recent.model.1.pdf

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MODEL TEST-1-NEW IC33-ENGLISH

1. Which is the following method of handling risk is termed as insurance?a) Risk retention b) Risk avoidance

c) Risk transfer d) Risk pooling

2. The main purpose of life insurance is to offer

a) Opportunities for wealth insurance b) Tax benefitsc) Financial security d) Risk retention

3. Which of the following is not a feature of professional marketing?

a) Need based selling. b) Mis-selling.

c) Openness and transparency in dealing.

d) Keeping the interest of the customer in the forefront.

4. Which of the following can be considered risk of low frequency but of high severity

a) Air crash. b) Road accident. c) Sickness. d) Burglary.

5. The outcome of risks that can be measured in monetary terms are known as

a) Dynamic risk b) Particular risk c) Financial risk d) Speculative

risks

6. Which of the following is not a hazard?

a) Smoking b) High blood pressurec) Fire d) Poorly constructed building

7. Consensus ad idem means

a) Ethical standards to the adopted in advertisements

b) Understand and agree upon the same thing in the same sense

c) Capacity to contract

d) Passing of consideration from one party to the other

8. Non-disclosure arises and gives grounds for avoidance by the insurer where the fact is

a) Already known to the insurer b) A matter of common knowledge

c) Material for assessing the risk d) Specified in the law

9. Which of the following statement is not correct?

a) Indemnity is financial compensation for the loss

b) Principles of indemnity makes sure that insured cannot profit from insurance

c) Indemnity makes sure that the insured is neither better nor worse off after the claim issettled

d) Life insurance is a contract of indemnity

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10. Which of the following statement is correct

a) F.P.R acknowledges receipt of first years premium

b) F.P.R is the basis of the insurance contract

c) F.P.R is the evidence that the insurance contract has begun

d) F.P.R is the evidence of the insurance contract

11. An endorsementa) Specifies changes made in the terms and conditions of the original insurance policy

b) Acknowledges receipt of the first premiumc) Needs to the stamped according to the Indian Stamp Act

d) Specifies the mutual obligations of the parties to the insurance contract

12. Prospectus is a document

a) That indicates the intention of the proposer to take up an insurance policy with the

insurer.

b) Issued by an insurance company giving information about the company, its products

andessential conditions to be known by the proposer

c) That gives essential particulars of the policy using issued.

d) Evidencing the existence of a contract between the insurer and the insured

13. Which is the following statement is correct in respect of nomination?

a) Nominee is the policyholder

b) Nominee is the owner of the policy as well as the policy moneysc) A nominee does not enjoy full right over the whole of the claim

d) Only legal heirs can be nominees

14. An assignment does not invalidate an existing nomination excepting whena) It is assigned to a bank b) It is a assigned to the

spouse

c) It is assigned to the insurer for getting a loan under the policy

d) It is assigned to a legal heir

15. When the premium has not been paid for the current due, but death occurs within the

days of grace allowed by the insurer ,

a) Only paid up value will be paid as death claim b) Death claim will not beallowed

c) Full sum assured with accrued bonus, if any, will be paid subject to recovery of

outstanding premium for the current policy year

d) Claim amount will be paid on an ex-gratia basis as decided by the insurer

16. Adverse selection is a term used to describe which of the following situations?

a) A situation where an insurance company accepts too many proposers who bring ahigher than average risk to the pool



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b) A situation where all people selected for insurance are standard lines

c) A situation where more number low income people take up insurance

d) A situation where only employed people are granted insurance

17. The most important source of preliminary information to the insurance underwriter is

a) Prospectus b) Proposalc) Policy d) Endorsement

18. Human life value can be defined asa) Total wealth of the individual

b) Value of future earning potential of an individualc) Present value of the future earnings of an individual

d) Net annual income of an individual

Study the following case study and answer Q.NO 19, 20 and 21 with reference to thesame:

Mukund Shah is 29 years old and wants to takeout a life insurance policy from XYZ lifeinsurance company. The company finds that Mukund is underweight. Taking into account the

nature of his risk profile, the company agrees to issue the policy at higher than normal

premium or alternatively imposing a lien clause. Mukund preferred lien to the imposed.

