QUESTIONS AND ANSWERS

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

2. Which among the following is a secondary burden of risk?

I. Business interruption cost
II. Goods damaged cost
III. Setting aside reserves as a provision for meeting potential losses in the future
IV. Hospitalisation costs as a result of heart attack

3. Which among the following is a method of risk transfer?

I. Bank FD
II. Insurance
III. Equity shares
IV. Real estate

4. Which among the following scenarios warrants insurance?

I. The sole bread winner of a family might die untimely
II. A person may lose his wallet
III. Stock prices may fall drastically
IV. A house may lose value due to natural wear and tear

5. Which of the below insurance scheme is run by an insurer and not sponsored by the Government?
I. Employees State Insurance Corporation
II. Crop Insurance Scheme
III. Jan Arogya
IV. All of the above

6. Risk transfer through risk pooling is called ________.

I. Savings
II. Investments
III. Insurance
IV. Risk mitigation

7.The measures to reduce chances of occurrence of risk are known as _____.

I. Risk retention
II. Loss prevention
III. Risk transfer
IV. Risk avoidance

8. By transferring risk to insurer, it becomes possible ___________.

I. To become careless about our assets
II. To make money from insurance in the event of a loss
III. To ignore the potential risks facing our assets
IV. To enjoy peace of mind and plan one’s business more effectively

9. Origins of modern insurance business can be traced to __________.

I. Bottomry
II. Lloyds
III. Rhodes
IV. Malhotra Committee

10. In insurance context ‘risk retention’ indicates a situation where _____.

I. Possibility of loss or damage is not there
II. Loss producing event has no value
III. Property is covered by insurance
IV. One decides to bear the risk and its effects

11. Which of the following statement is true?

I. Insurance protects the asset
II. Insurance prevents its loss
III. Insurance reduces possibilities of loss
IV. 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 burnt every year resulting in a combined loss of Rs. 80,000.
What should be the annual contribution 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 another individual
III. Insurance is a method of sharing the losses of a ‘many’ by a few
IV. 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 before acceptance of a risk?
I. To assess the risk for rating purposes
II. To find out how the insured purchased the property
III. To find out whether other insurers have also inspected the property
IV. 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 few
II. Sharing the losses of few by many
III. One sharing the losses of few
IV. Sharing of losses through subsidy

16. How does diversification reduce risks in financial markets?

I. Collecting funds from multiple sources and investing them in one place
II. Investing funds across various asset classes
III. Maintaining time difference between investments
IV. Investing in safe assets

17. Which of the below is not an element of the life insurance business?
I. Asset
II. Risk
III. Principle of mutuality
IV. Subsidy

18. Who devised the concept of HLV?

I. Dr. Martin Luther King
II. Warren Buffet
III. Prof. Hubener
IV. George Soros

19. Which of the below mentioned insurance plans has the least or no amount of savings element?
I. Term insurance plan
II. Endowment plan
III. Whole life plan
IV. Money back plan

20. Which among the following cannot be termed as an asset?

I. Car
II. Human Life
III. Air
IV. House

21. Which of the below cannot be categorised under risks?

I. Dying too young
II. Dying too early
III. Natural wear and tear
IV. Living with disability

22. Which of the below statement is true?

I. Life insurance policies are contracts of indemnity while general insurance policies are contracts of assurance
II. Life insurance policies are contracts of assurance while general insurance policies are contracts of indemnity
III. 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

23. Which among the following methods is a traditional method that can help determine the insurance needed by an individual?
I. Human Economic Value
II. Life Term Proposition
III. Human Life Value
IV. Future Life Value

24. Which of the below is the most appropriate explanation for the fact that young people are charged lesser life insurance premium as
compared to old people?
I. Young people are mostly dependant
II. Old people can afford to pay more
III. Mortality is related to age
IV. Mortality is inversely related to age

25. Which of the below is not an advantage of cash value insurance contracts?
I. Safe and secure investment
II. Inculcates saving discipline
III. Lower yields
IV. Income tax advantages

26. Which of the below is an advantage of cash value insurance contracts?

I. Returns subject to corroding effect of inflation
II. Low accumulation in earlier years
III. Lower yields
IV. Secure investment

27. Which among the following is an example of coercion?

I. Ramesh signs a contract without having knowledge of the fine print
II. Ramesh threatens to kill Mahesh if he does not sign the contract
III. Ramesh uses his professional standing to get Mahesh to sign a contract
IV. Ramesh provides false information to get Mahesh to sign a contract

28. Which among the following options cannot be insured by Ramesh?

I. Ramesh’s house
II. Ramesh’s spouse
III. Ramesh’s friend
IV. Ramesh’s parents

29. Which element of a valid contract deals with premium?

I. Offer and acceptance
II. Consideration
III. Free consent
IV. Capacity of parties to contract

30. _____________ relates to inaccurate statements, which are made without any fraudulent intention.
I. Misrepresentation
II. Contribution
III. Offer
IV. Representation

31. ________________ involves pressure applied through criminal means.

