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IN IC 78 – MISCELLANEOUS INSURANCE

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

PRACTICE TEST 1

Question1 The proposal form in a money insurance policy does not elicit which of the below
mentioned information?
(a) Name, address and business of the proposer
(b) Period of insurance
(c) Limit in respect of any one loss
(d) Health of the proposer
(e) Past insurance history

Correct Answer Health of the proposer

Answer Explanation Health details of the proposer are not required in the proposal form.

Question2 Which of these policies is likely to have the largest number of people insured under a single
policy?
(a) Collective commercial fidelity guarantee
(b) Floating commercial fidelity guarantee
(c) Individual commercial fidelity guarantee
(d) Blanket commercial fidelity guarantee
(e) Janta commercial fidelity guarantee

Correct Answer Blanket commercial fidelity guarantee

Answer Explanation Blanket policy covers the entire staff without showing name or position. No inquiries about
the employees are made by the insurers. Such policies are only suitable for an employer
with a large staff and the organisation to make adequate inquiries into the antecedents of
his employees.
Blanket commercial fidelity guarantee is likely to have the largest number of people
insured under a single policy.

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question3 The term Medical Practitioner would not include __________ .

(a) Physician
(b) Surgeon
(c) Specialist
(d) Nurse
(e) All of the above

Correct Answer Nurse

Answer Explanation Medical practitioner means a person who holds a degree / diploma of a recognised
institution and is registered by Medical Council of respective State of India. The term
Medical Practitioner would include Physician, Specialist and Surgeon.
The term Medical Practitioner would not include Nurse.

Question4 The Indian Cancer Society offers _____ types of memberships under Cancer Medical
Expense policy.
(a) 1
(b) 2
(c) 3
(d) 4
(e) 5

Correct Answer 4
Answer Explanation Cancer medical expense policy (Indian Cancer Society) insurance scheme is available to
members of Indian Cancer Society.
The Indian Cancer Society offers 4 types of membership as under
i. Annual membership
ii. Well-wisher life membership
iii. Corporate membership
iv. Ordinary membership

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question5 Which of the following is NOT covered under health insurance policies?
(a) Cosmetic surgery for beautification purpose
(b) Nursing Expenses
(c) Room, boarding expenses in the hospital / nursing home
(d) Anaesthesia Specialist fees
(e) Cost of Pacemaker

Correct Answer Cosmetic surgery for beautification purpose

Answer Explanation Cosmetic surgery for beautification purpose is not covered under health insurance policies.

Question6 The PASS scheme provides for payment of Rs. 3,000 in the event of accidental death of any
person in the age group of -
(a) 18 years to 60 years who is an earning member of poor family
(b) 18 years to 55 years who is an earning member of poor family
(c) 20 years to 60 years who is an earning member of poor family
(d) 20 years to 55 years who is an earning member of poor family
(e) 21 years to 60 years who is an earning member of poor family

Correct Answer 18 years to 60 years who is an earning member of poor family

Answer Explanation The PASS scheme (Personal Accident Social Security) provides for payment of Rs. 3,000 in
the event of accidental death of any person in the age group of 18 years to 60 years who is
an earning member of poor family.

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question7 Which of these conditions are examined before entertaining a claim under commercial
fidelity guarantees?
(a) Notice of claim
(b) Application of Control Measures
(c) Subrogation
(d) Prosecution
(e) All of the above

Correct Answer All of the above

Answer Explanation Application of control measures, notice of claim, subrogation, prosecution of the employee
etc. are examined before entertaining a claim under commercial fidelity guarantees.

Question8 Which of the following is exclusion under ‘All Risk’ policy?

(a) Loss due to theft
(b) Loss due to fire
(c) Loss due to burglary
(d) Damage caused by any process of cleaning, dyeing or bleaching
(e) Any other accidental or fortuitous circumstances

Correct Answer Damage caused by any process of cleaning, dyeing or bleaching

Answer Explanation One of the exclusions in an All Risk policy is -

'Damage caused by any process of cleaning, dyeing or bleaching, restoring, repairing or

renovation or deterioration arising from wear and tear, moth vermin, insects or mildew or
any other gradually operating clause.'

