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FINANCIAL PLANNING ACADEMY

Insurance Planning and Risk Management


PART - 1 1 Loss of income derived from a property is an example of: (a) Personal risk (b) Property risk (c) Liability risk (d) Financial risk 2 Insuring your house is an example of which of the following? (a) Risk transfer (b) Self insurance (c) A control measure (d) Risk retention 3 A car insurance policy with an excess of 800 in order to reduce the amount of the regular premium is considered to be: (a) Self insurance (b) Risk transfer (c) Partial risk retention (d) Complete risk retention 4 What is the third step in the risk management process? (a) Implement appropriate strategy (b) Identify the risk (c) Develop alternatives (d) Monitor, review and update strategy 5 When a financial planner is assessing insurance needs for his/her client, the financial planner should always: (a) Make sure the client has life cover (b) Identify any risks that the client may be exposed to and recommend strategies to address those risks (c) Recommend the client consult an insurance broker to identify risks the client is exposed to (d) Identify current investments, the risks associated with those investments and recommend strategies to address those risks

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6 Which of the following statements is correct with regards to an insurance agent? (a) They are responsible for the ongoing relationship between the adviser and the licensee (b) They are the insurance company who issues the insurance (c) Their duty is first and foremost to follow the client's instructions (d) Their responsibilities and obligations are to the insurance company that they represent 7. What does the insured's duty of disclosure mean? (a) The insured must disclose everything to the insurer (b) If a proposer does not answer a on the application form, the insurer does not have to pay claims (c) The insured must disclose to the insurer every relevant matter known (d) If a on an application form is ambiguous, and as such the meaning of the is misunderstood by the insured, the insurer can claim non-disclosure 8. Anti-discrimination and equal opportunity legislation prohibits discrimination on the basis of marital status, pregnancy, race, colour, disability and religious or political beliefs. This means that: (a) Insurance companies cannot refuse applications on any of these factors, but they can reflect it in an increased premium (b) Insurance companies cannot refuse applications on any of these factors, nor can they reflect it in an increased premium (c) Insurance companies can refuse applications on some of these factors but only under special circumstances (d) Insurance companies can refuse applications on all of these factors but only under special circumstances 9. A lender requires a particular insurers product to be in place before they grant a mortgage. This is known as: (a) A consumer contract warranty (b) Misrepresentation (c) Third line forcing (d) Fraudulent disclosure 10. Which of the following client categories are considered to be a high-risk group with regards to accidental death or injury? (a) Young adult (b) Young family (c) Over 40s (d) Mature adult

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11. Insurance underwriters consider occupation for the degree in which it could cause death or disablement. Another reason they consider occupation is: (a) The ability to meet the premium each year (b) The ability for clients to generate sufficient income to maintain lifestyle (c) The likelihood of being able to return to work after a relatively minor injury, such as a broken leg (d) The opportunity to get to know the client 12. Which of the following occupational classifications would be considered more hazardous for insurance purposes? (a) Professionals, such as accountants and lawyers (b) Clerical and other white collar workers (c) Skilled workers (d) Trades people doing manual work 13. The income of a client is used to determine: I. The amount of income protection cover required II. The amount of premium loading and/or any exclusions applicable to the policy III. What level of income would be required for dependants in the event of premature death IV. What level of income would be required in the event of disability (a) I and II (b) II and IV (c) I, III and IV (d) I, II and IV 14. Liability arising from the ownership or occupation of a property is an example of: (a) Fixed liability (b) Personal liability (c) Speculative liability (d) General liability 15. Capital Required = Living Expenses x Years Required. This is the formula for the: (a) Future value approach (b) Annuity approach (c) Needs approach (d) Multiple approach 16. Prakash earns 55,000 p.a. He estimates that his family would require 80% of his income in the event of his death or disability. Using the annuity approach, what is the required lump sum if the investment returned 5% per annum? (a) 2,750,000 (b) 220,000 (c) 1,40,000 (d) 880,000

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17. Which of the following is true with regards to workers compensation? (a) It will cover the employee for any injury (b) It can be used in place of income protection (c) It will cover the employee for 4-12 days per annum in the event of injury (d) It is required by law in all states 18. The two differences when considering funding a short or long term disability, rather than death, are medical and maintenance costs. Examples of this are: I. Modifications to the house for wheelchair access II. II. Chiropractic treatment III. III. Annual living expenses, including those of the client IV. IV. Funeral expenses (a) I and II only (b) I, II and IV (c) I, II, and III (d) I, II, III and IV 19. Income Protection provides cover for up to 75% of normal income. Why doesn't it provide a greater level of cover? (a) Any more than 75% might be a disincentive to return to work (b) As Income Protection payments are tax free, 75% of salary after tax is close to 40% of salary before tax (c) It is assumed that sick leave will provide the gap of 25% (d) It is assumed that workers compensation will provide the gap of 25% 20. Which of the following is NOT a control measure, which may be used to reduce property risk? (a) Extinguishers and fire blankets (b) An excess on the house and contents insurance (c) Car alarm (d) Cutting back trees around the home 21. Your house cleaner, Kamla, breaks her arm in your home. What insurance would provide the most comprehensive cover? (a) None, Kamla should have her own Income Protection Insurance (b) Home Insurance (c) Contents Insurance (d) Domestic Workers Compensation Insurance 22. What are the two main types of life insurance premiums? (a) Level and Stepped (b) Uneven and Level (c) Even and Stepped (d) Variable and Flat

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23. Which of the following is a benefit of having multiple lives covered under the one policy? (a) The premium is calculated based on the details of 'the person of least risk' (b) The clients are only required to pay the equivalent of one person's premium, being whichever is the most expensive (c) Each of persons covered has access to their own sum insured plus that of the other life insured, effectively doubling their level of cover (d) The clients only incur one policy fee 24. In the event of the life insured committing suicide, what would happen under a term life policy? (a) A claim would be paid in full if the policy had been in force for at least 12 months (b) Partial claim paid, depending on length the policy has been in force (c) The claim would be paid if the policy had been in force for at least 13 months (d) A claim will never be paid in this situation 25. With regards to TPD, the broad definition of being totally and permanently disabled is the 'the insured is unable to return to work'. Can a homemaker then, be covered for TPD? (a) No, as a homemaker is technically unemployed (b) Yes, but the homemaker must choose their desired definition of TPD from a number of options at time of application (c) Yes, but only if they are gainfully employed elsewhere at least on a part-time basis (d) Yes, but there may be a separate definition of TPD applied 26. What is the term used for the insured's right to renew their life insurance policy regardless of changes to medical status? (a) Right to renew (b) Guaranteed renewable (c) Right to continue (d) Guaranteed continuance 27. Some whole of life and endowment policies have a surrender value which gives rise to the 'non forfeiture' principle. Which of the following best describes the 'non forfeiture' principle? (a) The ability to 'skip' a premium without the policy lapsing (so long as the accumulated unpaid premiums, plus interest, do not exceed the surrender value) (b) The ability to 'skip' a premium without the policy lapsing (so long as the premium is paid within 6 months) (c) The ability to 'skip' a premium without the policy lapsing (so long as the premium is paid within 12 months) (d) The ability to 'skip' a premium without the policy lapsing (so long as the skipped premium, plus interest, is added to the next premium)

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28. If the life insured has NOT nominated a beneficiary: (a) The benefits will automatically be paid to the spouse (b) The benefits will be automatically paid to the policy owner (c) The benefits will paid to the insured's superannuation fund (d) The benefits will be paid to the insured's estate 29. A flat tax rate, limited liability to the value of ownership and separate legal entity are all characteristics of a: (a) Sole trader (b) Partnership (c) Company (d) Trust 30. Which of the following can sue and be sued as a separate legal entity? I. A sole trader II. A partnership III. A company A trust IV. (a) I, II and III (b) I and II only (c) III only (d) I, II, III and IV 31. Are the premiums for a business insurance policy tax deductible? (a) Yes (b) No (c) Yes, but only if the purpose of the policy is to cover a revenue loss (d) Yes, but only if the purpose of the policy is to cover a capital loss 32. Which of the following are all general insurances? (a) House owners, consumer credit insurance and motor vehicle (b) House owners, health, TPD and motor vehicle (c) House owners, health and life (d) Householders contents, death and motor vehicle

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33. Professional Indemnity Insurance upholds that: I. Duty of care is owed by suppliers of advice or information II. Suppliers of advice or information present themselves as having special skill and knowledge in the area that the information is related to III. It was reasonable that the person who took the advice or information would rely and act on that advice IV. Liability only arises as a result of dishonest service (a) I, II, III & IV (b) I, III & IV (c) I, II & IV (d) I, II & III 34. Major differences between underwriting life insurance and disability insurance are: I Death is a single event, disability can occur repeatedly II. Death is unpredictable, whilst demographic statistics indicate likely events of disablement III. Death is permanent, disability may be permanent or temporary (a) I, II & III (b) I & III (c) III (d) I & II 35. A financial adviser must demonstrate to the underwriter that they have considered: (a) The insurer's requirements, for the proposed amount of cover, has been fulfilled (b) Their clients ability to meet the cost of premiums (c) Alternative methods to control or avoid the risk (d) The amount of risk that the insurer is taking on by accepting the client 36. Step 2 in the insurance review process is, 'Establish changes in client circumstances'. What would NOT be considered a 'change'? (a) The client is made redundant (b) The client wants their insurances reviewed more frequently (c) The client's mother has permanently moved in The client's marriage recently ended

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PART - 2 Q1. An executive is offered two ways of collecting his company bonus: either cash equivalent to 6 months salary or a stock option with a 50-50 chance of either doubling in value or becoming worthless in the next year. If the executive were a risk seeker, what would he take? A. Definitely the cash. B. Definitely the stock option. C. Probably the cash. D. Probably the stock option. Q2. A house owner contends that he is exposed to the following risks: I. Loss from fire. II. Loss from theft. III. Loss from legal liability. IV. Possibility of loss when the house is sold. Identify the pure risks amongst those listed. A. I, II B. II, III C. I, II, III D. All of the above. Q3. Gambling losses are uninsurable for the following reason/s: I. It makes those partaking in such a system indifferent to losses. II. Legislation prohibit insuring gambling losses. III. The losses are unpredictable. IV. The losses may be catastrophic. A. I, II B. I, III C. II, III D. III, IV Q4. The ease with which an asset can be converted into cash for an approximation of its true value is referred to as the assets? A. Return. B. Critical mass. C. Liquidity. D. Margin.

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Use the following information to provide answers to Questions 5 to 6. Your client has entered into a partnership that offers an additional business interest of 450,000 in 10 years time or on earlier death or disability of his partner. Your client has decided to fund this buy-sell arrangement by ten annual contributions, the first beginning now. Assuming that the fund earns 7.0% per annum net returns, calculate: Q5. The annual contributions (assuming that the partner survives for 10 years): A. 30,439 B. 28,447 C. 35,111 D. 45,000 { HINT :FVA= PMT * [ (1+k)n 1] * (1+k) ) k 450,000 = PMT * (13.8614) * (1.07) PMT = 450,000/14.7835 PMT = 30,439 (multiply by (1+k) because the annual contribution is made at beginning of the period } Q6. The maximum amount your client has to raise immediately to meet the buy-sell arrangement if the partner dies after 5 years from now. A. 324,958 B. 312,700 C. 283,952 D. 262,700 { HINT :FVA= PMT * [ (1+k)n 1] * (1+k) ) k FVA = 30,439 * [(1.07)5 1] * (1.07) .07 FVA=30,439*6.15329 = 187,300 Max. Amount need to be raise = 450,000 - 187,300 = 262,700 } Q7. Which amongst the following is a benefit that arises when a life insurance policy is purchased? A. It serves as an immediate source of funds for the repayment of loans. B. It acts as a collateral for loans. C. It frees properties from leasehold encumbrances. D. It creates an immediate estate if the insured dies.

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Q8. A client has the need to provide for his childs college education costs. He envisages that four annual payments of 20,000 would be needed beginning 15 years from now. Ignoring inflation and assuming that the fund earns 8% per annum returns throughout, calculate the value to be placed on this liability when carrying out a needs analysis for this client. A. 80,000 B. 25,219 C. 97,332 D. 22,553 Solution :Annual Payment 20,000 20,000 20,000 20,000 Period 15 16 17 18 Discounted PV Rate 0.3152 0.2919 0.2703 0.2502 DCF Value 6,304 5,838 5,406 5,005 22,553

Q9. A client recently purchased a new home for 150,000 including the lot valued at 40,000. How much insurance would you recommend that your client purchase to cover full replacement of the house in the event of a loss? A. 88,000 B. 110,000 C. 120,000 D. 150,000 { HINT :Cost of new home less Value of the lot 150,000 40,000 = 110,000} Q10. In relation to life assurance, identify the incorrect statement amongst the following: A. A joint-life policy is payable upon the death of the first of two or more lives insured under the single contract. B. A last survivor policy is payable upon the death of the last of two or more lives insured under the single contract. C. Even with renewable term insurance, the policy owner/insured would not be permitted to renew the policy if he or she had contracted a terminal disease prior to the renewal date. D. With a level premium policy, level premiums in excess of the policys share of death claims in the early years of the contract are accumulated at interest in a reserve.

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Q11. The gross premium is obtained by loading the net premium. The loading reflects all of the following except: A. A percentage of the premium. B. A constant amount per 1,000 sum assured. C. A constant amount per policy. D. A factor for investment expenses. Q12. An annuity that makes lifetime payments with the first payment made after one period from issue is called a(an): A. Life annuity immediate. B. Life annuity due. C. Annuity certain. D. Annuity due. Q13. A disability income policy that specifies a flat benefit amount may contain a supplemental benefit granting the insured the right to increase the benefit amount in accordance with increases in his earnings, if he can prove a commensurate increase in income. The supplemental benefit contained in this policy is known as: A. A cost-of-living adjustment (COLA) benefit. B. A future purchase option benefit. C. A partial disability benefit. D. A guaranteed income contract (GIC) benefit. Q14. Investment related risks arise primarily due to: I. Lack of diversification in the assets held. II. The mismatching of assets and liabilities. III. Lack of clear guidelines from the authorities. A. I B. II C. I, II D. I, III Q15. Identify the correct statement among the following with regard to an insurers quality rating on the insurers financial condition: A. An insurers rating can affect its ability to attract new business. B. A ratings downgrade can damage an insurers persistency. C. In order to improve its rating an insurer may have to invest in highly conservative investments. D. All of the above.

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Q16. Before a contract of insurance is sold to a proposer, a life insurance agent should undertake the following except: A. Explain all the essential provisions of the contract. B. Draw attention to the long-term nature of the policy and the effects of early discontinuance. C. Attempt to persuade a prospective policyholder to cancel any existing policies. D. Explain the benefits arising from the plan and its riders. Q17. The following are statements concerning contracts of insurance. Identify the statement(s) that is/are correct. I. Whenever the wording in an endorsement or rider is in conflict with the terms of the policy to which it is attached, the endorsement or rider takes precedence. II. One reason for exclusions in insurance policies is that the risks are covered by other insurance. A. I B. II C. All of the above. D. None of the above. Q18. All of the following statements regarding insurable interest are correct except: A. A party has an insurable interest in a life insurance contract when he or she is subject to a loss upon the death of an insured. B. Only immediate family members can have insurable interest in each others lives. C. Persons are presumed to have an insurable interest on themselves. D. Generally, the person to have an insurable interest must give his or her consent before a policy is issued, even if the applicant has an insurable interest.

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PART - 3 1) What are the criteria for determining Insurable Risk? (A) Law of Large Numbers (B) The loss must be definite and measurable (C) The loss must not be catastrophic (a) (b) (c) (d) (C) only (B) & (C) (A), (B) & (C) None of the above

2) A type of risk with high frequency but low severity is probably best handled by: (a) A voidance (b) Subrogation (c) Self-insurance (d) Under-Insurance 3) Speculative risk can have following outcomes ________. (A) Loss (B) Gain (C) Status Quo (a) A only (b) B only (c) C only (d) A, B & C 4) LALGI is ___________. (a) Private contribution guarantee scheme (b) Private insurance (c) Public benefit guarantee scheme (d) Social insurance 5) For risk to be insurable which one of following is not correct? (a) The loss must be fortuitous or accidental. (b) The loss must not be catastrophic. (c) The loss produced by the risk must be definite and measurable. (d) There must be a sufficiently large number of heterogeneous exposure units to make the losses reasonably predictable.

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6) Consideration under the law is a return promise to: 1. Do certain things 2. Abstain from doing certain things 3. Forbear some acts 4. A minor (a) (1), (2), and (3) only (b) (1), (2), and (4) only (c) (1), (3), and (4) only (d) (2), (3), and (4) only

7) A client explains that she only wants an insurance policy that will cover her family against financial risk over the next five years, while she still has dependent children and a large mortgage. It is unlikely her income will increase over this period. What type of insurance is she looking for? (a) An unit linked insurance plan (b) Money back policy (c) Term insurance with a level premium (d) Term insurance with a stepped premium

8) Which of the following is type of pecuniary insurance? a) Commercial vehicle insurance b) Engineering insurance c) Money policy d) Workmans compensation

9) Participating policies are those where _____________. (a) Both insurer and insured participates in each others loss (b) Insured participates in running of insurance of company (c) Insured participates in surplus of insurance company (d) Insurer participates in loss of insured

10) In Unit-Link policy, market risk is with ______. (A) Insured (B) Insurer (a) (b) (c) (d) A B Both A & B Neither A nor B

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11) If the life insurance policy is endorsed under MWP Act, 1874 then ________. (a) Creditors have claim only to the extend of outstanding principal, on policy proceeds (b) Creditors have first claim on policy proceeds (c) Creditors have no claim on policy proceeds (d) Creditors have residual claim on policy proceeds 12) Minimum age at entry for Medi-claim is ___________. (a) 8 years (b) 91 days (c) 365 days (d) 18 years 13) Jigar was driving his car home from work, when a pit dug by the municipal corporation in the road, remained open and unmarked. He met with an accident and had to be hospitalised for 3 months. What are the insurance claims that can a rise from this accident? (a) Jigar can claim personal insurance for the accident, as it was not caused by negligence on his part; the municipal corporation cannot claim third party loss insurance to pay damages to Jigar, as it was negligent. Jigar can claim insurance for damage due. (b) Jigar can claim temporary disability insurance and insurance for his damaged car (c) Jigar has to apply to the municipal corporation for damages, which the corporation will pay out of its claims for liability to third party. His motor insurance will cover damages to his car. (d) Since the municipal corporation was negligent, it would not be able to lodge a claim to recover payment of damages to Jigar. Jigar will only receive motor insurance claims on his car.

14) Sujata was standing on the terrace of her building hanging out clothes. She accidentally fell off and landed on the sunshield of the next floor, which crashed and damaged the car of her neighbour parked below. What are the insurance claims that arise from this event? (a) Sujata can claim personal accident insurance. Both her neighbours will claim property insurance for the freak accident. (b) Sujata cannot claim accident insurance as the accident was caused by her negligence. Her neighbours can claim property insurance cover for loss to their property (c) Sujatas neighbours will collect damages from her, which Sujata can pay out of insurance cover for losses to third parties. (d) Sujatas neighbours will not be able to claim insurance, as the damage to their property due to such freak accidents is not usually covered by insurance. Sujata will be able to claim her accident insurance, as she did not fall intentionally.

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15) Your client has bought life insurance and medical insurance, but has not bought a cover for permanent disability. His argument is that he is paying too much by way of premium for risks that he believes are "farfetched" and "not likely to affect him". What would you advise the client? a) A financial planner can persuade the client to consider the losses from permanent disability and highlight the risks to the client and recommend an appropriate policy for him. b) If a client is not willing to bear the costs of premium, it can be assumed that he is willing to bear the costs of risk retention. Insurance may not be necessary in such cases. c) If losses that would occur to the client in the event of permanent disability are higher than what he can bear, the client is better off buying insurance. The costs of insuring against losses, which have lower probability of happening, will in any case be lower. d) The amount of insurance a person will buy depends on his perception of risks and their impact on him. It would not be possible to persuade this client to buy more insurance. 16) Suresh has not bought accident insurance cover, though his two-wheeler is covered for damages from accidents. He wears a helmet and drives carefully. What can you say about his risk management? (a) Suresh has insured the property risk. He controls some of his personal risk and retains the rest of the risk. (b) Suresh has controlled his personal risk and insured his property risk (c) Suresh has not done anything to manage his risks and has to immediately go for accident and personal risk cover. He cannot rely on third party damages alone to cover the risk of the road. (d) Suresh has transferred his personal risk to other drivers of the road, insured his property risk and can claim damages is accidents are caused by third party negligence. 17) Mrs.Kapoor, a 40-year-old widow, has a 8-year-old son. Her current savings are not adequate to provide for her sons post graduate studies however she will be able to save it up by the time he finishes graduation i.e. when he is 20 years old. Mortality tables indicate that her life expectancy is another 30 years. Which of the following is true? (a) She needs to insure her life for 12 years (b) She does not need to insure her life (c) She needs to insure her life for 30 years (d) She needs to insure her sons life for 30 years

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18) Bhimrao, 36 years and married, works for a multinational firm, which provides adequate medical and related covers. He is also able to accumulate sick leave. He already has his own home and savings of Rs. 35 lakh, which are well invested. Which insurance cover does he require the most? (a) (b) (c) (d) Life Cover Medical Cover Property Insurance Temporary Total Disablement Cover

19) Premium on Motor Insurance policy doesnt depend on which one of the following factors? (a) Zone of operation of the vehicle (b) Insured Declared Value (IDV) of the vehicle (c) Cubic capacity of the vehicle (d) Age of the owner of the vehicle 20) All of the following statements describe the operation of a life annuity EXCEPT: (a) Because of the interest factor, an annuitant is assured of receiving back more than he or she paid in (b) The annuitant is assured that he or she cannot outlive the length of time of the annuity payments (c) The emphasis is on the liquidation of the fund as opposed to its growth (d) The older the annuitant is when he or she receives the first annuity payment; the greater will be the amount of each payment

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21) In a sample of 200 observations, the lowest and the highest scores were 45 and 265 respectively, what would be range of the distribution? (a) 14 (b) 155 (c) 155.56 (d) 220 {HINT:Range=265-45=220} 22) Derive the Policy Cost Per Thousand with following data; Policy cost per thousand conversion = 0.001 Interest rate selected equivalent to the after-tax rate of return = 10% Dividend or Bonus = Rs.13000 <Death benefits =Rs.20, 00,000 <BR>Annual Premium = Rs. 23,000. Cash surrender value at the end of current policy year = Rs.6,00,000 Cash surrender value at the end of the previous policy year = Rs. 5,70,000 (a) Rs. 25.04 (b) Rs. 28.07 (c) Rs. 30.4 (d) Rs. 31.15 {(Cash Surrender Value (Prev. year)+Annual Premium Current Cash Surrender)*(1+r)} - {(Current Cash Surrender + Dividend)} Sum Assured Current Cash Surrende Current Refer Belth method [((570000+23000)*1.10)-(600000+13000)] ___________________________________ (2000000-600000)*.001

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PART - 4
1 (A)Death of the familys breadwinner is a financial risk ( B)It is a pure risk. (a) (b) (c) (d) Both statements A and B are correct. Both statements A and B are incorrect. Statement A is correct. Statement B is correct.

2 Radha had the option of investing her retirement funds in PO (MIS) Or Bank deposits or with private fund raisers. She could get her funds back with great difficulty when she invested in 3rd option. This was a case of Radha (a) Not understanding the risks (b) Taking a gamble for high returns (c) Succumbing to greed (d) Exercising poor judgment. (HINT : b c and d logically follow from a) 3 Mr. Kumar has suffered severe damages to his property (uninsured) because of a fire. Thereby he suffered severe financial losses. This happened because he did not cover (a) The investment risk (b) The pure risk (c) The speculative risk (d) None of the above 4 Which of the following statements is true? The impact of the death of one sole breadwinner of the family-over 40s family-would be severe in the area of (a) Meeting household debts (b) Meeting basic needs (c) Meeting medical needs (d) Meeting educational needs 5 Bhima the driver causes injuries to a pedestrian by rash driving of car. The injured victim had to spend Rs.400 in treating his injuries. Bhima s act has created liabilities under (a) Common law (b) Contract (c) Statue and Common law (d) Statute only

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6 Mr. K.Mangla took a business premise on lease with the provision that he himself had to pay the insurance premium for fire and other perils on the premises and not the owner of the premises. This would be an instance of (a) Risk control (b) Risk transfer (c) Risk retention (d) Risk reduction 7 The decision to retain risk should be based on (a) Ability to pay premiums (b) Ability to afford the financial consequences of self insurance (c) Standard practices (d) None of these. 8 Insurance is an agreement to (a) Share the losses (b) Spread the economic burden throughout the group (c) Make the individual feel more secure (d) All of the above 9 In insurance, the contingency insured against is usually the (a) Financial loss (b) Certain financial loss (c) Uncertain financial loss (d) Loss of profit 10 (A) The existence of insurance may make people to exert less effort to control losses (B)It might also induce commitment of frauds against insured. (a) (b) (c) (d) Both A and B statements are true Statement A is true Statement B is true Both A and B are not true.