I. Fraud
II. Undue influence
III. Coercion
IV. Mistake

32. Which among the following is true regarding life insurance contracts?
I. They are verbal contracts not legally enforceable
II. They are verbal which are legally enforceable
III. They are contracts between two parties (insurer and insured) as per requirements of Indian Contract Act, 1872
IV. They are similar to wager contracts

33. Which of the below is not a valid consideration for a contract?

I. Money
II. Property
III. Bribe
IV. Jewellery

34. Which of the below party is not eligible to enter into a life insurance contract?
I. Business owner
II. Minor
III. House wife
IV. Government employee

35. Which of the below action showcases the principle of “Uberrima Fides”?
I. Lying about known medical conditions on an insurance proposal form
II. Not revealing known material facts on an insurance proposal form
III. Disclosing known material facts on an insurance proposal form
IV. Paying premium on time

36. Which of the below is not correct with regards to insurable interest?
I. Father taking out insurance policy on his son
II. Spouses taking out insurance on one another
III. Friends taking out insurance on one another
IV. Employer taking out insurance on employees

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

38. 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 of pneumonia.
I. Pneumonia
II. Broken back
III. Falling off a horse
IV. Surgery

39. Which among the following would you recommend in order to seek protection against unforeseen events?
I. Insurance
II. Transactional products like bank FD’s
III. Shares
IV. Debentures

40. When is the best time to start financial planning?

I. Post retirement
II. As soon as one gets his first salary
III. After marriage
IV. Only after one gets rich

41. Which among the following is not an objective of tax planning?

I. Maximum tax benefit
II. Reduced tax burden as a result of prudent investments
III. Tax evasion
IV. Full advantage of tax breaks

42. An individual with an aggressive risk profile is likely to follow wealth _______ investment style.
I. Consolidation
II. Gifting
III. Accumulation
IV. Spending

43. Which among the following is a wealth accumulation product?

I. Bank Loans
II. Shares
III. Term Insurance Policy
IV. Savings Bank Account

44. Savings can be considered as a composite of two decisions. Choose them from the list below.
I. Risk retention and reduced consumption
II. Gifting and accumulation
III. Spending and accumulation
IV. Postponement of consumption and parting with liquidity

45. During which stage of life will an individual appreciate past savings the most?
I. Post retirement
II. Earner
III. Learner
IV. Just married
46. What is the relation between investment horizon and returns?
I. Both are not related at all
II. Greater the investment horizon the larger the returns
III. Greater the investment horizon the smaller the returns
IV. Greater the investment horizon more tax on the returns

47. Which among the following can be categorised under transactional products?
I. Bank deposits
II. Life insurance
III. Shares
IV. Bonds

48. Which among the following can be categorised under contingency products?
I. Bank deposits
II. Life insurance
III. Shares
IV. Bonds

49. Which of the below can be categorised under wealth accumulation products?
I. Bank deposits
II. Life insurance
III. General insurance
IV. Shares

50. __________ is a rise in the general level of prices of goods and services in an economy over a period of time.
I. Deflation
II. Inflation
III. Stagflation
IV. Hyperinflation

51. Which of the below is not a strategy to maximise discretionary income?

I. Debt restructuring
II. Loan transfer
III. Investment restructuring
IV. Insurance purchase

52. Which among the following is an intangible product?

I. Car
II. House
III. Life insurance
IV. Soap

53. The premium paid for whole life insurance is _____________ than the premium paid for term assurance.
I. Higher
II. Lower
III. Equal
IV. Substantially higher

54. ___________ life insurance pays off a policyholder's mortgage in the event of the person's death.
I. Term
II. Mortgage
III. Whole
IV. Endowment

55. The ________ the premium paid by you towards your life insurance, the ________ will be the compensation paid to the beneficiary in
the event of your death.
I. Higher, Higher
II. Lower, Higher
III. Higher, Lower
IV. Faster, Slower

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

57. In decreasing-term insurance, the premiums paid ____________ over time.

I. Increase
II. Decrease
III. Remain constant
IV. Are returned

58. Using the conversion option present in a term policy you can convert the same to __________.
I. Whole life policy
II. Mortgage policy
III. Bank FD
IV. Decreasing term policy

59. What is the primary purpose of a life insurance product?

I. Tax rebates
II. Safe investment avenue
III. Protection against the loss of economic value of an individual’s productive abilities
IV. Wealth accumulation

60. Who among the following is best advised to purchase a term plan?
I. An individual who needs money at the end of insurance term
II. An individual who needs insurance and has a high budget
III. An individual who needs insurance but has a low budget
IV. An individual who needs an insurance product that gives high returns

61. Which of the below statement is incorrect with regards to decreasing term assurance?
I. Death benefit amount decreases with the term of coverage
II. Premium amount decreases with the term of coverage
III. Premium remains level throughout the term
IV. Mortgage redemption plans are an example of decreasing term assurance plans

62. Which of the below statement is correct with regards to endowment assurance plan?
I. It has a death benefit component only
II. It has a survival benefit component only
III. It has both a death benefit as well as a survival component
IV. It is similar to a term plan

63. Which of the below is an example of an endowment assurance plan?

I. Mortgage Redemption Plan
II. Credit Life Insurance Plan
III. Money Back Plan
IV. Whole Life Plan

64. Which among the following is a non-traditional life insurance product?

I. Term assurance
II. Universal life insurance
III. Endowment insurance
IV. Whole life insurance

65. Which of the below statement is incorrect?

I. Variable life insurance is a temporary life insurance policy
II. Variable life insurance is a permanent life insurance policy
III. The policy has a cash value account
IV. The policy provides a minimum death benefit guarantee

66. What does inter-temporal allocation of resources refer to?

I. Postponing allocation of resources until the time is right
II. Allocation of resources over time
III. Temporary allocation of resources
IV. Diversification of resource allocation

67. Which among the following is a limitation of traditional life insurance products?
I. Yields on these policies is high
II. Clear and visible method of arriving at surrender value
III. Well defined cash and savings value component
IV. Rate of return is not easy to ascertain

68. Where was the Universal Life Policy introduced first?

I. USA
II. Great Britain
III. Germany
IV. France

69. Who among the following is most likely to buy variable life insurance?
I. People seeking fixed return
II. People who are risk averse and do not dabble in equity
III. Knowledgeable people comfortable with equity
IV. Young people in general

70. Which of the below statement is true regarding ULIP’s?

I. Value of the units is determined by a formula fixed in advance
II. Investment risk is borne by the insurer
III. ULIP’s are opaque with regards to their term, expenses and savings
components
IV. ULIP’s are bundled products