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question9 Under the Animal Driven Cart Insurance, in case of damage to rubber tyres, the liability is
limited to which of the following?
(a) 50% and in case of total loss to 80%
(b) 50% and in case of total loss to 75%
(c) 60% and in case of total loss to 75%
(d) 60% and in case of total loss to 80%
(e) 75% and in case of total loss to 90%

Correct Answer 50% and in case of total loss to 75%

Answer Explanation In Animal driven cart insurance, in case of damage to rubber tyres, the liability is limited to
50% and in case of total loss to 75%.

Question10 Forgery or alteration can be caused by –

1. The payment of bogus, fictitious, forged or raised cheques or drafts
2. The payment of genuine cheques, drafts or fixed deposit receipts bearing forged
endorsements
3. The establishment of any credit to any customer on the faith of such documents
(a) Only 1
(b) Only 2
(c) 1 and 3
(d) 1 and 2
(e) All 1, 2 and 3

Correct Answer All 1, 2 and 3

Answer Explanation Forgery or Alteration
This can be caused by:
i. The payment of bogus, fictitious, forged or raised cheques or drafts,
ii. The payment of genuine cheques, drafts or fixed deposit receipts bearing forged
endorsements, or
iii. The establishment of any credit to any customer on the faith of such documents.
The cover is operative irrespective of whether the said instruments are received over the
counter or through the clearing house or by mail.

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WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question11 Choose the FALSE statement -

(a) Court bonds are automatically renewable
(b) Court bonds attract lower stamp duty as compared to commercial fidelity contracts
(c) Court bonds are specialty contracts executed under seal
(d) Court bonds attract higher stamp duty as compared to commercial fidelity contracts
(e) The rate per cent is based on the value of the estate to be administered, the duration of
the administration and the complexities involved

Correct Answer Court bonds attract lower stamp duty as compared to commercial fidelity contracts
Answer Explanation Unlike a commercial fidelity guarantee policy, an administration bond / court bond is a
specialty contract to be executed under seal and it attracts stamp duty higher than the
ordinary policy.

Question12 In case of Videsh Yatra Mitra insurance is valid from ________ .

(a) 1st day of insurance
(b) 7th day of insurance
(c) 10th day of insurance
(d) 14th day of insurance
(e) 21st day of insurance

Correct Answer 1st day of insurance

Answer Explanation The Videsh Yatra Mitra insurance is valid from the first day of insurance and expires on:
i. The last day of the number of days specified in the Overseas Mediclaim Policy schedule
or
ii. On return on India whichever is earlier.

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question13 Which of the following is NOT an underwriting consideration for a burglary insurance
policy?
(a) Occupation of the insured
(b) Premises in which the insured property is housed
(c) Safety devices and installation of burglar alarms
(d) Nature of insured property
(e) Safety measures taken to secure the property

Correct Answer Occupation of the insured

Answer Explanation Occupation of the insured is not an underwriting consideration for a burglary insurance
policy.

Question14 Which of these is not a package policy?

(a) Shopkeeper’s insurance policy
(b) Householder’s insurance policy
(c) Mediclaim
(d) Adhikari Suraksha Kavach
(e) Doctors’ package insurance

Correct Answer Mediclaim

Answer Explanation Package policies are those which combine different covers into a single policy. It provides
convenience to the customers, who can operate all their insurances through a single policy.
Mediclaim is not a package insurance policy.

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question15 In Corporate frequent traveller’s endorsement the age limit is ___ years.
(a) 60
(b) 62
(c) 65
(d) 70
(e) 75

Correct Answer 60
Answer Explanation Corporate frequent traveller’s endorsement is an annual cover granted to officials of
corporate registered under the Companies Act, who are regularly travelling abroad.
The age limit is 60 years and no medical reports are required. A flat premium is charged.