Accordingly the company imposed a diminishing lien of 20% for 4 years.

19. Lien is a clause that

a) Offers an additional benefits on payment of an additional premiumb) Gives a right to the insurer to accept or reject revival o f a policy

c) Restricts the benefits available under the policy during a specified initial period of thepolicy

d) Is applicable to all policies

20. If Mukund dies within the first year of taking the policy, amount of claim payable will be

a) 95% of the sum assured b) 90% of the sum assured

c) 85% of the sum assured d) 80% of the sum assured

21. If Mukund dies in the fourth year of taking out the policy, amount of claim payable will

be

a) 90% of sum assured b) 85% of sum assured c) 95% of sum assured d) 80% of

sum assured

22. Gross premium chargeable to policyholders is arrived at

a) By adding interest yield on investment to the net premium

b) By deducting interest yield on investment from the risk premium

c) By adding the loading for expenses and profit margin to net premiumd) By adding the loading for expenses and profit margin to risk premium

23. Under childrens assurance plans, covering the childs life deferment period refers to



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a) The policy term b) Premium paying term

c) The gap between the date of taking the policy and the date of commencement of

risk

d) Period between the date of taking the policy and the date of completing 18 years

of age

by the child

24. Section 80-D allows deduction from taxable income for the premium paid on

a) Annuity policies b) Group insurance policies c) Health insurance policiesd) Policies designed for maintenance of handicapped dependants

25. Bank deposits will provide

a) Capital appreciation besides regular income b) Fixed rate of interest

c) Hedge against inflation d) Increasing return

26. An individuals investment decision should be primarily based on

a) Life cycle need of the individual b) Tax benefits available c) Incentivesoffered

d) What is suggested in advertisement and publicity materials.

27. Which of the following statement is true in respect of Health Insurance plan

a) No exclusions are specified in the Health Insurance plan

b) No claim bonus is not allowed under Health Insurance plans

c) Most Health Insurance plans cover pre-existing illness after a specified period

d) Cashless facility is available in all hospitals for all Health Insurance plans28. Critical illness rider under a life insurance policy provides

a) Reimbursement of hospitalization changes incurred by the life assuredb) A fixed amount usually a certain percentage of the sum assured in the event of the life

assured contacting specified diseasesc) All types of illness requiring hospitalization are covered under this rider

d) The premium for this rider will be more than the premium for the basis cover

provided by the policy

29. The premiums for a deferred annuity policy

a) Has to be paid as a single lump sum payment b) Has to be paid in annual mode only

c) Can be paid as a single premium or in equated installments also

b) Cannot be paid as a single premium

30. Before receiving periodic annuity payments the individual can make a lump sum

withdrawal from the accumulated premium, under a deferred annuity, which is known as

a) Survival benefit b) Commutation c) Cash value d) Fund value

31. Which of the following statements is correct in respect of annuitiesa) Annuity policies carry death risk cover also

b) Annuity policies can be surrendered during the annuity phase of the policy



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c) One of the options for annuity payment can be annuity payment during lifetime of the

annuity and return of purchase price on his death

d) The regular annuity payments received by the individual are tax-free

32. If the client is already having insurance policies

a) The agent has nothing to do and he has to seek another clientb) The agent has to examine the adequacy of the insurance and also analyse the other

needs of the client to suggest further insurance

c) He should ask the client to give references to his friends or relativesd) He should discuss with the client about the need for fulfilling his own business

quota

33. People having a short earning career span will prefer

a) Whole life policies with regular premium payment option

b) Long term endowment with regular premium payment option

c) Single payment or limited payment endowment policies

d) Convertible whole life policy

34. The main purpose of seeking information in the fact-finding process is

a) To make the client full comfortable and relaxed

b) To furnish the information to the insurer

c) To enable the agent to recommend financial products that meet the clients needs,

