1. The emergence of which of the following necessitates insurance as a form of security? (A) Joint family system (B) Nuclear family system (C) Both the above (D) None of the above .
2. Which was the first Act to regulate life insurance industry in India? (A) Insurance Act, 1938 (B) Life Insurance Companies Act, 1912 (C) IRDA Act, 1999 ( (D) LIC Act, 1956 .
3. Government of India transacts life insurance business in India through which of the following: (A) LIC of India (B) GIC of India (C) Postal Life Insurance (D) All the above.
4. Which of the following entity is exempt from the purview of the IRDA? (A) LIC of India (B) GIC of India (C) Postal Life Insurance (D) None.
5. The losses of a few are shared amongst many through the mechanism of –
(A) Nuclear family (B) Insurance (C) Government (D) All the above .
6. …….. consists of collecting premiums from numerous individuals to compensate the few who may suffer losses (A) Pooling (B) Contract (C) Guarantee (D) IRDA .
7. Which of the following is correct?
Statement A – Insurance reduces burdens Statement B – Insurance is a system of mutual support.
Statement C – Insurance the only method to manage risks
(A) A is correct (B) B is correct (C) A, B & C correct (D) A & B correct. .
8. Which of the following can easily be compensated thro’ insurance? A. Primary burden of risk B. Secondary burden of risk C. Both D. None .
9. Secondary burden of risk consists of …….. and …… one has to bear if exposed to loss situation. (A) Trials, tribulations (B) Costs, Strains (C) Situations, Safeguards (D) Circumstances, Conflicts .
10. Which are the methods to manage risks? (A) Risk Avoidance (B) Risk Retention (C) Risk Reduction (D) All the above .
11. …… and …….. refer to measures to reduce chance of occurrence and measures to reduce degree of losses (A) Loss Prevention, Loss damage (B) Loss Control, Loss management (C) Loss advantage, Loss prevention (D) Loss Prevention, Loss Reduction .
12. Risk reduction and control involves steps like – (A) Education and training (B) Making environmental changes (C) Spreading out items to various locations (D) All the above .
13. Risk Financing includes - (A) Risk Retention (B) Risk Transfer (C) A & B correct (D) Both A & B wrong.
14. Risk Retention means – (A) Insuring with an insurance company (B) Insuring with another individual (C) Insuring with the owner of the company (D) Self-insurance .
15. Risk Transfer means – (A) Insuring with an insurance company (B) Insuring with another individual (C) Insuring with the owner of the company (D) Risk retention .
16. Insurance refers to protection against an event that …… happen whereas Assurance refers to protection against an event that …. happen.
(A) may, may not (B) might, will (C) must, need not (D) will, will not .
17. Cost of the risk is product of which of the following 2 factors: (A) Insurance and Assurance (B) Happenings and result
(C) Cause and effect
(D) Probability and impact
.
18. Cost of the risk would ….. with the probability and amount of loss (A) Increase (B) Decrease (C) Vary (D) None of the above .
19. Considering insuring an ordinary ball pen is an example of – (A) Don’t risk more than you can afford to lose (B) Don’t risk a lot for a little (C) Both are correct (D) Both are wrong .
20. Considering insuring an oil refinery is example of (A) Don’t risk more than you can afford to lose (B) Don’t risk a lot for a little (C) Both are correct (D) Both are wrong.
21. Which of the following is correct?
Statement A. The system of insurance benefits individual, family and the society Statement B. Insurance companies could invest in
speculative ventures
(A) A is correct (B) B is correct (C) Both A and B correct (D) A & B wrong.
22. Which of the following is untrue?
A. Insurance promotes efficient use of existing resources
B. Insurance contributes to healthy economy and national productivity
C. Insurance policy can be used as a collateral security (A) A is true (B) B is true (C) A and B true (D) None.
23. Providing social security is the obligation of …. (A) State (B) Insurance companies (C) Private companies (D) Individuals.
24. Which is not an example of social security schemes of the Government (A) Rajeev Gandhi Equity Scheme (B) Janata Personal Accident (C) Jan Arogya Scheme (D) Employees State Insurance Corporation .
