ic33 - 8 practice tests

8/8/2019 IC33 - 8 Practice Tests

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Practice Paper 1

Name Advisor Name

Branch Marks 16

1 State which of the following statements is correct

a Insurance prevents the risk

b Insures compensates losses in full

c Both the above statements are correct

d Both the above statements are wrong d

2 Insurance is necessary because

a Assets depreciate over time and through usage

b Assets may be damaged by external causesc Assets may break down and become unusable

d None of the above reasons b

3 Insurance works on the principle of

a Sharing

b Probabilities

c Large numbers

d All of the above d

4 Which one of the following statements is correct in life insurance?

a The principle of good faith continues to operate till the policy becomes a claim

b Facts which happen after the policy has commenced, need not be reported

c Illnesses after the policy has commenced must be informed to the insurer

d All the above three statements are correct. d

5 Which one of the following statements is correct, with reference to life insurance?

a The claim payable is subject to the principle of indemnity

b The claim payable will depend on the Sum Assured

c The claim payable will depend on the income of the deceased person

d The claim payable will depend on the size of the family left behind a

6 The principle of utmost good faith will operate in an existing policy

a Every time the premium is paid

b If the policy has lapsed and it has to be revived

c If the insured person falls sick and is admitted to hospital

d If the insured person changes his job b


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7 The premium is loaded because of

a Interest likely to be earned

b Likely expenses

c Likely claims

d Age of the insured person b

8 Which one of the following statements is correct?

a Bonus is paid along with the survival benefit in a money back policy

b Bonus is paid when the money back policy matures

c Both the statements above are wrong

d Both the statements above are correct. b


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 above statements are wrongd Both the above statements are correct b


a Convertible plan policies do not participate in bonuses

b Money back policies are not convertible plan policies

c Both the statements above are correct

d Both the statements above are wrong a


a In industrial assurance plans, the premium is deducted from the pay rollb In salary savings scheme plans, the premium is deducted from the pay roll


d Both the statements above are wrong d


a In life insurance, the word rider means the person taking part in horse races

b In life insurance, the word rider refers to additional clauses


d Both the statements above are wrong b

13 State which one of the following statements is correct?

a In group insurance, there is only one proposal to insure many

b In group insurance, there is only one policy covering many





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a b

b The option of conversion can be exercised whenever the policyholder chooses to


d Both the statements above are correct b


a The members covered by a group insurance policy changes every year

b The amount of insurance for any member may change from year to year


d Both the statements above are wrong c

16 The system of non medical underwriting is introduced because

a Medical examiners are not available in all areas

b Most of the cases are found to be standard lives acceptable at OR

c Of both the above reasons

d Of some other reasons a

17 Moral hazard may be suspected in cases where

a The life to be insured is old

b The insurance is for a very large amount

c In both the above cases

d In neither of the above cases c


a A clause restricts the benefits under the policy

b A clause is the same as a rider

c Both the statements above are correctd Both the statements above are wrong a

19 The FPR is issued when

a The first premium is adjusted in the office

b The first premium is deposited in the office

c The underwriter makes his decision

d Consent of the proposer is received a


a An endorsement may be placed on the policy at the very beginningb The nomination may be made later by an endorsement



21 Which of the following are confidential and will not be given to the proposer?

a The medical report

b The agents confidential report to the insurer


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a Accident and disability benefits are payable along with maturity claims

b Accident and disability benefits are payable along with death claims only



30 What is meant by a claim under an insurance policy?

a Any demand made by the policyholder on the insurer

b A demand to fulfill the policyholders obligations

c A demand to fulfill the insurers obligations

d All the three above a


a Accident and disability benefits are payable along with maturity claims

b Accident and disability benefits are payable along with death claims onlyc Both the statements above are correct



a The insurer need not contest court orders relating to policy moneys

b The insurers should not sit on judgment between rival claims to policy moneys




a A claim may be paid in instalments only if there is a prior request

b A maturity claim may be payable years after the date of maturity




a In ULIPs, the SA must not be less than 1.25 times single premium

b In ULIPs, the SA must not be less than 5 times instalment premium


d Both the above statements are wrong b


a In ULIPs, one can pay additional premium in any year for investment

b In ULIPs, if one increases the premium, the SA must also be increased.


d Both the above statements are wrong c



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a ULIPs provide for flexibility

b ULIPs are better than traditional policies


d Both the above statements are wrong b

37 State which one of the following statements is correct

a An agent should not admit that he does not have a particular information

b An agent cannot know everything that the proposer wants to know



38 Which of the following statements is not correct?

a A life insurance agent should carry the literature with him

b A life insurance agent should carry his licence with him always

c A life insurance agent should not appear shabby

d All the above statements are correct d


a When vital information is not disclosed, the policyholder is benefited

b When a claim is repudiated, the agents trustworthiness is affected



40 The Insurance Association

a Conducts examination for agents

b Is constituted by the IRDA actc Is constituted by the Insurance Act

d Is none of the above b


a It is an offence if an agent gives a rebate

b It is an offence if an insurer gives a rebate



42 Which of the following matters can be referred to the Ombudsman?

a Dispute on whether a premium had been paid in time or not

b Dispute on whether the policy should be treated lapsed or not

c Complaint that the enquiries being made are unjustified and delaying the claim

d All of the above c

43 Premium Calculation

Calculate quarterly premium (rounded off to the next higher rupee) on the basis of the fo

S.A Rs. 50,000/- , Date of maturity 24.12.2036. - Term 30 years.


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Date of birth - 28.06.1979, Mode rebate for yearly Rs 1.50 per thousand, half yearly

Rs. 1.00, quarterly nil and monthly 5 % extra. SA Rebate Rs. 1.50 per thousand for SA

Rs. 50,000/- and above.

