Principles and Practice of Life Insurance MCQ Questions and Answers Part – 1

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Principles and Practice of Life Insurance MCQ Questions and Answers Part – 1

Principles and Practice of Life Insurance MCQ Questions and Answers Part – 2

Principles and Practice of Life Insurance MCQ Questions and Answers Part – 3

1. Insurance contract is sort of contract which is approved by
A. The Indian Contract Act
B. Indian Factory Act
C. Indian Companies Act
D. The Indian finance Act
ANSWER: A
2. General Insurance Corporation was established during the year
A. 1972.
B. 1955.
C. 1956.
D. 1971
ANSWER: A
3. General Insurance Business was nationalized under
A. General Insurance Business Nationalisation Act, 1971
B. General Insurance Business Nationalisation Act, 1972
C. General Insurance Business Nationalisation Act, 1973
D. General Insurance Business Nationalisation Act, 1974
ANSWER: B
4. The head office of New India Assurance & Co Ltd
A. New Delhi
B. Kolkata
C. Chennai.
D. Mumbai.
ANSWER: D
5. New Delhi is the head office of __________.
A. New India Assurance & Co Ltd.,
B. . United India Assurance & Co Ltd
C. Oriental Insurance Co Ltd
D. National Insurance Co Ltd
ANSWER: C
6. The Head office of National Insurance Co, Ltd, is ________.
A. Mumbai
B. Kolkata.
C. Bangalore.
D. Hyderabad
ANSWER: B
7. The Head office of United India Insurance co, Ltd, is
A. Chennai.
B. Bangalore.
C. New Delhi
D. . Mumbai.
ANSWER: A
8. The first company transacted insurance business was
A. LIC
B. GIC
C. Indian Mercantile Insurance Company
D. Oriental insurance Company.
ANSWER: C
9. The nationalization of insurance sector was taken over by ____ companies
A. 245
B. 950
C. 200
D. 100
ANSWER: A
10. LIC was formed in 1956 through nationalization of__________ Companies
A. 246
B. 256
C. 250
D. 252
ANSWER: B
11. ____ insurance were amalgamated under GIC
A. 107
B. 100
C. 102
D. none of the above
ANSWER: A
12. Those risks which are more than normal risk are called
A. Super standard risk
B. Substandard risk.
C. Both of the above
D. Neither of them
ANSWER: C
13. Premium on sub-standard lives can be increased by one of the following
A. By rating more than of age
B. By adding flat extra premium
C. By adding extra percentage
D. All of the above
ANSWER: D
14. Occupation is important for risk classification because of _________.
A. Income earned by individual
B. Tension, stress and worries given by workplace
C. Damage caused by pollution at the workplace
D. Both b. and c.
ANSWER: D
15. Risk of mortality is considered to be.
A. More on male life
B. More on female life
C. Same on life of both
D. All the above
ANSWER: B
16. Valuation in life insurance means
A. The process of arriving at the profit of a life insurance company
B. The process of determining the net premium for a life insurance policy
C. The process of arriving at the bonus in a life insurance company
D. The process by which the value of all the existing policies is ascertained in a life insurance company.
ANSWER: D
17. Notification of alteration in risk is a condition
A. precedent to liability.
B. subsequent to liability
C. . precedent to contract
D. subsequent to contract.
ANSWER: D
18. Life insurance in its present form came to India from
A. The United Kingdom
B. The USA
C. Canada
D. Germany
ANSWER: A
19. Life Insurance Company was set up in
A. 1824
B. 1823
C. 1800
D. 1801
ANSWER: B
20. Life Insurance Corporation was nationalized in
A. 1951
B. 1952
C. 1954
D. 1956
ANSWER: D
21. The Head office of National Insurance Co, Ltd, is ________.
A. Mumbai
B. Kolkata.
C. Bangalore.
D. Hyderabad.
ANSWER: B
22. The Head office of United India Insurance co, Ltd, is _______.
A. Chennai.
B. Bangalore.
C. New Delhi.
D. Mumbai.
ANSWER: A
23. Life insurance in its present form came to India from ______.
A. The United Kingdom.
B. The USA.
C. Canada.
D. Germany.
ANSWER: A
24. Life Insurance Company was setup in ________.
A. 1824.
B. 1823.
C. 1822.
D. 1821.
ANSWER: B
25. Life Insurance Corporation was nationalized in _______.
A. 1951.
B. 1952.
C. 1954.
D. 1956.
ANSWER: D
26. Life Insurance Corporation was formed with a capital contribution of ______.
A. Rs. 10 Crore.
B. Rs. 15 Crore.
C. Rs. 5 Crore.
D. Rs. 20 Crore.