11 (A) Insurance companies reduce risk by predicting losses within narrow limits based on the law of large numbers (B) It is the increasing pool of resources accessible to an insurer that reduce the risk of non payment. (a) Statement B alone is correct. (b) Both statements A and B are correct (c) Both statements A and B are incorrect. (d) Statement A is alone correct

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12 (A) The law of large numbers is useful for making predictions about the future only if we assume that future occurrences will approximate past experiences. (B) The law of large numbers would have predictive value only if future happenings are also a result of chance (a) Statement A alone is true (b) Statement B is alone true (c) Both A and B are not true (d) Both A and B are true 13 An entrepreneur who was into manufacturing corrugate boxes also owned few photocopying machines and also ran courier and fax services, sought a single comprehensive protective non-life insurance cover from an insurance company. The insurance company declined the business based on the principle of A ) Measurability and definiteness of loss B) Large number of homogenous exposure units (a) Statement A alone is correct (b) Statement B alone is correct (c) Both statements A and B are incorrect (d) Both statements A and B are correct 14 An owner of a large group of privately owned residential property units is seeking cover from a general insurance company for (1) fire and other associated perils (2) depreciation in the value of property (3) complete destruction of property from terrorist attacks for the next six months. The chances are that the insurance company will (a) Offer cover for (1) (2) and (3) above (b) Offer cover for (1) and (3) above (c) Offer cover for (1) above only (d) Offer cover for (1) and (2) above 15 (A) Gambling or wager creates the risk by its act of betting on it (B) The chance of loss exists in life, whether or not the risk is insured (a) Statement A alone is correct (b) Statement B alone is correct (c) Both statement A and B are incorrect (d) Both statements A and B are correct 16 Insurance companies often offer the services of specialists and experts to industry in different fields. This is for rendering advice on (a) Reduction in uncertainties (b) Loss prevention/minimization (c) Indemnification (d) None of the above

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17 (A) Over time,operating expenses of insurance companies go up for rendering customer services. (B) The availability of insurance gives a fill up to moral hazard (a) (b) (c) (d) Statements A and B are true Statements A and B are not true Statement A alone is true Statement B is true

18 In controlling risks, the overwhelming consideration will be (a) Economic (b) Physical (c) Specialized steps (d) None of the above 19 To cope with losses, total or partial, the steps to be taken include the following items which are given here in a jumbled up manner. Order these in their correct or logical sequences by indicating the correct ranking against each as 1,2 3 (A) Take into account potential impact of inflation (B) Itemize and value assets exposed to loss Assess the size of potential income/liability losses (a) (b) (c) (d) A-3, B-1,C-2 A-2, B-1, C-3 A-3, B-1, C-2 A-1,B-2,C-3

20 Generally speaking, high severity of losses will be accompanied by (a) High frequency of losses (b) Low frequency of losses (c) Equal frequency of losses (d) None of these 21 The demand for insurance tends to be inelastic because of (a) Statutory requirements (b) Financial prudence (c) Business transaction requirements (d) All of the above. 22 Highly refined risk classification systems enable insurers to (a) Earn greater profits (b) Reduce costs (c) Expand the market (d) All of the above

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23 In a business cycle situation when insurance underwriters are unable to correctly assess claim costs? (a) Profits falls (b) There is excess supply of insurance (c) Many new players are tempted to enter the market (d) All of the above 24 The length of the insurance industrys business cycle is shortened because of (a) Regulatory provisions (b) High specialization (c) Easy entry and exit conditions (d) None of these 25 Reserve management practices result in extending the period of business cycle by A. Increasing reserves in good times and lowering reserves in bad times B. Reporting greater profits in good times and lower profits in bad times (a) (b) (c) (d) Both A and B statements are correct Statement A alone is correct Statement B alone is correct Both A and B are incorrect

26 The probability distribution of number of possible accidents to the car of a fleet of owner of 40 cars is as under Number of Accidents Cumulative Relative Frequency 0 0.60 1 0.80 2 0.90 3 0.97 4 1.00 TOTAL 1.00 What is the probability that a car from the above pool of 40 cars has met with at least 3 accidents? (a) 0.1 (b) 0.2 (c) 0.3 (d) 1.0 ( Hint: the probability that a vehicle has met with 2 accidents is 0.90.Hence the probability ha I has me with at least 3 accidents i.e. accident or more I 0.90=0.1) 27 (a) (b) (c) (d) Probability distribution is generally used by insurers to Estimate profitability Determine premium Estimate future losses Select risks

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28 When there is the possibility of loss or no loss in an outcome it is a case of (a) Gambling (b) Speculative risk (c) Pure risk (d) Special risk 29 Every employer is obliged to ensure that his employees get a safe and secure workplace. In relation to the risks arising in the workplace which affects the employees, cover is provided through (a) Employees Provident fund (b) Workmens compensation insurance (c) Employees group life insurance (d) Employees personal accidents insurance scheme 30 Besides meeting the essential requirement of a valid contract (offer and acceptance, consideration etc ) the following must be there for a contract to be present. (a) Duty of care (b) Consensus ad idem (c) Waiver and Estoppel (d) None of these 31 In a life insurance contract, offer refers to (a) Proposer paying the first premium (b) Proposers application form for insurance (c) Original policy bond (d) Company brochure duly authenticated 32 In life insurance (A) Consideration is the payment of premium by the insured (B) Consideration is the payment of premium or the promise to pay future premiums (a) Statement A alone is correct (b) Statement B alone is contract (c) Statements A and B are both correct (d) None of the above 33 (A) Payment of the first premium is legal consideration (B) Payment of the first years premium as also the subsequent two years premium constitute legal consideration. (a) (b) (c) (d) Statement A is correct Statement B is correct Statement A and B are both incorrect None of these

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34 When it is said that insurance contracts, generally speaking are contracts of indemnity, the reference is to (a) Life insurance (b) Group insurance (c) Reinsurance (d) Non-life or general insurance 35 (A) Under the principle of indemnity, the amount payable by the insurer in the event of contingency insured against happening, payment will be limited to the loss the insured suffers. (B) In certain forms of medical/health insurance, the principle of indemnity is applicable (a) Statement A is only correct (b) Statement B is only correct (c) Statement A and B are incorrect (d) Statement A and B are correct 36 Which among the following limits the applicability of the principle of indemnity in insurance: (a) The subject matter of insurance is the insureds interest in that subject (b) The maximum liability of the insurer is limited to the sum insured (c) The sum insured may not always reflect the full value at risk (d) The value at risk is usually the depreciated value 37 A person owns a flat worth (market value) Rs.200000. He had insured it only for Rs 1,50,000. The flat is damaged by an earthquake, which loss is assessed at Rs.40000. Assuming the insurer applies the principle of Average to the loss, The insured will get a claim payment of (a) Rs.75000 (b) Rs.70000 (c) Rs.37900 (d) Rs.40000 (HINT: S.I/F.V.R*L=150000/200000*40000=75000) 38 In life insurance, for a claim to be entertained, insurable interest must exist (a) At the time of contract (b) At the time of occurrence of loss (c) Both at (a) and (b) (d) None of the above 39 In the above question if contact is for property insurance(excluding marine insurance) insurable interest must present (a) At the time of contract. (b) At the time of occurrence of loss. (c) Both at (a) and (b) above. (d) None of the above.

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40 (A) Debtors have insurable interest on the lives of creditors (B) Children have insurable interest on the lives of parents (a) (b) (c) (d) Statement A is only correct Statement B is only correct Statements A and B are incorrect None of these

41 In marine insurance claims, insurable interest must shown to exist at the time of (a) Loss (b) Contract (c) Both a and b above (d) None of the above 42 The principle of subrogation enables (a) An insured to recover to the extent of indemnity (loss) only (b) To prevent the insurer from recovering more than the amount paid as claim (c) The insurer to reduce overall losses (d) All of the above 43 The principle of subrogation is derived from the principle of (a) Utmost good faith (b) Adhesion (c) Duty of disclosure (d) Indemnity 44 Because of the application of the doctrine of adhesion, the courts construe the terms of insurance contracts in favor of (a) The insured (b) The insurer (c) Depends on circumstances (d) None of the above 45 (A) When an insurer makes an ex-gratia payment to the claimant, he is not entitled to subrogation rights (B) Because the insurer has already made a payment to the insured, he is within his rights to claim subrogation. (a) (b) (c) (d) Statement A is only correct Statement B is only correct Both statements A and B are incorrect None of these

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46 (A) Insurance contracts are contracts based on the principle of Uberrima fide (B ) The principle of caveat emptor governs ordinary commercial contracts. (a) (b) (c) (d) Statement A and B both are correct Statement A is incorrect while B is correct Statement A and B are incorrect Statement A is correct while statement B is wrong

47 The Duty of disclosure follows from (a) The doctrine of adhesion (b) The principle of subrogation (c) The principle of indemnity (d) The principle of utmost good faith 48 (A) In life insurance where the proposer was born would be deemed a material fact. (B) In personal accident insurance medical history would be deemed a material fact (a) (b) (c) (d) Statement A is wrong while B is correct Both statements A and B are correct Statement A is correct while B is wrong Both statements A and B are incorrect

49 (A) In fire insurance, type of construction will be considered a material test. (B) In motor insurance, driving track record of the driver will be considered a material fact. (a) (b) (c) (d) Both statements A and B are correct Statement A is correct while B is wrong Statement A is wrong while B is correct Both statements A and B are incorrect

50 (A) Longevity and age are inversely related. (B) Poor health and risk of death are directly related. (a) (b) (c) (d) Statement A is correct Statement B is correct Statement A and B both are correct Statements A and B are both wrong

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51 Explain the difference between a warranty and a representation? (a) A warranty must be strictly and literally complied with whereas a misrepresentation need not be literally true but substantially correct. (b) A breach of warranty will make the contract void able but breach of misrepresentation will make the contract void able only if it is material to the risk. (c) A warranty must be included in the policy either expressly or by reference. A representation does not appear in a policy. (d) All of the above 52 Contribution is considered as a corollary to the principle of indemnity. If in the event of loss, the insured recovers under various policies, the total amount recovered from such insurers would be more than his actual loss. (a) True (b) False 53 Personal accident policies are not strictly contracts of indemnity and hence principles of subrogation and contribution are not applicable there under. The insured can claim in respect of injuries sustained by him as well as recover damages from the negligent third party who has caused the injuries. (a) True (b) False 54 Sunil insured the building of his house for a sum of Rs.500000 against fire insurance. One day the house is totally gutted in a devastating fire. The insurance surveyors certified that the building is a total loss with no salvage value and that the insurable value of the building just prior to the loss was Rs.40000. The insurer will pay to Sunil: (a) Rs.400000 (b) Rs.250000 (c) Rs.500000 (d) Nil (In case of partial loss full amount will be given) 55 Premium under endowment plans equals (a) Risk premium+ savings element +expenses (b) Risk premium +expenses (c) Risk premium +saving element (d) None of these

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56 Shri. Mohan is an assistant manager in a private firm. His present age is 35 years and he is to retire at age 60.His present net salary per annum is Rs.240000. Total life insurance premium as on date including children and wifes policies come to Rs.15000 p.a. Income tax and professional tax amount to Rs.35000. Reasonable self maintenance expenses including entertainment, sports, club membership, recreation etc are Rs.30000. Medical expenses are being reimbursed by the company. Calculate the amount of insurance required using HLV method? Assume discount rate to be 8% p.a. (a) Rs.1850000 (b) Rs.1844600 (c) Rs.1689000 (d) Rs.1900500 (HINT: H=(E-M)*An H=human life value, E= earnings per annum, M=maintenance charges+ taxes+ life insurance premium, An annuity factor at a given rate of discount, N=number of years (working span) Calculation Gross total income= Less: Self maintenance expenses Taxes payable Life insurance premium Surplus income generated for the family Amount in Rs. 240000 30000 35000 15000 160000

This surplus income will be capitalized through discounting at the interest rate of 8% per annum for 25 years term. 160000 pmt, bgn mode , 25 n, 8 i Comp pv=1844600 57 The most important reason for the perceived increase in the longevity of adult life expectancy is because of improvements in (a) Child mortality (b) Migration of population (c) Improved mortality of older sections of people (d) None of these 58 The increase in adult life expectancy have implications for (a) Disability insurance (b) Long term care (c) Sickness insurance (d) All of the above

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59 Ram born in 1950 has a life expectancy at birth of 65 years. Sita his wife born in 1955 has a life expectancy at birth of 70 years. Assuming that the life expectancies have not changed. Ram is planning to buy an annuity to be paid to him or his wife till anyone of them is alive. Ram will retire on attaining age 58 i.e. in 2008 (a) 4 years (b) 12 years (c) 7 years (d) 17 years (HINT : Ram needs an annuity which will cover his expected span of life (1950+65=2015) as well as the expected life span of his wife Sita (1955+70=2025).So the annuity should be life spans of both Ram and Sita) 60 Under the event of the death or serious disabilities of spouse (home maker), the economic consequences to be covered by financial planning are (a) Day care for dependent children (b) Costs to meet domestic chores hitherto attended by spouse (c) Income substitution, if earning (d) All of these 61 (a) (b) (c) (d) For dependent parents, the least important risk to be covered is through Life insurance cover Hospitalisation /sickness cover Disability cover Long term care cover

62 One of the items stated below, will not generally have an impact in estimating the incidence and severity of losses and determining the premium for motor car insurance (a) Make (b) Age (c) Colour (d) Rating zone 63 Vishal made a proposal for insurance cover to protect his holiday home property which was occupied on and off during the year. One of the following perils may be excluded from the cover by the insurance company? (a) Fire (b) Third party liability (c) Theft (d) Loss of rental income

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64 Fact finder usage has many features and advantages . In the following list find the odd man out. (a) Use of fact finder is compulsory in India (b) It helps the client and advisor to arrive at precise recommendations (c) It is a safety and protection provision for the advisor against future litigations. (d) Enables easier periodic review of client needs based on information contained in fact finder 65 (A) Term insurance provides protection on insured lives for a selected period only (B) Premiums payable under term insurances are low because nothing is payable to the policyholder at the end of the term, if he survives (a) (b) (c) (d) Statement A and B both are correct Both statements are incorrect Statement A is correct Statement B is correct

66 John 22, is a young executive at the start of his career . He travels extensively by road in and out of the city. He has to start a family in 5-6 years time.What kind of life insurance cover should be suitable for him? (a) Endowment insurance policy (b) Money back policy (c) Unit-linked policy (d) Temporary insurance policy with convertibility and renew ability option 67 In our country terminal illness is defined as a condition where medical examiners do not consider the patient to be alive for more than (a) 9 months (b) 12 months (c) 18 months (d) 6 months 68 One way of protecting the erosion in the value of a term insurance policy is by taking an (a) Level benefit constant term insurance (b) Decreasing benefit term insurance (c) Increasing benefit term insurance (d) None of these 69 For repayment of mortgage (housing loan) or meeting hire purchase liabilities, this type of policy could be the most appropriate? (a) Decreasing term insurance (b) Level benefit term insurance (c) Increasing benefit term insurance (d) None of the above

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70 The conversion option in temporary assurance means that the assured can opt to convert the term cover into say a whole life or endorsement policy. Under this , one will normally get the (a) Same sum assured benefit level in the changed policy (b) Increased sum assured level in the changed policy (c) Reduced sum assured level (d) None of these 71 (A) Mortality of a life is influenced by age, gender and personal habits. (B)Under stepped premium method , premium at higher ages would be prohibitive for the life assured. (a) (b) (c) (d) Statement A and B are both correct Statement A and B are both incorrect Statement A alone is correct Statement B alone is correct

72 In a limited payment with profit whole life insurance, while the premium paying period is limited to a certain number of years, at the time of claim settlement: (a) Bonuses will be paid for the same period as the premium paying period (b) Bonuses for the period commencing from the year of cessation of premium to the claim date will be paid (c) Bonuses will be paid for the period commencing from the date of risk till the date of claim. (d) None of the above 73 The most important component for cash value (surrender value) accumulation in the early years of the policy term is the (a) Interest factor (b) Level premium (c) Home office exempts (d) None of these 74 The whole life policy which meets both the needs of providing for assureds dependents as well as providing for the assureds periodic financial needs is (a) Convertible whole life plan (b) Increasing whole life insurance policy (c) Anticipated whole life plan (d) Limited payment whole life plan

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75 A father takes out a policy to meet his sons enhanced educational needs when the son reaches 18 years of age. Unfortunately after paying 5 years premium, the father dies. By what means can the policy be kept in force without payment of further premiums so that the intended benefits are retained. (a) Accident benefit premium (b) Lien On policy (c) Premium waiver facility (d) None of these 76 Any payment received from an insurance policy by way of death or maturity claim , anticipated settlement payment, bonus etc are exempt from income tax as per the provisions of (a) Section 10 of the Income Tax Act, 1961 (b) Section 88 of the Income Tax Act (c) Section 80 C of IT Act (d) None of these 77 Sums received from any policy under which more than 20% of the sum assured is payable as premium will be (a) Taxable (b) Tax-exempt (c) Tax-exempt up to 50% (d) None of these 78 Under a deferred annuity, the purchaser can pay the purchase premium as (a) Single premium only (b) By installments only (c) In any way as stated in (a) and (b) above (d) None of the above 79 (A) Riders add to the basic benefits of a life policy (B) Riders do not cost anything to the assured (a) (b) (c) (d) Statements A and B both are correct Statement A and B are incorrect Statement A alone is correct Statement B alone is correct schemes

80 In financial planning, regular life insurance cover plus superannuation help build resources for (a) Death cover (b) Savings fund (c) Retirement income (d) All of the above

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81 The following are important exclusions from personal accident cover exept for one item, which is (a) War and nuclear risks (b) Insane people (c) Horse race jockeys (d) Persons with existing disablement 82 A typical personal accident policy would normally have provisions to pay (a) 2% of the sum assured per week up to a maximum of 52 weeks (b) 1% of the sum assured per week up to a maximum of 104 weeks (c) 1.5% of the sum assured per week up to a maximum of 48 weeks (d) None of these 83 The maximum benefit per adult male/female per year under the Jan Arogya Bima Policy is (a) Rs.7500 (b) Rs.5000 (c) Rs.8000 (d) Rs.4000 84 Under Unborn Child Disability policy, the following risks are covered except one: (a) Congenital defects (b) Congenital deformity (c) Malformation (d) Still Birth 85 (A) The maximum paid up capital of a TPA in equity shares amount to Rs.1 crore (B) The TPA should have a working capital at all times of not less than Rs.1 crore (a) (b) (c) (d) 86 (a) (b) (c) (d) Statement A alone is true Statement B alone is true Statement A and B are both correct Statement A and B are incorrect The purpose of coinsurance or average clause is to Persuade insured to go in for full value insurance cover Make premium reasonable Reduce losses None of these

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87 (A) For electronic goods the basis for claim is replacement value (B) No, it is market value (a) (b) (c) (d) Statement A alone is correct Statement B alone is correct Statement A and B are both incorrect None of these

88 Under motor vehicle insurance , the following losses are covered. Except for one (a) Terrorist action (b) Riot and strike (c) Burglary housebreaking or theft (d) Manufacturing defects 89 (A) Insureds declared value (IDV) is a negotiated arrangement between the insurer and the insured (B) In case of total loss, IDV and not the sum assured is payable as the claim amount (a) Statement A is correct and statement B is incorrect (b) Statement A is incorrect and statement B is correct (c) Statement A alone is correct (d) Statement B alone is correct 90 Under an Overseas Travel insurance policy , the maximum cover for third party liability is (a) US $ 40000 (b) US $ 200000 (c) US $ 500000 (d) None of these 91 Insurance is the method of transfer and distribution of ----------? (a) Funds (b) Resources (c) Risks (d) Losses 92 Life Insurance business is ------------ to the States efforts in social management. (a) Supplementary (b) Complementary (c) Contradictory

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93 The factors affecting computation of premium are: (a) Mortality (b) Rate of interest (c) Management expenses (d) All of the above 94 Unit linked Insurance Plan is designed for ----------------. (a) Residents in India (b) NRIs (c) Both residents in India and NRIs 95 Calculate the paid up value under a policy with the following particulars. S A (sum assured) =Rs.25000 Plan and Terms Endowment- 25 years DOC (date of commencement) 14.06.1989 Mode =quarterly Last premium paid 14.03.1997. (a) Rs.8000 (b) Rs.4000 (c) Rs.7500 (d) Rs.8500 Solution: Policy in force up to : = 14-06-199 Total period premiums paid = (14-06-1997)-(14-06-1989) = 8 years No of premiums paid = 32 No of premiums payable = 25*4=40 Paid up value= { (no of paid installments*SA)/ No of payments in total} = 32*25000/40=8000 96 Claim is the demand on the insurer for ---------------. (a) Policy money (b) Performance of promise (c) Terminating the contract

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97 In a death claim no evidence of the claimant title is required if there exists a proper---(a) Assignee (b) Nominee (c) Children 98 The term Master Policy is related to insurance cover--------------------------(a) For servant obtained by his master (b) Obtained by a group of employees for their master (c) Obtained for a number of persons under Group Insurance Scheme 99 For obtaining an insurance cover under Group Insurance Scheme for a group of people, The group concerned--------------------(a) Should be formed immediately before applying for the cover (b) Should already exist (c) Should be formed after finalizing terms with the insurer 100 A group insurance scheme that offers insurance cover together with the savings element is called-----------------(a) Group annuity scheme (b) Voluntary retirement scheme (c) GSLI

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PART - 5
1. (A) Death of the familys breadwinner is a financial risk (B) It is a pure risk. (a) (b) (c) (d) Both statements A and B are correct. Both statements A and B are incorrect. Statement A is correct. Statement B is correct.

2. The value of Rupee one receivable 15 years for on today at 5% interest are (a) 0.48 (b) 0.36 (c) 0.55 (d) 1.00 3.A has lodged a theft claim in a policy in his name for a watch belonging to his uncle for which he has no insurance. This is in infringement of the principle of: (a) Insurable Interest (b) Indemnity (c) Utmost Good faith (d) Utmost Good faith & Insurable interest 4. In marine insurance, for a claim to be entertained, insurable interest must exist (a) At the time of contract (b) At the time of occurrence of loss (c) Both at (a) and (b) (d) None of the above 5.In the above question if contact is for non marine insurance (excluding marine insurance) insurable interest must be present (a) At the time of contract. (b) At the time of occurrence of loss. (c) Both at (a) and (b) above. (d) None of the above.