71. All of the following are characteristics of variable life insurance EXCEPT:
I. Flexible premium payments
II. Cash value is not guaranteed
III. Policy owner selects where savings reserve is invested
IV. Minimum Death benefit is guaranteed

72. Which of the below is correct with regards to universal life insurance?
Statement I: It allows policy owner to vary payments
Statement II: Policy owner can earn market based rate of return on cash value
I. I is true
II. II is true
III. I and II are true
IV. I and II are false

73. All of the following is true regarding ULIP’s EXCEPT:

I. Unit holder can choose between different kind of funds
II. Life insurer provides guarantee for unit values
III. Units may be purchased by payment of a single premium or via regular premium payments.
IV. ULIP policy structure is transparent with regards to the insurance expenses component

74. As per IRDA norms, an insurance company can provide which of the below nontraditional
savings life insurance products are permitted in India?
Choice I: Unit Linked Insurance Plans
Choice II: Variable Insurance Plans
I. I only
II. II only
III. I and II both
IV. Neither I nor II

75. What does unbundling of life insurance products refers to?

I. Correlation of life insurance products with bonds
II. Correlation of life insurance products with equities
III. Amalgamation of protection and savings element
IV. Separation of the protection and savings element

76. Who provides public pensions?

I. State
II. Employers
III. Insurers
IV. NGO’s

77. Who bears the investment risk in a fixed benefit annuity?

I. Insurer
II. Insured
III. State
IV. Risk pool

78. Which among the below statements is true?

Statement I: Every pension is an annuity
Statement II: Every annuity is a pension
I. I and II are true
II. I and II are false
III. I is true and II is false
IV. I is false and II is true
79. Which of the below risk cannot be addressed through pensions?
I. Life longevity
II. Inflation
III. Investment risk
IV. Early death

80. With relation to annuities, explain what does “Liquidation period” refer to?
I. Period between the purchase of annuity and commencement of payments
II. Period during which insurer makes annuity payments
III. Time taken to build up the corpus
IV. Insolvency period

81. Amount of annuity payable depends on which of the following:

1. Principal sum of money
2. Investment period
3. Rate of return
4. Duration of annuity payments
I. 1 and 2
II. 1,2 and 3
III. 1,3 and 4
IV. 1,2,3 and 4

82. Amount of annuity payable is inversely related to which of the following:

1. Principal sum of money
2. Investment period
3. Rate of return

83. Duration of annuity payments

I. 1 only
II. 2 only
III. 3 only
IV. 4 only

82. What is the basic contingency associated with pensions?

I. Mortality
II. Morbidity
III. Post-retirement income security
IV. Disability

85. Which of the below best describes an ordinary annuity?

I. Equal cash flows at equal time intervals forever
II. Equal cash flows at equal time intervals for a specific time period
III. Lumpy cash flows at equal time intervals forever
IV. Lumpy cash flows at equal time intervals for a specific time period

86. From the choices mentioned below, select the one that cannot be categorised as an annuity.
I. Rs. 2000 received today, Rs. 2000 received next year and Rs. 2000 received
in 2 years
II. Electricity Bill
III. Car payments
IV. Mortgage payments

87.In an ordinary annuity, payments are made or received ___________ of each period.
I. At the beginning
II. At the end
III. On maturity
IV. 6 months before expiry

88. ___________ is an annuity with an infinite life and making continuous annual payments.
I. APR
II. Amortised loan
III. Perpetuity
IV. Principal

89. _____________ is a term used to refer pensions that have some level of Government administration.
I. Insurance Pension Fund
II. Public Pension Fund
III. Private Pension Fund
IV. Market Pension Fund
90. Health insurance is designed to handle which of the following risks?
I. Mortality
II. Morbidity
III. Infinity
IV. Serendipity

91. IRDA stands for __________.

I. International Regulatory & Development Authority
II. Indian Regulatory & Development Authority
III. Insurance Regulatory & Development Authority
IV. Income Regulatory & Development Authority

92. The term TPA refers to ________.

(Answer with regards to health insurance)
I. The Primary Associate
II. To Provide Assistance
III. Third Party Administrator
IV. Third Party Assistance

93. Which of the below group would not be eligible for a group health insurance policy?
I. Employees of a company
II. Credit card holders of an organisation
III. Professional association members
IV. Group of unrelated individuals formed for the purpose of availing group
health insurance

94. Who cannot be covered under a family floater policy?

I. Children
II. Spouse
III. Parents-in-law
IV. Maternal uncle

95. As per IRDA regulations issued in February 2013, what is the grace period allowed beyond the expiry date of the policy, for renewal?
I. 15 days
II. 30 days
III. 45 days
IV. 60 days

96. Identify the form of insurance that is depicted in the following scenario.
Scenario: Patient pays the health provider and is subsequently reimbursed by the health insurance company.
I. Service Benefit
II. Direct contracting
III. Indemnity
IV. Casualty

97. Moral hazard by health insurance companies can result in _________.

I. Community rating
II. Adverse selection
III. Abuse of health insurance
IV. Risk pooling

98. Primary care can be described as ____________.

I. Care provided to patient in an acute setting
II. Care provided in hospitals
III. First point of contact for people seeking healthcare
IV. Care provided by Doctors

99. ________________ is an insured who undergoes treatment after getting admitted in a hospital.
I. Inpatient
II. Outpatient
III. Day patient
IV. House patient

100. _________ refers to a hospital/health care provider enlisted by an insurer to

provide medical services to an insured on payment by a cashless facility.
I. Day care centre
II. Network provider
III. Third Party Administrator
IV. Domiciliary
101. What is the objective behind Mortgage Redemption Insurance?
I. Facilitate cheaper mortgage rates
II. Provide financial protection for home loan borrowers
III. Protect value of the mortgaged property
IV. Evade eviction in case of default

102. The sum assured under keyman insurance policy is generally linked to which of the following?
I. Keyman income
II. Business profitability
III. Business history
IV. Inflation index