ANSWER: C
27. The term Assurance refers to ________.
A. Life Insurance Business.
B. Marine Insurance Business.
C. Fire Insurance Business.
D. Motor Vehicle Business.
ANSWER: A
28. The Oriental Life Insurance Company came to India during ______.
A. 1919.
B. 1818.
C. 1899.
D. 1888.
ANSWER: B
29. The policies where the premium is payable throughout the life of the assured is called ___________.
A. Whole life policies.
B. Renewable term policies.
C. Sinking fund policies.
D. Annuity policies.
ANSWER: A
30. With profit policy is also termed as _______.
A. Multiple life policy.
B. Participating policy.
C. Level premium policy.
D. Lump-sum policy.
ANSWER: B
31. The Insurer who grants a guarantee from the direct insurer is called as _________.
A. Direct Insurer.
B. Ceding Insurer.
C. Re-Insurer.
D. Double Insurer.
ANSWER: C
32. The proportion of the risk which the direct insurer holds on his own account refers to ___________.
A. Line.
B. Retention.
C. Retrocession.
D. Ceding insurer.
ANSWER: B
33. When the same risk and subject matter is insured with more than one insurer is called as_______.
A. Double insurance.
B. Over insurance.
C. Reinsurance.
D. External insurance.
ANSWER: A
34. When the amount for which a subject matter is insured is more than its actual value is called __________.
A. Double insurance.
B. Over insurance.
C. Reinsurance.
D. Crop insurance.
ANSWER: B
35. IRDA refers to_________.
A. Indian Regulatory Development Authority.
B. Institute of Regulatory Development Authority.
C. Insurance Regulatory Development Association.
D. Insurance Regulatory Development Authority.
ANSWER: D
36. Committee of reforms in insurance sectors during 1993 headed by ________.
A. R.N. Malhotra.
B. S. Narashiman.
C. Manmohan Singh.
D. P.Chidambaram.
ANSWER: A
37. The danger of loss from the unforeseen circumstances in future refers to ______.
A. Perils.
B. Hazards.
C. Risk.
D. Damage.
ANSWER: C
38. ________ involved those losses that occur even if there were no changes in the economic environment
A. Dynamic risk.
B. Static risk.
C. Fundamental risk.
D. Particular risk.
ANSWER: B
39. Risks are not suited to treatment by insurance refers to ____________.
A. Static risk.
B. Property risk.
C. Dynamic risk.
D. Liability risk.
ANSWER: C
40. Fundamental risk is also termed as _________.
A. Particular risk.
B. Speculative risk.
C. Pure risk.
D. Group risk.
ANSWER: D
41. Unemployment, war, inflation, earthquakes etc., are the examples of ________.
A. Pure risk.
B. Fundamental risk.
C. Particular risk.
D. Personal risk.
ANSWER: B
42. Any risk involved a situation where there is a possibility of gain refers to ________.
A. Liability risk.
B. Personal risk.
C. Pure risk.
D. Speculative risk.
ANSWER: D
43. Direct or Consequential losses refer to _________.
A. Dynamic risk.
B. Particular risk.
C. Property risk.
D. Pure risk.
ANSWER: C
44. Spreading of risk otherwise termed as _________.
A. Spreading of risk.
B. Reduction of risk.
C. Acceptance of risk.
D. Shifting of risk.
ANSWER: A
45. Cargo ship caught by fire is an example of __________.
A. particular average loss.
B. actual total loss.
C. constructive total loss.
D. general average loss.
ANSWER: D
46. Rashtriya Krishi Yojana of Crop Insurance Scheme came into India during _________.
A. 1999.
B. 1888.
C. 1988.
D. 1977.
ANSWER: A
47. Corpus fund is created with contributions from the Central Government and State Government on ____________.
A. 75:25 basis.
B. 50:25 basis.
C. 60:40 basis.
D. 70:30 basis
ANSWER: B
48. The organisation structure of LIC refers to ___________.
A. Two-tier structure.
B. Four-tier structure.
C. Five tier structure
D. Three-tier structure.
ANSWER: B
49. The constitution of the IRDA consists of not more than _________ members.
A. 10 members.
B. 7 members.
C. 9 members.
D. 3 members.
ANSWER: C
50. Insurance business is based on __________.
A. Newton’s law.
B. The theory of probability and law of large numbers.
C. Parkinson’s law.
D. Boyles law
ANSWER: B

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Author and Assistant Professor in Finance, Ardent fan of Arsenal FC. Always believe "The only good is knowledge and the only evil is ignorance - Socrates"
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