Question16 Under Aquaculture (shrimp/prawn) insurance, the stocking density of Shrimp/Prawns

should not be more than _____ in case of P. Mondon.
(a) 10 per sq. m
(b) 8 per sq. m
(c) 20 per sq. m
(d) 15 to 20 pieces sq. m
(e) 15 per sq. m

Correct Answer 8 per sq. m

Answer Explanation The stocking density of Shrimp/Prawns should not be more than 8 per Sq. m in case of P.
Mondon (Giant Tiger Prawn) and 10 per sq. m in case of extensive / modified Extensive and
15 to 20 pcs. Sq. m in case of semi intensive.

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question17 A Hospital, as defined as per the health policy insurance laws, is one which has atleast
______ in-patient beds. (For A and B class cities /towns)
(a) 5
(b) 10
(c) 12
(d) 15
(e) 20

Correct Answer 15
Answer Explanation A hospital should have at least 15 in-patient beds (10 beds in class ‘C’ towns), fully
equipped operation theatre of its own wherever surgical operations carried out.

Question18 In the Employment and Study policy, what is included in 'Plan D'?
1. Worldwide travel excluding U.S.A. and Canada
2. Worldwide travel including U.S.A. and Canada
3. Worldwide travel excluding Australia and New Zealand
(a) Only 1
(b) Only 2
(c) Only 3
(d) 1 and 3
(e) 2 and 3

Correct Answer Only 2

Answer Explanation In the Employment and Study policy :
Plan C - Worldwide travel excluding U.S.A. and Canada
Plan D - Worldwide travel including U.S.A. and Canada

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WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question19 Discuss - 'Insurable interest arises for a creditor in his debtor’s life'
(a) No, there is no insurable interest for a creditor in his debtor's life
(b) Yes, Insurable interest arises for a creditor in his debtor’s life to the extent of Rs. 100000 as
fixed by the law
(c) Yes, Insurable interest arises for a creditor in his debtor’s life to the extent of the debt due
to the creditor
(d) Yes, Insurable interest arises for a creditor in his debtor’s life to the extent of 75% of the
debt due to the creditor
(e) Yes, Insurable interest arises for a creditor in his debtor’s life only if mentioned in the
policy terms

Correct Answer Yes, Insurable interest arises for a creditor in his debtor’s life to the extent of the debt due
to the creditor
Answer Explanation Insurable interest arises for a creditor in his debtor’s life to the extent of the debt due to
the creditor.

Question20 Name the occupations which are classified under Risk group I ?
1. Teachers 2. Architects 3. Veterinary Doctors
(a) Only 2
(b) 1 and 2
(c) 2 and 3
(d) 1 and 3
(e) All 1, 2 and 3

Correct Answer 1 and 2

Answer Explanation Classification of risks :
Risk group I consists of -
Accountants, Doctors, Lawyers, Architects, Consulting Engineers, Teachers, Bankers,
persons engaged in administration functions, persons primarily engaged in occupations of
similar hazards.
(Veterinary Doctors comes under Risk Group II)

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question21 According to the Principle of Insurable Interest, employers will have __________ .
1. Complete and unlimited insurable interest on the lives of their employees
2. Nil insurable interest on the lives of their employees
3. Insurable interest in the lives of their employees in so far as they would suffer in a
pecuniary sense by the death or disablement of their employees
(a) Only 1
(b) Only 3
(c) 1 and 2
(d) 2 and 3
(e) All 1,2 and 3

Correct Answer Only 3

Answer Explanation The employers are deemed to have an insurable interest in the lives of their employees in
so far as they would suffer in a pecuniary sense by the death or disablement of their
employees.

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question22 __________ is / are classified as hazardous risks for Commercial Fidelity guarantees.
1. Estate agents
2. Employees of bullion merchants
3. Collection agents whose financial limits are disproportionately high compared to their
remuneration and the security deposit given by them
(a) Only 2
(b) Only 3
(c) 1 and 3
(d) 2 and 3
(e) All 1,2 and 3

Correct Answer All 1,2 and 3

Answer Explanation Not all risks proposed for insurance are accepted at normal terms. Certain risks are
considered not good for insurance because of a very high degree of hazard associated
therewith and the high incidence of claims. Some examples are -

i. Collection agents whose financial limits are disproportionately high compared to their
remuneration and the security deposit given by them.
ii. Jewellery salespersons
iii. Cashiers in eating houses, cinema houses and other places of entertainment
iv. Estate agents
v. Treasurers of societies or associations
vi. Employees of bullion merchants and of works of art dealing in antiques, firms and other
valuables