6. What is the amount of claim payable if the loss is Rs.8000/- under a policy with a sum
insured of Rs.1 lakh and excess limit is Rs. 4,000/(a) Rs.2000/(b) Rs.400/(c) Nil (d) Rs.3000/-

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7. Discharge of Cargo at the port of distress is covered under (a) ICC - A Only (b) ICC-C & B (c) ICC-A, B & C (d) ICC- A & C 8. Under Private Car Package Policy, the insured vehicle shall be treated as a constructive Total Loss if the cost of repair of the vehicle exceeds---% of the IDV of the vehicle: (a) 75% (b) 80% (c) 90% (d) 40% 9. Salvage Charges under Marine Insurance refers to: (a) Charges deducted by insurers from the claim amounts towards value of salvage after a cargo loss. (b) Charges paid to a person for preventing an insured maritime loss independent of any contract. (c) Charges incurred by Ship owner, Chartered in salvaging a marine adventure (d) None of the above. 10. Cut-through Clause is a reinsurance agreement refers to: (a) The provision to reduce documentary formalities. (b) The right of the original insured to claim directly from the reinsurer (c) The provision to rescind the reinsurance contract under certain conditions. (d) None of the above. 11. Which of the following statement regarding small losses is correct: (a) Low severalty (b) Low Frequency (c) Significant impact (d) Minimum predictability 12. B/L stands for (a) Bill of Lading (b) Bill of Loading (c) Bale of loading (d) Bales of Loading

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13. Vishal made a proposal for insurance cover to protect his holiday home property which was occupied on and off during the year. One of the following perils may be excluded from the cover by the insurance company? (a) Fire (b) Third party liability (c) Theft (d) Loss of rental income 14. The Principle of UBERIMA FIDES applies to (a) Facultative Method (b) Excess of Loss Method (c) Stop of Loss Method (d) All of the above 15. Under the Fire Tariff the Buildings are classified as: (a) Industrial Building & Godown (b) Class a, b, c, (c) Kaccha construction & Other constructions (d) None of the above. 16. Under a liability insurance cover the risk factor is: (a) Low (b) High (c) Unlimited (d) Actual 17. The Letter of Credit is issued to (a) Importer (b) Exporter (c) All the Parties of the Contract (d) Authorised Bank who guarantee 18. Which of the following methods does not fall under Risk Retention (a) Self-insurance fund (b) Voluntary deductible (c) Transfer of Risk of Sub-Contractor (d) Losses debited to operating expenses

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19. State whether the following statements are true in relation to personal Accident policy A) Once a claim for permanent total disablement, the policy becomes inoperative B) Weekly compensation becomes payable only after the total amount payable is ascertained & agreed. (a) (b) (c) (d) Only Statement A Only Statement B Both Statements Neither of the statements

20. Which of the following requires additional premium to be covered under Money (transit) policy A) Dishonesty of employees carrying the cash B) Hold-up risk C) Disbursement risk (a) Only Statement A (b) Only Statement B (c) Only Statement C (d) All three 21. As per IRDA Regulations, if an insurer on receipt of Survey report requires additional information on specific issues, he shall make request within ______ days of receipt of the original report. (a) 15 days (b) 3 days (c) 21 days (d) 7 days 22. Which of the following is covered on a payment of extra premium under Agriculture Pump set policy? (a) Mechanical breakdown (b) Electrical breakdown (c) Flood (d) Terrorism 23. Which of the following is excluded under Horticulture / Plantation policy? (a) Fire (b) Forest fire (c) Bush fire (d) None of the above

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24. Which of the following statements is correct under private car package policy? Statement A: The liability of insurer shall not exceed for total loss the insureds Declared Value of vehicle less the value of wreck. Statement B: The liability for partial losses shall not exceed costs of repairs / replacement subject to depreciation. (a) (b) (c) (d) Only Statement A Only Statement B Both Statements Neither of the Statements

25. Breach of which of the following conditions in the policy will prevent the insured from recovering only a particular loss, the policy remaining unaffected. (a) Condition precedent to liability (b) Condition subsequent to liability (c) Condition precedent to contract (d) Condition subsequent to contract 26. Which of the following claims can not be settled by Branch offices of Public Sector insurance companies? (a) Cattle claims (b) Marine cargo claims (c) Motor Third Party claims (d) Fire claims 27. Which of the following statements is true? Statement A: The principle of subrogation supports the principle of contribution Statement B: The principle of subrogation supports the principle of indemnity (a) (b) (c) (d) Only Statement A Only Statement B Both Statements Neither of the statements

28. Under Universal Health Scheme the maximum sum insured per person or family does not exceed Rs._______. (a) Rs. 20,000 (b) Rs. 4,000 (c) Rs. 30,000 (d) Rs. 15,000

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29. To obtain a license a Surveyor has to undergo practical training not exceeding_______ months. (a) 3 months (b) 24 months (c) 6 months (d) 12 months 30. Which of the following statements are true? Statement A: Under Tariff classes of insurance all insurers must charge the same minimum rates. Statement B: As long as Tariff rates are charged the insurer may use their own policy wordings. (a) (b) (c) (d) Only Statement A Only Statement B Both Statements Neither of the Statements

31. Which of the following statements are true? Statement A: The sum insured under a fire policy stands reduced to the extent of the amount of claim paid. Statement B: The sum insured under a Marine Cargo policy stands reduced to the extent of the amount of claim paid (a) (b) (c) (d) Only Statement A Only Statement B Both Statements Neither of the Statements

32.Principle of Subrogation does not apply to: (a) Property Insurance (b) Liability Insurance (c) Motor Insurance (d) Life Insurance 33. No Fault Liability provisions the compensation payable for permanent disablement is (a) Rs. 25000 under Section 140 (b) Rs. 25000 under Section 141 (c) Rs. 50000 under Section 140 (d) Rs. 50000 under Section 141

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34.As per IRDA (Brokers Regulations) 2000 the kind of brokers are: a. b. c. d. e. f. Direct General Insurance Broker Direct Life Insurance Broker Direct Insurance Broker Corporate Insurance Broker Reinsurance Broker Composite Broker

The correct options are: 1. a, b, d, e, 2. b,d,e,f, 3. c,e,f 4. a,b,c, 35. The nature of a reinsurance contract is: (a) Domestic (b) Export (c) Internationals (d) Commercial 36. The Rate of Commission payable of reinsurance business is: (a) 30% (b) 35% (c) No Cap (d) 40% 37. The License of Insurance Company is renewable after: (a) 2 years (b) 3 years (c) 5 years (d) Annually 38. In Reinsurance Business the Cession means: (a) The amount transfer on account of commission payable to the basic insurer (b) The money returned the insurer for payment of proportionate claims (c) The amount payable to the Reinsurer in proportion of the treaty arranged (d) The Discount given in lieu of commission to the insurer 39. The limit of filing of an appeal against the order of the District Consumer Court: (a) 6 months (b) 3 months (c) 1 months (d) 1 year

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40.An Insurance Company is subject to which of the following audits: (a) Internal Audit (b) Statutory Audit (c) Audit of Comptroller & Auditor General (d) All of the above 41. Which of the following statement (s) are True? Statement A: Insurance is relevant only if there is a possible economic loss. Statement B: An event, which will certainly happen cannot be insured against. (a) (b) (c) (d) Only Statement A Only Statement B Both Statements Neither of the Statements

42. An important role of insurance in the development of the economy is to (a) Reduce investment in infrastructure (b) Reduce poverty in the nation. (c) Reduce inflation in the economy. (d) Give financial protection to the family 43. Which of the following statement (s) are True? Statement A: Insurance reduces social costs. Statement B: Insurance is an instrument of social security (a) (b) (c) (d) Only Statement A Only Statement B Both Statements Neither of the Statements

44. Which of the following statement (s) are True? Statement A: Insurance avoids risks. Statement B: Insurance does not avoid risks. (a) Only Statement A (b) Only Statement B (c) Both Statements (d) Neither of the Statements 45. Identify which of the following are basic principles of insurance (a) Utmost good faith (b) Insurable interest (c) Indemnity (d) All of the above

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46. Which of the following statements is true? Statement A: Compulsory Owner-driver cover is restricted to Indian Territory only. Statement B: The insured is not liable for compensation under any other policy in respect of same of disablement in case of personal accident insurance. (a) (b) (c) (d) Only statement A Only statement B Both Neither of the statements

47. In case of fire and miscellaneous insurance the insurable interest must be present (a) At the time of taking the policy (b) At the time of loss (c) Both of above (d) None of above 48. In marine insurance insurable interest must be present (a) At the time of taking policy (b) At the time of loss (c) Both of above (d) None of above 49. Assignment of policy requires prior consent of the insurer in case of (a) Fire & miscellaneous policies; (b) Marine policy (c) Marine hull (d) a & c 50. For applicability of principle of contribution the following must be common (a) Subject matter (b) Peril (c) Interest covered (d) All of the above 51. Which of the following principles supports the principle of indemnity? A) Subrogation B) Contribution (a) Only B (b) Both A & B (c) Neither A nor B (d) Only A

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52. Endorsement is issued ____________ (a) When change of insurers address (b) When cover requires cancellation (c) When risks are to be added/ deleted (d) All of the above 53. If an insurance policy is not stamped as per the Indian Stamp Act, the contract becomes_____________. (a) Unenforceable (b) Void (c) Voidable (d) Illegal 54. Which of the following statement(s) is true? Statement A: Endorsements are issued during the policy period to record alterations Statement B: Endorsements are issued as part of the policy at the time of issue (a) Only statement A (b) Only statement B (c) Both statements (d) Neither of the statements 55. Which of the following statements is true? Statement A: A warranty is an express condition. Statement B: A warranty must be strictly complied with, whether it is material to risk or not. (a) (b) (c) (d) Only Statement A Only Statement B Both Statements Neither of the statements

56. Which of the following statements is true? Statement A: As per IRDA Regulations there is legal obligation on the part of insurers to issue a renewal notice to the insured. Statement B: Issue of renewal notice means that the policy is automatically renewed, if the premium is paid. (a) (b) (c) (d) Only Statement A Only Statement B Both Statements Neither of the statements

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57. In case of technical breach of warranty, the claims are settled on _____________ basis (a) Ex-gratia (b) Non-standard (c) Past precedents (d) Arbitration 58. In motor, Cover note is valid for __________ days (a) 15 days (b) 30 days (c) 45 days (d) 60 days 59. Where risk period exceeds nine months, what %age of annual premium will be charged under motor policies? (a) 50% (b) 75% (c) 85% (d) 40% 60. Under motor insurance premium is fixed by (a) Make of the Vehicle (b) Age of the Vehicle (c) Value of the Vehicle (d) All of the above 61. The minimum premium under a Fire Policy for offices/ shops is (a) Rs.500 (b) Rs. 250 (c) Rs. 40 (d) Rs. 50 62. Which of the following statements is true? Statement A: The principle of utmost good faith is the same as the principle of let the buyer beware. Statement B: The existence of high blood pressure need not be disclosed, as the doctor can find it out during the medical examinations (a) Only Statement A (b) Only Statement B (c) Both Statements (d) Neither of the Statements

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63. To whom can the policyholder apply in case of bad service from an insurer? (a) I.R.D.A. (b) Consumer Forum (c) Ombudsman (d) All of the above 64. Which of the following statements is true under the Consumer Protection Act? Statement A: An appeal to the national commission against the order of the State commission has to be filed through an advocate Statement B: The decision of the national commission is final with no further appeal (a) Both statements (b) Neither of the statements (c) Statement A only (d) Statement B only 65. According to Fire Tariff, which of the following cannot be covered under value polices ? (a) Obsolete machinery (b) Brand new machinery (c) Curios (d) Works of art 66. Domiciliary Hospitalisation Benefit is provided if treatment is needed exceeding 3 days at home in India Statement A: The patient is not in position to go to nursing home Statement B: The patient does not have sufficient funds for treatment Statement C: The patient can not be removed to hospital for lack of accommodation (a) (b) (c) (d) A and C are correct B and C are correct B is correct C is correct

67. _____ is not an example of Standing charges insured under consequential loss (fire) policy. (a ) Purchase cost of raw materials (b) Salaries to permanent staff (c) Office & general establishment expenses (d) Insurance premium

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68. Which of the flowing statements is true? Statement A: Arbitration condition appears in all insurance policies. Statement B: Arbitration condition appears only on marine cargo policies. (a) Only Statement A (b) Only Statement B (c) Both Statements (d) Neither of the statements 69. Under the Transit Clause (Warehouse to Warehouse) of Institute Cargo Clauses, the insurance terminates on the expiry of __________ days after discharge from the vessel at the final port of discharge. (a) 30 (b) 60 (c) 7 (d) 15 70. Which of the following documents is common to claims processing under marine import policies and inland transit (Rail/Road) Policies? (a) Invoice (b) Bill of Lading (c) Copy of protest (d) Lost overboard certificate 71. Which of the following statements is true? Statement A: Marine cargo policies are valued policies Statement B: Marine hull policies are valued policies (a) Neither of the statements (b) Only statement A (c) Only statement B (d) Both statements 72. Which of the following statements is false in relation to marine cargo insurance? Statement A: The entire marine cargo insurance is governed by Tariff or market agreements Statement B: Special storage insurance is granted in conjunction with inland transit open policy (a) Neither of the statements (b) Only statement A (c) Only statement B (d) Both statements

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73. Under which of the following sale contracts, the seller is responsible for arranging the cargo insurance for the entire voyage? (a) C&F (b) C.I.F. (c) F.O.B. (d) F.O.R. 74. Which of the following is true in relation to marine cargo insurance? (a) Claim survey fee is payable by insurers only if the claim is payable (b) Under every marine policy for export shipments, certificate of insurance is issued (c) General average loses are covered only under Institute Cargo Clauses (A)- All risks. (d) None of the above 75. What is the maximum limit of cover for Third Party Property Damage under liability only polices in case of private cars (a) Rs 1 lac (b) Rs. 2 lacs (c) Rs. 5 lacs (d) Rs. 7.5 lacs 76. Which of the following is taken as sum insured under a motor policy? (a.) Fair value of subject matter of insurance (b.) Agreed value of property insured (b.) The amount paid when there is a total loss (d.) Insureds Declared Value 77. The liability of the owner of the motor vehicle to pay compensation for death claims, on no fault basis under the Motor Vehicles Act, 1988 is ______________. (a) Rs 4,000 (b) Rs. 25,000 (c) Rs. 50,000 (d) Unlimited 78. The compensation for death under Solatium Scheme is __________. (a) Rs. 25,000 (b) Rs. 12,500 (c) Rs. 50.000 (d) Rs. 1,00,000 79. Application for compensation under Solatium scheme has to be made to _____ (a) Corporate office of an Insurance company (b) Claims enquiry officer nominated by State Government (c) Nominated divisional office of the insurance company (d) Claims settlement commissioner nominated by the State Government

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80. In which of the following zones, a private car registered in Chandigarh falls for rating purpose. (a) Zone A (b) Zone B (c) Zone C (d) None of the above 81. Under the Motor Vehicles Act 1988, third party claims can be adjudicated upon by ____ set up by the State Government (a) Legal Aid Board of the State Government (b) Motor Accidents Claims Tribunal (c) Lok Adalat (d) Lok Nyayalaya 82. The purpose of Personal Accident Insurance is to pay: Statement A: Fixed compensation for death from accidental injury. Statement B: Variable compensation for death from accidental injury (a) (b) (c) (d) Both are correct B is correct A is correct None is correct

83. Which of the following contingencies is not covered under personal accident policy? (a) Permanent total disablement (b) Temporary total disablement (c) Permanent partial disablement (d) Temporary partial disablement 84. Under group personal accident policies, on duty cover is available at ____ % of the normal premium (a) 60 (b) 75 (c) 25 (d) 50 85. Which of the following statements is true in relation to Standard Personal Accident Policy? Statement A: The cover is for 24 hours Statement B: The cover is on a world-wide basis (a) (b) (c) (d) Both statements Neither of the statements Only statement A Only statement B

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86. The cumulative bonus under a personal accident policy cannot exceed ______ % of the total capital sum insured. (a) 50 (b) 25 (c) 60 (d) 40 87. Which of the following statements is true as per conditions of personal accident policy? Statement A: Short period premium refund is made if the policy is cancelled by the insured Statement B: Short period refund is made subject to being no claim made under the policy (a) Neither of the statements (b) Only statement A (c) Only statement B (d) Both statements 88. Which of the following statements is true? Statement A: The principle of contribution does not apply to personal accident insurance Statement B: The principle of contribution applies to weekly benefits under personal accident insurance (a) Neither of the statements (b) Only statement A (c) Only statement B (d) Both statements 89. The Mediclaim policy is available up to a maximum sum insured of Rs.__ lakh. (a) 5 (b) 2 (c) 3 (d) 4 90. The insurance under Overseas Mediclaim Policy does not operate beyond______ days of continuous absence from India a. 120 b. 180 c. 60 d. 90

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91. If hospitalization cover applies under Mediclaim policy, relevant medical expenses incurred during the period of ____________ days after hospitalization treated as part of the claim. (a) 30 (b) 45 (c) 15 (d) 60 92. Which of the following expenses are not payable under Maternity benefit? (a) Cesarean (b) Abdominal operation for extra uterine pregnancy (c) Miscarriages due to accident (d) Pre-natal expenses prior to hospitalization 93. Subject to no claim, cost of health check-up is payable under Mediclaim policy once in every _____ years. (a) 5 (b) 4 (c) 3 (d) 2 94. Brokers commission for General Insurance business is (a) Non Tariff business 17.5% (b) Statutory Tariff business 4% (c) Other Tariff business 12.5% (d) All of the above 95. Buyers of reinsurance are (a) Direct Insurers (b) Reinsurers (c) Captives (d) All of the above 96.In India, the amount donated qualifies for (a) Tax exemption under section 4 (4D) of Income Tax Act, 1961 (b) Tax exemption under section 80 L of Income Tax Act, 1961 (c) Tax exemption under section 88 of Income Tax Act, 1961 (d) Tax exemption under section 80 G of Income Tax Act, 1961

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97. In case of assessment of loss where the assessment is not carried out by licenced surveyor and loss assessor. (a) Up to 20000/(b) More than 20000/(c) None (d) Both a & b 98. In case of Non-Marine losses insured can exercise/opt for ------ as per policy in case amount offered by insurer is not acceptable to insured.. (a) Arbitration (b) Litigation (c) Grievance Redressal Committee (d) Ombudsman 99. Which Surveyors services are mandatory under section 64UM of Insurance Act 1938 where loss is 25000/-? (a) Independent Surveyor (b) In-House surveyor (c) Both (d) None of the above 100. Select the correct option in respect of pecuniary jurisdiction of the National Commission under the Consumer Protection Act 1986. (a) Above Rs. 20 lakhs and up to Rs. 40 lakhs (b) Above Rs. 20 lakhs and up to Rs. 50 lakhs (c) Above Rs. 40 lakhs (d) Above Rs. 20 lakhs and up to Rs. 40 lakhs

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PART - 6
1In life insurance, insurable interest must exist at the time of . (a) Premium payment (b) Claim (c) Proposal (d) Surrender 2 What is a proposal ? (a) A request for an insurance cover (b) An offer to enter into a contract (c) Both statements are correct (d) Both statements are wrong 3 Key man insurance can be taken on the life of (a) Child of key man (b) Wife of key man (c) Husband of key man (d) Key employee 4 Policy vests in the child when he / she .. (a) Attains majority (b) Gets married (c) Dies during the deferment period (d) On its maturity 5 Persuasion involves tackling an objection by using the technique. (a) No-infact (b) I know better (c) Yes-but (d) Holier than thou 6 With the sale of a life insurance policy, the prospect becomes .. (a) Nominee (b) Policyholder (c) Proposer (d) Claimant 7 Under group insurance, underwriting is done . (a) For the entire group (b) For some persons (c) For selected persons (d) On individual basis

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8 Which approach is good? (a) Agent advises his prospect that he need not mention that he is an NRI. (b) Agent advises his prospect that he need not mention death due to suicide in his family. (c) Both approaches. (d) Neither. 9 Which approach is good? (a) Agent advises his prospect not to mention his previous criminal conviction. (b) Agent sells term insurance policy to a prospect who wants to provide for his old age. (c) Both approaches. (d) Neither. 4 Which approach is good? (a) Agent advises his prospect not to mention his earlier dropped proposal submitted under a different agency. (b) Agent advises his client to include all his previous policies in the present proposal. (c) Both approaches are good. (d) Neither approach is good. 11 Sum assured payable on death may be maturity amount. (a) Equal to (b) More than (c) Less than (d) Any of these 12 Marketing of insurance includes (a) Maintaining regular contact with policyholders (b) Finding out about policyholders' experiences (c) Helping claimants to complete formalities (d) All the above 13 Insurance advertisements should not .. (a) Distort facts (b) Mislead consumer (c) Throw competition in bad light (d) All of the above. 14 Avoiding superfluous and redundant expressions helps (a) Verbosity (b) Conciseness (c) Redundancy (d) Exaggeration

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15 That the policyholder can pay the premium on yearly, half-yearly, quarterly or monthly basis is . (a) (b) (c) (d) Option Guarantee Rider None

16 Which statement is true with regard to the Children's policy? (a) Risk will commence on the deferred date automatically. (b) Risk will commence on the deferred date after satisfactory medical examination. (c) Risk will commence on the deferred date with enhanced premium. (d) All are wrong. 17 Which statement is correct? (a) (b) (c) (d) Life insurance business generates surplus. Male and female mortality are not the same. Both statements are correct. Both statements are wrong.

18 Assets are insured because they may be destroyed due to occurrences. (a) Random (b) Unintentional (c) Accidental (d) All these 19 State which of the following statements is correct (a) Agent fills up the gaps in the proposal form left by the proposer. (b) Agent declines to fill the proposal form himself. (c) Both statements above are correct (d) Both statements above are wrong 20 Premium is collected . (a) (b) (c) (d) In advance In part In anticipation All of these

21 State which statement is correct. (a) Ombudsman is created by IRDA Act. (b) Proportional paid up value is guaranteed by the Insurance Act 1938. (c) Both statements are correct. (d) Both statements are wrong.

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22 All the needs of the prospect can be met by (a) One policy (b) Two policies (c) Five policies (d) Different kinds of policies 23 Employer has insurable interest in the life of his employee (a) For ever (b) At no time (c) During employment contract (d) During recruitment 24 State which statement is correct. (a) The members of a housing society can negotiate for a group insurance policy. (b) The sports club can get a group insurance policy for its members. (c) Both statements are correct. (d) Both statements are wrong. 25 Term insurance is ideal for (a) Risk cover in early ages (b) Old age provision (c) Long term investment (d) Pension 26 Risk on a child's life under CDA plans starts on .. (a) The deferred date (b) The date of commencement (c) The date of maturity (d) The date of vesting 27 Policy document is (a) Evidence of the contract (b) Evidence of risk (c) Evidence of the company having accepted premiums (d) None of the above 28 Medical examination is not at all required under policy. (a) Partnership insurance (b) Group insurance (c) Individual insurance (d) Annuity

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29 Which of the following is correct? (a) General insurance is some times bought because of compulsions (b) Marketing is not necessary when there are compulsions to buy (c) Both are correct (d) Both are wrong 30 If a person having a policy of 4 lacs is suffering from brain hemorrhage and high BP, the insurer will pay (a) Basic SA (b) 50% of SA (c) EPDB (d) Nothing 31 Which of the following is correct? (a) Advertising is made through media. (b) The media for advertising has to keep in mind the likely customer. (c) Both are correct (d) Both are wrong 32 Which of the following is correct? (a) Banks are becoming part of the distribution channel for insurance. (b) Banks and insurers serve the same set of customers. (c) Both are correct (d) Both are wrong 33 Which of the following is correct? (a) The nominee under a policy can transfer his rights to another person (b) The nominee has no rights under a policy. (c) Both are correct (d) Both are wrong 34 A policy that has been assigned will revert to the assignor (a) If the assignment is conditional. (b) Whenever the assignor demands it. (c) When the conditions specified in the conditional assignment assignment happen. (d) On maturity of the policy. 35 Which of the following is correct? (a) An indemnity bond is necessary when the heirs challenge the nomination. (b) Heirs claiming the policy monies must be asked to obtain a court decree (c) Both are correct (d) Both are wrong

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36 Which of the following is correct? (a) The insurer should ignore a court order attaching the monies under an MWPA policy. (b) The insurer should not become a party to a dispute between rival claimants. (c) Both are correct (d) Both are wrong 37 Which of the following is correct? (a) A nomination can be made even before a policy commences. (b) A nomination can be made only by the insured himself. (c) Both are correct (d) Both are wrong 38 Which of the following is correct? (a) On revival, the relevant SA for underwriting is the original SA. (b) On revival, the relevant SA for underwriting is the original Sa less paid up value. (c) Both are correct (d) Both are wrong 39 Which of the following is correct? (a) No claim can be paid without either the original or the duplicate policy. (b) No maturity claim can be paid without the life assured signatures. (c) Both are correct (d) Both are wrong 40 Which of the following is correct? (a) Premiums have to be paid in cash or by cheque. (b) Premiums can be paid electronically. (c) Both are correct (d) Both are wrong 41 Which of the following is correct? (a) Vested bonus is also reduced along with SA in paid up cases. (b) Paid up option is effective from the date of FUP. (c) Both are correct (d) Both are wrong 42 Which of the following is correct? (a) Many people think that they do not need life insurance. (b) Many people think that there is no hurry to buy life insurance. (c) Both are correct (d) Both are wrong

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43 Which of the following is correct? (a) Some of the particulars in the proposal form have no bearing on underwriting. (b) The name of the proposed nominee must be mentioned in the proposal. (c) Both are correct (d) Both are wrong 44 Valuation is done by a life insurer because (a) It is a statutory requirement. (b) It is necessary to be able to declare dividends to shareholders. (c) It tells the insurer how well it is managing the business. (d) All the above. 45 An insurer as a trustee has to ensure that (a) The life fund is safe. (b) The life fund earns maximum interest. (c) Both are correct (d) Both are wrong 46 Which of the following is correct? (a) In a limited payment policy, there is a maximum limit to SA. (b) In a limited payment policy, the term can not exceed a specified limit. (c) Both are correct (d) Both are wrong 47 Which of the following is correct? (a) An SSS policy is an industrial insurance plan. (b) An SSS policy can be taken for a SA of Rs. 4 lacs. (c) Both are correct (d) Both are wrong 48 Insurance compensates losses (a) By rebuilding the original asset. (b) To the full extent of lost income. (c) Only to the extent of the insured amount. (d) All the above. 49 Which of the following is correct? (a) A rider modifies an existing condition in the policy. (b) A rider supplements or adds to an existing condition in the policy. (c) Both are correct (d) Both are wrong

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50 Which of the following is correct? (a) A life insurance agent should carry the literature with him. (b) A life insurance agent should carry his license with him always. (c) Both are correct (d) Both are wrong 51 Which of the following is correct? (a) The underwriter makes his decision only after the medical referee sees the case. (b) The medical referee usually sees only cases for large SA. (c) Both are correct (d) Both are wrong 52 An insured can afford to (a) Ignore safety precautions. (b) Be less serious on the packaging of goods. (c) Be lenient on controls in warehouses. (d) Do none of these three. 53 A person is an insurance agent because of (a) The nature of his duties. (b) His designation. (c) The training given to him. (d) All the three mentioned above. 54 What is a proposal? (a) A request for insurance cover. (b) An offer to enter into a contract. (c) Both the request and an offer to enter an insurance contract. (d) None of the above. 55 Which of the following is correct with regard to children's policies? (a) They insure minor children. (b) They insure only school going children. (c) Both are correct (d) Both are wrong 56 In a variable insurance policy (a) The policyholder has an option to modify the benefits from time to time. (b) The benefits under the policy are not changeable after commencement. (c) The benefits vary according to the rate of inflation. (d) None of the above statements are correct.