Tabular premium For age nearer birthday 26 -Rs. 26.46

a 312

b b

c 331

d 339 b

44 Calculation on PV or SV or Loan

Find out loan available at 90% of surrender value on the basis of following data,

(the answer to be rounded off to the next lower rupee)

SA. Rs 30,000 DOC 15.6.1992

Endowment with profit - 30 years

Due date of last premium paid 15-06-2007 mode half yearlyAccrued bonus Rs.750/- per thousand SA. SV factor 23%

a az

b 3388

c 7866

d None of these c

45 Claim Calculation

Calculate death claim amount on the basis of data given below if life assured

dies in the 25th year of the policy. Money back policy SA Rs, 50000.

Term 25 years Survival benefits of 15% each paid at the end of 5th, 10th, 15th, a

Accrued bonus Rs 965 per thousand SA. Interim bonus Rs 25 per thousand SAa 68250

b 69500

c 98250

d 99500 d

Correct Answers Practice Paper 1

1 d 16 c 31 d

2 b 17 c 32 c3 d 18 a 33 b

4 b 19 a 34 c

5 b 20 c 35 a

6 b 21 d 36 a

7 b 22 d 37 b

8 b 23 d 38 d

9 c 24 d 39 b

10 b 25 c 40 c

For age nearer birthday 27 -Rs. 27.08

For age nearer birthday 28 -Rs. 28.15


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11 b 26 a 41 c

12 b 27 a 42 d

13 c 28 d 43 b

14 a 29 d 44 c

15 c 30 c 45 d

Your Answers Practice Paper 1

1 Correct 16 0 31 0

2 Correct 17 Correct 32 0

3 Correct 18 Correct 33 0

4 0 19 Correct 34 0

5 0 20 0 35 0

6 Correct 21 0 36 0

7 Correct 22 0 37 0

8 Correct 23 0 38 Correct

9 0 24 0 39 Correct

10 0 25 0 40 011 0 26 0 41 0

12 Correct 27 0 42 0

13 0 28 0 43 Correct

14 0 29 0 44 Correct


Total Marks 16

RESULT FAIL


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llowing data.


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d 20th years.


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Practice Paper 2

Name Advisor Name

Branch Marks 0

1 The asset, which is a human being, perishes when

a He dies

b He becomes disabled to work

c He retires from work

d In all the above situations

2 Life insurance is better than other avenues of savings in respect of

a Marketability

b Liquidityc Transferability

d All the three above


a Trust

b Sharing

c Randomness

d All of the above


a People hesitate to buy life insurance because they are not aware of their needs

b People hesitate to buy life insurance because they prefer to enjoy the present

c Both the statements are correct

d Both the statements are wrong


a Declaration at the end of the proposal form has no legal sanctity

b Declaration at the end of the proposal is a warranty




a Capacity to contract applies to both parties.

b Consent to the contract can b e implicit



7 When interest rates fall, the premium charged by an insurer are likely to


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a Increase

b Decrease

c Remain the same

d Neither increase or decrease

8 The premium rates printed in the promotional literature are

a Risk premiums

b Net premiums

c Office premiums

d None of the above

9 In life insurance, profit is determined by

a The accountant who prepares the balance sheet

b The actuary who makes a valuation

c The auditor who certifies the annual accounts

d None of the above three persons


a Every plan of insurance is a combination of two basic plans

b The name given to a plan indicates the benefits available under the plan


d Both the statement s above are wrong

11 Who is benefited if a policy is under the salary savings scheme?

a The policyholder

b The insurerc The agent



a There is no difference between a term assurance plan and a Whole Life plan

b A Whole Life plan is a term assurance plan with an indefinite term


d Both the statements above are correct


a A master policy is issued in a group insurance policy

b Each member in a group policy pays the premium directly to the insurer


d Both the statements above are wrong

14 Which one of the following statements is true with regard to Childrens policies?

a The ownership of the policy changes on the deferred date


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b The ownership of the policy changes on the vesting date

c Both the above statements are wrong

d Both the above statements are correct.


a A money back type of policy is a variable insurance policyb A convertible policy is a variable insurance policy




a The agent is expected to make his report commenting on the risk factors

b The agents report is important for the underwriter




a The underwriter assesses the risk

b No policy can be issued without the underwriters decision




a A clause restricts the benefits under the policy

b A lien operates for a specific period



19 The date of issue of the FPR indicates

a The date when the risk effectively begins

b The date when the next premium falls due

c The date when the policy will commence

d None of the above


a An endorsement may be placed on the policy at the very beginning

b The nomination may be made later by an endorsementc Both the statements above are correct



a The proposal must be signed in the language in which it is printed

b The proposal can be signed in any language



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a The policy has to be given to the insurer at the time of surrender

b The policy has to be given to the insurer at the time of taking a loan

c Both the statements above are correctd Both the statements above are wrong


a On revival, the relevant SA for underwriting is the original SA

b On revival, the relevant SA for revival is the original SA less paid up value




a Vested bonus is also reduced along with SA in paid up casesb Paid up option is effective from date of first unpaid premium




a No alteration can be made without the request of the policyholder

b Some kind of alterations do not require the consent of the insurer




a Foreclosure can be done only with the consent of the policyholder

b Foreclosure can be done only after informing the policyholder




a If the nominee is a minor, the claim can be paid to the guardian

b If the nominee dies, the claim can be paid to the heirs of the nominee




a If there is an assignment, the will is not valid

b If there is a nomination, the will is not valid




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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