103. Mortgage redemption insurance (MRI) can be categorised under ________.

I. Increasing term life assurance
II. Decreasing term life assurance
III. Variable life assurance
IV. Universal life assurance

104. Which of the below losses are covered under keyman insurance?
I. Property theft
II. Losses related to the extended period when a key person is unable to work
III. General liability
IV. Losses caused due to errors and omission

105. A policy is effected under the MWP Act. If the policyholder does not appoint a special trustee to receive and administer the benefits
under the policy, the sum secured under the policy becomes payable to the _____________.
I. Next of kin
II. Official Trustee of the State
III. Insurer
IV. Insured

106. Mahesh ran a business on borrowed capital. After his sudden demise, all the creditors are doing their best to go after Mahesh’s
assets. Which of the below assets is beyond the reach of the creditors?
I. Property under Mahesh’s name
II. Mahesh’s bank accounts
III. Term life insurance policy purchased under Section 6 of MWP Act
IV. Mutual funds owned by Mahesh

107. Which of the below option is true with regards to MWP Act cases?
Statement I: Maturity claims cheques are paid to policyholders
Statement II: Maturity claims cheques are paid to trustees
I. I is true
II. II is true
III. Both I and II are true
IV. Neither I nor II is true

108. Which of the below option is true with regards to MWP act cases?
Statement I: Death claims are settled in favour of nominees
Statement II: Death claims are settled in favour of trustees
I. I is true
II. II is true
III. Both I and II are true
IV. Neither I nor II is true

109. Ajay pays insurance premium for his employees. Which of the below insurance premium will not be treated deductible as
compensation paid to employee?
Choice I: Health insurance with benefits payable to employee
Choice II: Keyman life insurance with benefits payable to Ajay
I. I only
II. II only
III. Both I and II
IV. Neither I nor II

110. The practice of charging interest to borrowers who pledge their property as
collateral but leaving them in possession of the property is called _____________.
I. Security
II. Mortgage
III. Usury
IV. Hypothecation
111. Which of the below policy can provide protection to home loan borrowers?
I. Life Insurance
II. Disability Insurance
III. Mortgage Redemption Insurance
IV. General Insurance

112. What does a policy lapse mean?

I. Policyholder completes premium payment for a policy
II. Policyholder discontinues premium payment for a policy
III. Policy attains maturity
IV. Policy is withdrawn from the market

113. Who bears the investment risk in case of ULIPs?

I. Insurer
II. Insured
III. State
IV. IRDA

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

115. Which of the below is not a factor in determining life insurance premium?
I. Mortality
II. Rebate
III. Reserves
IV. Management expenses

116. What is a policy withdrawal?

I. Discontinuation of premium payment by policyholder
II. Surrender of policy in return for acquired surrender value
III. Policy upgrade
IV. Policy downgrade

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

I. Excessive liabilities
II. Excessive turnover
III. Excess value of liabilities over assets
IV. Excess value of assets over liabilities

118. Which of the below is not a component of ULIP premiums?

I. Policy allocation charge
II. Investment risk premium
III. Mortality charge
IV. Social security charge

119. Life insurance companies may offer rebate to the buyer on the premium that is payable on the basis of ___________.
I. Sum assured chosen by the buyer
II. Type of policy chosen by the buyer
III. Term of the plan chosen by the buyer
IV. Mode of payment (cash, cheque, card) chosen by the buyer

120. Interest rates are one of the important components used while determining the
premium. Which of the below statement is correct with regards to interest rates?
I. Lower the interest rate assumed, lower the premium
II. Higher the interest rate assumed, higher the premium
III. Higher the interest rate assumed, lower the premium
IV. The interest rates don’t affect premiums

121. Which of the below statement is correct?

I. The typical loading to a net premium would have 3 parts: a) a constant amount for premiums b) a constant amount for each ‘1000 sum
assured’ and c) a constant amount per policy
II. The typical loading to a net premium would have 3 parts: a) a percentage of premiums b) a constant amount for each ‘1000 sum
assured’ and c) a constant amount per policy
III. The typical loading to a net premium would have 3 parts: a) a percentage of premiums b) a constant percentage for each ‘1000 sum
assured’ and c) a constant amount per policy
IV. The typical loading to a net premium would have 3 parts: a) a percentage of premiums b) a constant amount for each ‘1000 sum
assured’ and c) a percentage amount per policy

122.With regards to valuation of assets by insurance companies, __________ is the

value at which the life insurer has purchased or acquired its assets.
I. Discounted future value
II. Discounted present value
III. Market value
IV. Book value

123. In case of __________, a company expresses the bonus as a percentage of basic benefit and already attached bonuses.
I. Reversionary bonus
II. Compound bonus
III. Terminal bonus
IV. Persistency bonus

124. During the _________ period, if the policyholder has bought a policy and does not want it, he / she can return it and get a refund.
I. Free evaluation
II. Free look
III. Cancellation
IV. Free trial

125. Which of the below is an example of standard age proof?

I. Ration card
II. Horoscope
III. Passport
IV. Village Panchayat certificate

226. Which of the below can be attributed to moral hazard?

I. Increased risky behaviour following the purchase of insurance
II. Increased risky behaviour prior to the purchase of insurance
III. Decreased risky behaviour following the purchase of insurance
IV. Engaging in criminal acts post being insured

127. Which of the below features will be checked in a medical examiner’s report?
I. Emotional behaviour of the proposer
II. Height, weight and blood pressure
III. Social status
IV. Truthfulness

128. A __________ is a formal legal document used by insurance companies that provides details about the product.
I. Proposal form
II. Proposal quote
III. Information docket
IV. Prospectus

129. The application document used for making the proposal is commonly known as the __________.
I. Application form
II. Proposal form
III. Registration form
IV. Subscription form

