Insurance MCQ Questions with Answers

Insurance MCQ Questions with Answers
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Multiple choice questions of Subject Commerce Solved Insurance MCQ Questions with Answers ( Insurance MCQ Questions with Answers Quiz ) for Entrances (Entrance Exam) Conducted by different Central and State Universities are given below.

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1. Insurance is necessary because

(a) assets usually depreciate over a period of time

(b) assets require regular maintenance

(c) assets may be damaged in the course of their use

(d) All of the above

Ans. c

2. Insurance concept is based on

(a) the charity concept

(c) Both ‘a’ and ‘b’

(b) mutual help concept

(d) None of these

Ans. b

3. The principle behind insurance is

(a) probabilities

(c) large numbers

(b) sharing the risk

(d) All of these

Ans. d

4. State which of the following statements is correct.

(a) Risk is uniform for all the assets

(b) Life insurance improves standard of living

(c) Both of the above

(d) None of the above

Ans. b

5. When was the Oriental Life Insurance Company established?

(a) 1818

(b) 1834

(c) 1907

(d) 1938

Ans. a

6. When was general insurance business nationalised?

(b) 1971

(a) 1938

(c) 1973

(d) 1993

Ans. c

7. Insurance premium generally depends upon

(b) the risk associated

(d) Both ‘a’ and ‘b’

(a) the peril

(c) None of these

Ans. d

8. Out of the following policies, which policy gives returns regularly in terms of profit sharing?

(a) Equity linked policy

(c) Endowment policy

(b) Money back policy

(d) None of these

Ans. b

9. When was life insurance sector nationalised?

(b) 1907

(a) 1834

(c) 1938

(d) 1956

Ans. d

10. Insurance Regulatory and Development Authority (IRDA), the regulatory body for Indian insurance industry, has its head office situated in hich rity:

(a) Bangalore

(c) Chennal

(b) hudaiabad

(d) Delhi

Ans. b

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11. From October 2013, LIC started charging service tax at the rate of

(a) 5%

(b) 7%

(c) 14%

(d) 3%

Ans. d

12. The human assets, Le. human being perishes when

(a) he dies

(b) he become unable to work

(c) he retires from his work

(d) All of the above

Ans. d

13. When was the General Insurance Council formed

(a) 1938

(b) 1957

(c) 1973

(d) 1971

Ans. b

14. As a trustee, an insurer is responsible to

(a) the IRDA

(c) the policyholders

(b) the government

(d) the society

Ans. c

15. Which one of the following does not belong to the main products of life insurance

(a) Endowment

(b) Personal accident insurance

(c) Term

(d) Whole life

Ans. b

16. When was the Insurance Regulatory and Development Authority constituted?

(a) 1938

(d) 1999

(b) 1971

(c) 1983

Ans. d

17. During July 2014, the FDI limit in insurance sector in  India was raised from 26% to

(a) 51%

(b) 65%

(c) 49%

(d) 56

Ans. c

18. Reinsurance refers to the practice by insurance companies of

(a) issuing new policies

(b) renewing existing policies

(C) buying insurance from another firm

(d) None of the above

Ans. c

19. Which of the following is not a type of general insurance?

(a) Fire insurance

(c) Lite insurance

(b) Accidental insurance

(d) Marine insurance

Ans. C

20. In life insurance contract, the beneficiary may be

(a) the policyholder

(b) the life insured

(c) the dependents of the lite insured

(d) All of the above

Ans. d

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21. Life insurance is better option than other avenues of savings in respect of

(a) appreciation in worth

(c) usefulness in emergency

(d) All of these

(b) tar benefits

Ans. c

22. State which of the following statements is/are correct.

(a) Insurance helps in preventing risk

(b) Insurer compensates losses in ful

(c) Both of the above

(d) None of the above

Ans. d

23. Which of the statements is correct out of the following?

(a) A life insurance policy is necessary to be stamped

(b) A life insurance policy is a contract enforceable by law

(c) A life insurance helps in avoiding the risk of life

(d) None of the above

Ans. b

24. All the insurable interests are defined in

(a) The Insurance Act

(c) The Contract Act

(b) The IRDA notification

(d) None of these

Ans. d

25. In case of life insurance, the risk

(a) can be avoided

(c) can be reduced

(b) cannot be avoided

(d) None of these

Ans. b

26. Which one of the following statement would be correct?

(a) The policy is the basis of the insurance contract

(b) The proposal is the basis of the insurance contract

(c) Both are correct

(d) Both are wrong

Ans. b

27. The proposal form and personal statement contain information relevant to determine a level of risk

(c) insurable interest

(b) moral hazard

(d) All of these

Ans. d

28. Financial underwriting is done to evaluate

(a) the probability of the policy lapsing in future

b) the possibility of moral hazard

(c) both lapse and moral hazard probabilities

(d) None of the above

Ans. b

29. Which one of the following statements is/are correct?

(a) A medical referee is an underwriter

(b) A medical referee is an employee of the insurer

(c) Both are true

(d) Both are wrong

Ans. d

30. In case of a policy, the net premium will be

(a) less than the risk premium

(b) more than the risk premium

(c) Any one of the above

(d) None of the above

Ans. a

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31. The insurance contract is valid just because