30 If the heirs allege that the insured person is mentally deranged, the insurer should

a Ask the heirs to produce a stay order from the court

b Ignore the allegation and pay the maturity claim

c Apply to the court for appropriate directions

d Ask the insured person for his observations


a An indemnity bond is asked for when there is no clear proof of title

b An indemnity bond is not necessary when there is a probate of a will



a The claim may be repudiated, if the age is found to be different

b Insurer need not wait for formal death intimation



33 Before paying a claim, which of the following have to be verified?

a Premiums paid till dateb Balance of loan, if any

c Title of claimant

d All the three mentioned above


a ULIPs cannot be issued as participating policies

b Loans are not given under ULIPs


d Both the above statements are wrong


a In ULIPs, the best benefits come from growth funds

b In ULIPs, the best benefits come from the balanced funds





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a In ULIPs, the best benefits come from growth funds

b In ULIPs, the best benefits come from the balanced funds



37 A person is an insurance agent because of

a The licence given to him

b His knowledge

c His duties

d His salary

38 Which of the following statements is not correct?

a An agent should be able to suggest a total financial package for the prospect

b An agent should be an expert only with regard to life insurance

c An agent should be up-to-date on the tax laws

d An agent should be aware of the IRDA regulations

39 A licence for insurance agency will not be given unless the person

a Has passed an examination prescribed by the IRDA

b Is 21 years of age

c Has undergone training

d Satisfies all the above conditions

40 The Insurance Association is

a A trade union of insurance employees

b A voluntary association of insurers to negotiate with the IRDA

c A body constituted by the IRDA Actd None of the above


a The consumer forum can summon witnesses

b The Ombudsman can summon witnesses




a A rural area is defined in the Constitution of Indiab Business in the rural areas can be done only by rural agents



43 Calculate monthly premium (rounded off to next higher rupee)

SA Rs 60,000/- endowment - 39 years, date of maturity 28.09.2045,

Large sum assured rebate Rs. 1.50 for Rs. 50,000 and above. Date of Birth - 26.12. 1976

Premium per thousand SA For age next birthday 29 -Rs 27.46, 30-Rs 28.83, 31-Rs 29.37


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a 137

b 140

c 141

d 142

44 Given the following information, indicate which of the four options given belowwould be the correct premium to be deducted from the salary of a person

born on 28.6.1974, who has taken an endowment policy on his life.

Sum assured Rs. 40,000 Term 35 years

Date of maturity 24.12.2037

Tabular premium for age nearest birthday 27- Rs.27.46 per thousand



Premium adjustment - 5% extra for monthly mode, Re. 1 less for half yearly mode and

Rs. 1.50 less for yearly mode SA Rebate Rs. 1.50 less for Rs. 50,000 and above

a 87.77

b 89.57

c 92.80d 97.41

45 Find out the loan payable at 90% of surrender value as on 5.4.2007 on the basis

of following data, (the answer to be rounded off to the next higher rupee)

SA. Rs 40,000 DOC 15.09.1991

Endowment without profit - 31 yearsDue date of last quarterly premium paid 15-12-2006

Bonus vested Rs.34, 000 -,

SV factor duration 14 yrs 22%, 15 yrs 25%, 16 yrs 30%

a 8325

b 12150

c 14580

d None of these


1 d 16 c 31 c

2 d 17 c 32 b

3 d 18 c 33 d

4 c 19 a 34 c

5 b 20 c 35 d

6 c 21 b 36 d

7 a 22 c 37 c

8 c 23 b 38 b

9 b 24 b 39 d

10 a 25 c 40 d

11 d 26 b 41 a

12 b 27 d 42 d


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13 a 28 a 43 a

14 b 29 b 44 c

15 d 30 a 45 b


1 0 16 0 31 0

2 0 17 0 32 0

3 0 18 0 33 0

4 0 19 0 34 0

5 0 20 0 35 0

6 0 21 0 36 0

7 0 22 0 37 0

8 0 23 0 38 0

9 0 24 0 39 0

10 0 25 0 40 0

11 0 26 0 41 0

12 0 27 0 42 013 0 28 0 43 0

14 0 29 0 44 0

15 0 30 0 45 0

Total Marks 0

RESULT FAIL


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27/128


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Practice Paper 3

Name Advisor Name

Branch Marks 0

1 Which of the following events are insurable in a life insurance policy?

a The child to be a born is not a male child

b The child, when born, has physical deformities

c Neither of the above situations

d Both the above situations

2 A human beings value is measured by

a The income that he generates

b The value of the goods that he producesc His academic qualifications

d All of the above


a Risk, if certain, cannot be insured.

b Risk refers to the loss that happens



4 In the case of life insurance, the risks

a Can be avoided

b Cannot be avoided

c Are avoidable through medical science

d Are avoidable through proper food habits


a Life insurance helps people to get loans for car or house

b Life insurance helps policyholders to save income tax




a A person with an established business does not need life insurance

b Life insurance is necessary to save income tax





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d Both the above statements are correct

8 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







a Convertible plan policies do not participate in bonuses

b Money back policies are not convertible plan policies




a The cover in a group policy could depend on the ages of the lives insured

b The cover could be a uniform flat rate for all employees of a certain categoryc Both the statements above are correct



a If the option of conversion is not exercised, the policy will come to an end

b If the option of conversion is not exercised, the policy will continue as before




a Only participating policies are entitled to the benefit of bonus

b A bonus is the return of additional premium paid by a participating policy




a An annuity policy guarantees a pension


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b An annuity policy is issued only after a medical examination




a A premium waiver option is allowed as a riderb The premium on all riders depend on the age of the insured person