130. From the below given age proof documents, identify the one which is classified as non-standard by insurance companies.
I. School certificate
II. Identity card in case of defence personnel
III. Ration card
IV. Certificate of baptism

131. Money laundering is the process of bringing _______ money into an economy by hiding its _______ origin so that it appears to be
legally acquired.
I. Illegal, illegal
II. Legal, legal
III. Illegal, legal
IV. Legal, illegal

132. In case the policyholder is not satisfied with the policy, he / she can return the policy within the free-look period i.e. within
________of receiving the policy document.
I. 60 days
II. 45 days
III. 30 days
IV. 15 days

133. Which of the below statement is correct with regards to a policy returned by a policyholder during the free look period?
I. The insurance company will refund 100% of the premium
II. The insurance company will refund 50% of the premium
III. The insurance company will refund the premium after adjusting for proportionate risk premium for the period on cover, medical
examination expenses and stamp duty charges
IV. The insurance company will forfeit the entire premium

134. Which of the below is not a valid address proof?

I. PAN Card
II. Voter ID Card
III. Bank passbook
IV. Driving licence

135. What does a first premium receipt (FPR) signify? Choose the most appropriate option.
I. Free look period has ended
II. It is evidence that the policy contract has begun
III. Policy cannot be cancelled now
IV. Policy has acquired a certain cash value

136. Which of the following documents is an evidence of the contract between insurer and insured?
I. Proposal form
II. Policy document
III. Prospectus
IV. Claim form

137. If complex language is used to word a certain policy document and it has given
rise to an ambiguity, how will it generally be construed?
I. In favour of insured
II. In favour of insurer
III. The policy will be declared as void and the insurer will be asked to return the premium with interest to the insured
IV. The policy will be declared as void and the insurer will be asked to return the premium to the insured without any interest

138. Select the option that best describes a policy document.

I. It is evidence of the insurance contract
II. It is evidence of the interest expressed by the insured in buying an insurance policy from the company
III. It is evidence of the policy (procedures) followed by an insurance company
when dealing with channel partners like banks, brokers and other entities
IV. It is an acknowledgement slip issued by the insurance company on payment of the first premium

139. Which of the below statement is correct?

I. The proposal form acceptance is the evidence that the policy contract has begun
II. The acceptance of premium is evidence that the policy has begun
III. The First Premium Receipt is the evidence that the policy contract has begun
IV. The premium quote is evidence that the policy contract has begun

140. For the subsequent premiums received by the insurance company after the first premium, the company will issue __________.
I. Revival premium receipt
II. Restoration premium receipt
III. Reinstatement premium receipt
IV. Renewal premium receipt

141. What will happen if the insured person loses the original life insurance policy document?
I. The insurance company will issue a duplicate policy without making any changes to the contract
II. The insurance contract will come to an end
III. The insurance company will issue a duplicate policy with renewed terms and conditions based on the current health declarations of the
life insured
IV. The insurance company will issue a duplicate policy without making any changes to the contract, but only after a Court order.

142. Which of the below statement is correct?

I. The policy document has to be signed by a competent authority but need not be compulsorily stamped according to the Indian Stamp
Act.
II. The policy document has to be signed by a competent authority and should
be stamped according to the Indian Stamp Act.
III. The policy document need not be signed by a competent authority but
should be stamped according to the Indian Stamp Act.
IV. The policy document neither needs to be signed by a competent authority
nor it needs to be compulsorily stamped according to the Indian Stamp Act.

143. Which of the below forms the first part of a standard insurance policy document?
I. Policy schedule
II. Standard provisions
III. Specific policy provisions
IV. Claim procedure

144. In a standard insurance policy document, the standard provisions section will have information on which of the below?
I. Date of commencement, date of maturity and due date of last premium
II. Name of nominee
III. The rights and privileges and other conditions, which are applicable under
the contract
IV. The signature of the authorised signatory and policy stamp

145. “A clause precluding death due to pregnancy for a lady who is expecting at the time of writing the contract” will be included in which
section of a standard policy document?
I. Policy schedule
II. General provisions
III. Standard provisions
IV. Specific policy provisions

146. Under what circumstances would the policyholder need to appoint an appointee?
I. Insured is minor
II. Nominee is a minor
III. Policyholder is not of sound mind
IV. Policyholder is not married

147. 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 in return for a loan
II. Nomination can be done at the time of policy purchase or subsequently
III. Nomination can be changed by making an endorsement in the policy
IV. A nominee has full rights on the whole of the claim

148. In order for the policy to acquire a guaranteed surrender value, for how long must the premiums be paid as per law?
I. Premiums must be paid for at least 2 consecutive years
II. Premiums must be paid for at least 3 consecutive years
III. Premiums must be paid for at least 4 consecutive years
IV. Premiums must be paid for at least 5 consecutive years

149. When is a policy deemed to be lapsed?

I. If the premiums are not paid on due date
II. If the premiums are not paid before the due date
III. If the premium has not been paid even during days of grace
IV. If the policy is surrendered

150. Which of the below statement is correct with regards to grace period of an insurance 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.

151. What will happen if the policyholder does not pay the premium by the due date and dies during the grace period?
I. The insurer will consider the policy void due to non-payment of premium by the due date and hence reject the claim
II. The insurer will pay the claim and waive off the last unpaid premium
III. The insurer will pay the claim after deducting the unpaid premium
IV. The insurer will pay the claim after deducting the unpaid premium along
with interest which will be taken as 2% above the bank savings interest rate

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

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

154. Which of the below statement is incorrect with regards to a policy against which
a loan has been taken from the insurance company?
I. The policy will have to be assigned in favour of the insurance company
II. The nomination of such policy will get cancelled due to assignment of the policy in favour of the insurance company
III. The nominee’s right will affected to the extent of the insurer’s interest in the policy
IV. The policy loan is usually limited to a percentage of the policy’s surrender value

155. Which of the below statement is incorrect with regards to assignment of an insurance policy?
I. In case of Absolute Assignment, in the event of death of the assignee, the
title 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 the
rights right, title and interest in the policy (as property) from one person to another.
III. It is necessary that the policyholder must give notice of assignment to the insurer.
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 policy
tenure, wherein the policy reverts back to the beneficiaries of the insured.

