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Sample Question On Risk Analysis & Insurance Planning
Sample Question On Risk Analysis & Insurance Planning
RiskAnalysis&InsurancePlanning
PARTI(LIFEINSURANCE)
Section1
Marks120=20
Choosethemostappropriateanswerfromthealternativesgiven:
1. Whatarethetwomaintypesoflifeinsurancepremiums?
a) LevelandStepped
b) UnevenandLevel
c) EvenandStepped
d) VariableandFlat
2. Whatisthetermusedfortheinsured'srighttorenewtheirlifeinsurancepolicyregardless
ofchangestomedicalstatus?
a) Righttorenew
b) Guaranteedrenewable
c) Righttocontinue
d) Guaranteedcontinuance
3. For a young person with low income who has just started his career and expects bright
future,thesuitableplanmaybe
a) TermAssurance
b) MoneyBack
c) EndowmentPolicy
d) Convertiblewholelifepolicy
4. A fixed date on which benefits may become payable either absolutely or contingently in a
lifeinsurancepolicy,iscalled
a) death
b) disability
c) survival
d) allofthese
5. Forthesameageandbenefits,thepremiumunderaLimitedPaymentpolicy
a) willbelessthaninanonlimitedplanpolicy
b) willbemorethaninanonlimitedplanpolicy
c) maybemore,lessorsameasinanonlimitedplanpolicy
d) willbethesameasinanonlimitedplanpolicy
6. Thepremiumchargedfromthepolicyholderiscalledthe
a) Riskpremium
b) Purepremium
c) Officepremium
d) Anyoneoftheabove
7. Hazardsisthefactorthat.therisk
a) enhances
b) doubles
c) halves
d) reduces
Page 2 of 10 P.T.O
8. Insuranceispossible
a) Whenanadversehappeningislikely
b) Whenanadversehappeningiscertain
c) Whenanadversehappeningisunlikely
d) inalltheabovethreesituations
9. Whichoneofthefollowingstatementsiscorrect
a) Section45oftheInsuranceAct1938makestheprincipleofgoodfaithpartlyredundant
b) Theincontestableclauseappliesfromthecommencementoflifeinsurancecontract.
c) Boththestatementsarecorrect
d) Boththestatementsarewrong
10. Riskonchild'slifeunderChildrenDeferredAssuranceplanstartson.
a) Deferreddate
b) Dateofcommencement
c) Dateofvesting
d) Dateofmajority
11. Ahumanbeingis
a) aneconomicasset
b) aperishableasset
c) Bothoftheabovearetrue
d) Noneoftheaboveistrue.
12. Theprobabilitydistributionofcaraccidentsisasunder
NumberofAccidents CumulativeRelativeFrequency.
0 0.40
1 0.65
2 0.75
3 0.90
4ormore 1.00
Findtheprobabilityofonecarhavingmetwithatleast2accidents.
a) 0.25
b) 0.75
c) 0.10
d) 0.35
13. Ifl30is9,83,989;andl31is982838,thencalculatetheriskpremiumforagroupof5000
personsforaSAofRs10,00,000each.
a) 58,55,492
b) 5,85,549
c) 58,48,643
d) 5,84,864
14. Calculateriskpremiumattheageof29yearsforaSAofRs.10,00,000fromthedatagiven
below:
Agex lx
28 986292
29 985142
30 983989
a) Rs1169.02
b) Rs1167.34
c) Rs1170.39
d) Rs1171.76
Page 3 of 10 P.T.O
15. If expenses are 20% of the gross (office) premium and the pure premium is Rs5000, then
whatwouldbetheofficepremium?
a) 6000
b) 4167
c) 6250
d) Noneoftheabove
16. Apersonwhotakesthedecisiontoaccepttheproposalinaninsurancecompanyiscalled
a) Accountant
b) Actuary
c) Underwriter
d) Director
17. Avoidablecontractisacontractenforceableattheoptionof
a) Boththepartiestothecontract
b) Onlyonepartytothecontract
c) Boththeabovearecorrect
d) Noneoftheaboveiscorrect
18. Whichofthefollowingisnotrelevantelementforavalidcontract
a) Proposalandacceptance
b) Consideration
c) Indemnity
d) Consensusadidem
19. Acontractwherebyoneofthepartiesisboundtocomplywithhispromiseandthereisno
suchbindingontheotherpartytodosoinfutureiscalledacontractofthenatureof
a) Aleatory
b) Unilateral
c) Conditional
d) Contingent
20. Ms Neelam runs her own business at a small level where she finds that there exists a risk
thatoccursfrequentlybutitsseverityisverylow.Whichdeviceofriskmanagementshould
sheusetohandlesucharisk?