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57 Adjustments are made to tabular premium because of (a) Recommendations of the agent (b) Age of the person to be insured (c) Frequency of premium payment (d) All the above. 58 State which of the following statements is correct (a) The records of an agent are his main tool for managing himself (b) Competence is indicated by the time taken to do a job (c) Both statements above are correct (d) Both statements above are wrong 59 State which of the following statements is correct (a) Convertible plans do not participate in profits (b) Money back policies are not convertible policies. (c) Both statements above are correct (d) Both statements above are wrong 60 A policy in which payment to the annuitant begins after one year and is payable there after annually is called .. Annuity. (a) Quarterly (b) Immediate (c) Deferred (d) Monthly 61 FPR is the evidence of the company, (a) Accepting the risk (b) Commencing the policy (c) Deferment of acceptance (d) Any of the above 62 Life insurance is a .. Contract. (a) Long term (b) Short term (c) Unlimited period (d) None of these 63 State which of the following statements is correct (a) No medical examination is required under an annuity policy irrespective of the amount (b) A diabetic person can be accepted under group insurance policy up to certain amount (c) Both statements above are correct (d) Both statements above are wrong

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64 State which of the following statements is correct (a) Smoking is a hazard inviting additional premium (b) Drinking is a hazard inviting additional premium. (c) Both statements above are correct (d) Smoking is a hazard inviting additional premium 65 Which approach is correct? (a) Agent tells his prospect, who is a non-earning housewife, to mention her occupation as a school teacher. (b) Agent overstates his client's weight in a non-medical proposal by 4 Kilograms. (c) Both approaches are right. (d) Neither approach is correct. 66 State which of the following statements is correct (a) Only one policy is issued under group insurance (b) Under a joint life insurance each life is underwritten (c) Both statements above are correct (d) Both statements above are wrong 67 Proper servicing benefits (a) Agent (b) Policyholder (c) Company (d) All these 68 In a declined case, the insurer the proposal. (a) Modifies (b) Accepts (c) Refuses (d) Postpones 69 What is meant by claim under an insurance policy ? (a) Any demand made by policy holder on insurer (b) A demand to fulfill policyholder obligations (c) A demand to fulfill insurer obligations (d) All of the above 70An agent should report on prospect's agent's status. (a) Financial (b) Social (c) Social (d) All of these

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71State which of the following statements is correct (a) The minimum business to be done from rural areas is 5 % every year. (b) The minimum business to be done from rural areas goes up every year. (c) Both statements above are correct (d) Both statements above are wrong 72 Social sector includes (a) Formal sector (b) Organized sector (c) Economically vulnerable sector (d) None of these 73 Consensus ad idem means parties are of .. mind. (a) Two (b) Differing (c) Same (d) All of these 74 State which of the following statements is correct (a) Nomination can be made in joint life policies. (b) A joint life policy can be assigned. (c) Both statements above are correct (d) Both statements above are wrong 75 Under compound reversionary bonus, bonus declared attaches to (a) Premium paid (b) Term of the policy (c) SA and accrued bonus (d) SA only 76 State which of the following statements is correct (a) A person who vehemently asks for life insurance is likely to be a case of moral hazard. (b) People neglect to buy life insurance because of the compulsions of today. (c) Both statements above are correct (d) Both statements above are wrong 77 State which of the following statements is correct (a) In the case of automatic advance of premiums, policies are entitled to bonus. (b) Paid up policies are entitled to bonus. (c) Both statements above are correct (d) Both statements above are wrong

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78 Agents' disqualifications are stated in Insurance Act, Section . (a) 40 (b) 41 (c) 42 (d) 45 79 Moral hazard is suspected in cases where (a) The life to be assured is old (b) The insurance is for a very large amount (c) In both the above cases (d) In neither of the above cases 80 State which of the following statements is correct (a) Underwriting is done only when there is a medical examination. (b) Medical examination is necessary before a policy can be issued. (c) Both statements above are correct (d) Both statements above are wrong 81 An insurance agent holds a license to act as an insurance agent for a life insurer and a general insurer is .. (a) Agent (b) Special agent (c) Corporate agent (d) Composite agent 82 Stating all essential facts and anticipating all possible doubts is .. (a) Incompleteness (b) Haphazardness (c) Shadiness (d) Completeness 83 Certificate to act as an insurance agent is called a ------------------(a) License (b) Permit (c) Charter (d) Certificate 84 Person who performs valuation U/S 13 of Insurance Act is .. (a) Underwriter (b) Auditor (c) Actuary (d) Valuer

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85 Money back policy takes care of aspect of . (a) Investment (b) Risk cover (c) Bonus (d) None of the above 86 Hazard is a factor that . The risk. (a) Doubles (b) Enhances (c) Halves (d) Reduces 87 Of the following which is the basis of the contract? (a) Proposal form (b) Agent's confidential report (c) Occupational query form (d) Medical report 88 A new insurer in the fifth year of operations should bring in the following percentage of business from the rural sector: (a) 7 (b) 12 (c) 15 (d) 16 89 Avoiding complicated imaging and saying a thing directly helps.. (a) Concreteness (b) Slipshod (c) Laxity (d) Vagueness 90 The insurance that is sold is (a) Tangible (b) Intangible (c) Definite (d) Movable 91 Policy document consists of . (a) Preamble (b) Schedule (c) Operative clause (d) All of these

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92 If a policy document is lost, contract . (a) Is not lost (b) Is suspended (c) Is cancelled (d) Is lost 93 License once issued is valid for .. (a) 1 year (b) 2 years (c) 3 years (d) 5 years 94 Insurance brokers, re-insurance brokers, insurance consultants and surveyors are known as . (a) Agents (b) Advisors (c) Intermediaries (d) None of the above 95 Tabular premium charged takes care of expected deaths according to a standard mortality table. (a) A fraction of (b) 50% (c) Some (d) 40% 96 For a chartered accountant composite agent, the training time for renewal is . Hours. (a) 25 (b) 35 (c) 37 (d) 50 97 IRDA Regulations prescribe for agents. (a) Training (b) Minimum physical standards (c) Minimum business (d) Maximum premium income 98 State which of the following statements is correct. (a) Organizational structure determines the employee strength of the office. (b) Organizational structure affects the morale of employees. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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99 The element which does not figure in the calculation of life insurance premiums is: (a) Interest (b) Mortality (c) GDP (d) Expenses 100 Policyholder commits suicide on 1 - 1 - 2002 which happens to be the date of maturity under his endowment policy, what is the amount of claim payable? (a) Basic plus DAB (b) Basic only (c) Surrender value (d) Nothing 101 Which approach is good? (a) Agent substitutes his own cheque for cash collected from the prospect. (b) Agent insists that the prospect should give standard age proof. (c) Both approaches (d) Neither approach 102.. Information means information which, if not disclosed, can nullify the policy. (a) Fraudulent (b) Material (c) Important (d) Uncommon 103. Life insurance takes care of family's .. Needs. (a) Physical (b) Spiritual (c) Financial (d) Cultural 104 Insurance agent is licensed under Sec of the Insurance Act. (a) 39 (b) 40 (c) 41 (d) 42 105 Courteous behavior comes from . Respect. (a) Affected (b) Genuine (c) Pretended (d) Selfish

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106 U/S 45 of the Insurance Act 1938, a policy cannot be called in question after .. Years from commencement. (a) One (b) Two (c) Three (d) Five 107 State which one of the following statements is correct (a) Special agent work only for life insurance (b) Chief agent work only for Life Insurance (c) Both statements are correct (d) Both statements are wrong 108 State which one of the following statements is correct (a) The commission payable to agent is determined by IRDA (b) The minimum business to be done by an agent is laid down by Insurance act (c) The function of agent are same, which ever the insurer he is working for (d) The function of an agent differ, which ever the insurer he is working for 109 State which one of the following statements is correct (a) The bonus declared is uniformly appropriate to all plans of Insurance (b) Interim bonus is paid along with Death Claim (c) Both statements are correct (d) Both statements are wrong 110 State which one of the following statements is correct (a) An absolute assignment holds good even after maturity (b) A nomination holds good only till maturity (c) Both statements are correct (d) Both statements are wrong 111Under a limited payment whole life policy premiums are payable (a) For a selected term (b) Up to age 60 (c) Up to age 85 (d) Up to death 112 If a life insured had died a few days before the date on which survival benefit was due, to whom this benefit to be paid? (a) Nominee (b) Surviving heirs (c) Policy holders bank account (d) To none

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113 Insurance works on the principles of (a) Equal contributions (b) Proportional contributions (c) Contributions dependent on affordability (d) None of the above 114 State which one of the following statements is correct (a) The date of payment of premium is the date of the receipt by insurer (b) The date of payment of premium is the date on which the cheque is cleared (c) Both statements are correct (d) Both statements are wrong 115 The definition of an insurance agent is given by (a) Contract act (b) IRDA Act (c) Insurance act (d) Life Insurance Corporation act 116 State which one of the following statements is correct (a) The premium collected in the early years is less than what is required (b) The premium collected in the early years is more than what is required (c) The premium collected in the early years is exactly what is required (d) All of the above 117 Retention of risk can be conveniently done by (a) Large corporations (b) Small companies (c) Single individuals (d) None of the above 118 The distribution channel for insurance consists of (a) The branch offices (b) The insurance agents (c) The brokers (d) All the above 119 Medical examination is not at all required under policy. (a) Partnership insurance (b) Group insurance (c) Individual insurance (d) Annuity

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120 State which one of the following statements is correct (a) The limits of business from rural and social sector apply only to new insurer (b) Existing insurers should do 16% business from rural sector (c) Both statements are correct (d) Both statements are wrong 121 State which one of the following statements is correct (a) Marketing is necessary to attract customers (b) Marketing makes it easier to persuade (c) Both statements are correct (d) Both statements are wrong 122 State which one of the following statements is correct (a) The internet is controlled by Government of India (b) Agents can set up their own websites on the internet. (c) Both statements are correct (d) Both statements are wrong 123 The insurer will not pay claim unless (a) The event insured against happens (b) Policy holder himself makes demand (c) The nominee makes a demand (d) When all the three above happens 124 State which one of the following statements is correct (a) A rural area is defined by the IRDA Act (b) A rural area is an area outside municipal limits (c) Both statements are correct (d) Both statements are wrong 125 In which of these early death claims will the insurer be more careful (a) Revival with simple declaration of good health (b) Revival by simply paying arrears of premium within 6 months of lapse (c) Revival within maturity date only 4 years from date of death (d) New policy under non medical scheme 126 Bonus which is attached to the policy and is payable along with the basic SA is called (a) Tontine (b) Cash (c) Deferred (d) Reversionary

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127 State which one of the following statements is correct (a) An individual who is the director of the company can become a chief agent. (b) A company can become a chief agent if its director obtains a license (c) Both statements are correct (d) Both statements are wrong 128 State which one of the following statements is correct (a) Sec 45 of Insurance Act deals with nomination (b) Indisputability clause does not apply to Childrens policy (c) Both statements are correct (d) Both statements are wrong 129 A life insurance agent should (a) Persuade the prospects to buy a life insurance policy (b) Say that life insurance is better than all other avenues for investment (c) Say that life insurance is meant for young people only (d) Advise the prospects about the best financial arrangements for a situation 130 State which one of the following statements is correct (a) An effective agent must be able to write articles for newspaper (b) Communication skills includes the ability to listen (c) Both statements are correct (d) Both statements are wrong 131 A missing person will be presumed dead only after (a) 9 years (b) 7 years (c) 3 years (d) 5 years 132 The principle of Utmost Good Faith will operate in existing policy (a) If the insured person changes his job (b) If the policy has lapsed and it has to be revived (c) Every time the premium is paid (d) f the insured person falls sick and is admitted to the hospital 133 State which one of the following statements is correct (a) An annuity can be taken only on single life (b) In life annuity the risk of death is covered (c) Both statements are correct (d) Both statements are wrong

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134 State which of the following statements is correct (a) If the prospect asks the agent to show his license, it is an insult (b) The commission paid to an agent is a secret between the insurer and the agent (c) Both statements above are correct (d) Both statements above are wrong 135 Adjustments are made to tabular premium because (a) Mode of payment (b) Size of sum assured (c) Method of premium payment (d) All of the above 136 An agent is known by (a) The job he does (b) The license issued to him (c) The way that he is remunerated (d) All of the above 137 State which one of the following statements is correct (a) Only participating policies are entitled to benefit of bonus (b) The bonus is return of additional premium paid by a participating policy (c) Both statements are correct (d) Both statements are wrong 138 State which one of the following statements is correct (a) An underwriter charges extra premium for physical hazard (b) An underwriter charges extra premium for moral hazard (c) Both statements are correct (d) Both statements are wrong 139 Which of the following complaints would be heard by the Ombudsman? (a) That the insurer is delaying the claim on the grounds of investigation (b) That the premium was paid on time but accounted by the insurer late (c) That the policy should not be treated as lapsed (d) All of the above 140 Which is true with regard to Childrens policy (a) Risk cover begins on or after vesting date (b) Risk cover begins immediately when the policy commences (c) Both statements are correct (d) Both statements are wrong

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141 State which one of the following statements is correct (a) The first premium receipt is proof of commencement of risk (b) Risk does not commence till the policy is signed (c) Both statements are correct (d) Both statements are wrong 142 when does a claim arise under a insurance policy? (a) Whenever the policyholder feels the need for money (b) When the insured event happen (c) When premium is not paid (d) When ever any of the above three happen 143 Price of a deferred annuity is payable in (a) Lump sum (b) Quarterly installments (c) Annual installments (d) Any of the above 144 Insurers should bring the following lives in the 4th year of their operations (a) 5000 (b) 4000 (c) 15000 (d) 20000 145 State which of the following statements is correct (a) All maturity claims are paid in one lump sum (b) All death claims are paid in one lump sum (c) Both statements above are correct (d) Both statements above are wrong 146 State which of the following statements is correct (a) Recognition happens when the bearer remembers your taste in the restaurant (b) Recognition happens when your thoughts are taken seriously (c) Both statements above are correct (d) Both statements above are wrong 147 Which of the following aspects are common to three non-forfeiture options? (a) They seek to protect the policyholder's interest (b) Extent of insurance cover on death (c) The extent of debt on the policy (d) The amount payable on maturity

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148 State which of the following statements is correct (a) Nobody does anything unless he wants to do it. (b) The primary need of every agent is to earn as much as he can. (c) Both statements above are correct (d) Both statements above are wrong 149 A person can be given any amount of insurance subject to his capacity .. (a) To pay (b) To earn (c) To spend (d) To save 150 State which of the following statements is correct. (a) Revivals are in the interest of the policyholders. (b) Revivals are in the interest of the insurers. (c) Both the statements above are correct. (d) Both the statements above are wrong. 151 State which of the following statements is correct. (a) A policyholder loses his rights on the policy once the assignment is done. (b) Assignment can be cancelled by crossing / tearing the deed of assignment. (c) Both the statements above are correct. (d) Both the statements above are wrong. 152 U /S 40A of Insurance Act maximum F Y commission which a new insurer can pay is (a) 30% (b) 25% (c) 35% (d) 40% 153 Life insurance policy grants Extended Permanent Disability Benefit (EPDB) if caused by .. (a) Accident (b) Sickness (c) Attempted suicide (d) None of these 154 State which of the following statements is correct. (a) Alterations are generally allowed if they do not affect the risk. (b) Alterations are generally allowed if they do not increase the risk. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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155 In a variable insurance policy (a) The amount receivable under the policy is equal to the SA (b) The sum assured varies according to the fluctuations in the stock market. (c) The SA varies according to the rate of inflation. (d) None of the above statements are correct. 156 State which of the following statements is correct. (a) Underwriting standards are changing. (b) The underwriting standards of all insurers are the same. (c) Both the statements above are correct. (d) Both the statements above are wrong. 157 The probability is mentioned (a) Either as a percentage or a ratio (b) As a percentage (c) As a ratio (d) Neither as a percentage nor as a ratio 158 The responsibility to comply with the principle of utmost good faith rests with (a) The agent (b) The proposer (c) The life to be insured (d) All the three 159 If the life to be insured falls sick, that fact has to be informed to the insurer (a) If it happens before the policy is issued. (b) If it happens before the First Premium Receipt is issued. (c) If it happens within two years of commencement. (d) Only if there is a specific query from the insurer. 160 State which of the following statements is correct. (a) Consumer behaviour is important for developing marketing strategies. (b) Marketing strategies are same for life and general insurance. (c) Both the statements above are correct. (d) Both the statements above are wrong. 161 State which of the following statements is correct. (a) On revival, the original terms of the policy will not be affected. (b) On revival, the original terms of the policy may be changed. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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162 The addition to the life fund arises because of the (a) Loading in the premium for bonus. (b) The practice of charging level premiums. (c) Not having paid the claims on time. (d) All the above reasons. 163 State which of the following statements is correct. (a) The beneficiaries under the MWP Act can be any member of the family. (b) A policy can be taken under the MWP Act for the benefit of partners. (c) Both the statements above are correct. (d) Both the statements above are wrong. 164 Marketing of insurance includes (a) Maintaining regular contact with policyholders. (b) Finding out about policyholders' experiences. (c) Helping claimants to complete formalities. (d) All the above. 165 State which of the following statements is correct. (a) An insurance agent is a part of the insurer's organization. (b) Arrangements for medical examination are part of an insurer's organization. (c) Both the statements above are correct. (d) Both the statements above are wrong. 166 U / S 113 of Insurance Act, a life insurance policy acquires guaranteed surrender value after ..of the policy. (a) 3 years (b) 1 year (c) 2 years (d) 5 years 167 If a policy is kept alive by advancing premiums from surrender value (a) The death claim will be the full SA less premiums advanced with interest. (b) The death claim will be the full SA without any deduction. (c) The death claim will be the full SA less premiums till the current policy year. (d) All the three above are wrong. 168 Amount paid to an agent for procuring policies is . (a) Honorarium (b) Commission (c) Fees (d) Salary

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169 State which of the following statements is correct. (a) A policy is specific and relevant only to a particular contract. (b) A policy is a specimen, applicable to all cases under a specified plan. (c) Both the statements above are correct. (d) Both the statements above are wrong. 170 State which of the following statements is correct. (a) The proposal must be signed in the language in which it is printed. (b) The proposal can be signed in any language. (c) Both the statements above are correct. (d) Both the statements above are wrong. 171 State which of the following statements is correct. (a) Policyholders resent agents who keep in touch regularly. (b) Keeping in touch is the surest way to build relationships with policyholders. (c) Both the statements above are correct. (d) Both the statements above are wrong. 172 Under the Consumer Protection Act, a claim for Rs. 2,00,000 can be referred to (a) District Forum (b) State Forum (c) Supreme Court (d) National Commission 173 Insurance benefit replaces (a) The monetary losses, but only to some extent (b) All physical losses but partly (c) All physical losses fully (d) All monetary losses in full 174 State which of the following statements is correct. (a) Any policy which promises a payment on a fixed date is an endowment policy. (b) If the sum assured increases every year, it is a participating policy. (c) Both the statements above are correct. (d) Both the statements above are wrong. 175 State which of the following statements is correct. (a) The name given to a plan indicates the benefits available under a plan. (b) Every plan of insurance is a combination of two basic plans. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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176 Communication happens (a) When something is said by the sender. (b) When the receiver makes some meaning. (c) At the end of the sender. (d) None of the above. 177 Life insurance is arranged because (a) Some one may die. (b) Some one may live. (c) For both the above reasons. (d) For neither of the above reasons. 178On maturity of the policy, nomination (a) Ends (b) Is cancelled (c) Continues (d) None of these 179 A material fact is that circumstance that would an underwriter's judgment. (a) Weaken (b) Influence (c) Hamper (d) Not influence 180Arrangements made in order that the activities are carried out smoothly are called (a) Business (b) Organization (c) Company (d) None of these 181 For a joint life assurance, underwriting is done (a) On one life (b) On both lives (c) On better of the two (d) None of these 182 State which of the following statements is correct. (a) With the availability of the internet, the agent's role in servicing is reduced. (b) When internet is introduced, satisfactory service is guaranteed. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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183 A new Insurer, in his second year of operation, should bring the following percentage of policies from Rural sector .. (a) 4 (b) 12 (c) 15 (d) 9 184 Parties to a contract must have intention to create . relationship. (a) Social (b) Legal (c) Political (d) Emotional 185 The premium is loaded because of (a) Likely claims (b) Interest likely to be earned. (c) Age of the insured person. (d) Likely expenses. 186 State which of the following statements is correct. (a) The lay out of an office is part of an insurer's organizational structure. (b) The internet access facilities are part of an insurer's organizational structure. (c) Both the statements above are correct. (d) Both the statements above are wrong. 187 State which of the following statements is correct. (a) It is not necessary to be perfect in what one does. (b) Every improvement is a step towards perfection. (c) Both the statements above are correct. (d) Both the statements above are wrong. 188 A policy which has been assigned absolutely, will revert to the assignor (a) When the assignee dies. (b) When the policy becomes a claim. (c) Whenever the assignor likes it to happen. (d) When the assignee reassigns the policy. 189 Life insurance policy can cover Disability arising from . (a) Accident (b) Sickness (c) Congenital (d) None of the above

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190 Bonus is declared as a result of valuation done (a) Every four years (b) Every year (c) Every two years (d) Every three years 191 Life insurance is better than other avenues of saving in respect of (a) Appreciation (b) Tax benefits (c) Usefulness in emergency (d) All of the above 192 State which of the following statements is correct. (a) Marketing focuses on the needs of the customer. (b) Marketing focuses on the internal processes of the insurer. (c) Both the statements above are correct. (d) Both the statements above are wrong. 193 An insurance agent, who holds a license to act as an insurance agent for a life insurer and a general insurer is .. Agent (a) Combined (b) Composite (c) Absorbed (d) Joint 194 State which of the following statements is correct. (a) A good organizational structure makes work move faster. (b) Organizational structures help employees to avoid work. (c) Both the statements above are correct. (d) Both the statements above are wrong. 195 A professional agent should keep in his mind (a) Maximization of commission earnings (b) Client's interests (c) His future prospects (d) His personal gains 196 State which of the following statements is correct. (a) In group policies, each case is separately underwritten. (b) In group policies, personal histories are not examined. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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197 State which of the following statements is correct. (a) If the underwriter feels that the risk is more, he will accept at OR. (b) If the underwriter feels that the risk is more, he may impose a lien. (c) Both the statements above are correct. (d) Both the statements above are wrong. 198 State which of the following statements is correct. (a) Maturity claim cheques are paid to the trustees in a MWP Act case. (b) Maturity claim cheques are paid to the beneficiaries in a MWP Act case. (c) Both the statements above are correct. (d) Both the statements above are wrong. 199 The person for whose benefit Trust is created under the MWP Act is . (a) Nominee (b) Trustee (c) Beneficiary (d) None of these 200 Geographical segmentation of a market differentiates between (a) Mind sets of people (b) Needs based on age and family groups (c) Needs according to income groups (d) None of the above 201 State which of the following statements is correct. (a) In the case of a missing person, the claim arises from the date he is missing. (b) In the case of a missing person, premiums have to be paid till the court judgement. (c) Both the statements above are correct. (d) Both the statements above are wrong. 202 Insurance helps to reduce consequences. (a) Long term (b) Short term (c) Favourable (d) Adverse 203 FPR is the evidence of the company . (a) Accepting the risk (b) Commencing the policy (c) Deferring the acceptance (d) Any one of the above

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204 In the case of life insurance, the risks (a) Cannot be avoided. (b) Are avoidable through proper habits. (c) Can be avoided. (d) Are avoidable through medical science. 205 The surplus in the life fund represents (a) The profits of the business. (b) The excess premium collected by the insurer. (c) The dues to the shareholders. (d) None of the above. 206 State which of the following statements is correct. (a) Life insurance does not meet the needs of all the people always. (b) Life insurance is not better than all other investments. (c) Tax advantage is not the best reason for buying life insurance. (d) All the above statements are correct. 207 A new insurer in his third year of operation should bring in the following percent of policies from rural sector. (a) 15 (b) 12 (c) 7 (d) 4 208A will subsequent to the earlier nomination (a) Overrides (b) Does not affect (c) Continues (d) Extends such nomination.