156. Which of the below alteration will be permitted by an insurance company?

I. Splitting up of the policy into two or more policies
II. Extension of the premium paying term
III. Change of the policy from with profit policy to without profit policy
IV. Increase in the sum assured

157. Which of the following cases is likely to be declined or postponed by a lifeinsurer?

I. Healthy 18 year old
II. An obese person
III. A person suffering from AIDS
IV. Housewife with no income of her own

158. Which of the following is an example of moral hazard?

I. Stunt artist dies while performing a stunt
II. A person drinking copious amounts of alcohol because he is inured
III. Insured defaulting on premium payments
IV. Proposer lying on policy document

159. Why is heredity history of importance in medical underwriting?

I. Rich parents have healthy kids
II. Certain diseases can be passed on from parents to children
III. Poor parents have malnourished kids
IV. Family environment is a critical factor

160. Which of the following denotes the underwriter’s role in an insurance company?
I. Process claims
II. Decide acceptability of risks
III. Product design architect
IV. Customer relations manager

161. Which of the following is not an underwriting decision?

I. Risk acceptance at standard rates
II. Declinature of risk
III. Postponement of risk
IV. Claim rejection

162. Which of the following is not a standard age proof?

I. Passport
II. School leaving certificate
III. Horoscope
IV. Birth certificate

163. Which of the following condition will affect a person’s insurability negatively?
I. Daily jogs
II. Banned substance abuse
III. Lazy nature
IV. Procrastination

164. Under what method of underwriting does an underwriter assign positive rating
points for all negative or adverse factors (negative points for any positive or favourable factors)?
I. Judgment
II. Arbitrary
III. Numerical rating
IV. Single step

165. Under risk classification, ___________ consist of those whose anticipated

mortality corresponds to the standard lives represented by the mortality table.
I. Standard lives
II. Preferred risks
III. Sub-standard lives
IV. Declined lives

166. Amruta is pregnant. She has applied for a term insurance cover. Which of the below option will be the best option to choose for an
underwriter to offer insurance to Amruta? Choose the most likely option.
I. Acceptance at ordinary rates
II. Acceptance with extra premium
III. Decline the proposal
IV. Acceptance with a restrictive clause

167. Which of the below insurance proposal is not likely to qualify under non-medical underwriting?
I. Savita, aged 26 years, working in an IT company as a software engineer
II. Mahesh, aged 50 years, working in a coal mine
III. Satish, aged 28 years, working in a bank and has applied for an insurance cover of Rs. 1 crore
IV. Pravin, aged 30 years, working in a departmental store and has applied for
an endowment insurance plan for a tenure of 10 years

168. 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 method
II. Numerical method
III. Any of the above method since an illness like diabetes does not play a major role in the underwriting process
IV. Neither of the above method as diabetes cases are rejected outright

169. Santosh has applied for a term insurance policy. His anticipated mortality is significantly lower than standard lives and hence could be
charged a lower premium. Under risk classification, Santosh will be classified under ___________.
I. Standard lives
II. Preferred risks
III. Substandard lives
IV. Declined lives

170. Which of the below statement best describes the concept of claim? Choose the most appropriate option.
I. A claim is a request that the insurer should make good the promise specified in the contract
II. A claim is a demand that the insurer should make good the promise specified in the contract
III. A claim is a demand that the insured should make good the commitment specified in the agreement
IV. A claim is a request that the insured should make good the promise specified in the agreement

171. Given below is a list of policies. Identify under which type of policy, the claim payment is made in the form of periodic payments?
I. Money-back policy
II. Unit linked insurance policy
III. Return of premium policy
IV. Term insurance policy

172. Mahesh has bought a life insurance policy with a critical illness rider. He has made absolute assignment of the policy in favour of
Karan. Mahesh suffers a heart 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. Mahesh
II. Karan
III. The payment will be shared equally by Mahesh and Karan
IV. Neither of the two because Mahesh has suffered the heart attack but the policy is assigned in favour of Karan.

173. Praveen died in a car accident. The beneficiary submits documents for death claim. Which of the below document is an additional
document required to be submitted in case of accidental death as compared to natural death.
I. Certificate of burial or cremation
II. Treating physician’s certificate
III. Employer’s certificate
IV. Inquest Report

174. Which of the below death claim will be treated as an early death claim?
I. If the insured dies within three years of policy duration
II. If the insured dies within five years of policy duration
III. If the insured dies within seven years of policy duration
IV. If the insured dies within ten years of policy duration

175. Given below are some events that will trigger survival claims. Identify which of the below statement is incorrect?
I. Claim paid on maturity of a term insurance policy
II. An instalment payable upon reaching the milestone under a money-back policy
III. Claim paid for critical illnesses covered under the policy as a rider benefit
IV. Surrender value paid on surrender of an endowment policy by the policyholder

176. A payment made under a money-back policy upon reaching a milestone will be classified under which type of claim?
I. Death claim
II. Maturity claim
III. Periodical survival claim
IV. Surrender claim

177. Shankar bought a 10 year Unit Linked Insurance Plan. If he dies before the maturity of the policy which of the below will be paid?
I. Lower of sum assured or fund value
II. Higher of sum assured or fund value
III. Premiums paid will be returned with 2% higher interest rate as compared to a bank’s savings deposit
IV. Surrender value

178. 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 plan
II. Manoj dies after one and half years of buying a term insurance plan
III. David dies after two and half years of buying a term insurance plan
IV. Pravin dies after five and half years of buying a term insurance plan

