Insurance Basic Multiple Choice Question MCQ
Categories: EDUCATION
Ques 1. Insurance works on the principle of a. Sharing of losses b. Probabilities c. Large numbers d. Randomness e. All of the above Ans. e Ques 2. Insurance helps to a. Prevent adverse situations from occurring b. Reduce the financial consequences of adverse situations c. Negate all consequences of adverse situations d. Make assets continuously productive e. All of the above Ans. b Ques 3. The term ‘Risk’ includes: a. Damage to machinery and property b. Impact on the health or life of a person c. Leakage of toxic products into the atmosphere d. Effect on the healthy life of the neighborhood e. All of the above Ans. e Ques 4. The main purpose of having Life insurance is: a. As an avenue for long-term investment b. As a medium for getting income tax benefits from savings c. As a governmental programme for reducing poverty d. As an avenue for short-term investment e. None of the above Ans. e Ques 5. Which of the following intermediaries do not require IRDA’s license/ approval to operate in India? a. Insurance Brokers b. Insurance Agents c. Third Party Administrators d. Surveyors e. All the above intermediaries require IRDA’s license/ approval Ans. e Ques 6. An actuary is expected to a. Make an exact forecast of the future liabilities of policies b. Make a reasonable forecast of the future liabilities of policies c. Calculate the premium required to cover a risk on a long-term basis d. Find the probability of an insured event to happen in non-life policies e. All the above statements are incorrect Ans. b Ques 7. The principle of _____ ensures that an insured does not profit by insuring with multiple insurers a. Subrogation b. Contribution c. Co-insurance d. Indemnity e. Particular Average Ans. b Ques 8. The principle of average applies when the value is _____________ in the proposal a. Understated b. Overstated c. Not ascertainable d. Negligible e. Only sentimental Ans. a Ques 9. Fidelity Guarantee Policies cover losses due to fraud by ____________ a. Employees b. Customers c. Borrowers d. Suppliers e. Financiers Ans. a Ques 10. CTL as used in insurance a. Contributory Total Loss b. Constructive Total Loss c. Construction Totally Lost d. Contractors’ Total Loss e. Co-insurer’s Tally of Loss Ans. b Ques 11. GA as used in insurance a. General Assurance b. General Average c. General Adjustment d. Guaranteed Assurance Ans. b Ques 12. Which of the following terms matches closest with ‘Family Floater’? a. Health insurance b. Property insurance c. Accidental injury d. Consequential loss e. Marine Partial Loss Ans. a Ques 13. In cases where a Life Insurance Agent collects the premium from the policyholder and remits it to the insurer’s office, he is acting as an agent of _____ a. IRDA b. the Insurance Company c. the Policyholder d. the broker e. the general public Ans. a Ques 14. A policy where the policyholder makes a one-time payment of premium, is known as a _______: a. Money-back policy b. Single premium policy c. Salary Savings Scheme policy d. Half-yearly policy e. Annual policy Ans. b Ques 15.State which of the statements given below is correct . a. An organisation can exist only with employees b. An organisation can exist only with different sections c. An organisation can exist only with its own office building d. An organisation can exist without a purpose e. An organisation will grow as years pass by Ans. a Ques 16 _____ may be described as a social device to reduce or eliminate risk of loss to life and property. a. investment b. saving c. insurance d. loan Ans. c Ques 17. State which of the statements given below is correct a. People generally feel that life related risks are imminent b. Religious beliefs interfere with the purchase of life insurance c. People are always keen to buy insurance d. Life insurance cannot be denied to anyone at any time e. Life insurance is to be sold to people who are not in good health Ans. b Ques 18. Which of the following is/ are important activities of an organisation’s Account Department? a. Keeping control on cash b. Investments of funds c. Processing bills d. Reconciling bank statements e. All of the above Ans. e Ques 19. Which of the following is an important reason for insurers to sell life insurance policies through agents? a. The benefits of life insurance policies are simple and clear to all b. People can decide which policy is best for them c. Agents have to earn their commissions d. Agents have to meet their marketing targets e. Many people require personalized guidance for selecting the right policy Ans. e Ques 20. Compared to the premium for a Whole Life plan, the premium for an Endowment plan will be ______ for the same age a. more b. less c. the same d. double e. half Ans. a