a) Avoidance
b) Coinsurance
c) Retention
d) UnderInsurance
Section2
Marks210=20
Choosethemostappropriateanswerfromthealternativesandgivereasonsthereof.
21. Apersonaged60hasawholelifeplanwithahighleveloflifeinsuranceforthereasonhe
wantsto
(i)Payestateduty
(ii)Providesuccessionordependentincome
(iii)Repayoutstandingdebt
(iv)BuildCashValue
a) Only(i)and(ii)
b) Only(i)and(iii)
c) Only(i),(ii)and(iii)
d) Alloftheabove
Page 4 of 10 P.T.O
22. Which of the following does not constitute a valid charge on the premiums paid for an
investmentlinkedlifeassurancepolicy?
a) bidofferspread
b) frontendcharges
c) recurrentfundrelatedcharges
d) surrenderpenalty
23. The following are statements concerning contracts of insurance. Identify the statement/s
thatis/arecorrect.
I. Whenever the wording in an endorsement or rider is in conflict with the terms of the
policytowhichitisattached,theendorsementorridertakesprecedence.
II. One reason for exclusions in insurance policies is that the risks are covered by other
insurance.
a) Ionly
b) IIonly
c) IandII
d) NeitherInorII
24. The following are statements made concerning contracts of insurance. Identify the
statement/sthatis/arecorrect.
I. For life insurance contracts, misstatement of the insureds age constitutes a voidable
misrepresentation.
II. Aninnocentmisrepresentationbyanapplicantforinsuranceconstitutesfraud.
a) Ionly
b) IIonly
c) IandII
d) NeitherInorII
25. The maxim buy term and invest the balance may not be a feasible proposition for many
investorsforthefollowingreasonsEXCEPTfor:
a) itmaybedifficulttoachievesufficientdiversificationintheinvestedassets
b) it may be difficult to achieve a suitable investment portfolio with the desired risk
rewardrelationship
c) it may be possible to consistently outperform the investment returns earned by an
establishedlifeoffice
d) thattheinsurerofferscapitalguaranteesoncashvalues
26. Identifywhichamongstthefollowingis/arethebasicaim/sofunderwriting:
I. totreatequitablythelivesproposingforinsurancecoverage
II. todesignanappropriateloadingstructureforsubstandardlives
a) Ionly
b) IIonly
c) IandII
d) NeitherInorII
27. Aregularpremiumlifeassurancepolicyistobeissuedtoalifewithadecreasingextrarisk.
Thisextrariskisusuallyhandledby:
a) Chargingalevelpercentageextrapremiumforthepremiumpaymentduration
b) Charging a level percentage extra premium for a shorter period than the premium
paymentduration
c) Age ratingthe life and charging the premium appropriate to a standard life having the
ratedage
d) Chargingadebtorimposingalien
28. Whichofthefollowingistrueregardingtheownershipoflifeinsurancepolicy?
a) Apolicycanonlybeissuedtotheinsured
Page 5 of 10 P.T.O
b) Generally,assigningapolicyrequiresproofthattheinsuredisstillinsurable
c) Onlyapersonwithaninsurableinterestcanbenamedasabeneficiary
d) Theownercanassignthepolicytoanybody.