179. Given below is a list of documents to be submitted for a normal death claim by all beneficiaries in the event of death of life insured.
Pick the odd one out which is additionally required to be submitted only in case of death by accident.
I. Inquest report
II. Claim form
III. Certificate of burial or cremation
IV. Hospital’s certificate

180. As per IRDA (Protection of Policyholders Interests) Regulations, 2002, a claim under a life policy shall be paid or be disputed, within 30
days from the date of receipt of all relevant papers and clarifications required.
I. 7 days
II. 15 days
III. 30 days
IV. 45 days

181. Which of the below statements is correct?

I. The prime purpose of insurance regulation is to protect the insurance companies
II. The prime purpose of insurance regulation is to protect the policyholder
III. The prime purpose of insurance regulation is to protect the insurance intermediaries
IV. The prime purpose of insurance regulation is to protect the Government

182. Which of the below statement is correct?

I. If agent loses the licence, then no duplicate licence is issued. The agent has
to wait till the time of renewal, when another copy is issued
II. If agent loses the licence, then the Authority may issue a duplicate licence free of cost.
III. If agent loses the licence, then the Authority may issue a duplicate licence only 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 duplicate licence on payment of a fee of rupees fifty.

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

184. Insurance agent represents the __________.

I. Insurance company
II. Sub-agent
III. Co-agent
IV. Broker

185. 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
186. Agent’s licence is to be renewed __________.
I. Every year
II. After 5 years
III. After 3 years
IV. After 15 years

187. Identify the statement which is not correct. Insurance agent should __________.
I. Indicate the scale of commission if asked by the customer
II. Share the commission by way of rebate
III. Disclose his licence on demand
IV. Indicate the premium to be charged

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

189. The Authority may issue duplicate licence in case it is ____________.

I. Lost
II. Destroyed
III. Mutilated
IV. All of the above

180. If an agent is found guilty of criminal misappropriation the designated person will ____________.
I. Cancel the licence
II. Issue a duplicate licence
III. Renew the existing licence
IV. Take some fees from the agent

190. Minimum qualification required for insurance agent is _______ pass.

I. Graduate
II. 10th
III. Post-graduate
IV. 7th

191. ___________ may deal with more than one life insurance company or general insurance company or both.
I. Agent
II. Surveyor
III. Composite agent
IV. None of the above

192. Which of the below statements is incorrect?

I. An individual insurance agent is a representative of the insurance company
and is governed by the agent-principal relationship.
II. An individual insurance agent's primary relationship and responsibility is to
the insurance buyer and not the insurance company.
III. Insurance broker, who represents the insured, generally does not have any
contractual agreement to exclusively serve any one insurance company
IV. Insurance broker is expected to represent the customer’s interest when
choosing the right product and company that would best fit the customer’s particular needs.

193. In 1964, Harvard Business Review published a study on “What makes a good salesman”. The authors came up with an interesting
insight. They found that a good salesman should have two basic qualities. Which are those two qualities?
I. Affection and zeal to succeed
II. Patience and pro-activeness
III. Empathy and ego drive
IV. Hunger for growth and self-confidence

194. 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. Persistency
II. Consistency
III. Uniformity
IV. Reliability

195. An insurance agent is typically a representative of ______________.

I. Customer
II. Insurance company
III. Government
IV. IRDA

196. Direct marketing involves which of the below?

I. Telemarketing
II. Insurance agents
III. Bancassurance
IV. All of the above

197. “Hurt not others with that which pains yourself”. This golden rule of ethics is
given in the teaching of which religion?
I. Buddhism
II. Christianity
III. Hinduism
IV. Judaism

198. When an applicant is seeking license for the first time, he / she is supposed to
undergo ________of practical training (from an approved institution) in life insurance.
I. 25 hours
II. 50 hours
III. 75 hours
IV. 100 hours

199. The license issued to the agent is valid for _________.

I. One year
II. Two years
III. Three years
IV. Five years

200. As per Section 182 of the Indian Contract Act, _____ is a person employed to do
any act for another or to represent another in dealing with a third person.
I. Principal Officer
II. Proxy
III. Mediator
IV. Agent

201. An insurance broker represents _______.

I. Insurance company
II. Insured
III. Association of insurance companies
IV. Community of people who have already taken insurance

202. Which of the below reflects Principle 2 of the Insurance Marketplace Standards Association (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 and disputes.
IV. To maintain a system of supervision and review that is reasonably designed
to achieve compliance with these principles of ethical market conduct.

203. Before the composite licence could be renewed, the applicant needs to undergo
renewal training of ________ from an approved institution.
I. 25 hours
II. 50 hours
III. 35 hours
IV. 75 hours

204. IRDA has decided to implement guidelines on persistency from _______.

I. 1st July 2011
II. 1st July 2012
III. 1st July 2013
IV. 1st July 2014

205. Which of the below statement best describes a “testimonial”?

I. An endorsement from a satisfied customer
II. Test result for a product in a benchmarking test
III. List of tests that a product must pass
IV. Money required to test a product

206. The key to successful closing lies in helping the prospect to say ________.
I. No
II. Don’t know
III. Yes
IV. Maybe

207. Which of the following is not part of sales process?

I. Prospecting
II. Sales interview
III. Loss assessment
IV. Closing

208. Prospecting in an insurance sale is ___________.

I. Gathering the names of people who may be interested in insurance
II. Preparing a list of all the persons in the city
III. Enlisting all the policyholders of the branch office
IV. Preparing list of all the agents in the neighbourhood

209. In insurance, need-gap analysis involves _____________.

I. Identifying the areas where the prospect needs insurance protection
II. Identifying people to work as insurance agents
III. Identifying how much assets a prospect has
IV. Identifying the poverty level of the prospects

210. Cold Calling is ___________.

I. Meeting customers in winter
II. Meeting customers when they are suffering from cold
III. Meeting people unannounced
IV. Meeting customer after fire was extinguished