(a) promotes socially desirable causes

(b) it is not a wagering contract

(c) it takes care of the destitute

(d) it provides government with large funds

Ans. b

32. Reinsurance is the name given to

(a) an individual taking insurance for the second time

(b) an insurer placing insutarice with another insurer

(c) Both are correct

(d) Both are wrong

Ans. b

33. When does a claim arise under an insurance policy

(a) Whenever the policyholder feels the need for money

(b) When the insured events happen

(d) When a premium is not paid

(d) Whenever any of the three happen

Ans. b

34. Before making a death claim what is required to verified?

(a) Death proot

(b) Recepts of all premiums paid from commencemn

(c) Enenement lor accident benefts

(d) All of the above

Ans. d

35. In which case the help of agent is most useful?

(a) Death claims

(c) Survival benefits

(b) Maturity clairms

(d) Annuity cases

Ans. a

36. When will be a missing person considered to be dead?

(a) After 4 years

(c) After 5 years

(b) After 7 years

(d) After 1 year

Ans. b

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37. State which of the following statements is/are correct.

(a) ULIP’s provide for flexibility

(b) ULIP’s are better than traditional plans

(C) Both are correct

(d) Both are wrong

Ans. a

38. A person is an insurance agent because of

(a) his knowledge

(b) his service

(c) his salary

(d) his license as agent

Ans. b

39. Licence to act as an insurance agent can be given to

(a) individual

(b) companies

(d) All of these

(c) cooperative societies

Ans. d

40. What do you mean by loss by fire in case of fire insurance?

(a) Accidental fire

(b) Cases arising from fire

(c) Damage caused due to non extinguishing fire

(d) None of the above

Ans. a

41. person who agrees to insure cargo, hull or freight called

(a) undertaker

(b) Caretaker

(c) underwriter

(d) None of these

Ans. b

42. A person who is in the business of personalised advice on life insurance must be

(a) a licensed financial adviser

(b) a registered financial adviser

(c) an approved financial adviser

(d) None of the above

Ans. b

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43. The sole purpose of any life insurance polícy is to

(a) make up for loss of earnings due to the death of the person

(b) pay for urgent medical expenses to save the life of the person

(c) meet an insured person’s debts and other financial commitments in the everit of death

(d) All of the above

Ans. c

44. Which of the following does not determine the underwriting capacity of an insurer?

(a) The volume of premiums written relative to the insurer policyholders’ surplus

(b) Availability and cost of adequate reinsurance

(c) Ability to generate an acceptable return on equity

(d) Standardised methods used to organise underwriting activities

Ans. d

45. Which of the following is an ethical obligation insurers have with regard to using their superior knowledge of loss control and prevention?

(a) Earn a profit

(b) Provide funds for government sponsored disaster reliet programmes

(c) Assist in preventing or reducing accidental losses

(d) Discourage risk-taking in business and personal activities

Ans. c

46. Which of the following is not included among an insurer’s claim representatives?

(a) Insurance agents and brokers

(b) Independent claim adjusters

(c) Public claim adjusters

(d) Managing General Agents (MGAS)

Ans. c

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47. Which of the following causes of loss are common carriers liable for when a shipper’s goods are damaged?

(a) By an act of God

(b) By theft while the property is in the care, custody and control of the carrier

(c) By negligence of the shipper

(d) None of the above

Ans. b

48. Which of the following is the traditional and most commonly used system for compensating victims of auto accidents?

(a) Pure no-fault system

(c) Tort liability system

(b) Absolute liability system

(d) Vicarious liability system

Ans. c

49. The minimum percentage of the surplus to be set a side for policyholder is

(a) 95%

(c) 85%

(b) 90%

(d) None of these

Ans. b

50. A bonus becomes possible because

(a) actual experience is better than expectations

(b) there is a loading for bonus in the premium

(c) the assumptions made in constructing the premium conservative

(d) All of the above

Ans. d

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