Page 6 of 10 P.T.O
29. Aninsuredhasapremium dueonhisgeneralinsurancepolicyhaving no graceperiod.He
contactstheagentforextensionofthepremiumpaymentdate.Theagentassureshimthat
theinsurerusuallygrantsagraceperiodofoneweekforsuch premiumpayment.Oneday
aftertheduedateofpremium,theinsuredscarmeetswithanaccident.Theinsurercannot
deny liability for the loss, on the grounds that the premium was not paid within time
becauseofthePrincipleof:
a) Waiver
b) Estoppel
c) UtmostGoodFaith
d) InsurableInterest
30. CalculatePaidUpValueonthebasisofthedataasunder:
SumAssured Rs.50,000
Plan&Term ParticipatingEndowmentfor12years
Dateofcommencement 1
st
November,1998
DueDateoflastpremiumpaid 1
st
November,2000
Modeofpremiumpayment Halfyearly
Consolidatedbonusrate @Rs100perthousandSA
a) Rs12,500
b) Rs15,417
c) Rs10417
d) Noneoftheabove
Section3
Marks32=6
Attemptanytwo.Eachquestioncarries3marks.Showcalculations.
31. Mr.Ajayaged30yrsplanstoRetireatage60.HiscurrentAnnualSalaryisRs.3,00,000.He
paysprofessionaltaxofRs.1,000andIncometaxRs25,000.His selfmaintenanceexpenses
are estimated to be Rs60,000 p.a. He pays Life insurance premium for self Insurance
Rs.7,000foraselfpolicyofRs2Lakhs,alsopremiumforhiswifespolicyRs2000.Iftherate
ofinterestis6%,calculatethetotallifeinsurancerequiredasperHLVmethod.
a) Rs.52lakhs
b) Rs.68lakhs
c) Rs.48lakhs
d) Rs.66lakhs
32. Calculate cost per thousand of the risk amount of Mr. Ashoks Life Insurance policy which
heboughtforSAofRs20lakh.HepaysapremiumofRs15,000pa.TheSurrendervalueof
thepolicyisRs6,00,000atpresent.Ifhecontinuesit,thesurrendervaluewouldincreaseto
Rs25,000.Assumeinterestrateof7.5%pa.
a) Rs2.63
b) Rs26.27
c) Rs20.31
d) Noneoftheabove.
33. CalculateHalfyearlyPremiumfromthefollowingdata:
SA Rs1,00,000
TabularPremium Rs30.40perthousand
RebateforHalfyearlymode@Re1.00perthousand
LargeSumAssuredrebateRs1.50iftheSAisequaltoormorethanRs50,000
DoubleAccidentBenefitRiderpremium@Re1.00perthousand
Healthextra@Rs1.50perthousand
a) Rs3040
b) Rs1520
c) Rs1500
d) Noneoftheabove.
Page 7 of 10 P.T.O
34. If the insured dies on 2762007 who had taken a participating endowment policy for
Rs30,000 on 13121991. The halfyearly premiums @Rs900 were paid due up to 136
2006.Thepolicytermis30years.Thebonusalreadyallocatedtothepolicyis@Rs.800per
thousand forall the years upto March 2006. The interim bonus @Rs75 per thousand was
declaredonthevaluationason3132006.Calculatetheamountofdeathclaimpayableto
thenominee.
a) Rs54000
b) Rs56250
c) Rs54450
d) Noneoftheabove
Section4(Subjective)
Attemptanytwoquestions.Allquestionscarry5markseach.
36. Differentiatebetweenperilandhazardswiththehelpofexamples?
37. Whatisthedifferencebetweentermandendowmentplan?
38. PrincipleofIndemnitydoesntapplytolifeinsurancepolicies.Explain.
Page 8 of 10 P.T.O
PARTII(GENERALINSURANCE)
Section5
Marks115=15
Choosethemostappropriateanswerfromthealternativesgiven:
39. Whichofthefollowingisnotpurerisk?
a) Prematuredeath
b) Fireinagown
c) Investmentinequity
d) Machinerybreakdown
40. A loss arising from indifferent attitude towards safety because of existence of
insuranceis___________
a) Moralehazard
b) Occupationalhazard
c) Physicalhazard
d) Unintentionalhazard
41. Licenceforworkingasinsuranceagentaregivento__________
a) Individual
b) Companies
c) C0operatviesocieties
d) Alltheabove.
42. Mr.HanishinsuredhisshopworthRs.40,00,000forRs.20,00,000.Inadevastating
fire the shop was completely gutted. Calculate the amount of claim payable to Mr.