209 State which of the following statements is correct. (a) An agent who anticipates correctly the thoughts of the prospect is listening. (b) Silence is a kind of communication (c) Both the statements above are correct. (d) Both the statements above are wrong. 24 Obligations of Indian Insurers to Rural Sector are specified in .. (a) Insurance Act (b) IRDA Act (c) Relevant IRDA Regulations. (d) None of these

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211 State which of the following statements is correct. (a) A kiosk is a place where information is made available. (b) A kiosk works throughout the 24 hours. (c) Both the statements above are correct. (d) Both the statements above are wrong. (e) Both the statements above are wrong. 212 If the monthly premium was due on 24th February 1996 (Tuesday) (a) The grace period will end on 4th March( Wednesday). (b) The grace period will end on 25th March( Thursday). (c) The grace period will end on 9th March (Tuesday). (d) The grace period will end on 11th March( Thursday). 213 Management deals with using one's (a) Money (b) Time (c) Material (d) All these 214 The limits of the authority of an agent are laid down by (a) IRDA (b) Insurance Act (c) The Insurer (d) None of the above. 215 If a life insured has died a few days before date of maturity, but after signing discharge form, to whom should the claim be paid? (a) Nominee (b) Surviving heirs (c) The policyholder's bank account (d) Any of the three above. 216 State which of the following statements is correct. (a) An agent's license may be cancelled if the code of conduct is violated. (b) Interference in another agent's business is an offence. (c) Both the statements above are correct. (d) Both the statements above are wrong. 217 Which of the following is not a non-forfeiture option? (a) Grace period (b) Policy becomes paid up (c) Payment of surrender value (d) Automatic advance of premium

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218 State which of the following statements is correct. (a) People who believe in fate never buy life insurance. (b) People rarely volunteer to buy life insurance. (c) Both the statements above are correct. (d) Both the statements above are wrong. 219 Which of the approaches of the agent is / are right? (a) Agent offers to pay first quarterly premium on prospect's behalf, as an advance. (b) Agent advises the policyholder to pay the renewal premium by himself. (c) Both approaches (d) Neither approach 220 State which of the following statements is correct. (a) Ombudsman is created by IRDA Act. (b) Proportionate paid up value is guaranteed by the Insurance Act. (c) Both the statements above are correct. (d) Both the statements above are wrong. 221 Which of the approaches of the agent is / are right? (a) An agent tells his prospect to give his consent letter in advance to meet future requirement. (b) When the proposal is accepted with heavy extra premium, agent reduces the Sum Assured without proponent's knowledge. (c) Both approaches (d) Neither approach 222 State which of the following statements is correct. (a) A professional agent is more concerned with his commission. (b) A professional agent takes life cycle needs of the prospect into account while making a sale. (c) Both the statements above are correct. (d) Both the statements above are wrong. 223 State which of the following statements is correct. (a) Insurers should inform the agent about a policyholder's death. (b) A good agent will know about his client's death before the insurer. (c) Both the statements above are correct. (d) Both the statements above are wrong. 224 The agent earns the trust of the policyholder by (a) Telling him what is wrong in his ways of thinking. (b) Apologizing for not returning his telephone calls. (c) Showing him the office bulletin praising his work. (d) Showing genuine concern for his interests.

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225 State which of the following statements is correct. (a) The premium of a joint life policy depends on the age of the older person. (b) The bonus on a joint life policy is calculated on double the Sum Assured. (c) Both the statements above are correct. (d) Both the statements above are wrong. 226 State which of the following statements is correct. (a) The premium under a life insurance policy has to be paid every month. (b) The premium under a life insurance policy has to be paid every year. (c) Both the statements above are correct. (d) Both the statements above are wrong. 227 Which of the approaches of the agent is / are right? Which is the good approach? (a) Agent advises his prospect to mention cause of death of his brother as accident instead of suicide. (b) Agent advises his client that he should mention loss in his weight during last one year. (c) Both approaches (d) Neither approach 228 State which of the following statements is correct, with reference to kiosks (a) A kiosk is connected to the insurer's office. (b) A kiosk can be used to pay premiums. (c) Both the statements above are correct. (d) Both the statements above are wrong. 229 State which of the following statements is correct. (a) The Sum Assured under some policies increases every year. (b) The Sum Assured under some policies reduces every year. (c) Both the statements above are correct. (d) Both the statements above are wrong. 230 State which of the following statements is correct. (a) Every insurer must have a training manager. (b) Every life insurer must have an underwriting department. (c) Both the statements above are correct. (d) Both the statements above are wrong. 231 State which of the following statements is correct. (a) A broker can work for more than one life insurer (b) A broker is appointed by an insurer. (c) A broker works only for non-life insurers. (d) All the above statements are correct.

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232 Adjustments are made to the tabular premiums because of (a) The frequency of premium payment. (b) The method of premium payment (c) The occupation of the person insured. (d) All of the above. 233 State which of the following statements is correct. (a) A change of job after the commencement of policy affects the terms of policy. (b) The life insured can change his job only with the consent of the insurer. (c) Both statements are correct (d) Both statements are wrong 234 In what ways does Group Insurance differ from Salary Savings Scheme? (a) Number of persons insured under a policy. (b) Responsibility of employer (c) Issue of premium receipts. (d) In all the above respects. 235 State which of the following statements is correct. (a) The business plan will include the number of calls to be made. (b) The pay-off from service calls is not immediate. (c) Both the statements above are correct. (d) Both the statements above are wrong. 236.. Means the person who makes the decision to accept the proposal. (a) Director (b) Accountant (c) Underwriter (d) Actuary 237For repudiating a claim liability U/S 45 of Insurance Act, non-disclosure must be (a) Intentional (b) Material (c) Fraudulent. (d) All these. 238 Who is benefited if a policy is under the Salary Savings Scheme? (a) The policyholder. (b) The Insurer. (c) The Agent. (d) All the three above.

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239 State which of the following statements is correct. (a) Technology makes it possible to avoid the postal services. (b) A policy transmitted through e-mail is not evidence of a contract. (c) Both the statements above are correct. (d) Both the statements above are wrong. 240 State which of the following statements is correct. (a) Revivals are not done unless the entire outstanding premium is paid. (b) Revivals are not done unless there is evidence of continued good health. (c) Both the statements above are correct. (d) Both the statements above are wrong. 241 State which of the following statements is correct. (a) In Group Insurance, the proposal is made by the employer. (b) In Group Insurance, proposals are made by each of the insured. (c) Both the statements above are correct.

242 Which of the following is true for a group policy? (a) Copies of the master policy are given to all members. (b) Entry into the scheme and exit out of it is at the option of the members. (c) The amount of the cover is determined by the scheme. (d) The group has to be formed exclusively for the purpose of insurance. 243 A plan of insurance is said to be different from another if (a) The age of the life assured is different. (b) The sum assured is different. (c) The date of commencement of policy is different. (d) The conditions when the sum assured becomes payable are different. 244 A lien may be imposed by the underwriter if (a) The additional risk is expected top wear off in course of time. (b) The proposer is unlikely to agree to pay a higher premium. (c) In both the above cases. (d) In neither of the above cases. 245 Insurance benefits (a) Individuals (b) The country (c) The society (d) All the three.

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246 Policyholder dies a day after the date of maturity, but before the receipt of claim cheque. Who is the person entitled to policy money? (a) Heirs of the deceased. (b) Nominee (c) His wife (d) His sons 247 State which of the following statements is correct. (a) When a nomination is made, the rights to the policy are transferred. (b) The assignee immediately becomes the policyholder. (c) Both the statements above are correct. (d) Both the statements above are wrong. 248 If agent's morale is not high, he will exhibit .. (a) Disappointment (b) Satisfaction (c) Happiness (d) Smile 249 For an insurance agent the whole world is .. (a) A potential market (b) Segment (c) Shop (d) None of these 250 State which of the following statements is correct. (a) Foreclosure action will be taken only in paid up cases. (b) Loans will not be given on paid up policies. (c) Both the statements above are correct. (d) Both the statements above are wrong. 251 State which of the following statements is correct. (a) Organizational structure includes processing of insurance related papers. (b) Organizational structure includes ways to maintain cleanliness of the office. (c) Both the statements above are correct. (d) Both the statements above are wrong. 252 Premium is . Charged for running the risk. (a) Fine (b) Price (c) Interest (d) Penalty

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253 State which of the following statements is correct. (a) Group Superannuation policies provide pensions to retiring employees. (b) A Group Superannuation policy can be taken by a company for its mortgages. (c) Both the statements above are correct. (d) Both the statements above are wrong. 254 State which of the following statements is correct. (a) The limits for the rural sector are stated in number of policies. (b) The limits for the social sector are stated in number of policies. (c) Both the statements above are correct. (d) Both the statements above are wrong. 255 A plan of insurance is said to be different from another if (a) The conditions for payment of Sum Assured are different. (b) The date of maturity is different. (c) The amount of premium is different. (d) The mode of payment of premium is different. 256 State which of the following statements is correct. (a) A nomination can be made in favour of a friend. (b) A nomination can be made in favour of a lover. (c) Both the statements above are correct. (d) Both the statements above are wrong. 257 A policy which has run for 5 years can be called in question if there is . (a) Misrepresentation (b) Fraud (c) Mistake (d) All of the above 258 State which of the following statements is correct. (a) Working women are treated on par with men. (b) Educated women are treated on par with men. (c) Both the statements above are correct. (d) Both the statements above are wrong. 259 The IRDA Regulations regarding advertisements are meant to (a) Avoid wasteful expenditure (b) Prevent agents from advertising on their own. (c) make insurers take responsibility for all advertisements in their name. (d) Ensure all the three above.

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260 The surplus disclosed in a valuation means (a) That the interests of the policyholders are safe. (b) That the funds of the insurer are adequate to meet its liabilities. (c) That the business is being managed well. (d) All of the above. 261 State which of the following statements is correct. (a) One must find time for attending seminars, reading books, playing games, etc. (b) Earning maximum commission is not the first priority. (c) Both the statements above are correct. (d) Both the statements above are wrong. 262 State which of the following statements is correct. (a) Foreclosure action cannot be taken till a notice is served on the policyholder. (b) When a foreclosure action is taken, nothing is payable to the policyholder. (c) Both the statements above are correct. (d) Both the statements above are wrong. 263 State which of the following statements is correct. (a) Paid up option is effective from due date of first unpaid premium. (b) Paid up option is effective from policy anniversary after unpaid premium. (c) Both the statements above are correct. (d) Both the statements above are wrong. 264 State which of the following statements is correct. (a) A trade union can take out a group insurance policy for its members. (b) The cover for an employee can be equal to his age multiplied by a fixed number. (c) Both the statements above are correct. (d) Both the statements above are wrong. 265 Under a Term insurance plan, Sum Assured is payable (a) On death (b) On reaching age 60 (c) On completion of the term (d) On reaching age 80 266 State which of the following statements is correct. (a) In cases of automatic advance of premium, the surrender value increases. (b) In cases of paid up policies, the surrender value increases. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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267 The business of insurance has (a) Social implications (b) Impact on economic development of the country (c) Impact on the economic well being of families (d) All the above implications 268 First Premium Receipt covers the risk (a) For one year (b) For ever (c) Up to the next renewal date (d) None of these 269 The proposal form contains information relevant to determine (a) Premium rates. (b) Family history (c) Both premium rates and family history. (d) Neither. 270 State which of the following statements is correct. (a) An MWP Act policy can be assigned. (b) Loans are not granted under MWP Act policies. (c) Both the statements above are correct. (d) Both the statements above are wrong. 271 State which of the following statements is correct. (a) A whole life plan is basically a term insurance plan. (b) A money back plan is basically a Pure Endowment plan. (c) Both the statements above are correct. (d) Both the statements above are wrong. 272 State which of the following statements is correct with regard to joint life policies. (a) The premium is the total of the premiums for insuring the two persons separately. (b) The premium will be less than the cost for insuring the two persons separately. (c) Both the statements above are correct. (d) Both the statements above are wrong. 273 State which of the following statements is correct. (a) Errors in the statements made at the time of revival can nullify the policy. (b) The principle of utmost good faith does not apply at the time of revival (c) Both the statements above are correct. (d) Both the statements above are wrong.

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274 A plan of insurance is said to be different from another if (a) The date of maturity is different (b) The conditions when the Sum Assured becomes payable are different (c) The underwriter decides to charge extra premium in one case (d) The date of commencement of risk is different 275With sale of life insurance policy, the prospect becomes (a) Claimant (b) Policyholder (c) Proposer (d) Nominee 276 State which of the following statements is correct. (a) The agent must keep in mind the commission that he may earn from the sale. (b) The agent's earnings from the sale should not be revealed to the prospect. (c) Both the statements above are correct. (d) Both the statements above are wrong. 277 In what ways does Group Insurance differ from Salary Savings Scheme? (a) Ownership of the policy (b) Mode of payment of premium (c) Parties to the contract (d) In all the above respects 278 State which of the following statements is correct. (a) The reserve accumulates under a policy because of level premiums. (b) The reserve does not accumulate in money Back policies. (c) Both the statements above are correct. (d) Both the statements above are wrong. 279 State which of the following statements is correct. (a) Foreclosure can be done only with the consent of the policyholder. (b) Foreclosure can be done only after informing the policyholder. (c) Both the statements above are correct. (d) Both the statements above are wrong. 280 Which of the approaches of the agent is / are right? Which is the good approach? (a) Agent helps the clients for settlement of claims on policies not sold by him. (b) Agent offers to help his clients for the claim settlement, provided they place family insurance with him. (c) Both approaches (d) Neither approach

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281 When a certain level of bonus is declared, what does it mean? (a) That this level will be maintained in future years. (b) That it is the return on one's investment, viz., premium. (c) Both the statements above are correct. (d) Both the statements above are wrong. 282 State which of the following statements is correct. (a) A conversion becomes effective when the policyholder exercises the option. (b) A conversion option is subject to the insured person being in good health. (c) Both the statements above are correct. (d) Both the statements above are wrong. 283 State which of the following statements is correct. (a) A rural area is defined in the Constitution of India. (b) Business in the rural areas can be done only by rural agents. (c) Both the statements above are correct. (d) Both the statements above are wrong. 284 If death takes place within the days of grace, claim is . (a) Paid in full subject to recovery of unpaid premiums. (b) Paid for 50 % (c) Paid in full. (d) Not paid

285 State which of the following statements is correct.


(a) (b) (c) (d) When a policy lapses, the agent's prospects for new business improve. When a policy lapses, the insurer benefits as his liability ceases. Both the statements above are correct. Both the statements above are wrong.

286 State which of the following statements is correct. (a) The sum of all the premiums paid will be more than the Sum Assured. (b) The Sum of all the premiums paid will be less than the Sum Assured. (c) Both the statements above are correct. (d) Both the statements above are wrong. 287 The job of an agent includes (a) Checking whether the renewal premium has been paid. (b) Checking about changes in career or family of his clients. (c) Helping out if there is any problem. (d) All the three above.

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288 State which of the following statements is correct.


(a) (b) (c) (d) A maturity claim is finally settled on the date of maturity. A death claim, after admission, may be paid years later. Both the statements above are correct. Both the statements above are wrong.

289 In which respect does non-life insurance differ from life insurance? (a) Object of insurance (one insures human beings, the other does not). (b) One is based on indemnity, the other is not. (c) Length of contract (one issues long term, the other does not). (d) Nature of cover (one covers sickness, the other does not). 290 Ombudsman scheme is framed U / S . Of Insurance Act. (a) 114 (b) 113 (c) 45 (d) 13

291 A good agent is one who


(a) Decides which plan is best for the policyholder. (b) Writes out the proposal form for the proposer. (c) Does the maximum business. (d) Arranges to inform the insurer of the death of the policyholder. 292 Which of the following segments are potentially good for life insurance? (a) Working women (b) Aged persons (c) Young children (d) All the above. 293 A new insurer in his first year of operation should bring following percent of policies from rural sector .. (a) 4 (b) 7 (c) 12 (d) 5 294 The IRDA has powers U / S 47A of Insurance Act to decide on disputes relating to claims not exceeding (a) Rs. 4,000 (b) Rs. 5000 (c) Rs. 2000 (d) Rs, 3000

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295 State which of the following statements is correct. (a) When only balance premiums are received, the revival is automatic. (b) When evidence of good health is required, the underwriter decides on revival. (c) Both the statements above are correct. (d) Both the statements above are wrong. 296 State which of the following statements is correct. (a) When a nomination is made, the title of the policyholder is transferred. (b) When a nomination is made, the rights of the policyholder are transferred. (c) Both the statements above are correct. (d) Both the statements above are wrong. 297 How does Automatic Advance of Premium differ from Extended Term Assurance? (a) In the amount of SA payable on death. (b) Likelihood of terminating without any cash payment to the policyholder. (c) In the duration for which the policy will remain in force. (d) In the case of reviving the policy on original terms. 298 State which of the following statements is correct. (a) The death claim is settled in favour of the nominee in MWP Act cases. (b) The death claim is settled in favour of the trustee in MWP Act cases. (c) Both the statements above are correct. (d) Both the statements above are wrong. 299 State which of the following statements is correct. (a) The SA is always payable in a lump sum. (b) The SA is always payable in installments. (c) The SA is always payable in a lump sum unless asked for otherwise. (d) All the statements above are wrong. 300 In what ways does Group Insurance differ from Salary Savings Scheme? (a) The person who pays the premium. (b) Responsibility to pay the premium. (c) Decision to take the policy. (d) In all the above three respects. 301 State which of the following statements is correct. (a) Agency development and business planning may be done by the same person. (b) The medical referee can be a full time employee of the insurer. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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302 State which of the following statements is correct. (a) Appointment of agents will be the function of the Investment Department. (b) The declaration of bonus will be the function of the Actuarial Department. (c) Both the statements above are correct. (d) Both the statements above are wrong. 303 State which of the following statements is correct. (a) An assignment is to be notified to the insurer in order to become effective. (b) A nomination is to be notified to the insurer to become effective. (c) Both the statements above are correct. (d) Both the statements above are wrong. 304 State which of the following statements is correct. (a) The limits for the rural sector are stated in terms of number of lives. (b) The limits for the social sector are stated in terms of number of policies. (c) Both the statements above are correct. (d) Both the statements above are wrong. 305 Which of the following should not be done during an interview? (a) Let the prospect write down the important and relevant facts. (b) Attend to a telephone call on your mobile telephone. (c) Make the prospect talk. (d) Keep your laptop computer open. 306 For what period is an interim bonus valid? (a) Till the next valuation date. (b) Till the next declaration of bonus. (c) As long as the management wants it to be. (d) For as long as the policy is in force. 307 State which of the following statements is correct. (a) An agent is a professional. (b) An agent is a businessman. (c) Both the statements above are correct. (d) Both the statements above are wrong. 308 State which of the following statements is correct. (a) Moral hazard may be suspected if the proponent is proposing for insurance for the first time at age 60. (b) Moral hazard may be suspected if the proponent's address is c/o agent., (c) Both the statements above are correct. (d) Both the statements above are wrong.

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309 State which of the following statements is correct. (a) The requirement of business from the rural areas increases every year. (b) The minimum requirement is in terms of number of policies. (c) Both the statements above are correct. (d) Both the statements above are wrong. 34 Age is material for underwriting because it affects (a) The amount of premium. (b) The decision to call medical examinations and tests. (c) The plan that can be offered. (d) All the three factors above. 311 In variable insurance policy, (a) The SA varies from year to year. (b) The benefits under the policy are not definite. (c) The amount payable on death and maturity are the same. (d) The amount paid by the policyholder is the premium for the risk cover. 312 State which of the following statements is correct. (a) Personal development includes discussion with senior agents. (b) An agent can learn from other, even junior, agents. (c) Both the statements above are correct. (d) Both the statements above are wrong. 313 A license for insurance agency will not be given unless the person (a) Has passed examination prescribed by the IRDA. (b) Is 21 years of age. (c) Has undergone training. (d) Satisfies all the above conditions. 314 State which of the following statements is correct. (a) The cover in a group policy could depend on the ages of the life to be insured. (b) The cover could be a uniform flat rate for all employees of a certain category. (c) Both the statements above are correct. (d) Both the statements above are wrong. 315 State which of the following statements is correct. (a) The nomination can only be in favour of one person. (b) The nomination can be in favour of more than one person. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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316 State which of the following statements is correct. (a) IRDA Regulations on advertisements apply to visiting cards of agents. (b) An agent is allowed to have a website on the internet. (c) Both the statements above are correct. (d) Both the statements above are wrong. 317 Which of the approaches of the agent is / are right? Which is the good approach? (a) Agent collects FP in cash and substitutes his own cheque and pays in the insurer's office. (b) Agent collects premium of big cheque and deposits in the office after one week. (c) Both approaches (d) Neither approach 318 Which of the approaches of the agent is / are right? Which is the good approach? (a) Agent declares that he can get a clean policy for any person. (b) Agent tells his prospect that he will ensure that no extra premium will be charged for his overweight. (c) Both approaches (d) Neither approach 319 In which of the cases listed below will the help of the agent be most useful? (a) Death claims. (b) Maturity claims. (c) Survival benefits (d) Annuity cases. 320 Medical examination is not at all required under .. Policy. (a) Individual (b) Partnership Insurance (c) Group insurance (d) Annuity 321 Insurance covers situations (a) When the consequences of the happening are beneficial. (b) When the consequences cannot be measured in money terms. (c) When the consequences are harmful. (d) When the consequences are immaterial. 322 State which of the following statements is correct. (a) The number of members covered by a group insurance policy can change every year. (b) The amount of insurance for any member may change from year to year. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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323 State which of the following statements is correct. (a) Agents are appointed separately to work in the rural sector. (b) Any agent can do business from the rural areas (c) Both the statements above are correct. (d) Both the statements above are wrong. 324 State which of the following statements is correct. (a) The agent with an internet connection can visit the insurer's office at any time. (b) Enquiries and clarifications can be sought within moments. (c) Both the statements above are correct. (d) Both the statements above are wrong. 325 The probability of 50% for an event happening means that the event (a) Will happen 50% of the time over a very large number of trials. (b) Will happen regularly every alternate occasion. (c) Happening will become closer to 50 % as the attempts increase. (d) Will never exceed 50 % however large be the attempts made. 326 For proper listening, agent must have .. (a) Sympathy (b) Apathy (c) Empathy (d) Good hearing 327 Special surrender value is .. Premiums paid. (a) Less than (b) More than (c) Equal to (d) None of these 328 The action of foreclosure is complete when (a) The cheque is sent to the policyholder. (b) The discharge voucher is sent to the policyholder. (c) The discharge voucher is received back by the insurer. (d) The insurer makes a decision in the office. 329 State which of the following statements is correct. (a) Salary Savings Scheme policies are Group Insurance policies. (b) Group insurance policies benefit only employees of big organizations. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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330 As the duration elapsed increases, surrender value . (a) Does not change (b) Decreases (c) Increases (d) None of these 331 The asset, which is a human being, perishes when (a) He dies (b) He loses his ability to work (c) He retires from work (d) In all the above situations 332 What does a premium depend upon? (a) Religion of the person to be insured. (b) Income of the person to be insured (c) Neither the religion nor the income of the person to be insured. (d) Both the religion and the income of the person to be insured. 333 Which of the approaches of the agent is / are right? Which is the good approach? (a) In a policy without accident benefit, agent advises his prospect not to mention previous accident. (b) Agent advised his prospect to mention his earlier sick leave even though it was taken on false grounds. (c) Both approaches (d) Neither approach 334 Preparing to approach the prospect is (a) Meeting (b) Interview (c) Approach (d) Pre-approach 335 If age proof submitted along with proposal is later found to be false, the insurer (a) May declare the policy null and void ab initio. (b) May revise the premium on the basis of actual age from the commencement. (c) May revise the premium and other terms of the contract. (d) May do any one of the three suggested above. 336 Insurance companies (a) Hesitate to invest in speculative ventures. (b) Freely invest in speculative ventures. (c) Invest only in government securities. (d) Totally avoid investing in speculative ventures.

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337 Using simple words, short sentences, avoiding technical jargon and uncommon words helps . (a) Awkward (b) Confusion (c) Clarity (d) Complexity 338 Which of the following statements is true with regard to Children's policies? (a) The policy vests at age 18 last birthday. (b) The policy vests at age 18 next birthday. (c) The policy vests at age 18 nearest birthday. (d) All the statements above are correct. 339 Which of the following are confidential and will not be given to the proposer? (a) The medical report. (b) The agent's confidential report. (c) Both the medical report and the agent's report. (d) Neither of the above. 340 Which of the approaches of the agent is / are right? Which is the good approach? (a) An agent distributes company's leaflets to his clients, adding there in that he was the company's best agent. (b) On his personal card, agent states that he is a representative of the best life insurance company. (c) Both approaches (d) Neither approach 341 State which of the following statements is correct. (a) When premium is advanced from surrender value, the policy does not lapse. (b) The premium advanced under the non-forfeiture option remains a debt. (c) Both the statements above are correct. (d) Both the statements above are wrong. 342 State which of the following statements is correct. (a) Most people do not know how they spend their time. (b) Busy agents have no time to keep up with the circulars from office. (c) Both the statements above are correct. (d) Both the statements above are wrong. 343 A new Insurer in his fourth year of operation should bring in the following percent of policies from rural sector. (a) 4 (b) 15 (c) 14 (d) 12

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344 State which of the following statements is correct. (a) The authority of an employee is decided by the insurer's organization. (b) Arrangements for premium collection are part of an insurer's organization. (c) Both the statements above are correct. (d) Both the statements above are wrong. 345 The FPR is important (a) Till the claim is settled. (b) To know the terms of acceptance. (c) As evidence of contract in case the original policy is lost. (d) Till the policy is issued. 346 Which of the approaches of the agent is / are right? Which is the good approach? (a) Agent advertised in local news paper that he had qualified for MDRT membership. (b) Agent sends birthday greetings to his clients. (c) Both approaches (d) Neither approach 347 State which of the following statements is correct. (a) In the case of SSS policies, the employer gets the Renewal Premium Receipts. (b) In the case of SSS policies, FPR's are not issued. (c) Both the statements above are correct. (d) Both the statements above are wrong. 348 A fixed date on which benefits may become payable either absolutely or contingently, is called (a) Maturity. (b) Due date. (c) Vesting date. (d) None of these. 349 Premium which takes into account the three elements of mortality, interest and expenses is . Premium. (a) Office (b) Tabular (c) Risk (d) Net 350 The route by which the product reaches the consumer is . (a) Distribution channel (b) Market bypass (c) Trade line (d) Selling arena

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351 For the same age and SA, the premium under an ordinary whole life policy (a) Will be more than in a limited payment whole life policy. (b) Will be less than in a limited payment whole life policy. (c) Will be the same as in a limited payment whole life policy. (d) Can be more, less or the same as in a limited payment whole life policy 352 A good agent should (a) Make himself available whenever contacted by a policyholder. (b) Contact the policyholder frequently to ask whether he can be of help. (c) Contact the policyholder occasionally and ask whether any friend needs insurance. (d) Do all the three above. 353 Ombudsman has to pass an award within .. Month (s) of the receipt of the complaint. (a) One (b) Two (c) Three (d) Four 354 Usual objection to life insurance policy is .. (a) Returns are not good (b) There is no security (c) Yield is very high (d) None of the above. 355 The benefits to the insurer from an internet connection are (a) Faster contact with the agents. (b) Faster response to public enquiries about offerings. (c) Avoidance of considerable paper work. (d) All the above. 356 State which of the following statements is correct. (a) Plans of insurance can be compared by reading the names given to the policies. (b) Plans of insurance can be compared by comparing the premium rates. (c) Both the statements above are correct. (d) Both the statements above are wrong. 357 A life insurance policy becomes invalid if (a) The statements in the proposal are found to be substantially wrong. (b) There is a change in occupation after the policy has commenced. (c) The policyholder is unable to pay the premiums. (d) If the policyholder changes his residence to another country.