211. ________ as a profession refers to the act of inducing a commercial transaction through inducing the purchase of a product or
service, such act being carried out with the intent of earning remuneration.
I. Marketing
II. Selling
III. Advertising
IV. Promotion

212. Which of the below statement is correct?

I. Life insurance is sold, not bought
II. Life insurance is bought, not sold
III. Life insurance is neither bought nor sold; it is a necessity and hence should
be bought by every individual.
IV. None of the above

213. Which of the below statement is correct?

I. Selling is an art and not a science
II. Selling is a science and not an art
III. Selling is neither an art or a science
IV. Selling is both an art and a science

214. While prospecting for selling insurance, approaching the members of a caste or community association will be classified under which
category?
I. Immediate group
II. Natural market
III. Centres of influence
IV. References and introductions

215. Identify the incorrect statement with regards to a ‘qualified’ prospect.

I. A qualified prospect is one who can pay for insurance
II. A qualified prospect is one who can be approached on a favourable basis
III. A qualified prospect is one who is academically well qualified to buy insurance
IV. A qualified prospect is one who can pass the company underwriting requirements

216. What is meant by customer lifetime value?

I. Sum of costs incurred while servicing the customer over his lifetime
II. Rank given to customer based on business generated
III. Sum of economic benefits that can be achieved by building a long term relationship with the customer
IV. Maximum insurance that can be attributed to the customer

217. In a customer’s mind, there are two types of feelings and related emotions that arise with each service failure on part of the
insurance company. These feelings are
I. Confusion and empathy
II. Dishonesty and revenge
III. Ignorance and sympathy
IV. Sense of unfairness and hurt ego

218. Which among the following is not an element of active listening?

I. Paying good attention
II. Being extremely judgmental
III. Empathetic listening
IV. Responding appropriately

219. ____________ is not a tangible good.

I. House
II. Insurance
III. Mobile Phone
IV. A pair of jeans

220. ____________ is not an indicator of service quality.

I. Cleverness
II. Reliability
III. Empathy
IV. Responsiveness

221. In customer relationship the first impression is created:

I. By being confident
II. By being on time
III. By showing interest
IV. By being on time, showing interest and being confident

222. Select the correct statement:

I. Ethical behaviour is impossible while selling insurance
II. Ethical behaviour is not necessary for insurance agents
III. Ethical behaviour helps in developing trust between the agent and the insurer
IV. Ethical behaviour is expected from the top management only

223. Active listening involves:

I. Paying attention to the speaker
II. Giving an occasional nod and smile
III. Providing feedback
IV. Paying attention to the speaker, giving an occasional nod and smile and providing feedback

224. _________ refers to the ability to perform the promised service dependably and accurately.
I. Reliability
II. Responsiveness
III. Assurance
IV. Empathy

225. ___________ relate to one’s ability to interact effectively with other workers
and customers, both at work and outside.
I. Hard skills
II. Soft skills
III. Negotiating skills
IV. Questioning skills

226. Which of the below elements promote trust?

I. Communication, assertiveness and being present
II. Politeness, affirmation and communication
III. Attraction, communication and being present
IV. Affirmation, assertiveness and attraction

227. Which of the below tips are useful for making a good first impression?
I. Being on time always
II. Presenting yourself appropriately
III. Being open, confident and positive
IV. All of the above

228. ___________ is reflected in the caring attitude and individualised attention provided to customers.
I. Assurance
II. Empathy
III. Reliability
IV. Responsiveness

229. The ______________ has jurisdiction to entertain complaints, where value of

the goods or services and the compensation claimed is up to Rs.20 lakhs.
I. District Forum
II. State Commission
III. Zilla Parishad
IV. National Commission

230. Expand the term IGMS.

I. Insurance General Management System
II. Indian General Management System
III. Integrated Grievance Management System
IV. Intelligent Grievance Management System

231. Which of the below consumer grievance redressal agencies would handle
consumer disputes amounting between Rs. 20 lakhs and Rs. 100 lakhs?
I. District Forum
II. State Commission
III. National Commission
IV. Zilla Parishad

232. Which among the following cannot form the basis for a valid consumer complaint?
I. Shopkeeper charging a price above the MRP for a product
II. Shopkeeper not advising the customer on the best product in a category
III. Allergy warning not provided on a drug bottle
IV. Faulty products

233. Which of the below will be the most appropriate option for a customer to lodge an insurance policy related complaint?
I. Police
II. Supreme Court
III. Insurance Ombudsman
IV. District Court

234. Which of the below statement is correct with regards to the territorial jurisdiction of the Insurance Ombudsman?
I. Insurance Ombudsman has National jurisdiction
II. Insurance Ombudsman has State jurisdiction
III. Insurance Ombudsman has District jurisdiction
IV. Insurance Ombudsman operates only within the specified territorial limits

235. How is the complaint to be launched with an insurance ombudsman?

I. The complaint is to be made in writing
II. The complaint is to be made orally over the phone
III. The complaint is to be made orally in a face to face manner
IV. The complaint is to be made through newspaper advertisement

236. What is the time limit for approaching an Insurance Ombudsman?

I. Within two years of rejection of the complaint by the insurer
II. Within three years of rejection of the complaint by the insurer
III. Within one year of rejection of the complaint by the insurer
IV. Within one month of rejection of the complaint by the insurer

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

238. Are there any fee / charges that need to be paid for lodging the complaint with the Ombudsman?
I. A fee of Rs 100 needs to be paid
II. No fee or charges need to be paid
III. 20% of the relief sought must be paid as fee
IV. 10% of the relief sought must be paid as fee

239. Can a complaint be launched against a private insurer?

I. Complaints can be launched against public insurers only
II. Yes, complaint can be launched against private insurers
III. Complaint can be launched against private insurers only in the Life Sector
IV. Complaint can be launched against private insurers only in the Non-Life Sector