16 Under the system of non-medical underwriting

a There is no restriction on age

b There is no restriction on SA

c There is restriction on both the SA and age

d Only some towns are covered


a Working women are treated on par with men

b Educated women are treated on par with men




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




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




a Once the FPR is issued, the policyholder cannot back out of the contract

b Policies can be back dated to any date within the financial yearc FPR is evidence of the insurance contract

d All the three statements above are wrong


a In the case of SSS policies, the employer gets the renewal premium receipts

b In the case of SSS policies, FPRs are not issued



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a A policy which is foreclosed can be reinstated

b Wife is automatically the beneficiary under a MWP Act policy


23 If a policy is under the MWP Act,

a It can be surrendered by the beneficiaries

b A loan can be taken by the trustees

c It can be made paid up

d It can be assigned

24 A policy which has been assigned, will revert to the assignor

a If the assignor survives till maturityb Whenever the assignor demands it

c When the conditions specified in a conditional assignment happen

d On maturity of the policy

25 When a policy is foreclosed, it benefits

a The policyholder

b The insurer

c Both the policyholder and the insurer

d Neither the policyholder nor the insurer

26 If the 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 the 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


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



28 In which of the above cases, is the claimant likely to feel most anxious?

a Death claim within two years

b Surrender cases

c Applications for loans

d Survival benefit cases


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a If there is an assignment, the will is not valid

b If there is a nomination, the will is not valid




a The insurer need not contest court orders relating to policy moneys

b The insurers should not sit on judgment between rival claims to policy moneys




a When a claimant produces the original will, no further proof is necessary

b An affidavit filed before a court by the heirs is adequate evidence of title


32 If a claim is made in January 2007 under a policy, which commenced in May 2002, stating that th

a Section 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


a Frauds are more likely in death claim cases than in maturity casesb If the life insured had died one month before maturity date, it is a death claim




a In ULIPs, the premium will be invested as per the offer price

b The offer price will always be higher than the bid price




a In ULIPs the entire premium paid is invested in the chosen fund.

b The entire premium less cost of insurance is invested in the chosen fund





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a In ULIPs the entire premium paid is invested in the chosen fund.

b The entire premium less cost of insurance is invested in the chosen fund



37 When is the job of a life insurance agent over?

a As soon as the policy is issued

b When the claim arises under the policy

c When the claim is paid under the policy

d It is not over as long as the policyholder or any member of his family is alive

38 Which of the following laws affect the working of an insurance agent?

a The Insurance Act

b The Contract Act

c The Income Tax Act


39 When is the job of a life insurance agent over?

a As soon as the policy is issued

b When the claim arises under the policy

c When the claim is paid under the policy

d It is not over as long as the policyholder or any member of his family is alive


a The tax provisions are the same for all kinds of savings

b The tax provisions are included in the Constitution



a Agents are appointed separately to work in the rural sector

b Any agent can do business from the rural areas



42 The Insurance Act deals with

a Registration of insurersb Investments of insurance funds

c Licensing of agents

d All of the above

43 On the basis of the following data

S.A. Rs. 1, 00,000/- tabular premium. Rs. 33.10

Rebate Rs. 2/- per thousand for yearly mode. Re 1/- for half yearly, none for quarterly.


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SA Rebate Rs. 3/- per thousand for Rs. 1, 00,000 and above.

DAB Re. 1/- per thousand Occupation extra Rs. 4/- per thousand.

Calculate the yearly premium.

a 2810

b 3110

c 3310

d 3360

44 Find out the loan payable at 90% of surrender value on the basis of following

data, (the answer to be rounded off to the next higher rupee)

SA. Rs 1, 00,000 DOC 14.11.2001

Endowment without profit - 20 yearsDue date of last premium paid 14-05-2007 mode half yearly, SV factor 32%

a 7773

b 8370

c 9068

d None of these

45 Given the following data, state which of the following is the correct amount of the claim payable u

Plan and term Endowment 38 years

Sum assured Rs. 50,000

Date of commencement 20.05.1989

Date of death of life assured 18.8.2002

Bonus vested Rs. 36000.

Interim bonus declared after valuation on 31.3.2001. Rs. 68 per thousand

a 85360

b 88760c 86320

d 89720


1 c 16 c 31 d

2 a 17 c 32 d

3 c 18 b 33 c

4 b 19 a 34 a5 c 20 b 35 d

6 d 21 d 36 d

7 c 22 a 37 d

8 b 23 c 38 d

9 c 24 c 39 d

10 b 25 d 40 d

11 c 26 d 41 b

12 b 27 b 42 d

Quarterly premium Rs. 320 due in August 2002 paid on 6th August 2002.


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13 a 28 a 43 c

14 a 29 a 44 b

15 a 30 c 45 b


1 0 16 0 31 0

2 0 17 0 32 0

3 0 18 0 33 0

4 0 19 0 34 0

5 0 20 0 35 0

6 0 21 0 36 0

7 0 22 0 37 0

8 0 23 0 38 0

9 0 24 0 39 0

10 0 25 0 40 0

11 0 26 0 41 0

12 0 27 0 42 013 0 28 0 43 0

14 0 29 0 44 0

15 0 30 0 45 0

Total Marks 0

RESULT FAIL


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e life insured had died in April 2004,


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nder the policy.


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Practice Paper 4

Name Advisor Name

Branch Marks 0

1 The business of insurance affects

a Availability of capital for business

b The life span of individuals

c The safety of equipments in factories

d All these three

2 Insurance benefits replace

a All physical losses, in full

b All physical losses, partlyc All monetary losses, in full

d The monetary losses, but only to some extent

3 In a life insurance contract, the beneficiary may be the

a The policyholder

b The life insured

c The dependents of the life insured



a The principle of utmost good faith applies only to life insurance

b The principle of utmost good faith applies only to non-medical cases

c The principle of utmost good faith is operative only for two years

d All the above statements are incorrect

5 An insurance contract is valid because

a It is not a wagering contract

b It promotes socially desirable causes

c It takes care of the destitute

d It provides Government with large funds


a It is difficult to accurately value a human life.

b It is possible to reasonably estimate the value of a human life.



