Multiple Choice
Identify the choice that best completes the statement or answers the question.
1. The amount payable under a life Insurance policy depends on?
a. The income pf the insured person at
the time of the claim
c. The amount of the sum assured
b. The income of the insured person
When he took the insured
d. None of the above
ANSWER: C
2. Life insurance is arranged because?
a. someone may die c. Both the above reasons
b. Someone may live d. Neither of the above reasons
ANSWER: C
3. In a life insurance contract, the beneficiary may be the?
a. The policy holder c. The dependents of the life insured
b. The life insured d. All the three mentioned above
ANSWER: D
4. Reinsurance is the name given to?
a. An individual taking insurance for the
second time
c. Both the above situation
b. An insurer placing insurance with
another insurer
d. Neither of the above situations
ANSWER: B
5. A professional insurance market carnies?
a. Need based selling c. Commission based selling
b. Product based selling d. Company based selling
ANSWER: A
6. What is the death benefit if the person has multiple sums assured under different
policies?
a. Sum assured will be paid as total of all
insurance plans
c. No sum assured will be Paid.
b. Sum assured will be paid for only one
plan with highest sum assured
d. None of the above
ANSWER: A
7. Prabhu, a businessman, has taken a term insurance for Rs. 30 lacs for 30 yrs. He is an
example for?
a. Risk retention c. Risk avoidance
b. Risk transfer d. Risk tolerance
ANSWER: B
8. Utmost good faith will operate in existing policy?
a. Every time premium is paid c. If insured person falls sick and
admitted to hospital
b. If policy has lapsed and it has to be
revived
d. If the insured person changes his job
ANSWER: B
9. Generally insurance companies do not hold premium in case fraud or misrepresentation.
However due to which of the following circumstances the insurance can retain the
premium the policyholder?
a. Fraudulent claim c. Redressal procedure
b. Indisputability clause d. Pending decision from ombudsman
ANSWER: C
10. In utmost good faith, the principle applies equally on both proposer and insurer, but law
sees the main party to contract for material facts?
a. Agent c. Broker
b. Insurance company d. Proposer
11. A policyholder takes an insurance contract for 30 yrs. and reduces after25 yrs. What
could be the likely reason?
a. Bonus not accumulated c. Policy made paid up
b. Age proof was wrong substantially d. It is a ULIP
ANSWER: C
12. The obligation of insurer for the whole life policy is mentioned in?
a. Operative clause c. Proviso
b. Preamble d. Endorsement
ANSWER: A
13. Shailendra has an endowment policy of 30 years. He could pay premium for eight year.
Sum assured Rs. 8,00,000 and vested bonus is Rs. 60,000. What is the paid up value?
a. 213333 c. 273333
b. 229333 d. 293333
ANSWER: C
14. What is done in the free lock in period or cooling off period?
a. Returning policy by speed post c. Not issuing receipt
b. Delaying the payment d. Withdrawing from contract within 15
days
ANSWER: D
15. Mr. A wants an insurance cover. But he is drinks alcohol frequently. What kind of hazard
you may categorize?
a. Physical hazard c. financial risk
b. Moral Hazard d. Pure risk
ANSWER: B
16. Vishal and Sandeep applied for a health plan in xyz life insurance company Vishal is
asked to undergo a medical check-up but Sandeep is not asked to go for any medical
check-up. What could be the most possible reason for the difference?
a. Sandeep has taken another policy
from xyz life insurance company
c. Sandeep is earning more than Vishal
b. Vishal is older than Sandeep d. Vishal is working in an MNC
ANSWER: B
17. Mr. Kumar's wife is suffering from blood cancer. Doctors have lost their hope on her.
Mr. Kumar would like to take life insurance policy on wife's name in order to get
monetary benefit. Insurance company rejects this proposal on grounds of?
a. Anti-money laundering c. Capacity of paying future premiums
b. Legality of objector purpose d. All of above
ANSWER: B
18. Why is ACR required?
a. To calculate premium c. To verify plan proposal
b. To calculate commission d. To help underwriter to assess risk
ANSWER: D
19. Krishna and Laxmi are married and have a 10 year old child. Which policy will satisfy
the long term protection needs for both?
a. Endowment c. Term Insurance
b. Money back d. Child Investment policy
ANSWER: C
20. What is the special feature of ULIP that ensures customer risk profile for long time
insurance policies?
a. Fund switching c. Premium holiday
b. Partial withdrawal d. Riders
ANSWER: A
21. Open market option under annuity policy would extend which of the following benefit?
a. Ensure better annuity rate c. increase in return
b. Increase in range d. Switch of funds
ANSWER: B
22. Whose signature is required on the attestation of the policy?
a. Agent c. Authorised official of insurer
b. Policyholder d. Proposer
ANSWER: C
23. An agent sold two different persons having the same policy term. He declares the
commissions to each of them differently one is more than other. What could be the
reason for this difference?
