MOCK TEST – 2

1. Mr. Suresh got a Job recently, he can't afford to pay the higher premium as of now but in future once he settles
down in his job he can pay higher premium. Which one will be the best plan?

a) Convertible Endowment plan

b) Convertible Term plan
c) Convertible pure Endowment
d) Convertible Money Back Plan

2. Principle of utmost good faith will operate in existing policy

a) Every time premium is paid

b) If the policy has lapsed and it has to be revived
c) If the insured person falls sick and is admitted to hospital
d) If the insured person changes his job

3 The basic elements of life insurance are

a) Accident benefit and riders.

b) Pension and monthly income.
c) Death cover and maturity benefit.
d) Interest yield and variable income

4. Grouping the similar risks by Insurance Company Is called as....

a) Grouping of Risk
b) Risk Grading
c) Risk Assessment
d) Risk pooling

5. Insurance protects which of the following?

a) The life of the person paying compensation

b) The risk retained person's family
c) The financial goal of the insured
d) The life of the nominee

6. An employee has 30 years of service and has earned a final salary of Rs. 30000 per month at the time of
retirement. If the accrual rate was i/60 for each year pensionable service. This employee is eligible for the pension
amount of ------------.

a) 27500
b) 15000
c) 21500
d) 25333

7. Human beings need life insurance because

a) Death is certain
b) Death is uncertain
c) The timing of death is uncertain
d) Death is the solution

8. Which is the best option to manage risk?

a) Retain
b) Transfer
c) Avoid
d) None

9. If the sum assured remains the same, what will be impact of net premium if the age of the policyholder increases?

a) It rises
b) It falls
c) It remains constant
d) Gross premiums increases

10. What tax rate, If any, will be applicable to a life insurance policy holder for the maturity proceeds of a Rs 5000 life
insurance policy

a) Nil
b) 10%
c) 20%
d) 30%

11. In a Whole life plan -The policyholder's responsibility to give disclosure

a) At the beginning of the contract

b) Throughout the contract
c) Revival stage
d) Beginning of renewal

12. Hari wants a constant life cover till his 31st birthday. But he can't afford to pay high premiums. The best suited
products for him would be

a) Pure Endowment
b) Anticipated endowment
c) Term plan
d) ULIP

13. Both the parties to a contract must agree and understand the same thing and in the same sense, which is called
a) Consideration
b) Legality of an object
c) Consensus ad idem
d) Acceptance

14. In the context of Public pension, PAYG stands for

a) Pay as your goal

b) Payment after you go
c) Pay as you go
d) None of the above

15 In case of life insurance, Insurable interest must exist

a) At inception of policy
b) Not needed
c) At the time of claim
d) Any time during the contract

16. .A proposer shows his age lesser than his actual age. This will be termed as

a) Breach of utmost good faith

b) Breach of trust
c) Both a & B
d) Only a

17. The principle of utmost good faith applies to

a) Only insurers
b) Only proposer
c) Both insurers and proposer
d) Neither insures nor proposer

18. Mr. Kumar's wife is suffering from blood cancer. Doctors lost their hope on her live. Mr. Kumar would like to take Life
Insurance policy on wife's name in order to get monitory benefit. Insurance company rejects this proposal on the grounds
of

a) Anti Money Laundry

b) Legality of object or purpose
c) Capacity of paying future premiums.
d) All of the above

19. Rohit, 17 years old, submitted a proposal for Endowment plan of Rs.l lac to AB Insurance Co. In the absence of an
essential ingredient of a valid contract, the proposal was not accepted. Which factor caused the insurer for non-
acceptance of the proposal?

a) Capability of performance
b) Legality of object
c) Capacity to contract
d) Offer

20. Loan is available for a policy In which there is a feature of

a) Fund switch
b) Cash value
c) Partial withdrawal
d) Surrender
21. HLV is used as a Yardstick to determine
a) Emotion Loss can be compensated for
b) The correct cover needed to compensate economical loss to their family In case of death of the earning member
c) A lump sum amount that the person wilt get from the Insurance Company
d) NA

22. The business of Insurance is connected with

a) Physical values of assets

b) Economic values of assets
c) Metaphysical values of assets
d) Market Values of assets.

23. Which type of pension calculates defined benefit with reference to the final salary, no of years & accrual rate

a) Personal pensions
b) Public pensions
c) Occupational pensions
d) Annuity

24. In the context of health insurance PED stands for

a) Pre Existing Diseases

b) Permanent Existing Diseases
c) Pre Exposed Diseases
d) Post Existing Diseases

25. Principle of utmost good faith is expected for max up to which stage

a) Before the contract is concluded

b) Upto 2 years from the start of the policy
c) Upto 5 years from the start of the policy
d) NA

26. At the time of maturity, quarter of the SA Is paid though the policy was In force •

a) Endowment
b) Lien
c) Money back
d) Surrender

27. Domiciliary Hospitalization refers to

a) Medical treatment for a period exceeding 7 days for such illness/injury which would require treatment at the nursing
home /hospital, but was actually taken at home in India.
b) Medical treatment for a period exceeding 3 days for such illness/injury which would require treatment at the
nursing home /hospital, but was actually taken at home in India.
c) Medical treatment for a period exceeding 3 days for such illness/injury which would require treatment at home in
India
d) Medical treatment for a period exceeding 5 days for such illness/injury which would require treatment at the nursing
home /hospital, but was actually taken at home in India
28. Total premium payable for family floater policy is

a) Equal to the non floater policy

b) Less than non floater policy
c) More than non floater policy
d) None of the above