7 The premium printed on the schedule of the policy is worked out from


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a Net premiums

b Risk premiums

c Office premiums

d None of the above

8 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


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 any year is exactly what is required

d All the above statements are 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 to




a A group insurance contract is between the insurer and the insured persons

b The extent of insurance cover is chosen by each individual memberc Both the statements above are correct


12 Which of the following could be the basis of the cover in a group policy?

a Amount of annual income

b Level in the hierarchy

c Age of the person



a The ownership of the policy changes on the deferred date

b The ownership of the policy changes on the vesting date


d Both the above statements are correct.


a Risk cover begins on or after vesting date


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b Risk cover begins immediately after the policy commences



15 For the same age, SA and term, the premium under an Endowment policy

a Will be the same as in a limited payment Endowment policyb Will be more than in a limited payment Endowment policy

c Will be less than in a limited payment Endowment policy

d Can be same, more or less than in a limited payment Endowment policy


a In the case of a lien, the amount payable on death will vary from year to year

b A lien operates till the policy matures




a An underwriter acts in the interests of the policyholders as a whole

b An underwriter acts in the interests of the insurance company




a In some cases, the underwriter consults the reinsurers before deciding

b The numerical method of underwriting is the best method




a If policy document is lost, the insurance contract becomes void

b The family history appears in the personal statement



20 The FPR is issued when

a The first premium is adjusted in the office

b The first premium is deposited in the officec The underwriter makes his decision

d Consent of the proposer is received

21 The FPR is important

a Till the policy is issued

b Till the claim is settled

c As evidence of contract in case the original policy is lost


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d To know the terms of acceptance


a Assignee is free from the assignors obligations under the policy

b A nomination is automatically cancelled when a loan is taken under the policy


23 When a policy is foreclosed, the insurer will

a Pay the balance moneys to the nominee

b Offer to reinstate the policy on original terms

c Pay balance surrender after adjustment of all outstanding dues

d Do none of the above


a The amount of loan can be more than the surrender valueb Loans are available on paid up policies




a The Insurance Act does not protect those who try to cheat the insurer

b Section 45 does not apply if the policy had been revived within a year




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



27 If a policy is under the MWP Act,

a It can be surrendered by the beneficiaries

b A loan can be taken by the trustees

c It can be made paid up

d It can be assigned


a A death claim within two years of revival is treated as an early claim

b A death claim within two years of an alteration is treated as an early claim




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a A survival benefit is paid only to the life insured

b A death claim can be paid only to the nominee



30 In the case of a life insured who is a defence personnel and is missing in action

a Presumption of death is automatic

b Presumption of death depends on the certificate of the military unit

c Presumption of death depends on the court orders

d Presumption of death will have to wait for seven years


a No claim can be paid without either the original or the duplicate policy

b No maturity claim can be paid without the life insureds signature


32 In which of the following cases, is the maximum documents asked for?

a Death claim

b Maturity claim

c Survival benefits

d Annuity cases


a Rival claimants to policy moneys should resolve the dispute themselvesb The insurer need not examine the validity of rival claims to policy moneys




a In ULIPs, loans are available

b In ULIPs, partial withdrawals are permitted periodically




a In ULIPs, the death benefit may be integrated

b In ULIPs, the death benefit will be the basic SA only





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37 A person is an insurance agent because of

a The nature of his duties

b His designation

c The training given to him


38 Which of the following statements is true?

a An insurance agent is a full time employee of the insurer

b An insurance agent is a part time employee of an insurer

c An insurance agent is not an employee of an insurer

d An insurance agent is not allowed to have any other employment


a Ethical behaviour leads to improved business and earnings

b Ethical behaviour is automatic when the policyholders interest are kept in mind



40 Which of the following matters can be referred to the Ombudsman?

a A complaint that the extra charged is not reasonable

b Grievance against the decision of a consumer forum

c Dispute on the amount offered by the insurer to settle a claimd All of the above


a Tax benefits are part of policy conditions.

b Tax benefits available in the first year of the policy, do not change thereafter




a Life insurance policies provide savings in taxesb The income tax relief will be the same throughout the policy term



43 Calculate half yearly premium on the basis of the following data

Date of birth 28.06.1978. Date of maturity 24.12.2041, SA Rs 1, 00,000 term 35 years.

Tabular premium for age next birthday- age 27 Rs. 27.46, for age 28 Rs. 27.83

& for age 29 Rs. 28.37. Rebate 5 % extra for monthly, less Rs. 1/- for half yearly,


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Rs. 1.50 for yearly, SA rebate Rs. 1.50 for SA Rs. 50000/- and above.

a 1266.50

b 1267.00

c 1293.50

d 1294.00

44 Find out surrender value on 01.09.2007, on the basis of following data

(the answer to be rounded off to the next lower rupee).

SA Rs.50, 000 DOC- 13.7.2001,

Endowment without profit 25 years Due date of last premium paid 13.07.2006 :

Yearly mode SV factor 5 yrs 23.91%, 6 yrs 24.63%, 7 yrs 26.48%

a 2869

b 2955

c 3177

d None of these

45 The life assured under an endowment without profits policy for 20 yearsfor Rs.1, 00,000/- SA. with DAB rider died on 30th June 2007 committing suicide.

The policy was taken on 21st March 2007 and was backdated to 1st April 2006.