a. Risk profile of both policyholder
different
c. One selected single premium policy
and other has chosen regular premium
b. Age of both are different d. Both have chosen different kind of
policies
ANSWER: D
24. In group insurance plans contract of insurance is between?
a. Employer and Insurer c. Employee and Insurer
b. Employer and Employee d. Employer and Employer
ANSWER: A
25. A person holding master policy shows that a plan taken is under?
a. Convertible policy c. Group insurance
b. Joint policy d. Child plan
ANSWER: C
26. Under which section of the Income Tax Act can an individual get a deduction from
taxable income?
a. S. 80D c. S 80E
b. S. 80C d. S. 80F
ANSWER: A
27. What is the frequency of interest in cumulative deposit account?
a. Monthly c. Half Yearly
b. Quarterly d. Yearly
ANSWER: B
28. As an investment diversification Bela invested in ETF. What would be the weight of
gold in 100 units?
a. 5/10gm c. 15/20 gm
b. 50/100gm d. 10/20 gm
ANSWER: B
29. Which of the following ways is easier for a person to take a saving product?
a. Through individual agent c. Corporate agent
b. Through internet d. Call centres
ANSWER: B
30. In a guaranteed annuity option of 5 years, the policy holder will get annuity till?
a. Entire life term c. Annuity only for 5 years
b. Till 5 years and continue till annuitant
lives
d. None of the above
ANSWER: B
31. While calculating pension figures, required at the time of retirement, two factors should
be considered while planning, One is taxation and other is?
a. Health c. Inflation
b. Charges d. Interest rates
ANSWER: C
32. A Client takes critical illness rider and the rider benefit has been claimed. The rider
benefit now get?
a. Reduced from the base sum assured c. Continue as is
b. Terminated d. New critical illness rider has to be
added to the base policy
ANSWER: B
33. In a guaranteed annuity option of 5 yrs. the policy holder will get annuity till?
a. Entire life term c. Annuity only for 5yrs
b. Till policy term d. Premium payment term
ANSWER: B
34. Manoj is 26 yrs. old and has a 7 years old daughter. What will happen to his monthly
disposable income after 15 years of job?
a. Marginally decrease c. Less after l5years
b. Significantly increase d. Will remain same
ANSWER: B
35. A couple has 7 year old child. What solution would they be looking for?
a. Retirement c. Child education
b. Health care d. Life cover
ANSWER: C
36. An agent should disclose the commission if?
a. the commission is low c. Customer asks for it
b. the commission is high d. customer not asks for it
ANSWER: C
37. Why building long term relationship with clients is necessary as?
a. A satisfied client may be source
of other potential clients
c. Agent has option to recommending
highest commission
b. Previewing financial needs and, plans
are necessary changes
d. Introduction of different company’s
policies
ANSWER: A
38. Delay in settling claim by any insurance company as per IRDA norms has to pay _% if
the bank rate was 5.2% durin9 the claim?
a. 0.07 c. 0.072
b. 0.09 d. 0.08
ANSWER: C
39. Pankaj bought a plan in 2009 and he died in a road accident in 2011. Which one of the
report will not be considered in this case?
a. Police first information report c. Post mortem report
b. Advisor confidential report d. Coroner's report
ANSWER: B
40. When can a policy be rendered void?
a. When there are mistakes in contract c. None of the above
b. Under illegal/ unlawful circumstances d. All of the above
ANSWER: D
41. AML programme of every insurer must include?
a. A procedure of training and audit c. Appointment of principal compliance
officer
b. Audit by finance ministry d. Inspection by Auditor general
ANSWER: D
42. Karthik has written to his insurer about non settlement of a maturity claim. As per
regulations, the insurer has to reply to this within how many working days?
a. 3 c. 7
b. 5 d. 10
ANSWER: D
43. What is the period of award passed to the customer decided by ombudsman?
a. 2months c. 5 months
b. 3 months d. 6 months
ANSWER: B
44. What is the maximum stake a foreign company can have in one insurance company in
India?
a. 20% c. 0.24
b. 0.26 d. 0.76
ANSWER: B
45. Which council among the following focus on creating a positive image of insurance
industry?
a. Life Insurance Council c. National insurance Council
b. Consumer Insurance Council d. General Insurance Council
ANSWER: A
46. According to IRDA agents code of conduct what is the best method of showing the
amount of commission earned by the advisor?
a. Signed copy of sales illustration c. Hand written declaration by agent
b. Brochure d. Verbal communication to customer
ANSWER: A
47. For an insurance advisor churning as a practice is?
a. Good c. Compulsory
b. Bad d. Appreciable
ANSWER: B
48. Ravi was expecting a claim amount of Rs. 12 lac from insurer. But it was rejected. He
feels that it is repudiated on wrong reasons. Which consumer forum can he approach?
a. National commission c. State level
b. District level d. High level
ANSWER: B
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