objectives

and personal profile

d) To enable the agent to underwrite the proposal

35. Presentation skills are vital fora) Securing acceptance of the recommendations of the agent

b) Identifying suitable products for the clientc) Deciding the principles for the identified needs

d) Making cost-benefit analysis

36. Which is the following is not required to be submitted along with the proposal, to comply

with know your customer (KYC) procedure

a) Photograph b) Proof of Identity

c) Proof of address d) I.T Return

37. Which of the following statement is correct in respect of a life insurance agenta) Agent role ends with the submission of the proposal

b) Agent has to act in the best interest of the client as well as the insurer

c) The agent should not disclose the scales of commission in respect o insurance

products offered for sale

d) The Agent can claims a Share in the claim proceeds for the services rendered byhim in claim settlement

38. What the agent should do when the client is not satisfied with the recommended product



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a) Abandon the client and stop contacting him again

b) Assert that the product is good for him and his rejection is baseless

c) The product will have to be reviewed according to needs of the client and some other

suitable alternative product may be recommended

d) Inform the client that he will meet him again after a few days with his sales

manager

39. Persistency refers to

a) Procuring more number of policies on an year to year basisb) The amount of business the insurance companies are successful in retaining without

lapses and surrendersc) Maintaining consistent profitability of the company

d) The attempt to make claim payments more stringent

40. Paid up value is

a) The amount payable on surrendering the policy even before maturity of the policy

b) The maximum amount upto which policy loan can be grantedc) The Proportionately reduced sum assured payable on maturity of the lapsed policies

subject to eligibility condition

d) The sum of the premium paid under a policy

41. Which of the following is not a claim

a) Maturity benefit b) Death benefitc) Survival benefit d) Surrender value

42. A claim

a) Can be made at anytime by the policyholder

b) Is a request for withdrawal o f amount available under his policyc) Is a demand on the insurer to perform his part of the contract

d) Is the request for cancellation of the policy

43. Discounted claim can be made

a) At anytime after three years of commencement of the policy

b) Within one year of the date of maturity of the policy

c) Anytime during the last three years of the policy

d) Anytime after the policy acquires paid-up value

44. In the case of life insurance policies, where a claim investigation is warranted, the same

has to be completed withina) One month b) Three month

c) Six month d) One year

45. Which of the following is true in respect of renewal of agents licence?a) Before renewal of licence agent should have undergone a training for 50 hours

b) Agent should have passed a qualifying test

c) Renewal application and fees should reach the IRDA at least 30 days before the

licence expiry date



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d) License has to be renewed every two years

46. Which of the following cannot be beneficiaries of a life assurance policy effected under

Sec. 6 of the M.W.P Act?

a) Wife b) One or more children

c) Wife and one or more children jointly d) Parents

47. Along with the policy document the insurer should also include information on how to

contact the

a) Insurance council b) Consumer Forum

c) Insurance Ombudsman d) Tariff advisory committee

48. Which of the following complaints will not be entertained by the Insurance Ombudsmen?

a) Any Partial/total repudiation of claims by the Insurance companies

b) Agent not parting with his commission to the client as an incentive to buy insurance

c) Any dispute with regard to premium paid or payabled) Any delay in settlement of claims

49. Which of the following statement is not true in respect of ethical behavior of the agent

and the insurer?a) Adopting high standard of ethical practice will help to build trust and confidence

among the publicb) Ethical practices help to develop the goodwill of the co mpany

c) Ethical practices will result in negative publicity for the companyd) High ethical standards are of benefits both to the company and also the clients

50. Lapsation and surrenders can bea) Beneficial to the insurer

b) Beneficial to the agent

c) An indicator of failure on the part of the agent or deficiency in the service of the

insurance

company

d) An Indicator of the increasing number of loyal clientele.


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