Determine the amount of claim payable

a Nothing

b 100,000

c 200,000

d Return of premium


1 a 16 a 31 d

2 d 17 c 32 a

3 d 18 a 33 a

4 d 19 b 34 b

5 a 20 a 35 c6 c 21 a 36 a

7 c 22 d 37 a

8 b 23 c 38 c

9 b 24 b 39 c

10 a 25 c 40 c

11 d 26 c 41 d

12 d 27 c 42 a


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13 b 28 a 43 c

14 c 29 d 44 b

15 c 30 b 45 a


1 0 16 0 31 0

2 0 17 0 32 0

3 0 18 0 33 0

4 0 19 0 34 0

5 0 20 0 35 0

6 0 21 0 36 0

7 0 22 0 37 0

8 0 23 0 38 0

9 0 24 0 39 0

10 0 25 0 40 0

11 0 26 0 41 0

12 0 27 0 42 013 0 28 0 43 0

14 0 29 0 44 0

15 0 30 0 45 0

Total Marks 0

RESULT FAIL


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58/128


59/128


60/128


61/128


62/128


63/128


64/128


65/128

Practice Paper 5

Name Advisor Name

Branch Marks 0

1 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

2 The competition for the business of life insurance is

a Non-life insurance

b Small savingsc House property

d None of these three


a Risk is uniform for all assets

b Life insurance improves standards of living




a Duty to disclose applies till the claim arises in life insurance

b Insurers are responsible for adverse selection



5 Which one of the following statements is correct, with reference to life insurance?

a The claim payable is subject to the principle of indemnity

b The claim payable will depend on the Sum Assured

c The claim payable will depend on the income of the deceased person

d The claim payable will depend on the size of the family left behind

6 Which of the following statements is correct?

a The principle of indemnity does not apply to life insurance policies

b The principle of indemnity does not apply to insurance on human beings

c The principle of indemnity does not apply to third party motor insurances

d All the above statements are wrong



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a The annual premium must be twelve times the monthly premium

b The annual premium may be less than twelve times the monthly premium



8 The premium printed on the schedule of the policy is worked out from

a Net premiums

b Risk premiums

c Office premiums

d None of the above


a The life fund belongs to the policyholders

b The life fund belongs to the shareholders



10 A plan of insurance is said to be different from another if

a The date of maturity is different

b The date of commencement of risk is different

c The underwriter decides to charge extra premium in one case

d The conditions when the sum assured becomes payable are different


a On the deferred date, the insured child has to be at least 15 years old

b On the deferred date, the insured child need not be a majorc On the deferred date, the policy must have been in force for at least ten years

d All the statements above are wrong

12 In what ways does group insurance differ from salary savings schemes?

a Number of persons insured under a policy

b Responsibility of employer

c Issue of premium receipts

d In all the above three respects


a There is no difference between a term assurance plan and a Whole Life plan

b A Whole Life plan is a term assurance plan with an indefinite term



14 Who pays for the premium in the group policy?

a The insured persons only


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b The person who has the master policy only

c Both the insured persons and policyholder jointly

d Any one of the three ways above


a A master policy is issued in a group insurance policyb Each member in a group policy pays the premium directly to the insurer




a By writing a truthful report, the agent is helping the insurer

b By writing a truthful report, the agent is helping the life to be insured




a The underwriter assesses the risk

b No policy can be issued without the underwriters decision




a An underwriter is an actuary

b An underwriter uses financial and medical data




a The declaration in the proposal makes the principle of good faith operational

b The declaration in the proposal establishes insurable interest




a A copy of the proposal has to be given to the proposer

b A copy of the medical report has to be given to the proposerc Both the statements above are correct



a The policy is the basis of the insurance contract

b The proposal is the basis of the insurance contract



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a A lapse is effectively a case of adverse selection

b A lapse should make the agent reflect on the correctness of the sale



a A nominee must be above 18 years of age

b A nominee must be a close relative



24 How does automatic advance of premium differ from extended term assurance?

a In the duration for which the policy will remain in forceb In the amount of SA payable on death

c In the ease of reviving the policy to original terms

d Likelihood of terminating without any cash payment to the policyholder

25 In which of the following aspects do the three non-forfeiture options differ?

a The extent of insurance cover

b The amount of debt on the policy

c The amount payable on maturity

d On all the above three


a Outstanding amounts of loans are deducted from the claim amount

b Fresh loans cannot be taken till the earlier loan is repaid




a Age is material information and may affect the terms of underwriting

b If age is found to be different, the only effect is on the premium rate




a The claim may be repudiated, if the age is found to be different

b Insurer need not wait for formal death intimation




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29 When a court orders that a missing insured person is presumed to be dead,

a The premiums paid since his disappearance are returned along with the claim

b The date of death is taken to be the date of court order

c Enquiries will be made as in the case of early death claims

d Suicide clause will operate if the person was missing within one year of policy

30 In which of the above cases, will the help of the agent be most useful?

a Death claims

b Maturity claims

c Survival benefits

d Annuity cases

31 When a court orders that a missing insured person is presumed to be dead,

a The premiums paid since his disappearance are returned along with the claim

b The date of death is taken to be the date of court order

c Enquiries will be made as in the case of early death claimsd Suicide clause will operate if the person was missing within one year of policy


a Rival claimants to policy moneys should resolve the dispute themselves

b The insurer need not examine the validity of rival claims to policy moneys




a The insurer makes enquiries only in the case of death claimsb The insurer makes enquiries in the case of maturity claims also




a In ULIPs, if the policy is terminated earlier, a charge has to be paid

b In ULIPs, an administrative charge has to be paid every year




a In ULIPs, the death benefit may be integrated

b In ULIPs, the death benefit will be the basic SA only





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a In ULIPs, one can pay additional premium in any year for investment

b In ULIPs, if one increases the premium, the SA must also be increased.




a Unethical behaviour can affect the settlement of the claim, if it is early

b Ethical behaviour is beneficial to the policyholder, but not to the agent



38 Which of the following laws affect the working of an insurance agent?

a The Insurance Act

b The Contract Act

c The Income Tax Act



a An agent has to ensure that nominations are changed whenever necessary

b An agent is the agent of the proposer / policyholder




a A rural area is defined in the IRDA Act

b A rural area is an area outside municipal limits


41 state which one of the following statements is correct?

a A consumers forum is set up exclusively for insurance matters

b There is no appeal against the decision of the consumer forum




a Every insurer has to do a minimum SA of business from the rural areasb Every insurer has to do a minimum number of policies from the rural areas



43 Given the following information, indicate which of the four options given below

shows the monthly premium (rounded off to the nearest rupee) to be paid

by a person born on 28.6.1974, who has taken an endowment policy on his life.