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358 State which of the following statements is correct. (a) Convertible plans allow whole life plans to be altered to endowment plans. (b) The option of conversion can be exercised whenever the policyholder chooses. (c) Both the statements above are correct. (d) Both the statements above are wrong. 359 Which of the approaches of the agent is / are right? Which is the good approach? (a) Agent advises his client to mention his parents' ages at death as 60 each, even though they had died earlier than age 40. (b) Agent advises his client to mention death of one of his family members by suicide. (c) Both approaches (d) Neither approach 360 A warranty is a condition, which must be complied . (a) In full (b) If convenient (c) Substantially (d) In part 361 Which of the following is correct? (a) Action will be initiated by the insurer well before the date of maturity (b) The rightful claimant in the case of maturity is the policyholder or assignee (c) Both are correct (d) Both are wrong 362 Agent's advice to the prospect should be in the interest of .. (a) Agent (b) Company (c) Prospect (d) None of these 363 Before paying a claim, which of the following have to be verified? (a) Premiums paid till date. (b) Balance of loan, if any. (c) Title of claimant. (d) All the three mentioned above. 364 State which of the following statements is correct. (a) All cash transactions must be reported to the Accounts Department. (b) All cash transactions must be reported to the Investment Department. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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365 State which of the following statements is correct. (a) In the case of many nominees, the claim will be paid to them jointly. (b) In the case of many nominees, the claim will be divided among them. (c) Both the statements above are correct. (d) Both the statements above are wrong. 366 State which of the following statements is correct. (a) An agent is a manager. (b) An agent is a businessman. (c) Both the statements above are correct. (d) Both the statements above are wrong. 367 State which of the following statements is correct. (a) Reinstatement of a foreclosed policy is like a revival. (b) Reinstatement of a foreclosed policy requires underwriting. (c) Both the statements above are correct. (d) Both the statements above are wrong.

368 When interest rates fall, the premiums charged by an insurer are likely to
(a) Increase (b) Decrease (c) Neither increase nor decrease (d) Remain the same. 369 State which of the following statements is correct. (a) When a policy lapses after 5 years, the insurance cover becomes zero. (b) If the insured dies during the days of grace, the claim is admissible. (c) Both the statements above are correct. (d) Both the statements above are wrong. 370 Single policy issued as evidence of a group insurance contract is called .. (a) Group (b) Overall (c) Master (d) Unit 371 State which of the following statements is correct. (a) A clause restricts the benefits under the policy. (b) A clause is the same as a rider. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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372 State which of the following statements is correct. (a) The proposal must be signed by a witness. (b) The policy must be signed by a witness. (c) Both the statements above are correct. (d) Both the statements above are wrong. 373 The premium charged by a life insurance company is on the basis of . (a) Mortality (b) Interest (c) Expenses (d) All these 374 State which one of the following is not a non-forfeiture option. (a) Payment of cash value (b) Offering reduced sum assured proportionate to premiums paid. (c) Using surrender value to keep the policy alive. (d) The provision of guaranteed surrender value. 375 For a young person who has just started his career, the suitable plan may be (a) Money Back (b) Convertible whole life policy (c) Endowment policy (d) Term Assurance 376 Which of the following is correct? (a) The organization affects the efficiency of the insurer (b) Every insurer in India is registered under the Companies Act. (c) Both are correct (d) Both are wrong 377 The competition for the life insurance agent comes from those who canvass for (a) Small savings (b) Mutual funds (c) House property (d) All the three above 378 Which of the following is correct? (a) An administrator is appointed by IRDA (b) An administrator manages the administrative department of insurer (c) Both are correct (d) Both are wrong

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379 State which of the following statements is correct. (a) A group insurance contract is between the insurer and the insured person. (b) The extent of insurance cover is chosen by each individual member. (c) Both the statements above are correct. (d) Both the statements above are wrong. 380 State which of the following statements is correct. (a) The FPR acknowledges premium for the first year of the policy. (b) The second quarterly premium after commencement is called renewal premium. (c) Both the statements above are correct. (d) Both the statements above are wrong. 381 The business of insurance affects (a) Social security (b) Employment security (c) Political security (d) All these three 382 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) Neither lapse nor moral hazard. 383 State which of the following statements is correct. (a) The Insurance Act does not protect those who try to cheat the insurer. (b) Protection under Sec 45 does not apply if the policy had been revived within a year of death. (c) Both the statements above are correct. (d) Both the statements above are wrong. 384 State which of the following statements is correct. (a) A market consists of several segments. (b) An agent should operate in the entire market. (c) Both the statements above are correct. (d) Both the statements above are wrong. 385 Prospect's objections should be (a) Removed (b) Clarified (c) Answered (d) All these

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386 The insurance product that is being sold is .. (a) Definite (b) Movable (c) Intangible (d) Tangible 387 Which of the following factors help to avoid adverse selection in group policies (a) No option to choose quantum of insurance cover (b) Minimum number to be included in the cover (c) Similarity in the nature of the jobs (d) All the three above 388 In the business of life insurance, valuation means (a) An actuarial exercise to determine adequacy of funds (b) An attempt to determine the correctness of the values of assets (c) Estimating the values of immovable properties (d) All of the above 389 Before paying a claim, which of the following have to be verified? (a) Age of the life assured (b) Age of the nominee (c) Age of the assignee, if any (d) All of the above 390 If the LA has died a few days after the date on which SB was due, to whom this SB should be paid? (a) Nominee (b) Surviving heir (c) Policyholder's bank account (d) Any of the above 391 Who can make a proposal for insurance on an adult? (a) The mother of the LA (b) The father of the life insured (c) The life to be insured himself (d) Any of the above 392 In the case of an insured person presumed to be dead (a) The insurer has to come to a conclusion on the facts as presented to him (b) The accident benefits will become payable (c) The policy will be deemed to be paid up from the date he is missing (d) The insurer has to act on the instructions of a court of law

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393 What does premium depend upon? (a) The decision of the underwriter (b) The report of the agent (c) The place of worship visited by the insured (d) The state of health of the policyholder 394 When new agents are added by an insurer (a) The distribution channel becomes wider (b) Business increases (c) Public awareness of insurer increases (d) All of the above 395 It is wrong to terminate an existing policy and take out a fresh one if (a) It is done with a view to collect higher first year commission (b) The earlier policy was taken without fully understanding the implications of the MWPA Act (c) The agent who had recommended the earlier policy is not active any more (d) The benefit under the new policy are drastically different from the existing one. 396 Which of the following statements is correct if the insurer started operations on 1 6 2000 (a) It must insure at least 5000 lives in the year 2000-2001 from social sector (b) It must insure at least 3750 lives in the year 2000-2001 from social sector (c) It must insure at leat2500 lives in the year 2000-2001 from social sector (d) All the above statements are wrong 397 The principle of utmost good faith does not apply to (a) Facts of common knowledge (b) Facts of law (c) Facts which are not material for underwriting (d) All of the above 398 Which of the following factors are relevant to compare two avenues for saving (a) Withdrawal facilities (b) Govt recognition of the fund (c) The qualifications of the agent (d) None of the above 399 When a policy lapses, it can be inferred that (a) The agent has not been in touch with the policyholder (b) The agent had not explained the benefits of insurance properly (c) The agent has failed in his duty (d) All of the above

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400 In what respect non-life insurance differs from life insurance (a) Requirement of a written proposal before the contract can be entered into (b) Avoidance of the contract if material facts are suppressed (c) The claim amount is fixed in one but has to be assessed in another (d) Prior inspection or examination of object of insurance 401 The date of commencement of the policy (a) Cannot be later than the date of issue of the FPR (b) Cannot be earlier than the date of issue of the FPR (c) Will be the date on which the FPR is recd by the proposer (d) Will be the date on which the underwriter accepts the proposal 402 The principle of insurable interest applies to the (a) Agent (b) Person to be insured (c) Person applying for insurance (d) Proposed nominee 403 The principle of UGF does not apply if the fact relates to (a) Provision of law (b) Height or weight in the personal statement submitted to the doctor (c) Relationship to the nominee (d) Any of the above 404 If a claim is made in Jan 2003 under a policy which commenced in May 1998 stating that the LA had died in June 1999 (a) Sec 45 of the Act will not apply (b) The claim can be treated as an early claim (c) Foul play must be suspected (d) All the three statements above are correct 405 If asked by a policyholder to help a friend's insurance problem, the agent should (a) Find out what has happened to the earlier agent before agreeing (b) Agree to do so straight away (c) Refuse on the ground that it is not proper to handle another agent's policy (d) None of the above 406 When an agent visits a policyholder after the policy is sold, he communicates that (a) He is looking for more business (b) He wants to help if the policyholder has any problem (c) He has nothing better to do at that time (d) Any of the above

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407 A human being's value is measured by (a) The income he generates (b) The value of goods that he produces (c) The extent to which he is popular among friends (d) All the above three 408 State Which of the following is correct? (a) A physical hazard affects the probability of death. (b) Body measurement may indicate physical hazards (c) Both are correct (d) Both are wrong 409 State Which of the following is correct. (a) When a loan is taken under the policy the nomination is cancelled (b) A loan will be paid only when the policy is assigned to the insurer (c) Both are correct (d) Both are wrong 44 State Which of the following is correct? (a) Loans are not granted under term assurance policies. (b) Loans are not granted under a whole life policy (c) Both are correct (d) Both are wrong 411 Which of the following is correct? (a) The nominee must be above 18 years of age (b) The nominee must be a close relative (c) Both are correct (d) Both are wrong 412 Which of the following is correct? (a) The age nearer birthday is always less than the age next birthday (b) The age nearer birthday is always more than the age next birthday (c) Both are correct (d) Both are wrong 413 Limited payment plan policies may be preferred by persons (a) Whose careers are likely to be short (b) Who have large families (c) Who are very wealthy (d) Who are young and just started the career

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414 Personal development affects (a) Ones life as an agent (b) Ones life as a family (c) Ones life as a citizen (d) All the above three 415 Which of the following is correct? (a) Maturity claims are paid to policy holders (b) Maturity claims are paid to absolute assignees (c) Both are correct (d) Both are wrong 416 Who can make a proposal? (a) A person who is not less than 18 years old (b) A licensed broker (c) An agent of insurer (d) All the above 417 Which of the following is correct? (a) Group insurance business is growing faster than individual business (b) Group insurance is socially very relevant (c) Both are correct (d) Both are wrong 418 Which of the following is correct? (a) Creating separate departments slows down the work (b) Organization is influenced by the consideration of costs (c) Both are correct (d) Both are wrong 419 Which of the following is correct? (a) If the nominee is a minor, the maturity claim can be paid to the guardian (b) If the nominee dies, the claim can be paid to the heirs of the nominee (c) Both are correct (d) Both are wrong 420 State which one of the following statements is correct (a) A good organizational structure avoids duplication of work (b) Procedures are a part of organizational structure (c) Both statements are correct (d) Both statements are wrong

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421 Distribution channel .. the distance between the producer and the consumer., (a) Widens (b) Bridges (c) Extends (d) Destroys 422 State which of the following statements is correct. (a) The nomination can be changed after the policy has been assigned. (b) The assignee can make a fresh nomination. (c) Both the statements above are correct. (d) Both the statements above are wrong. 423 State which of the following statements is correct. (a) An excellent product does not guarantee that people will buy. (b) The needs for life insurance are not the same for every body. (c) Both the statements above are correct. (d) Both the statements above are wrong. 424 State which of the following statements is correct. (a) The prospect and the claimant have the same mindset. (b) Claimants understand the benefits of life insurance better than policyholders. (c) Both the statements above are correct. (d) Both the statements above are wrong. 425 State which of the following statements is correct. (a) An objection is to be welcomed. (b) An objection means that the agent has to explain more. (c) Both the statements above are correct. (d) Both the statements above are wrong. 426 State which of the following statements is correct. (a) There is no investment which is perfect. (b) A safe investment is the best investment. (c) Both the statements above are correct. (d) Both the statements above are wrong. 427 An agent must enjoy the ----------------- of the policyholder (a) Favour (b) Satisfaction (c) Trust (d) Pleasure

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428 The premium actually paid by the policyholder depends upon (a) The wealth of the person to be insured. (b) The level of risk as assessed by the underwriter. (c) The tables of rate printed by the insurer. (d) All the above 429 State which of the following statements is correct. (a) Frauds are more likely in death claim cases than in maturity cases. (b) If the life insured had died one month before maturity date, it is a death claim. (c) Both the statements above are correct. (d) Both the statements above are wrong. 430 State which of the following statements is correct in connection with a kiosk. (a) It is managed by advertising agencies. (b) Information is given manually. (c) Both the statements above are correct. (d) Both the statements above are wrong. 431 Which of the following is correct? (a) Customer will buy when he sees the advertisement in TV (b) Insurance is service like hotel or travel (c) Both are correct (d) Both are wrong 432 The social sector includes (a) Salaried workers from industry. (b) Self-employed agricultural labour. (c) People living in chawls in cities. (d) All the above. 433 State which of the following statements is correct. (a) The requirement of medical examination varies according to the duration of lapse. (b) The requirement of medical examination depends on the sum assured. (c) Both the statements above are correct. (d) Both the statements above are wrong. 434 State which of the following statements is correct. (a) The best investment is that which suits an individual's needs. (b) Shares of a good company are better than fixed deposits in banks. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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435 State which of the following statements is correct. (a) A paid up policy is entitled to further bonuses. (b) A paid up policy is entitled to further bonuses if it is a with profits policy. (c) Both the statements above are correct. (d) Both the statements above are wrong. 436 State which of the following statements is correct. (a) A policy lapses only when the policyholder decides that he does not want it. (b) A lapse may happen because of temporary financial difficulties. (c) Both the statements above are correct. (d) Both the statements above are wrong. 437 An insurance agent can act at one time for . Life insurer/s. (a) 1 (b) 2 (c) 3 (d) any number of 438 Which one of the following should not be done during an interview? (a) Record the conversation on a tape recorder. (b) Allow the prospect time to think about the proposal. (c) Enquire about the prospect's financial situation. (d) Contradict the correctness of the prospect's ideas. 439 State which of the following statements is correct. (a) A group insurance cover is given only if there is a certain minimum number. (b) A group policy is not granted if the group has been formed only to avail of cover. (c) Both the statements above are correct. (d) Both the statements above are wrong. 440 State which of the following statements is correct. (a) The Consumer Protection Act may be violated if an agent has poor knowledge. (b) The interest of the agent and of the policyholder are mutually supportive. (c) Both the statements above are correct. (d) Both the statements above are wrong. 441 Speech pleasantly worded, requesting instead of commanding is .. (a) Disrespect (b) Discourtesy (c) Offence (d) Courtesy

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442 A good agent is one who (a) Does not allow his policyholders to go to the office. (b) Is contacted by the policyholder whenever he has a problem. (c) Remembers every important date in the life of his policyholders. (d) Is all of the above . 443 State which of the following statements is correct. (a) Group insurance is the same as Salary Savings Schemes. (b) Premiums under some group policies are paid by governments. (c) Both the statements above are correct. (d) Both the statements above are wrong. 444 A policy which has been assigned, will revert back to the assignor (a) When the purpose for which it was assigned is not valid any more. (b) When the policy becomes a claim. (c) When the nominee under the policy dies. (d) When the policy is assigned back by the assignee. 445 State which of the following statements is correct. (a) The rates of interest on loans are fixed by the IRDA. (b) The rates of interest on loans are fixed by the Reserve Bank of India. (c) Both the statements above are correct. (d) Both the statements above are wrong. 446 Which of the following is correct? (a) There is no death risk cover in an annuity. (b) Though called annuity, the payment may be paid every month (c) Both are correct (d) Both are wrong 447 Which of the following is most effective in building strong relationships? (a) Sending his peon to the policyholders reminding them of premium due. (b) Sending letters to the policyholders explaining new plans on offer. (c) Telephoning policyholders and enquiring of their welfare. (d) Personally calling on customers and asking them of their welfare. 448 Who amongst the following can take out a group insurance policy? (a) Office goers who travel in the same compartment in the suburban train. (b) A group of travelers on a package tour. (c) A contractor who engages the same people every day on daily wages. (d) Members of a toddy tappers association.

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449 Which one of the following is correct with regard to childrens policy? (a) On vesting date, the insured person has no option to change the term of the policy. (b) On vesting, the insured person has no option to increase the Sum assured under the policy. (c) Both statements are correct (d) Both statements are wrong 450 Insurance is necessary because: (a) Assets depreciate over time and through usage. (b) Assets may be destroyed unexpectedly. (c) Assets may break down as a result of an accident and become non-functional. (d) None of the above 451 The proposal form contains information relevant to determine: (a) Level of risk. (b) Moral hazard (c) Insurable interest. (d) All of the three. 452 State which one of the following is correct (a) Trustees have to be appointed in all group policies (b) All group policies need approval of Income Tax department (c) Both statements are correct (d) Both statements are wrong 453 In the case of Life Insurance, the principle of insurable interest operates: (a) In the same way as in fire insurance. (b) In the same way as in marine insurance. (c) In the same way as in motor insurance. (d) Differently than in other forms of insurance. 454 Which one of the following is correct with reference to Life Insurance? (a) The claim can be paid only after verification of the income of the deceased person. (b) The claim amount should not exceed the loss of income to the family. (c) The claim amount should be determined by a surveyor. (d) None of the above is true. 455 Under the system of non medical underwriting (a) Only some towns are covered (b) There is no restriction on age. (c) There is no restriction on sum assure (d) There is restriction on both sum assured and age.

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456 State which one of the following is correct? The Ombudsmans award is binding on all parties. The ombudsman is like a judge appointed by the chief justice of India Both are correct Both are wrong 457 State which one of the following statements is correct. (a) The nominee becomes owner of the policy. (b) The nominee becomes an heir of the insured person. (c) Both statements are correct. (d) Both statements are wrong. 458 Which one of the following statements is correct? (a) In a convertible plan, the insurer has necessarily to agree to the conversion asked for. (b) In a convertible plan, the conversion is done on the request of the policy holder unless the policy provides for automatic conversion. (c) Both statements are correct (d) Both statements are wrong 459 Which one of the following is correct? (a) If a person is missing for 7 years the claim is called death claim (b) A claim can be admitted if the life insured is not heard of for 7 years (c) Both statements are correct (d) Both statements are wrong 460 State which one of the following is correct? (a) Pre -approach is the same as qualifying the prospect (b) Prospects' likes are not necessary when working among friends (c) Both statements are correct (d) Both statements are wrong 461 Which one of the following is correct? (a) Service calls should be part of the agents routine (b) Service calls may not be liked by Policy Holders (c) Both statements are wrong (d) Both statements are correct 462 State which one of the following is correct? (a) The foreign exchange regulations apply if the life insured is a non resident (b) The foreign exchange regulations apply if the claimant is a non resident (c) Both statements are correct (d) Both statements are wrong

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463 Which one of the following is correct? (a) The premium decreases as the age of the person increases (b) The premium increases as the age of the insured person increases (c) The premium is the same for the person aged 30 for all plans of insurance (d) The premium is the same whatever is the age of the person 464 State which one of the following is correct? (a) Building relationship with policyholder does not produce any income (b) A policy may lapse even if the agents quality of service is very good (c) Both statements are correct (d) Both statements are wrong 465 When court orders that a missing person is presumed to be dead (a) Suicide clause will operate if a person was missing with in one year of policy (b) Enquiries will be made as in the case of early death claim (c) Enquiries will be made as in the case of death claim (d) The date of death is taken to be the date of court order 466 Personal Development affects one's (a) Habits (b) Temperament (c) Professional Knowledge (d) All of the above 467 In which way does the rehearsal help? (a) It makes sure that the sale will definitely happen (b) The ideas will flow in logical sequence (c) it avoids to think afresh at the time of interview (d) It helps in all the three above 468 Business targets of an agent include (a) Business to be done during the year (b) Business to be done during the month (c) Business to be done during the next week (d) all the above three 469 Which of the following is correct? (a) A person whose children are well settled does not require life insurance (b) A person who has no family does not need life insurance (c) Both are correct (d) Both are wrong

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470 Which of the following is correct?? (a) If there is no decree from a court, the insurer can pay death claim to nominee (b) If any dispute is raised, insurer should avoid paying death claim to nominee (c) Both are correct (d) Both are wrong 471 Which of the following is correct? (a) The amount of premium is equal to sum assured divided by the term of the policy (b) The amount of premium increases as the term of the policy increases (c) Both are correct (d) Both are wrong 472 Which of the following is correct? (a) The policy has to be given to insurer at the time of surrender (b) The policy has to be given to insurer at the time of loan (c) Both are correct (d) Both are wrong 473 Which of the following is correct? (a) When a policy lapses, the contract comes to an end (b) When a policy lapses, nothing further is payable under it (c) Both are correct (d) Both are wrong 474 Which of the following matters can be referred to ombudsman (a) A complaint that extra premium charged is not reasonable (b) Grievances against the decision of a consumer forum (c) Dispute on the amount offered by the insurer to settle claim (d) All of the above. 475 Which of the following is correct? (a) A premium paid within grace period is a payment made on due date (b) A policy is not considered to have lapsed during the days of grace (c) Both are correct (d) Both are wrong 476 Because of the principle of Indemnity (a) There would be difficulties in settling claim in General Insurance (b) There are frequent disputes at the time of settling claims (c) There may be an attempt to exaggerate the claim (d) All the above 3 may happen

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477 Which of the following is correct? (a) Life insurance is the best saving scheme for all persons (b) Life insurance is the best investment scheme for young persons (c) Both are correct (d) Both are wrong 478 Which of the following is correct? (a) Industrial assurance is meant only for industrial workers (b) Industrial assurance is meant for people with low income (c) Both are correct (d) Both are wrong 479 Which of the following is correct? (a) An endorsement may be placed on the policy at the very beginning. (b) The nomination may be made later by endorsement (c) Both are correct (d) Both are wrong 480 The practice of charging level premium has the benefit of (a) Making it easy for the policy holder to maintain the insurance cover (b) Increasing the returns to policy holder (c) Helping the agent in his sales effort (d) All the above 481 Which of the following is correct? (a) A medical referee examines the life to be insured (b) A medical referee only sees the report received by the insurer (c) Both are correct (d) Both are wrong 482 Marketing of Insurance includes (a) Simplifying claims settlement procedures (b) Reducing premium rates (c) Increasing agency commission rates (d) All of the above 483 Which of the following is correct? (a) Group policies are popular because of legal compulsions (b) Group policies give employees benefits better than legally required (c) Both are correct (d) Both are wrong

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484 Which of the following is correct? (a) The scope of group policies is limited by the requirement of law (b) Group insurance policies can be tailor made to suit specific needs (c) Both are correct (d) Both are wrong 485 Which one of the following is correct? (a) A claim under the MWP Act policy will be paid to official trustee, if no trustee is appointed (b) A claim under MWP Act policy will be paid to the beneficiaries if no trustee is appointed (c) Both statements are correct (d) Both statements are wrong 486 Which one of the following is correct? (a) A Nomination is automatically cancelled when an assignment is made (b) A nomination is automatically cancelled when a loan is taken under the policy from the same insurer. (c) Both statements are correct (d) Both statements are wrong 487 State which one of the following is correct? (a) Life insurance premium paid may lead to saving of taxes. (b) The rebate available on the premium paid is the same for all taxpayers (c) Both statements are correct (d) Both statements are wrong 488 State which one of the following is correct? (a) Recognition happens when the bearer remembers your tastes in the restaurant (b) Recognition happens when ones thoughts are taken seriously (c) Both statements are correct (d) Both statements are wrong 489 Which one of the following is correct? (a) In extended term assurance option the full installment premium is advanced (b) In automatic premium advance option the full installment premium is advanced (c) Both statements are wrongs (d) Both statements are correct 490 Which one of the following is correct? (a) When ever a policy is revived a new policy is issued (b) When ever a policy is revived endorsements are placed on the policy (c) Both Statements are right (d) Both statements are wrong.