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question23 Identify the statement(s) which are true for Commercial Guarantees –
1. Commercial Guarantees have to be stamped in accordance with the stamp duty
prescribed for deeds and documents, under seal
2. Commercial guarantees are normal annual contracts which the insurers may renew at
their option
3. The commercial guarantee is subject to conditions the breach of which may render the
policy void or void able
(a) Only 1
(b) Only 3
(c) 1 and 2
(d) 2 and 3
(e) All 1, 2 and 3

Correct Answer 2 and 3

Answer Explanation Commercial Guarantees have to be stamped in accordance with the stamp duty prescribed
for deeds and documents, under seal - This statement is not true.
The correct statement is - Commercial guarantees are stamped with the ordinary
insurance stamps.
[Court bonds have to be stamped in accordance with the stamp duty prescribed for deeds
and documents, under seal]

Question24 In a Pet Dog insurance, till what age can a pet dog be insured?
(a) 5 years
(b) 6 years
(c) 7 years
(d) 8 years
(e) 10 years

Correct Answer 8 years

Answer Explanation In a Pet Dog Insurance, insurance is granted in pure or cross bred pedigree dogs, watch
dogs and sheep dogs, within the age limit of 2 months to 8 years.

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WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question25 The maximum age limit for availing PA cover is ______ .

(a) 55 years
(b) 60 years
(c) 65 years
(d) 70 years
(e) 75 years

Correct Answer 70 years

Answer Explanation The minimum and maximum age limit for availing Personal Accident (PA) cover is 5 years to
70 years.
(Age beyond 70 years can also be considered on certain grounds with loading of premium)

Question26 A Health Policy pays for expenses incurred under which of the following heads?
1. Surgeon and Anaesthesia fees
2. Room, Boarding expenses in the Hospital/ Nursing Home
3. Nursing expenses
(a) Only 1
(b) Only 2
(c) 1 and 2
(d) 2 and 3
(e) All 1, 2 and 3

Correct Answer All 1, 2 and 3

Answer Explanation The Health policy pays for expenses incurred under the following heads:
a) Room, Boarding expenses in the Hospital / Nursing Home
b) Nursing expenses
c) Surgeon, Anaesthesia, Medical Practitioner, Consultants, Specialist fees
d) Anaesthesia, Blood, Oxygen, Operation Theatre charges, Surgical appliances, Medicines
and Drugs, Diagnostic materials, and X-Ray, Dialysis, Chemotherapy, Radiotherapy, cost of
Pacemaker, Artificial limbs and cost of Organs and similar expenses

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WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question27 Insurance for elephants can be provided for _______ .

1. Elephants used for commercial purpose
2. Elephants used for religious purpose
3. Wild elephants
(a) Only 1
(b) Only 2
(c) 1 and 2
(d) 2 and 3
(e) 1,2 and 3

Correct Answer 1 and 2

Answer Explanation Elephants using for commercial purpose and elephants using for religious purpose, can be
covered under elephant insurance. Wild elephants can’t be covered.

Question28 The terms of a Burglary Insurance cover and its acceptance is based on _______ .
(a) The Reports of the surveyors
(b) The exact location of the house
(c) The Sum Insured
(d) The Nature of the property
(e) The Reports of the underwriters

Correct Answer The Nature of the property

Answer Explanation The terms of a Burglary Insurance cover and its acceptance is based on the Nature of the
property.
Two aspects are relevant in this context.
i. The value of the property
ii. The weight and/or volume of the property
Articles of small volume/weight and having high value are obviously attractive to burglars.

Other relevant factors are premises in which insured property is housed (premises situated
in densely populated areas are considered better risks than those situated in lonely
areas) and safety measures (Watchman, CCTV etc.)