Sum Assured Rs. 40,000 Term 35 years Date of maturity 24.12.2037


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Tabular premium for age nearest birthday 27 - Rs.27.46 per thousand



Premium adjustment - 5% extra for monthly mode, Re. 1 less for half yearly mode and

Rs 1.50 less for yearly mode SA Rebate Rs. 1.50 less for Rs. 50,000 and above

a 97.00

b 97.40c 97.50

d None of the above

44 Find out the loan payable at 90% of surrender value on the basis of following

data, (the answer to be rounded off to the next higher rupee)

SA. Rs 50,000 DOC 19.02.2002

Endowment without profit - 20 yearsDue date of last unpaid premium 19-02-2006 mode yearly

Bonus declared Rs.60/- per thousand SA. Every year since 2001, SV factor 32%a 2880

b 8784

c 9760

d None of these

45 Given the following data, state which of the following is the correct amount of the claim payable u

Plan and term Endowment 40 years

Sum assured Rs. 50,000

Date of commencement 20.02.1989

Date of death of life assured 18.02.2002

Bonus vested Rs. 36,000.

Interim bonus declared after valuation on 31.3.2001. Rs. 68 per thousand

a 86000

b 89400

c 86300

d 89700


1 d 16 c 31 b

2 d 17 c 32 a

3 b 18 b 33 a

4 d 19 a 34 c

5 b 20 a 35 c

6 a 21 b 36 a

7 b 22 c 37 a

8 c 23 d 38 d

9 a 24 a 39 c

10 d 25 d 40 d

11 b 26 a 41 d

(a) 97.00 (b) 97.40 (c) 97.50 (d) None of the above

Quarterly premium Rs. 300 due in February 2002 paid on 6 th February 2002.


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12 d 27 a 42 b

13 b 28 b 43 a

14 d 29 b 44 a

15 a 30 a 45 d


1 0 16 0 31 0

2 0 17 0 32 0

3 0 18 0 33 0

4 0 19 0 34 0

5 0 20 0 35 0

6 0 21 0 36 0

7 0 22 0 37 0

8 0 23 0 38 0

9 0 24 0 39 0

10 0 25 0 40 0

11 0 26 0 41 012 0 27 0 42 0

13 0 28 0 43 0

14 0 29 0 44 0

15 0 30 0 45 0

Total Marks 0

RESULT FAIL


73/128


74/128


75/128


76/128


77/128


78/128


79/128

nder the policy.


80/128


81/128

Practice Paper 6

Name Advisor Name

Branch Marks 43


a Trust

b Sharing

c Randomness


2 Insurance is legitimate

a when an adverse happening is likely

b When an adverse happening is unlikelyc When an adverse happening is certain

d In all the above three situations a

3 Insurance benefits replace

a All physical losses, in full

b All physical losses, partly

c All monetary losses, in full

d The monetary losses, but only to some extent d


a People hesitate to buy life insurance because they are not aware of their needs

b People hesitate to buy life insurance because they prefer to enjoy the present


d Both the statements are wrong c

5 Which is the right time for taking life insurance?

a When you are about to get married

b Soon after you have got married

c Just when you are joined a new job

d All the three times are right d

6 Retention of risk may be done conveniently by

a Large corporations

b Small companies

c Single individuals

d None of the three a

7 A valuation is done by a life insurer because


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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


8 The reason for charging level premiums is

a Risk increases as age increases

b It is convenient to the policyholder

c It is convenient to the insurer

d All the above reasons d

9 What does a premium depend upon?

a The place of worship visited by the person to be insured

b The state of health of the policyholder

c The decision of the underwriter

d The report of the agent c


a In group insurance, a single policy is issued covering many persons

b A master policy covers servants of a master




a In a limited payment policy, there is a maximum limit to the SA

b In a limited payment policy, there is a maximum limit to the termc Both the statements above are wrong

d Both the statements above are correct c


a On vesting, the insured person has an option to change the term of the policy

b On vesting the insured person has an option to increase the SA




a Height of the life insured

b Age of the life insured

c Size of the insureds family

d All the three above b


a On vesting, the insured person has an option to change the term of the policy


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b On vesting the insured person has an option to increase the SA




a Every plan of insurance is a combination of two basic plansb The name given to a plan indicates the benefits available under the plan


d Both the statement s above are wrong a


a Underwriting is done only when there is a medical examination

b Medical examination is necessary before a policy can be issued




a The underwriter determines the premium to be charged

b The underwriter is an employee of the insurer




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




a The schedule of a policy is not altered after the policy is issued

b Changes in the terms of the policy are made through endorsements



20 The date of issue of the FPR indicates

a The date when the risk effectively begins

b The date when the next premium falls duec The date when the policy will commence

d None of the above a


a In the case of SSS policies, renewal premium receipts are issued

b In the case of SSS policies, FPRs are issued



84/128



a Assignee is free from the assignors obligations under the policy

b A nomination is automatically cancelled when a loan is taken under the policy

c Both the statements above are correctd Both the statements above are wrong d


a The beneficiaries under the MWP Act can be any member of the family

b A policy can be taken under the MMWP Act for the benefit of parents




a Foreclosure can be done only with the consent of the policyholderb Foreclosure can be done only after informing the policyholder




a Revivals are not done unless the entire outstanding premium is paid

b Revivals are not done unless the underwriter agrees




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




a The beneficiaries under the MWP Act can be any member of the family

b A policy can be taken under the MMWP Act for the benefit of parents




a A presumption of death is not the same as proof of death

b Presumption of death allows inheritance of property




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29 When does a claim arise under an insurance policy?