29. What Is the special feature of ULIP that ensures customer risk profile for long time Insurance policies

a) Fund switching
b) Partial with drawl
c) Premium holiday
d) Riders

30. Term Insurance Plan will give

a) Only Death Benefit

b) Only Maturity Benefit
c) Only Bonus Benefit
d) Only Tax Benefit

31. If there is a claim free year in mediclaim what could be the benefit offered to the insured

a) Increase in Sum Assured

b) No claim bonus
c) Free medical check up
d) All of the above

32. The income of an individual can be protected with the help of

a) A Unit linked policy

b) A Term life policy
c) An Endowment policy
d) A Money back policy

33. Under this situation may leads to breach of the duty of utmost good faith

a) Non disclosure of material facts

b) Concealment of a material fact
c) Fraudulent misrepresentation of facts
d) All of the above

34. For his investment need, Ravi has parked funds In equity. The returns from this form of investment can be
categorized as

a) High Risk
b) Low Risk
c) Moderate Risk
d) No Risk
35. Shameer has a health insurance policy of ' 1, 00,000 individually and from his company for 2,00,000. He falls sick and
got hospitalized. His hospital bill ran to ' 50,000. He claimed this amount from his individual policy. Also, he placed the
request

a) Indemnity contract
b) Value contract
c) Deemed contract
d) Rolling contract

36. Ramesh bought an endowment plan for ten year he pays the same Amount in every year is called:

a) Gross Premium
b) Level Premium
c) Risk Premium
d) Net Premium

37. The proposer can withdraw from the contract, if they disagree with the terms and conditions of the Policy, within a
'free look-in period' of

a) 15 days from the date of receipt of the policy document

b) 15 days from the date of submission of proposal form
c) 25 days from the date of receipt of the policy document
d) 30 days from the date of receipt of the policy document

38. Premium paid for health insurance policy is eligible for tax benefit under which section

a) 80C of Income Tax Act

b) 80CC of Incomr Tax Act
c ) 80D of Income Tax Act
d) 80E of Income Tax Act

39. Who coined the name Mediclaim?

a)Public sector Life Insurance Companies

b) Public sector Life Insurance Companies
c) Public sector General Insurance Companies
d) Private sector General Insurance Companies

40. Low risk products give

a) High Returns
b) Low Returns
c) Moderate Returns
d) Good Returns

41. Ajay and Vijay both are unmarried. Ajay has dependant Parent. Which need Ajay must take care of on priority,
although that will not be a priority for Vijay?
a) Retirement plan
b) Health Insurance for parents
c) Term Assurance
d) Endowment Plan

42. Akash is an Unmarried person and employed with company ABC and drawing a handsome salary. He has no liabilities.
In which life stage he is?

a) Learner
b) Earner
c) Provider
d) Partner

43. Mr. Ramachandra's son Mr. Bharat has just been employed as a software engineer, daughter Anusha has got
married. Now Mr.Ramachandra is free from his burden. So Mr.Ramachandra is now in the stage.

a) Pre-retirement stage
b) Post retirement stage
c) Married with older children stage
d) Employment stage

44. Vinod being an insurance agent can offer assistance to his client Ramesh by

a) Providing him emergency fund

b) Matching the product with Ramesh's financial need
c) Recommendation of product with highest return
d) Discourse saving in a purposeful and need based manner

45. Mr. Ram is 30 year old.He has bought a retirement plan for 25 years. This type of annuity is known as

a) Immediate annuity
b) Deferred annuity
c) Joint life annuity
d) Annuity certain

46. Married Woman's Property Act 1874 provides that a life Insurance Policy that has been taken out by:

a) Married Woman
b) Married Man
c) Married Son
d) Married Daughter

47. The first life insurance company to be set up in India is

a) Triton Insurance Co. Ltd.

b) Bombay mutual Assurance Society
c) The Oriental Life Insurance Company
d) National Insurance Company Ltd

48. Risk transfer through risk pooling is called as

a) Savings
b) Investments
c) Insurance
d) Risk mitigation

49. Which among the following can be termed as a categorized under wealth accumulation product?

a) Bank deposits
b) Life insurance
c) Shares
d) Bonds

50. Using the conversion option in a term policy you can convert the same to

a) Whole life policy

b) Mortgage policy
c) Bank FD
d) Decreasing term policy

Mock Test – 2
Answers
Sno ANS Sno ANS Sno ANS Sno ANS
1 B 16 A 31 D 46 B
2 B 17 C 32 B 47 C
3 C 18 B 33 D 48 C
4 D 19 C 34 A 49 C
5 C 20 B 35 A 50 A
6 B 21 B 36 B
7 C 22 B 37 A
8 B 23 C 38 C
9 C 24 A 39 C
10 A 25 B 40 B
11 A 26 C 41 B
12 C 27 B 42 B
13 C 28 B 43 C
14 C 29 A 44 B
15 A 30 A 45 B