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WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question29 In Health Insurance the final claim with receipted bills, cash memos, claim form and list of
documents as listed in the claim form etc. should be submitted to the company/TPA within
______ from the date of completion of treatment.
(a) 5 days
(b) 10 days
(c) 15 days
(d) 30 days
(e) 45 days

Correct Answer 30 days

Answer Explanation

Question30 What is the minimum number of birds that can be insured under poultry policy insurance
in the case of Hatchery?
(a) 500 per batch
(b) 1000 per batch
(c) 1500 per batch
(d) 2000 per batch
(e) 3000 per batch

Correct Answer 2000 per batch

Answer Explanation In case of Hatchery, 2000 per batch is the minimum number birds that can be insured
under poultry insurance. It is different for Broilers (100) and Layers (500).

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question31 __________ can get discounts in an Agricultural Pump Set policy.

1. Group policies 2. Long term policies 3. Policies without a claim – ‘No claim’ policy
(a) Only 3
(b) Only 1
(c) 1 and 2
(d) 2 and 3
(e) All 1, 2 and 3

Correct Answer All 1, 2 and 3

Answer Explanation In Agricultural Pump Set policy, there are discounts for group policies, long term policies
and for ‘no claim’.

Question32 The nature of insured property is an important underwriting consideration in burglary

insurance. Which is / are the relevant factors which hold importance in this aspect?
1. The value of the property 2. The volume of the property 3. The weight of the property
(a) Only 1
(b) Only 2
(c) 1 and 2
(d) 1 and 3
(e) All 1, 2 and 3

Correct Answer All 1, 2 and 3

Answer Explanation The relevant factors which hold importance in underwriting considerations for ‘Nature of
insured property’ in Burglary insurance, includes all of the above factors i.e. the value of
the property, the weight of the property & the volume of the property.

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question33 Which coverage protects companies for patent, copyright, or trademark infringement
claims arising out of the company's operation?
(a) Identity theft cover
(b) Intellectual Property Insurance
(c) Money policy to individuals for withdrawals from ATMs
(d) E-Commerce insurance/Web business insurance
(e) Kidnap and ransom insurance

Correct Answer Intellectual Property Insurance

Answer Explanation Intellectual property insurance coverage protects companies for patent, copyright or
trademark infringement claims arising out of the company's operation.
The policy covers legal expenses to defend & exercise rights of the insured. It also covers
damages awarded along with witness expenses.

Question34 As per the Overseas Health policy / Videsh Yatra Mitra, _______ means a person legally
qualified to practice in medicine or surgery including other legally qualified medical
practitioners duly licensed by their respective jurisdiction and such person is not a member
of the insured person’s family.
(a) TPA
(b) Physician
(c) Third party liability
(d) Medical advisors
(e) Claim settlement agency

Correct Answer Physician

Answer Explanation

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question35 In the event of loss of sight, written notice thereof must be given within ______ after such
loss of sight to avail claim under the Personal Accident (PA) policy.
(a) one week
(b) 15 days
(c) one calendar month
(d) two calendar months
(e) three calendar months

Correct Answer one calendar month

Answer Explanation In the event of loss of sight or amputation of limbs, written notice thereof must be given
within one calendar month after such loss of sight or amputation.

Question36 As per the Office protection shield - Personal accident insurance for self and employees,
which of these risks is/are covered?
1. Death
2. Permanent total or partial disablement
3. Temporary total disablement due to accident
(a) Only 1
(b) 2 and 3
(c) 1 and 3
(d) 1 and 2
(e) All 1, 2 and 3

Correct Answer All 1, 2 and 3

Answer Explanation Personal accident insurance for self and employees: Risks covered - Death, permanent total
or partial disablement and temporary total disablement due to accident.

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WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question37 Which of these statements is /are CORRECT with respect to VIDESH YATRA MITRA?
1. Any claim which has not been conclusively proven and the amount thereof substantiated
shall not be payable
2. No sum payable under this policy shall carry interest
3. In the event of the insured person’s death, insurers shall have the right to carry out a
post mortem at their expense.
(a) Only 3
(b) Only 2
(c) All 1, 2 and 3
(d) 1 and 2
(e) 2 and 3

Correct Answer All 1, 2 and 3

Answer Explanation All the above statements are correct with respect to Videsh Yatra Mitra.