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491 State Which of the following is correct? (a) People in the rural areas are poor (b) The rural market is a fast growing market (c) Both statements are correct (d) Both statements are wrong 492 State Which of the following is correct? (a) The insurance act stipulates that the insurer must do the minimum business in the rural areas (b) The IRDA has stipulated the minimum business that is to be done in rural areas (c) Both are correct (d) Both are wrong 493 Which of the following is correct? (a) Bonus is paid along with the survival benefit in Money Back Policy (b) Bonus is paid when money back policy matures (c) Both are correct (d) Both are wrong 494 An objection is (a) A blessing in disguise (b) A flimsy excuse (c) A means to get rid of the agent (d) All of the above 495 Which of the following is correct? (a) A lien operates for a specific period (b) A clause excludes specific risks (c) Both are correct (d) Both are wrong 496 Which of the following is correct? (a) Outstanding amount of loans including outstanding interest are deducted from the claim amount (b) Fresh loans cannot be taken till the earlier loan is repaid in cash or cheque (c) Both are correct (d) Both are wrong 497 Personal development affects ones (a) Ability to think clearly (b) Ability to handle stressful situations (c) Ability to speak (d) All the three above

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498 Which of the following is correct? (a) Life insurance helps when one wants to take a loan for a home (b) Life insurance helps one to leave a comfortable retired life (c) Both are correct (d) Both are wrong 499 The policyholder is concerned with the (a) Office premium (b) Pure premium (c) Net premium (d) None of the above 500 In Life insurance Contract, the beneficiary may be (a) The policyholder (b) The life insured (c) The dependents of the life insured (d) All the three above 501 Which one of the following is correct? (a) Action is initiated by the insurer well before the date of maturity (b) He rightful claimant in the case of maturity is the policyholder or assignee (c) Both are correct (d) Both are wrong 502 Which of the following is correct? (a) The underwriter determines the premium to be charged (b) The underwriter is an employee of the insurer (c) Both are correct (d) Both are wrong 503 State Which of the following is correct. (a) Branch offices can be allowed to release TV advertisement (b) Branch office can correspond with IRDA directly (c) Both are correct (d) Both are wrong 504 Which of the following is correct? (a) An insurers organization is determined by the IRDA (b) An insurers organization has to be approved by IRDA (c) Both are correct (d) Both are wrong

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505 The amount of insurance depends on (a) Neither the peril nor the risk (b) Both peril and risk (c) The risk (d) The peril 506 State Which of the following is correct. (a) In group policies, the chance of adverse selection is low (b) In group policies every person is medically examined (c) Both are wrong (d) Both are correct 507 In the case of life insurance insurable interest should exist (a) At the inception of the policy (b) At the time of claim (c) At the time of every renewal premium payment (d) All the above 508 Advertisements include (a) Hoardings on highways (b) F lashing neon signs on buildings (c) Message on visiting cards (d) All of the above 509 Personal development makes the agent (a) Pleasant to deal with (b) Dependable (c) Trustworthy (d) All the above 510 Which one of the following is correct with reference to the Kiosk? (a) This is useful only to people who do not have computer and internet knowledge (b) Technical knowledge is necessary to operate the kiosk (c) Both are correct (d) Both are wrong 511 The date of the issue of First Premium receipt indicates (a) The date when the risk officially begins (b) The date when the next premium falls due (c) The date when the policy will commence (d) None of the above

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512 Which of these is not enough to claim policy money? (a) Probate of will (b) Succession certificate (c) An agreement between heirs (d) A court decree 513Which of the following is correct? (a) A policy is foreclosed when the loan is not repaid (b) A policy is foreclosed at the time of claim (c) Both are correct (d) Both are wrong 514 A license of insurance agency will not be given unless the person (a) Is recommended by an insurer (b) Is a graduate (c) Is a resident of town where the insurer has an office (d) Satisfies all the above conditions 515 Which of the following is correct? (a) Accident and disability benefits are payable along with maturity claims (b) Accident and disability benefits are payable along with death claims (c) Both are correct (d) Both are wrong 516 State which one of the following is correct (a) Very few people recognize that early death is a possibility for themselves (b) The service of insurance happens at the time of the claim (c) Both are correct (d) Both are wrong 517 The tariff advisory committee (a) Determines the basic premium for life insurance (b) Determines the basic premium for motor insurance (c) Approves the premium rates decided by the actuary (d) None of the above 518 which one of the following is correct? (a) A prospect buys an agent before he buys a life insurance policy (b) An agent is bought when he is seen to be trustworthy (c) Both are correct (d) Both are wrong

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519 Which of the following is correct? (a) A request for a loan is considered a claim (b) A request for surrender a policy is considered a claim (c) Both are correct (d) Both are wrong 520 Which of the following is correct? (a) An assignee becomes the policyholder (b) The nominee becomes the policyholder (c) Both are correct (d) Both are wrong 521 Which of the following is correct? (a) It is essential that every insurer should have a branch office (b) Agent can be looked after by branch manager (c) Both are correct (d) Both are wrong 522 Which of the following is correct? (a) An agent with mobile telephone provides better communication facility (b) A policyholder needs repeated reassurance that the insurance policy is worth it (c) Both are correct (d) Both are wrong 523 Why are enquiries made in the case of early claim? (a) To confirm that the underwriter's decision was correct (b) To confirm the validity of the mortality tables used (c) To check whether underwriting policy need changes (d) None of the above 524 Which of the following is correct? (a) In case of soldiers, the commanders certificate is proof of death (b) In case of soldiers, the prisoner of war must continue to pay the premium (c) Both are correct (d) Both are wrong 525 Which of the following is correct? (a) A sale is first made in the mind of the agent (b) It is always possible to predict the response of the prospect (c) Both are correct (d) Both are wrong

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526 Which of the following is correct? (a) Actuary has to certify the valuation report of the insurer (b) Actuary is responsible for the adequacy of the premium (c) Both are correct (d) Both are wrong 527 State Which of the following is correct? (a) Costs are affected by organizational structure (b) Bonuses are affected by organizational structure (c) Both are correct (d) Both are wrong 528 Which of the following is correct? (a) Foreclosure action is taken when interest is outstanding for 2 years (b) Foreclosure action is taken when loan and interest equals Surrender Value (c) Both are correct (d) Both are wrong 529 Which of the following is correct? (a) A Statement is required from employers in all death cases. (b) A coroner's report is required in accident cases (c) Both are correct (d) Both are wrong 530 Which of the following is correct? (a) Bonus is payable along with survival benefits in Money Back Policies. (b) Bonus is paid along with maturity in Money back Policies. (c) Both are correct (d) Both are wrong 531 Which of the following is correct? (a) A good agent must be a good public orator (b) A good agent must have command over language and good communication skills (c) Both are correct (d) Both are wrong 532 Which of the following is correct? (a) Customers will buy if there is good product to buy (b) Marketing increases the awareness about the product (c) Both are correct (d) Both are wrong

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533 The days of grace (a) Depend on frequency of premium (b) Days of grace may be 30 or 31 (c) Both are correct (d) Both are wrong 534 Which of the following is correct?? (a) Revivals are in the interest of policy holders (b) Revivals are in the interest of insurers (c) Both are correct (d) Both are wrong 535 State which of these persons will not be given license to work as an insurance agent. (a) A person with criminal record (b) The executive of corporate (c) An employee of insurance company (d) All of the above. 536 Which of the following is correct? (a) If death claim is intimated after a long period, it may not be genuine (b) If death claim is intimated after a long period, it must be carefully scrutinized (c) Both are correct (d) Both are wrong 537 Which of the following is correct? (a) a person just retired from a lucrative job does not require insurance (b) A person who has spent 20 years in Dubai does not require insurance (c) A person who just joined in a new job does not require insurance (d) All the above wrong 538 Which of the following is correct?? (a) An annuity policy guarantees a pension (b) An annuity policy is issued only after medical examination (c) Both are correct (d) Both are wrong 539 Which of the following is correct? (a) Decisions on organizations are based on customer convenience (b) Decisions on organizations are based on administrative convenience (c) Both are correct (d) Both are wrong

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540 A probability of 1 in 40 is valid (a) Only when it happens 40 times (b) Even when it happens 50 times (c) When it happens 400 times (d) Any of the above situations 541 Which of the following is correct? (a) The schedule of the policy will change when there is change in plan (b) The change in plan will be made by endorsements (c) Both are correct (d) Both are wrong 542 Which of the following is correct? (a) Ethics are compromised when an agent gives importance to commissions (b) The agent has to inform to the insurer about all the information he has about the insured (c) Both are correct (d) Both are wrong 543 Which of the following is correct? (a) A revival is always done without evidence of good health (b) A revival is as important as a new proposal (c) Both are correct (d) Both are wrong 544 Which of the following is correct? (a) An underwriter acts in the interests of policyholders as a whole (b) An underwriter acts in the interests of the insurer (c) Both are correct (d) Both are wrong 545 Which of the following pairs do not have insurable interest? (a) Husband-wife (b) Employer-employee (c) Creditor-debtor (d) Financier-fiancee 546 State which statement is correct. (a) Paid up value is subject to deduction of unpaid premiums. (b) When a policy becomes paid up, the surrender value option is lost. (c) Both statements are correct. (d) Both statements are wrong.

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547 Which of the following is correct? (a) People hesitate to buy life insurance because they are not aware of their needs (b) People hesitate to buy life insurance because they like to enjoy the present (c) Both are correct (d) Both are wrong 548 Which of the following is correct? (a) In an assignment, property is transferred (b) When a nomination is made, property is transferred (c) Both are correct (d) Both are wrong 549 Which of the following is correct? (a) Claims may be paid on the basis of indemnity bond if title is not established (b) Claims may be paid on the basis of indemnity bond if the original policy is lost (c) Both are correct (d) Both are wrong 550 Which of the following is correct? (a) Riders are allowed only if the life insured is first class (b) Riders are allowed only if the underwriter agrees to the same (c) Both are correct (d) Both are wrong 551 The premium printed on the schedule of the policy is worked out from (a) Net premium (b) Risk premium (c) Office premium (d) None of the above 552 The principle of utmost good faith is meant to protect the interest of (a) The insurer (b) The community of policy holders (c) The share holders (d) None of the above 553 Which of the following is correct? (a) IRDA is authorized to adjudicate over all claims of insurers (b) Only claims exceeding 20,000 can be decided by IRDA (c) Both are correct (d) Both are wrong

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554 Which of the following is correct? (a) A nominee can make further nomination under the policy (b) A nominee cannot make a nomination (c) Both are correct (d) Both are wrong 555 Which of the following is correct? (a) A copy of proposal has to be sent to proposer (b) A copy of medical report has to given to proposer (c) Both are correct (d) Both are wrong 556 Which of the following is correct? (a) The annual premium will be twelve times the monthly premium (b) The annual premium will be less than twelve times of the monthly premium (c) Both are correct (d) Both are wrong 557 Which of the following segments are potentially good for annuities (a) Women with earned income (b) Persons over 45 years of age (c) Young children (d) All of the above 558 Which of the following is correct? (a) Motivation of people is varied (b) Good agents value reputations more than money (c) Both are correct (d) Both are wrong 559 Which of the following is correct? (a) The IRDA can appoint directors on the board of an insurer (b) Special agents are issued registration certificates by IRDA (c) Both are correct (d) Both are wrong 560 Which of the following is correct? (a) The prosperity in rural areas is increasing faster than in urban areas (b) The rural market may be main area for growth in near future (c) Both are correct (d) Both are wrong

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561 Which of the following is correct? (a) The rates of premium charged can be less than tabular premium (b) The rates of premium charged can be more than tabular premium (c) Both are correct (d) Both are wrong 562 Which of the following is correct? (a) An agent who is very busy may appear to be not responsive (b) An agent who is easy to get in touch provides a lot of satisfaction (c) Both are correct (d) Both are wrong 563 Which of the following is correct?? (a) Personal development includes seminars and workshops (b) Training classes are meant only for agents (c) Both are correct (d) Both are wrong 564 Limited payment plan policies may be preferred by persons (a) Who do not expect to be in active employment for long (b) Who are not first class lives (c) Whose careers have just begun (d) Who are in the best of their health 565 Which of the following is correct? (a) Bonus will vest in a limited payment plan even after premium stops (b) The bonus in a joint life policy is calculated on double the sum assured (c) Both are correct (d) Both are wrong 566 Which of the following is correct? (a) Service calls are unnecessary intrusions on the time of policyholder (b) Service calls require that the agent must meet the policyholder personally (c) Both are correct (d) Both are wrong 567 The specialty of group insurance is .. (a) Master policy (b) Individual underwriting (c) High cost (d) High premium

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568 Which of the following is correct? (a) A lapse is effectively a case of adverse selection (b) A lapse should make the agent reflect on his competence (c) Both are correct (d) Both are wrong 569 A human being (a) Is an economic asset (b) Is an income earning asset (c) Is a perishable asset (d) All of the above 570 A life insurance agent should (a) Be aware of the plus and minus points of all financial investments (b) Know the benefits of all life insurance plans (c) Understand how the income tax laws apply to prospect (d) Know all the three above 571 State which one of the following statements is correct: (a) If the premium is paid within the days of grace, there is no penalty (b) If the premium is not paid within the days of grace, the policy lapses (c) Both statements are correct (d) Both statements are wrong 572 State which one of the following statements is correct: (a) Pre-approach happens before the prospect list is finalized (b) A sale has to be made first in the agent's mind (c) Both statements are correct (d) Both statements are wrong 573 Sate which one of the following statements is correct? (a) The distribution channel is like a bridge (b) The distribution channel helps the product to reach the customer (c) Both statements are correct (d) Both statements are wrong 574 In the event of the death of the policy holder, which one is correct? (a) The claim amount, when paid belongs to the nominee (b) The claim amount, when paid belongs to the heirs of the insured (c) Both statements are correct (d) Both statements are wrong

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575 Which of the following statements is true ? (a) Anybody can become an Insurance Agent (b) Some people will not be allowed to become insurance agents (c) Both statements are correct (d) Both statements are wrong 576 Which in the following 4 statements is true with regards to children's policies (a) The deferred date is a policy anniversary (b) The vesting date is a policy anniversary (c) Both statements are correct (d) Both statements are wrong 577 State which one of the following statements is correct (a) Policy holders are part of an Insurance organization (b) Medical examiners are part of the Insurance organization (c) Both statements are correct (d) Both statements are wrong 578 Which one of the following statements is correct? (a) When a claimant produces the original will, no further proof is necessary (b) An affidavit placed before a court by the heir is adequate evidence of title (c) Both statements are correct (d) Both statements are wrong 579 Which one of the following statements is correct? (a) The premium is the price paid by the policy holder to secure insurance (b) The amount of premium indicates the better quality of the insurance plan (c) Both statements are correct (d) Both statements are wrong 580 Which one of the following statements is correct? (a) An underwriter is an Actuary (b) An underwriter uses financial and medical data (c) Both statements are correct (d) Both statements are wrong 581 Which of the following help to get the attention of the prospect? (a) Using pictorials and graphs (b) Using computer based colourful presentations (c) Taking the prospect right down the relevant figures and facts (d) All of the above

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582 The system of non-medical underwriting is introduced because (a) The medical examiners are not available in all areas (b) Most of the cases are found to be standard lives acceptable at ordinary rates (c) Of both the above reasons (d) Of some other reasons 583 The word of mouth publicity from a satisfied claimant endorses (a) The agent (b) The insurer (c) The business of life insurance (d) All of the above 584 State which one of the following statements is correct ? (a) An insurance agent's office is a part of the insurer's organization (b) The collecting branch is part of a insurer's organization (c) Both statements are correct (d) Both statements are wrong 585 State which one of the following statements is correct (a) The pre-approach stage is the preparation for the first meeting (b) The policy can be sold during the pre-approach stage itself, sometimes (c) Both statements are correct (d) Both statements are wrong 586 State which one of the following statements is correct (a) The records of an agent are mainly for income tax purposes (b) The records of an agent will have much to learn from (c) Both statements are correct (d) Both statements are wrong 587 State which one of the following statements is correct (a) Appointment of an agent will be function of the investment department (b) The declaration of bonus will be the function of Actuarial department (c) Both statements are correct (d) Both statements are wrong 588 State which one of the following statements is correct? (a) An agent's effectiveness depends only on his knowledge about insurance (b) Agents has to spend some time everyday on his personal development (c) Both statements are correct (d) Both statements are wrong

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589 Which one of the following statements is correct? (a) An indemnity bond is asked for when there is no clear proof and title (b) An indemnity bond is not necessary when there is no probate of a Will (c) Both statements are correct (d) Both statements are wrong 590 In life insurance, profit is determined by: (a) The accountant who prepares the balance sheet (b) The actuary who makes the valuation (c) The auditors who certify the annual accounts (d) None of the above three persons 591 The insurance company will refuse to pay the claim if it is found that (a) The damage was caused by the striking employees deliberately (b) The damage was caused by a burglar deliberately (c) He damage was caused by the owner deliberately (d) None of the above situations. 592 The principle of utmost good faith is important to ensure (a) That the premium charged is correct (b) That the insurance cover is not illegal (c) That there is no adverse selection (d) All the three factors mentioned above. 593 Segmentation of a market means (a) A geographical area (b) People with a certain profession (c) People of the same age (d) All of the above 594 Knowledge of a plan of insurance means (a) Details about the benefits available under that plan (b) Availability of similar plans from competitors (c) Provisions of the relevant tax laws (d) All of the above 595 The amount payable under a non-life insurance policy depends on (a) The extent of damage that has occurred (b) The value of the insurance cover mentioned in the policy (c) The lower of the above two values (d) The higher of the above two values

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596 Insurance reduces the burden on (a) The society (b) Individual families (c) Business houses (d) All the three 597 Under an MWPA policy, the beneficiaries (a) May be specified even after the claim has arisen (b) Must be specified at the commencement of the policy (c) Are determined by law (d) Can be specified at any time during the course of the policy 598 The benefits to the agent from an internet connection are (a) The prospects' list will grow faster (b) Personal calls on the prospects can be totally avoided (c) Personal visits to the insurer's office can be reduced (d) All the above three 599 An insurer as a trustee is responsible to (a) The policyholders (b) IRDA (c) Government (d) All of the above 600 License to work as an insurance agent is given to (a) Individuals (b) Companies (c) Cooperative societies (d) All the three above 601 The time for closing has to (a) Be sensed by the agent (b) Wait till the moral hazard issues are settled (c) Wait till the spouse confirms that the insurance can be taken (d) Wait till the prospect finally says 'yes' 602 Personal developments affects one's (a) Earning (b) Reputation (c) Relationship with people (d) All the above

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603 Bonus becomes possible because (a) Actual experience is better than expected (b) The assumptions made in constructing the premiums were conservative (c) There is a loading for bonus in the premiums (d) All of the above 604 Insurance is meant to (a) Prevent consequences from specified events (b) Compensate for losses from specified events (c) Prevent specified events (d) Rebuild the assets lost because of specified events 605 If a policyholder applies for cancellation of his policy soon after he receives the FPR (a) Full premium will be refunded (b) Policy will be treated as lapsed from the nest premium due date (c) He will be debarred from taking any further insurance policy (d) Full premium after small deductions will be refundable 606 State which one of the following statements is correct (a) Life insurance is bought, not sold (b) General insurance business is often bought without being sold (c) Both statements are correct (d) Both statements are wrong 607 State which one of the following statements is correct (a) The Schedule of the Policy is not altered after the policy is issued (b) Changes in terms of policy are made through endorsements (c) Both statements are correct (d) Both statements are wrong 608State which of the following statements is correct. (a) The non-forfeiture clauses are relevant only when the premium is not paid. (b) The non-forfeiture clauses operate when the loan interest is not paid. (c) Both the statements above are correct. (d) Both the statements above are wrong.

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1 Calculate age nearer birthday, age last birthday & age next birthday based on following data: DOP is 22nd March 2003 and DOB is 8th June 1950. (a) Age nearer birthday is 53, age next birthday 53 and age last birthday 52 (b) Age nearer birthday is 54, age next birthday 54 and age last birthday 53 (c) Age nearer birthday is 52, age next birthday 52 and age last birthday 51 (d) None of the above 2 Calculate age nearer birthday, age last birthday & age next birthday based on following data: DOP is12th Sep 2003 and DOB is 8th March 1972. (a) Age nearer birthday is 32, age next birthday is 32, age last birthday 31 (b) Age nearer birthday is 33, age next birthday is 33, age last birthday 32 (c)Age nearer birthday is 31, age next birthday is 31, age last birthday 30 (d) None of the above 3Calculate ages nearer, next and last birthday if DOP is 4th March 2003 and DOB is 3rd March 1948. (a) 55, 56, 55 (b) 56, 57, 55 (c) 54, 55, 53 (d) None of the above 4 Calculate ages nearer, next and last birthday if DOP is 15th Feb 2003 and DOB is 8th April 1942. (a) 61, 61, 60 (b) 62, 62, 61 (c) 60, 60, 59 (d) None of the above 5 Calculate age nearer, next and last birthday if DOP is 6th Sep 2003 and DOB is 8th June 1971. (a) 32, 33, 32 (b) 33, 34, 33 (c) 31, 32, 31 (d) None of the above 6 Calculate age nearer, next and last birthday if DOP is 23rd Sep 2003 and DOB is 8th Oct 1969. (a) 34, 34, 33 (b) 35, 36, 35 (c) 33, 34, 33 (d) None of the above

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7 Calculate age nearer , next and last birthday if the DOP is 4th May 2004 and DOB is 8th Oct 1953. (a) 51, 51, 50 (b) 52, 53, 52 (c) 50, 51, 50 (d) None of the above 8 Calculate age nearer , next and last birthday if the DOP is 13th March 2002 and DOB is 8th July 1944. (a) 58, 58, 57 (b) 59, 59, 58 (c) 57, 57, 56 (d) None of the above 9 Calculate age nearer , next and last birthday if the DOP is 4th May 2003 and DOB is 8th Oct 1952. (a) 51, 51, 50 (b) 52, 53, 52 (c) 50, 51, 50 (d) None of the above 10 Calculate age nearer , next and last birthday if the DOP is 13th March 2003 and DOB is 8th July 1945. (a) 58, 58, 57 (b) 59, 59, 58 (c) 57, 57, 56 (d) None of the above 11 Calculate ages nearer, next and last birthday if DOP is 27th Aug 2003 and DOB is 8th March 1970 (a) 33, 34, 33 (b) 34, 35, 34 (c) 32, 33, 32 (d) None of the above 12 Calculate ages nearer, next and last birthday if DOP is 4th March 2003 and DOB is 8th Dec 1948. (a) 54, 55, 54 (b) 55, 57, 56 (c) 3, 55, 54 (d) None of the above.