25. Human Life Value concept measures the value of a human life on the basis of his – (A) Gross earnings (B) Net earnings (C) Total earnings (D) Expenses.
26. Human Life Value can be arrived at by dividing . by… (A) Gross earnings, Rate of interest (B) Net earnings, Gross earnings (C) Gross earnings, Net earnings (D) Net earnings, Rate of interest .
27. As per HLV concept, the amount of insurance one can buy could be …. times of one’s annual income (A) 5 to 10 times (B) 10 to 15 times (C) 25 to 50 times (D) 50 to 100 times .
28. HLV concept helps to determine the ……… limit beyond which life insurance could be speculative UPPER LOWER MIDDLE ALL THE ABOVE.
29. Life Insurance covers the risk of - (A) Dying too early (B) Living too longer C) Both are correct (D) Both are wrong .
30. ….. means that insurer would assess and compensate only the exact amount of loss. (A) Certainty (B) Uncertainty (C) Probability (D) Indemnity.
31. Which is not a contract of indemnity? (A) Personal Accident (B) Fire (C) Marine (D) Motor.
32. In which type of contract, the happening of event is certain but its timing is not known? (A) Life Insurance (B) General Insurance (C) Both (D) None .
33. How life insurance is possible? (A) Timing of death is certain B) Timing of death is uncertain (C) Death is certain but its timing is uncertain (D) None of the above .
34. With increase in premium with age, healthy people tended to withdraw leaving unhealthy people. This lead to development of – (A) Gross premiums (B) Single premiums (C) Advance premiums (D) Level premiums .
35. Which of the following is correct? A. Life insurance is a long term contract
B. General insurance is a short term contract
A is correct B is correct (C) Both A and B correct (D) None .
36. Life insurance policy, in general, is a mixture of – (A) Protection and security (B) Insurance and Assurance (C) Protection and Savings (D) Protection and Tax relief .
37. principle means flow of resources from many to one (A) Mutuality or Pooling (B) Mutuality or co-operation (C) Pooling or funding (D) Resourcing or pooling .
38. Which of the following is incorrect? A. Mutuality means funds from various individuals are combined
B. Diversification means spreading out funds to various destinations
A is correct B is correct C) Both (D) None .
39. An Insurance contract has to fulfill the requirements of (A) Insurance Act 1938 (B) IRDA Act, 1999 (C) LIC Act, 1956 (D) Indian Contract Act, 1872 .
40. Which is not an element of a valid contract? (A) Offer and Acceptance (B) Capacity to pay premiums (C) Consideration (D) Capacity of the parties .
41. The person who makes the offer is called the ……… and the person who accepts the offer in an insurance contract is called the ……… (A) Offerer, Acceptor B) Insurer, Insured (C) Proposer, Insured D) Proposer, Insurer .
42. If any condition is put by the Insurer then it is – (A) Acceptance (B) Offer (C) Counter offer (D) Conditional acceptance.
43. Which is evidence of contract? (A) Proposal (B) First Premium Receipt (C) Deposit amount (D) Policy bond .
44. Which is the ‘consideration’ from the insured in an insurance contract? (A) Premium (B) Proposal (C) Understanding (D)Acceptance.
45. Which is the ‘consideration’ from the insurer in an insurance contract? (A) Premium (B) Promise to indemnify (C) Policy bond (D) Proposal .
46. Consent is not said to be free when it is caused by (A) Coercion (B) Fraud (C) Misrepresentation (D) All the above .
47. Which is not a capacity to enter into contract? (A) Minor (B) Major (C) Sound mind (D) Not disqualified under law .
48. ……. means every party to an insurance contract must disclose all material information. (A) Insurable Interest (B) Indemnity (C) Proximity (D) Uberrima Fides .
49. In commercial contracts, the principle to be observed is – (A) Caveat Emptor (B) Indemnity (C) Proximity (D) Uberrima Fides.
50. Material facts are those that would help the insurer to decide : (A) The acceptability of risk (B) The rate of premium to be charged (C) Both A and B correct (D) None are correct .
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