates only within the specified territorial limits

7.How is the complaint to be launched with an insurance ombudsman?I. The complaint is to be made in writingII. The complaint is to be made orally over the phoneIII. The complaint is to be made orally in a face to face mannerIV. The complaint is to be made through newspaper advertisement

8.What is the time limit for approaching an Insurance Ombudsman?I. Within two years of rejection of the complaint by the insurerII. Within three years of rejection of the complaint by the insurerIII. Within one year of rejection of the complaint by the insurerIV. Within one month of rejection of the complaint by the insurer

9.Which among the following is not a pre-requisite for launching a complaint withthe Ombudsman?I. The complaint must be by an individual on a ‘Personal Lines’ insuranceII. The complaint must be lodged within 1 year of the insurer rejecting thecomplaintIII. Complainant has to approach a consumer forum prior to the OmbudsmanIV. The total relief sought must be within an amount of Rs.20 lakhs.

10.Are there any fee / charges that need to be paid for lodging the complaint withthe Ombudsman?I. A fee of Rs 100 needs to be paid

II. No fee or charges need to be paidIII. 20% of the relief sought must be paid as feeIV. 10% of the relief sought must be paid as fee

11.Can a complaint be launched against a private insurer?I. Complaints can be launched against public insurers onlyII. Yes, complaint can be launched against private insurersIII. Complaint can be launched against private insurers only in the Life SectorIV. Complaint can be launched against private insurers only in the Non-LifeSector