Question38 According to Personal Accident cover of Overseas Travel/Health Policy, this insurance will
pay if the insured person sustains bodily injury during the covered trip caused by accidental
external violent and visible means and such bodily injury within _______ of the date of the
injury is the sole and direct cause of death or loss of eye(s) or limb(s) of the insured.
(a) 2 months
(b) 3 months
(c) 6 months
(d) 9 months
(e) 12 months

Correct Answer 12 months

Answer Explanation Under Personal Accident cover of Overseas Travel/Health Policy, the duration within which
the insurance is payable, if body injury occurred during the covered trip causes death/loss
of eye/limbs of insured is within 12 months of the date of injury.

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WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question39 Commercial fidelity guarantee is issued for a period of ________ .

(a) 3 months
(b) 6 months
(c) 9 months
(d) 12 months
(e) 24 months

Correct Answer 12 months

Answer Explanation Commercial fidelity guarantees - This policy covers the employer in respect of any direct
financial loss which he may suffer as a result of employees’ dishonesty.
The policies are customarily, issued for a period of 12 months.

Question40 Samit is an asthma patient who can travel. During one of his travels, he falls into a street
excavation site and breaks his leg. Discuss the case with regard to proximate clause.
(a) In this case, the disease has prompted the accident and the injuries are due to accident
(b) In this case, the accident remains the proximate cause so long as the events which follow it
are the natural ones
(c) In this case, the claim for the accident cannot be admitted. It can be admitted if there is a
proof of the accident being the proximate cause of death
(d) In this case, accident is not contributed by the disease but the condition is proximately
caused by the accident.
(e) In this case, the disease is remote cause and the accident the proximate cause

Correct Answer In this case, accident is not contributed by the disease but the condition is proximately
caused by the accident.
Answer Explanation In the above circumstances, accident is not contributed by the disease but the condition
(breaking of leg) is proximately caused by the accident.

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WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question41 Shopkeepers insurance policy covers legal liability in respect of accidental death or bodily
injury to a third party under which section?
(a) Under Section 6
(b) Under Section 7
(c) Under Section 8
(d) Under Section 9
(e) Under Section 10

Correct Answer Under Section 10

Answer Explanation Section 10 : Legal liability -

Shopkeepers insurance policy covers legal liability in respect of accidental death or bodily
injury to a third party or accidental damage to their property during performance of any
act in connection with the insured’s business.

Question42 Corporate frequent traveller’s endorsement is _______ cover.

(a) a weekly
(b) a monthly
(c) a six monthly
(d) an annual
(e) a lifetime

Correct Answer an annual

Answer Explanation Corporate frequent traveler’s endorsement is an annual cover granted to the officials of
corporate registered under the Companies Act and partners of the registered firms who are
regularly travelling abroad.

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Question43 Identify the true statement(s) with respect to Facultative Reinsurance –

1. Each risk is proposed separately and individually to the reinsurer and the reinsurer
decides whether to accept the same or not.
2. it is not obligatory for the ceding company to cede to any particular accepting company
nor is it obligatory for the accepting company to accept the ceding company’s each and
every offer
3. The accepting company, at its discretion, may reject the offer or accept only a part
thereof
(a) Only 1
(b) Only 3
(c) 1 and 2
(d) 2 and 3
(e) 1, 2 and 3

Correct Answer 1, 2 and 3

Answer Explanation Under Facultative Reinsurance, each risk is proposed separately and individually to the
reinsurer and the reinsurer decides whether to accept the same or not. In facultative
reinsurance it is not obligatory for the ceding company to cede to any particular accepting
company nor is it obligatory for the accepting company to accept the ceding company’s
each and every offer.
The accepting company, at its discretion, may reject the offer or accept only a part thereof.