a Whenever the policyholder feels the need for money

b When the insured events happen

c When a premium is not paid

d Whenever any of the three things mentioned above happen b


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



31 If a claim is made in January 2007 under a policy, which commenced in May 2002, stating that t

a Section 45 of the Act will not apply

b The claim can be treated as an early claim

c Foul play must be suspectedd All the three statements above are correct d


a A policy reported to be lost, may actually have been assigned

b A policy has no value after the payment of survival benefits




a The foreign exchange regulations apply if the life insured is a non-residentb The foreign exchange regulations apply if the claimant is a non-resident







d Both the above statements are wrong a


a In ULIPs, the offer bid spread is the difference between the two prices

b In ULIPs, the offer bid spread, will in some cases be zero





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a In ULIPs the insurance cover must be a minimum multiple of the premium

b ULIPs can be surrendered after two years


d Both the above statements are wrong a


a Life insurance is the best savings scheme for all persons

b Life insurance is the best investment scheme for young persons



38 Which of the following statements is correct?

a An insurance agent has fixed working hours

b An insurance agent has to mark his attendance in office every day

c An insurance agent works according to his schedule

d An insurance agent cannot do any other work c


a When vital information is not disclosed, the policyholder is benefited

b When a claim is repudiated, the agents trustworthiness is affected




a The social sector is not only in the urban areas

b The social sector includes the unorganized sector

c Both the statements above are correctd Both the statements above are wrong c


a The Ombudsmans authority is limited to claims matters only

b The Ombudsman is not a judicial authority




a The tax provisions are the same for all kinds of savingsb The tax provisions are included in the Constitution



43 A proposal for SA of Rs. 10 lakhs with DAB for monthly mode under SSS.

Proposer had a previous policy of Rs. 5 lakhs with DAB. Proposal was

accepted with health extra of Rs. 2.75 per thousand SA premium for DAB Re 1 per

thousand. 5% extra for monthly mode. large SA rebate of Rs 2/- per thousand for


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1 lakh and above. Tabular premium Rs. 48.20 maximum total SA on which DAB is allowed is Rs

Find monthly (SSS) premium, rounded off to the next higher rupee

a 4102

b 4121

c 4183

d 4195 b

44 Find out surrender value on the basis of following data (the answer to

be rounded off to the next lower rupee). SA Rs.30, 000 DOC- 15.6.1992,

Endowment with profit - 30 years

Due date of last premium paid 15-06-2007 mode half yearly

Accrued bonus Rs.750/- per thousand SA. SV factor 23%

a 3670

b 3765

c 8740

d None of these c

45 A money back policy for SA. of Rs.50,000/- Matured after 25 years.

and 20th years. Bonus had accrued at Rs.965/- per Rs.1000/- SA. Interim bonus

@ Rs.25/- per thousand SA is payable. What is the maturity claim amount?

a 68250

b 69500

c 98250

d 99500 b


1 d 16 d 31 d

2 a 17 c 32 a

3 d 18 b 33 c

4 c 19 c 34 a

5 d 20 a 35 c6 a 21 b 36 a

7 d 22 d 37 d

8 d 23 d 38 c

9 c 24 b 39 b

10 a 25 d 40 c

11 c 26 a 41 b

12 c 27 d 42 d

Survival benefits of 15% each had been paid at the end of 5th, 10th, 15th,


88/128

13 b 28 c 43 b

14 c 29 b 44 c

15 a 30 a 45 b


1 Correct 16 Correct 31 Correct











12 Correct 27 Correct 42 Correct13 Correct 28 Correct 43 Correct



Total Marks 43

RESULT PASS


89/128


90/128


91/128


92/128


93/128

he life insured had died in April 2004,


94/128


95/128


96/128


97/128

Practice Paper 7

Name Advisor Name

Branch Marks 44

1 Insurance reduces the burden on

a The society

b Individual families

c Business houses

d All the three d

2 Micro insurance can be transacted by

a Life insurers only

b Non-life insurers onlyc Both life and non-life insurers

d Only by specially created insurers c

3 The asset, which is a human being, perishes when

a He dies

b He becomes disabled to work

c He retires from work

d In all the above situations d

4 In the case of life insurance, the principle of insurable interest operates

a In the same way as in marine insurance

b In the same way as in fire insurance

c In the same way as in motor insurance

d Differently than in other forms of insurances d

5 If the life to be insured falls sick, that fact has to be informed to the insurer

a If it happens within two years of commencement of risk

b If it happens before the first premium receipt is issued

c If it happens before the policy document is issued

d Only if there is a specific query from the insurer b


a Many people think that they do not need life insurance

b Many people think that there is no hurry to buy life insurance





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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 any year is exactly what is required

d All the above statements are correct b

8 The policyholder is concerned with the

a Office premium

b Pure premium

c Net premium

d Risk premium a

9 The practice of charging level premiums has the benefit of

a Making it easy for the policyholder to maintain the insurance cover

b Increasing the returns to the policyholder

c Helping the agent in his sales effort

d All the above a


a A master policy is issued in a group insurance policy

b Each member in a group policy pays the premium directly to the insurer




a Any policy which promises a payment on a fixed date is an Endowment policy

b If the SA increases every year, it is a participating policyc Both the statements above are correct



a In group insurance, a single policy is issued covering many persons

b A master policy covers servants of a master




a Amount of annual income

b Level in the hierarchy

c Age of the person

d All the three above d

14 In what respect does group insurance differ from salary savings schemes?

a The person who pays the premium


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b Responsibility to pay the premium

c Decision to take the policy

d In all the above three respects d


a A trade union can take out a group insurance policy for its membersb The cover for an employee can be equal to his age multiplied by a fixed number




a An underwriter acts in the interests of the policyholders as a whole

b An underwriter acts in the interests of the insurance company




a Underwri

ic33 - 8 practice tests

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