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13 Calculate age nearer, next and last birthday if DOP is 6th Sep 2005 and DOB is 8th June 1971. (a) 34, 35, 34 (b) 34, 34, 35 (c) 35, 35, 34 (d) None of the above 14 Calculate age nearer, next and last birthday if DOP is 23rd Sep 2005 and DOB is 8th Oct 1969. (a) 36, 36, 35 (b) 35, 36, 35 (c) 35, 35, 36 (d) None of the above 15 Calculate IP if SA is 30,000/-, TP is 68.70, Mode is Yearly, Rebate for Yearly mode is 1.5% and Rebate for SA above Rs. 4,000/- is Re/- 1/- per thousand. (a)2025 (b) 1985 (c) 2000 (d) 1995 16 Calculate installment premium if SA is 25,000 with DAB, TP is 36.55, Premium for DAB is Re. 1/- per thousand, Mode is Half-yearly, Rebate for Half-yearly mode is 1.5%, and Rebate for SA above 4,000/- is Re. 1/- per thousand. (a)400 (b) 450 (c) 500 (d) 475 17 Calculate installment premium if SA is 50,000/- with DAB, TP is 48.4, Mode is Quarterly, Rebate for SA above 20,000/- is 2/- per thousand, Premium for DAB is Re. 1/per thousand. (a) 589 (b) 685 (c) 571 (d) 583 18 Calculate installment premium if SA is 30,000/-, TP is 68.70, Mode is SSS, SA rebate above 4,000/- is Re. 1/- per thousand. (a)158 (b) 178 (c) 169 (d) 162

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19 Calculate IP if SA is 30,000/-, TP is 68.70, Mode is monthly, Extra Premium for Monthly mode is 5% and SA rebate above4,000/- is Re. 1/- per thousand. (a)158 (b) 178 (c) 169 (d) 162 20 Calculate Yearly premium if DOP is 3 3 2003, DOB is 28 6 1974, proposal is to be backdated by 3 months, SA is 50,000/-, TP is 27.46 (age 27), 27.83 (age 28), 28.37 (age 29), YLY Mode Rebate is 1.50 and If SA is 50,000/- or more. (a)1241 (b) 1242 (c) 1250 (d) None 21 Calculate HLY premium if SA is 1,00,000/-, DOB is 28 6 1974, DOP is 20 12 2002, TP for age nearer BD 27 is 27.46, for 28 it is 27.83 and for age 29 it is 28.37. Rebate for HLY is 1/- and rebate for SA 50,000/- and above is 1.50 (a)1266.5 (b) 1246.5 (c) 1293.5 (d) None of the above 22 Calculate premium under SSS if DOB is 28 6 1974, SA is 40,000/-, Term is 35, DOM is 24 12 2037, SA Rebate for SA 50,000/- and above is 1.50. TP is 27.46 for age 27, 27.83 for age 28 and 28.37 for age 29. (a)Rs.87.77 (b) Rs.89.57 (c) Rs.97.41 (d) None of the above 23 Calculate installment premium if SA is 50,000/- with DAB, TP is 48.4, Mode is Quarterly, Rebate for SA above 20,000/- is 2/- per thousand, Premium for DAB is Re. 1/per thousand. (a) 589 (b) 685 (c) 571 (d) 583 24 Calculate Paid up value with the help of the following data: SA is 4,000/-; Plan & Term is Endowment for 20 years; DOC is 1st January 1995; LUP is 1st January 1998 and Mode of payment is Quarterly. (a)Rs.3000 (b) Rs.1500 (c) Rs.2500 (d) Nil

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25 Calculate PV if SA is 2,00,000/-, Term is 25 years, LUP is 1st October 1999, DOC is 1st October 1990 and Mode of payment is Yearly (a) 72,000/(b) 64,000/(c) 80,000/(d) 88,000/26 Calculate PV if SA is 1,00,000/-, Term is 25, LUP is 1st February 2002, DOC is 1st August 1998 and Mode of payment is Half-yearly. (a)12,000/(b) 14,000/(c) 16,000/(d) 18,000/27 Calculate PV if SA is2,00,000/-, Term is 25 years, LUP is 1 - 4 - 1998, DOC is 1 - 4 1989, Mode is Yearly. (a) 72,000/(b) 64,000/(c) 80,000/(d) 88,000/28 Calculate PV if SA is 1,00,000/-, Term is 25, LUP is 1 2 2002, DOC is 1- 8 - 1998, and Mode is HLY. (a)12,000/(b) 14,000/(c) 16,000/(d) 18,000/29 Calculate PV if SA is 20,000/-, Term is 25 years, LUP is 1st October 1999, DOC is 1st October 1990 and Mode of payment is Yearly (a) 7,200/(b) 6,400/(c) 8,000/(d) 8,800/30 Calculate PV if SA is 1,50,000/-, Term is 25 years, DOC is 1st Sep 1992, LUP is 1st March 1995 and Mode is HLY. (a)21,000/(b) 18,000/(c) 24,000/(d) Nil

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31 Calculate PV if SA is 25,000/-, Term is 25 years, DOC is 1st April 1990, LUP is 1st April 1996 and Mode is QLY. (a)4,500/(b) 7,500/(c) 9,000/(d) 6,000/32 Calculate PV if SA is 200,000/-, Term is 25 years, DOC is 1st Jan 1998, LUP is 1st Oct 2001 and Mode is QLY. (a)32,000/(b) 30,000/(c) 28,000/(d) Nil 33 Calculate PV if SA is 20,000/-, P & T are Endowment for 20 years, DOC is 1st May 1997, LUP is 1st November 2002 and Mode is Half yearly. (a)6,500/(b) 5,500/(c) 6,000/(d) 5,000/34 Calculate PV if SA is 23,000/-, End Term is 15 years, LUP is 1st March 1982, DOC is 1st March 1973 and Mode is Qly. Also assume that bonus addition is @ 75/- per thousand per annum. (a)30,858 (b) 28,325 (c) 29,325 (d) 22,192 35 Calculate the PV if SA is 23,000/-, Term is 4 years, LUP is 1 - 4 - 2002, DOC is 1 - 4 - 1998, and Mode is YLY. (a)11,500/(b) 9,200/(c) 13,800/(d) None 36 Calculate PV if SA is 30,000/-, Term is 20 years, DOC is 1 - 1 - 1997, LUP is 1 - 7 2002 and Mode is HLY. (a)9,250/(b) 8,250/(c) 7,500/(d) 9,000/-

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37 Calculate PV if SA is 4,000/-, Term is 20 years, DOC is 1 - 1 - 1995, LUP is 1 - 1 1998 and Mode is QLY. (a)3,000/(b) 1,500/(c) 2,500/(d) Nil 38 Calculate PV if SA is 32,000/-, Term is 16 years, LUP is 1st April 2002, DOC is 1st April 1994 and Mode is QLY. (a)17,600/(b) 16,000/(c) 14,400/(d) 12,800/39 Calculate PV if SA is 40,000/-, Term is 12 years, DOC is 1st March 1998, LUP is 1st March 2002 and Mode of payment of premium is HLY. (a)15,500/(b) 16,666/(c) 13,333/(d) 15,000/40 Calculate PV if SA is 35,000/-, Term is 25 years, DOC is 1st April 1975, LUP is 1st April 1988 and Mode is HLY. (a) 18,200/(b) 16,800/(c) 19,600/(d) 35,000/41 Calculate PV if SA is 50,000/-, Term is 25 years, LUP is 1 - 8 - 2002, DOC is 1 - 2 1988 and Mode is HLY. (a) 9,000/(b) 4,000/(c) 11,000/(d) 12,000/42 Calculate PV if SA is 50,000/-, Term is 25 years, DOC is 1st Sep 1992, LUP is 1st March 1995 and Mode is HLY. (a)7,000/(b) 6,000/(c) 8,000/(d) Nil

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43 Calculate PV if SA is 50,000/-, Term is 25 years, DOC is 1st April 1990, LUP is 1st April 1996 and Mode is QLY. (a)21,000/(b) 15,000/(c) 18,000/(d) 12,000/44 Calculate PV if SA is 50,000/-, Term is 25 years, DOC is 1st Jan 1998, LUP is 1st Oct 2001 and Mode is QLY. (a)8,000/(b) 7,500/(c) 7,000/(d) Nil 45 Find out SV if DOS is 5 - 4 - 2003, Plan & Term is Endowment for 31 years, SA is 40,000/-, due date of the LPP (H) is 25 - 9 - 2001, DOC is 25 - 9 - 1986, VB after valuation as on 31 - 3 - 2001 is 34,000/- and SV factors for various durations are 22% for (a)11,000 (b) 13,500 (c) 16,200 (d) 9,250 46 Calculate SV if DOS is 5 - 4 - 2003, Plan & Term is Endowment for 31 years, SA is 40,000/-, LPP (H) is 25 - 9 - 2001 paid on 22 - 11 - 2001, DOC is 25 - 9 - 1986, VB is 34,000/- and SV factors for various durations are 22% for 14 years, 25% for 15 years a (a)13,500/(b) 16,006/(c) 13,339/(d) 16,200/47 Calculate SV if DOS is 5 - 4 - 2003, Plan & Tern are Endowment for 31 years, Sa is 40,000/-, LPP (H) is 25 - 9 - 2001, DOC is 25 - 9 - 1986, VB is Nil and SV factors for various durations are 22% for 14 years, 25% for 15 years and 30% for 16 years (a)4,400/(b) 6,000/(c) 5,000/(d) 5,500/48 Calculate SV if SA is 50,000/-, Term is 30 years, LPP (H) is 15 12 2000, DOC is 15 6 1986, VB as on 24 6 2000 is @ 750/- per thousand and SV Factor is 52.3% (a)30,000/(b) 45,000/(c) 45,762/(d) 32,688/-

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49 Calculate SV if DOS is 5 - 4 - 2003, Plan & Tern are Endowment for 31 years, Sa is 40,000/-, LPP (H) is 25 - 9 - 2001, DOC is 25 - 9 - 1986, VB is Nil and SV factors for various durations are 22% for 14 years, 25% for 15 years and 30% for 16 years. (a)4,400/(b) 6,000/(c) 5,000/(d) 5,500/50 Calculate Loan Value if Plan & Term are Endowment for 31 years, SA is 40,000/-, DOC is 25 - 9 - 1986, Mode is HLY, IP due in September 2001 has been paid, VB as on 31 - 3 - 2001 is 34,000/-, SV factors for various durations are 22% for 14 years, 25% for 1 (a)13,500/(b) 16,006/(c) 13,339/(d) 14,580/51 Find out the claim amount to be paid if DOD is 18 - 2 - 2002, DOC is 20 - 7 - 1989, LUP (Q) is 20 - 1 - 2002, IP is 320/-, SA is 40,000/-, VB is 30,000/- and IB is 70 per thousand as per Valuation as o 31 - 3 - 2001. (a)Rs.50,000 (b) Rs.69,360 (c) Rs.72,160 (d) Rs.52,800 52 Find out the claim amount payable if DOD is 18 - 8 - 2002, DOC is 20 - 8 - 1989, LPP (Q) is 20 - 8 - 2002 paid on 6 - 8 - 2002, IP is 320/-, SA is 50,000/-, VB is 36,000/-, IB as per valuation as on 31 - 3 - 2001 is 68/- per thousand. (a) 89,720/(b) 89,400/(c) 86,000/(d) 86,320/53 Find out the claim amount payable if DOD is 18 - 2 - 2003, DOC is 20 - 5 - 1989, LPP (Q) is 20 - 2 - 2003 paid on 6 - 2 - 2003, IP is 300/-, SA is 50,000/-, VB is 36,000/and IB as per Valuation as on 31 - 3 - 2002 is 68/- per thousand. (a)89,700/(b) 86,300/(c) 86,000/(d) 89,400/-

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54 Find out the claim value payable if DOD is 18 - 2 - 2002, DOC is 20 - 2 - 1989, LPP (Q) is 20 - 2 - 2002 ( paid on 6 - 2 - 2002), IP is 300/-, SA is 50,000/-, VB is 36,000/- and IB as per valuation (31 - 3 - 2001) is 68/- per thousand. (a) Rs. 89,700/(b) Rs. 86,300/(c) Rs. 89,400/(d) Rs. 86,000/55 Calculate Claim Value if DOD is 18 8 2002, DOC is 20 5 1989, LPP (Q) is 20 8 2002 (paid on 6 8 2002), IP is 320/-, SA ia 50,000/- and VB is 36,000/- and IB is 68/- per thousand as per valuation as on 31 03 2001. (a)Rs. 85,360/(b) Rs. 88,760/(c) Rs. 86,320/(d) Rs. 89,720/56 Find out the claim amount payable if DOD is 18 - 2 - 2003, DOC is 20 - 5 - 1989, LPP (Q) is 20 - 2 - 2003 paid on 6 - 2 - 2003, IP is 300/-, SA is 50,000/-, VB is 36,000/and IB as per Valuation as on 31 - 3 - 2002 is 68/- per thousand. (a)89,700/(b) 86,300/(c) 86,000/(d) 89,400/-

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Important Formulae to be used in Insurance Planning Module. 1. Age Nearer Birthday

Date of Policy Date Of Birthday


Eg. DOP = 22/03/2003, DOB= 8/5/1950. As per formula; 22 03 2003 08 05 1950 14 10 52 Month = 12+03-05 = 10 Therefore AGE Nearer Birthday will be 53 year. 2. Surrender Value :( Paid up Value + Bonus ) * Factor ( This factor part will be given in the problem ) Though Factor part will be given in the Question. But we have to calculate No. of Premium Paid for the information given. No. Premium paid will be collected as follow; Last Unpaid premium Date of Commencement ( It should solve in the same manner as per formula 1.) 3. Paid up Value = (No. of Premium Paid / Term of Policy) * Sum Assured. 4. Insurance Premium = Step 1. Tabular Premium Rebate %(Mode of payment) Step . 2 = Step 1 Discount on Sum Assured taken Step .3 = (Step2* Sum Assured ) / 1000

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What is HLV and how do you estimate it? Under the HLV approach the effort is to estimate the future earnings of an individual and capitalize them with an appropriate discounting factor (a reasonable rate of interest ) keeping in view the present inflation and bank rate. This present value of the total future earnings is thus the total economic surplus available to the dependent family (as an economic unit). The surplus amount, however, does not include the individual's 1. Self maintenance charges 2. Statutory or legal taxes and also the 3. Existing life insurance premium These expenses need to be deducted from the surplus to determine the net economic gain in terms of HLV meant for the family. The effort is to protect this estimated future economic value being contributed to the family through a life insurance policy.
Formula for HLV H = (E-M) x an where H = Human Life Value E = Earnings per annum M = SELF (Maintenance charges + taxes+ Life Insurance Premium) an= Annuity factor at a given rate of discount & n = the working span (Retirement age - Present age) Example

Jains present age is 40 years and wishes to retire at age 60. Present salary is Rs 3,50,000 per annum. Total Life Insurance premiums paid Rs 30,000 p.a. (including children's and wife's policy). Income Tax amounts to Rs 45,000. Medical expenses are being reimbursed by the company and self maintenance expenses Rs 36,000 (including entertainment, club membership, sports)
The calculation as per the above formula would be: Gross total Income = Less: Self-Maintenance charges = Taxes payabe = Life insurance premium on policies = Surplus income generated for the family = where the working span is 20years Rs 3,50,000 Rs 36,000 Rs 45,000 Rs 30,000 Rs 2,39,000

Now this income needs to be capitalized through discounting at an appropriate rate ( say 8% p.a.) for the next 20 years is Rs 25,34,260/From a financial calculator perspective 239,000 is the payment 20 is n (No. of years for the payment) 8 is the % (discount factor) You need to calculate for PV (the present value) The assumption in the calculation is that the present income will continue to remain the same (an adjustment for inflation and for seen sickness, partial disability or unemployment for a short term).

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The above HLV is only a representative economic value of the individual for his family and needs to be protected with life insurance cover against premature death or permanent disability

1. Mr. and Mrs. Pagnis , aged 46 and 42 years, both have a life expectancy of 35 years. Calculate the insurance based on need based and income replacement methods on Mr. Pagnis life. You have the following information :Current investments Rs 20,00,000 Expenses Rs 3,00,000 ( including 1 lakh of Mr. Pagnis personal expenses) Mr. Pagnis income post tax Rs 3.5 lakh Final costs Rs 1 lakh Post tax, post inflation rate/discount factor is 3% Under the needs approach there are 3 basic steps to follow: 1stStep Is to estimate the total economic resources the family needs to maintain their standard of living 2ndStep Is to determine all resources that would be available to the family from available resources 3rdStep Subtract 2 from 1 and the result is the amount of funds needed to provide for the family Solution: 1st step: The expenses are Rs 3,00,000 (including 1 lac of Mr. Pagnis personal expenses) Resources required by family to maintain the standard of living is Rs 2 lacs (to be required for the next 35 years) Rs 2 lacs capitalized through discounting factor of 3% per annum for the next 35 years the capitalized value arrived at is: 2,00,000 X 22.1318* = Rs 44,26,360 ( BGN ) (*discounting factor applicable for applied interest rate of 3%) 2nd step: Resources available to the family - Rs 20 lacs from current investments 3rd step Subtracting 2 from 1 we have (Rs 44,26,360 - Rs 20,00,000) = Rs 24,26,360 To this amount we add the final costs of Rs 1 Lacs THE AMOUNT OF INSURANCE REQUIRED UNDER THE NEED BASED APPROACH IS Rs 24.26 Lacs

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In the Income Replacement method the effort is to produce a level of income in line with that currently being received - but adjusted for dependents need only. For e.g in the question: Mr. Pagnis income post tax is Rs 3.5 lacs. Adjusted for dependent's need only the amount required is Rs 2 lacs. To arrive at the capital needed to produce that amount would be Rs 2 lacs divided by .03 which is Rs 66,66,667. To this you add the final costs of Rs 1,00,000 THE TOTAL INSURANCE REQUIRED UNDER THE INCOME REPLACEMENT METHOD IS Rs 67,66,667 or Rs 68 lacs

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1. A type of risk with high frequency but low severity is probably best handled by: a) Self-insurance b) Insurance c) Avoidance d) Transfer

2. 'Consideration' under the law is a return promise to: (1) Do certain things (2) Abstain from doing certain things (3) Forbear some acts (4) Accept an offer a) (1), (2), and (3) only b) (1), (2), and (4) only c) (1), (3), and (4) only d) (2), (3), and (4) only

3. Frank has an indemnity policy in respect of his house. The house was valued when he first took out the policy three years ago at 80,000 and insured for that amount. The policy has been renewed each year since, without alteration. If the house is destroyed by fire and the cost of re-building it would be 110,000, how much is Frank likely to recover? a) 58,182 b) 80,000 c) 88,000 d) 110,000

4. A client explains that she only wants a life insurance policy that will cover her family against financial risk over the next five years, while she still has dependent children and a large mortgage. It is unlikely her income will increase over this period. What type of insurance is she looking for? a) Pure endowment assurance b) Term insurance with a level premium c) Single premium life insurance d) Whole of life assurance to be made paid up after five years

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5. The 'principle of subrogation' means: a) An insurer may bring an action against a third party in the name of the insured after satisfying a claim b) An insured may not take legal action in respect of a matter which is the subject of a claim c) An insurer undertakes to take legal action on behalf of its insured and to pay to the insured the net proceeds of such legal action d) An insurer which has satisfied a claim may recover from the insurer of a third party who admits liability

6. During retirement, a person would maintain a high level of life insurance protection to: (1) Pay estate duty (2) Provide succession or dependent income (3) Repay outstanding debt (4) Build cash value a) (1) and (2) b) (1) and (3) c) (1), (2) and (3) d) None of the above

7. Which of the following is true regarding the ownership of life insurance? a) A policy can only be issued to the insured b) Generally, assigning a policy requires proof that the insured is still insurable c) Only a person with an insurable interest can be named as a beneficiary d) The owner can assign the policy to whomever he or she chooses, even if the assignee has no insurable interest 8. Steven has a premium due on a motor insurance policy. He calls the agent and requests for an extension. The agent assures him that the insurer usually gives a grace period of one week for such payment. Steven has an accident. The insurer cannot deny liability for the loss on the grounds that the premium was not paid because of the doctrine of: a) Waiver b) Estoppel c) Agency d) Utmost good faith

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9. A reversionary bonus is: a) Any profit distributed to holders of life policies who cash in those policies b) Generally profit that will be distributed on the same terms as the sum assured c) A distribution of income to shareholders d) Profit distributed to holders of unit-linked policies 10. Professional indemnity insurance protects a financial advisor who has been negligent in giving investment advice: a) Only if the advisor is liable under statute b) Only if a contract exists between the advisor and the investor c) Only if the investor relies on the advice d) Only if the advisor has not included a disclaimer of liability in the contract with the investor

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Mock Test :Ques1. The money insurance policy is designed to cover the Riot & Strike (a) Loss of money in transit in the hands of insured's employee bill collectors. (b) Loss during payment of wages. (c) Loss due to hold up risks Ques2.Which type of the following fidelity guarantee policies is suitable to an insured who fears that more than one employee may act in collusion and cause a loss? (a) (b) (c) (d) Floating Collective Individual Group

Ques3. Under which of the following extensions is 'not' provided for Workmen's Compensation Tariff? (a) (b) (c) (d) Contractor's Workmen Damage to personal effects of workmen kept in the factory Diseases specified in the Act Medical expenses

Ques4 which of the following contingencies is 'not' covered under personal accidental policy? (a) (b) (c) (d) Permanent total disablement Temporary total disablement Permanent partial disablement Temporary partial disablement

Ques5. Claim forms are not compulsorily used in ___________ (a) (b) (c) (d) Fidelity guarantees Marine cargo (exports/imports) Machinery breakdown Bankers blanket

Ques6. Which of the following documents is not relevant to bodily injury claims for processing third party claims under motor policies? (a) Medical certificate (b) Coroner's (post-mortem) report (c) Driving license (d) Police report

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Ques7.The Mediclaim policy is available upto a maximum sum insured of Rs____lakh (a) (b) (c) (d) 5 2 3 4

Ques8. The premium under Mediclaim policy is not related to_____ (a) (b) (c) (d) Age Job History of previous surgery Sex

Ques9. Under group personal accident policies, 'on duty' cover is available at ___% of the normal premium. (a) (b) (c) (d) 60 75 25 50

Ques10. Which of the following is correct meaning of sum assured under majority of policies? (a) (b) (c) (d) Fair value of subject matter of insurance Agreed value of property insured The amount paid when there is a total loss The maximum limit of liability under the policy

Ques11. The insurance under Overseas Medical policy does not operate beyond ____ days of continuous absence from India (a) (b) (c) (d) 120 180 60 90

Ques12. Under the personal Accident Policy, weekly benefits are paid subject to a maximum period of ______ weeks. (a) (b) (c) (d) 100 104 52 75

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Ques13. In case of a Fire Declaration Policy, if sum insured-Rs 1 crore, Rate of premium- Re.1 per mille, and average of Monthly Declaration Rs 60 lakh. Calculate provisional Premium and refund of Premium. (a) (b) (c) (d) Rs.9,000, Rs.5,000 Rs.10,000, Rs.4,000 Rs.7,000, Rs.7,000 Rs.8,000, Rs.6,000

Ques14. Which of the following statements is true? Statement A: Electronic Equipment policy covers electrical or mechanical breakdown of the insured item. Statement B: Electronic Equipment policy covers damage caused by failure of electricity supply. (a) (b) (c) (d) Neither of the students Statement A only Statement B only Both Statements

Ques15. Out of 400 houses, each valued at Rs.20,000/-, 4 houses get burnt (on an average) every year. What should be the contribution of each owner to pay for the losses of 4 houses? (a) (b) (c) (d) Rs.800 Rs.200 Rs.400 Rs.600

Ques16 Calculate the total premium payable under the Collective fidelity Guarantee Policy for. A Cashier-Rs. 1 lakh-Rate 0.75% and an accountant -Rs.2 lakh- Rate 1.00% (a) (b) (c) (d) Rs.2,750 Rs.3,000 Rs.1,700 Rs.2,500

Ques17. A policy with a sum insured of Rs 1 lakh is subject to a 'franchise' or Rs.10,000.What is the amount of claim payable, if the loss is Rs.8,000? (a) (b) (c) (d) Rs.2,000 Rs.10,000 Rs. 18,000 Nil

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Ques18. Which of the following statement is true in relation to Group Mediclaim Policy? Statement A: Cumulative Bonus is not available Statement B: Health checkup expenses are not payable (a) (b) (c) (d) Neither of the statement Statement A only Statement B only Both statements

Ques19. The Standard Fire and Special perils Policy covers works of art for an amount 'not' exceeding Rs._________________ (a) (b) (c) (d) 20,000 10,000 5,000 15,000

Ques20.What is the amount of claim payable if loss is Rs15,000 in case of a policy with sum assured Rs. 1 lakh and excess clause Rs.10,000? (a) (b) (c) (d) 2,000 5,000 3,000 4,000

Ques21. Calculate the extra premium payable on expiry of the policy in case Money in transit Policy, if estimated amount as per proposal is 10 lakh, actual amount as per declaration is 12 lakh and rate of premium is Re. 1 per mille. (a) (b) (c) (d) Rs.200 Rs.1000 Rs.1200 Rs.500

Ques22 Out of 1000 pedal cycles, each valued at Rs.2000, 5 are stolen on an average every year. The rate of premium for each pedal cycle in % may be indicated. (a) (b) (c) (d) 5 10 50 0.5

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Ques.23 Which of the following fidelity guarantee policies is automatically cancelled on payment of loss. (a) (b) (c) (d) Floating Policy Individual Policy Position Policy Blanket Policy

Ques24. Which of the following is 'not' considered as a material fact? (a) (b) (c) (d) The Insured had cancelled his policy. The previous Insurer had cancelled the policy. The previous Insurer had rejected the proposal. The previous Insurer had refused to renew the proposal.

Ques25 Which of the following cover is suitable for regular export/import shipments? (a) (b) (c) (d) Open cover Annual policy Duty insurance Special Declaration Policy

Ques26. According to Fire Tariff, which of the following cannot be covered under valued policy? (a) (b) (c) (d) Obsolete machinery Work of art Brand new machinery Curios

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Ques27 Which of the following risks is not covered under Bankers Blanket policies? (a) (b) (c) (d) Dishonesty of appraisers Trading losses Fire Criminal acts of employees

Ques28. As per law premium collected by an agent shall be deposited with the insurer_________. (a) (b) (c) (d) The same day Within 24 hours Within 48 hours Within 7 days

Ques29 Calculate the refund payable on expiry of the policy in case Money in Transit Policy, if estimated amount as per proposal is 20 lakh, actual amount as per declaration is 12 lakh and rate of premium is Re. 1 per mille. (a) (b) (c) (d) Rs.800 Rs.1000 Rs.1200 Rs.500

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Solution 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 B A B D B B A D B D B A B D B 16 17 18 19 20 21 22 23 24 25 26 27 28 29 A D D B B A D B A A C B B A

Q13 Hint: Per mille means per thousand. Provisional premium= 1cr x 1/1000= 10000 Refund of premium= 10000- (60 lac x 1/ 1000)= 4000 Q15. Hint: 20000 x 4 / 400=200 Q16.Hint: (100000 x .75)+(200000 x 1) Q21. Hint: (12lac-10lac) x 1/ 1000 Q22. Hint: Premium per cycle= 2000 x 5 / 1000= Rs. 10 Rate of premium= 10/2000= 0.5 Q29. Hint: (20 lac- 12 lac) x 1/ 1000.

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