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question44 Identify the true statement(s) with respect to CRITICAL ILLNESS cover-
1. The insured gets the sum insured in lump sum as a benefit, after ninety days of diagnosis
of the named critical illnesses like cancer, renal failure, organ failure etc.
2. The patient does not have to produce evidence of taking treatment for the disease.
3. This is an indemnity policy
(a) Only 1
(b) Only 3
(c) 1 and 2
(d) 1 and 3
(e) All 1, 2 and 3

Correct Answer 1 and 2

Answer Explanation Critical illness/Dreaded diseases cover is not an indemnity policy but a benefit policy.

The Critical illness/Dreaded diseases cover, which is popular in the western countries, has
gained momentum in India. This is a benefit policy, wherein, the insured gets the sum
insured in lump sum as a benefit, after ninety days of diagnosis of the named critical
illnesses like cancer, renal failure, organ failure requiring transplantation, multiple
sclerosis, coronary diseases etc. The patient does not have to produce evidence of taking
treatment for the disease.

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question45 The Honey Bee insurance applies to which of the following?

1. Bee colony / Hives belonging to the cooperative society
2. Bee colony / Hives belonging to a corporate
3. Silkworm fed on mulberry leaves
(a) Only 1
(b) Only 2
(c) 1 and 2
(d) 1 and 3
(e) All 1, 2 and 3

Correct Answer Only 1

Answer Explanation Honey bee insurance applies to hives and/or bee colony belonging to the cooperative
society.

Question46 A banker’s indemnity policy is issued for a duration of _____ .

(a) 3 months
(b) 6 months
(c) 12 months
(d) 18 months
(e) 24 months

Correct Answer 12 months

Answer Explanation With the vast expansion of banking business in the country the incidence of white collar
crimes e.g. fraud, dishonesty etc. has also increased. The Bankers Indemnity insurance,
which is a combination of several specific covers provides protection to the banks against
such losses.
Banker’s indemnity policy is issued for a period of twelve calendar months which
commences and ends as per the financial year of the insured bank.

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question47 A Burglary policy which has been issued to business premises will cover which of the
following ?
1. Fixtures and fittings
2. Tools of trade such as typewriters and calculators
3. Loss or damage to contents or to any part of the building caused by burglary
(a) Only 3
(b) 1 and 2
(c) 2 and 3
(d) 1 and 3
(e) All 1,2 and 3

Correct Answer All 1,2 and 3

Answer Explanation Burglar Policies issued to business premises cover stock-in-trade, goods held in trust or on
commission, fixtures and fittings, tools of trade such as typewriters and calculators and
other similar property against the risks of burglary.
Loss or damage to contents or to any part of the building caused by burglary or any
attempt therefore, is also covered.

Question48 What does 'Identity Theft' cover provide for ?

1. Losses due to theft of his identity and fraudulent usage thereof
2. Any loss which is compensated by any other source
3. Expenses for physical injury, sickness, disease etc.
(a) Only 1
(b) Only 3
(c) 1 and 2
(d) 2 and 3
(e) All 1, 2 and 3

Correct Answer Only 1

Answer Explanation Under Identity theft cover - If a person incurs losses due to theft of his identity and
fraudulent usage thereof, he gets compensated. People have become vulnerable to theft
and subsequent losses arising from Credit / Debit cards, for which they are legally liable to
pay. To take care of such losses and the costs incurred for efforts to resolve the theft and
the issue thereof is sought to be covered.

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

Question49 In Cattle Insurance, BULLOCKS can be provided insurance in which of these age limits?
(a) 2 years to 10 years
(b) 5 years to 10 years
(c) 5 years to 12 years
(d) 3 years to 12 years
(e) 3 years to 8 years

Correct Answer 3 years to 12 years

Answer Explanation Bullocks can be insured within the age of 3 years to 12 years.

Question50 What is the minimum number of birds that can be insured under poultry policy insurance
in the case of Layers?
(a) 200 per batch
(b) 500 per batch
(c) 750 per batch
(d) 1000 per batch
(e) 2000 per batch

Correct Answer 500 per batch

Answer Explanation In case of Layers, 500 per batch is the minimum number birds that can be insured under
poultry insurance. It is different for Broilers (100) and Hatchery (2000).

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PRACTICE TEST 1

WWW.TOP4SURE.IN IC 78 – MISCELLANEOUS INSURANCE

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