Harish
a) Rs.10,00,000
b) Rs.20,00,000
c) Rs.40,00,000
d) Noneoftheabove
43. Acompositebrokeristhatbrokerwhocarriesonbusinessas_________
a) Broker&agent
b) General&lifeinsurancebroker
c) Insurance&reinsurancebroker
d) Anyoftheabove
44. Apackagemotorinsurancepolicywillcover
a) Onlydamagetothevehicle
b) Onlyliabilitytothethirdparties
c) Injurytodriver/owner
d) Alloftheabove
45. Insuranceisprimarilyacaseof
a) Riskretention
b) Riskreduction
c) Risktransfer
d) Riskprevention
46. Whichofthefollowingisnotconsideredasamaterialfact
a) Previousinsurerhasrejectedtheproposal
b) Insuredhimselfhascancelledthepolicy
c) Previousinsuredhascancelledthepolicy
d) Noneoftheabove
Page 9 of 10 P.T.O
47. Undermotorvehicleactnofaultliabilityincaseofpermanentdisabilityis
a) Rs.1lakh
b) Rs.50,000
c) Rs.25,000
d) Rs.12,500
48. A policy with sum insured Rs. 10 lakh is with franchise Rs. 10,000. The loss is Rs.
15,000.Whatistheamountofclaimpayable?
a) Rs.10,000
b) Rs.5,000
c) Rs.15,000
d) NIL
49. Overseasmediclaimpolicycanbeissuedforamaximumperiodof
a) 365days
b) 180days
c) 30days
d) 7days
51. In fidelity guarantee insurance (floator policy) the insured wants to cover 10
employeesforasuminsuredofRs.10Lakh.PremiumrateisRs.1%&forpercapita
Rs.10.Calculatethepremium.
a) 5050
b) 10000
c) 10100
d) 11000
52. Whichofthestatementiscorrect
A. Undercommonlawinsurerhasarightofsubrogationonlyaftersatisfyingtheclaim
B. Underpolicyinsurerhasrightofsubrogationevenbeforepayingtheclaim
a) StatementAiscorrect
b) StatementBiscorrect
c) Botharecorrect
d) Neitheriscorrect
53. The war risk can be covered under personal accident insurance, by charging extra
premium@____%duringabnormalperiod
a) 10%
b) 15%
c) 50%
d) 150%
Page 10 of 10 P.T.O
Section6
Marks25=10
Choosethemostappropriateanswerfromthealternativesandgivereasonsthereof.
54. Under mediclaim policy, as in patient stay of 24 hours is not applicable for
treatmentof
a) Lithotripsy
b) Asthama
c) Diabetes
d) Hernia
55. Domiciliaryhospitalisationexpensesarenotpayablefor
a) Renalfailure
b) Tonsillitis
c) CardiacArrest
d) Correctionoffractureinspinalcord
56. Whichofthefollowingstatementistrue
A. Weeklybenefitsunderpersonalaccidentarepayableonlywhencompensationamount
isarrivedat&agreedupon
B. Weeklybenefits&medicalexpensesaresubjecttocontributionclause.
a) StatementAiscorrect
b) StatementBiscorrect
c) Botharecorrect
d) Neitheriscorrect
57. Underfloatorcumdeclarationpolicytheminimumpremiumtoberetainedis
a) 10%
b) 30%
c) 40%
d) 50%
58. The declaration policy for burglary insurance issued for a provisional sum insured
ofRs.1crorewithrateofpremiumRs.1.ActualdeclarationmadeisRs.40lakh.
Calculateprovisionalsuminsured&refundableamount
a) Rs.1000Rs.500
b) Rs.10,000Rs.5000
c) Rs.10,000Rs.6,000
d) Rs.11,000Rs.4,000
Section7(Subjective)
Marks52=10
Attemptanytwoquestions.5markseach
59. Write what is covered under burglary insurance policy for commercial
establishment(minimumfourloses)withconditionsapplicable?
60. Explaincoverageunderfidelityguaranteeinsurancepolicy&typeofpolicies?
61. Explain in details full coverage under maternity benefits in a mediclaim policy &
whatareexclusion.
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