Insurance Related Questions: Insurance MCQs

Insurance Related Questions. Multiple-Choice Questions related to Insurance Companies. For more Insurance Related Questions visit Insurance Company Interview Questions


Insurance Related Questions


For a household insurance policy, insurable interest need only exist at outset, and at what other point ??

a. The termination date
b. The date the policy document is received
c. The date a claim occurs
d. The date the cancellation period expires


Rahul is employed by Sunny. In respect of this employment, Rahul automatically has an insurable interest in Sunny’s life up to what limit, if any ??

a. There is no limit
b. Sunny’s annual profit
c. Rahul’s pension fund value
d. Rahul’s monthly salary


Arun started a 20-year term insurance policy. Once established, when, if at all, is the insurer next entitled to ask him for proof of continuing good health ??

a. When a lapsed policy is revived
b. At the point when he changes occupation or retires
c. After the end of the first 12 months
d. At no point


The concept of indemnity is based on the key principle that policyholders should be prevented from ??

a. Profiting from insurance
b. Paying excessively for insurance cover
c. Making false insurance claims
d. ensuring existing losses


Once an absolute assignment is effected under a life insurance policy, who will be the titleholder(s) of this policy ??

a. The assignor and assignee jointly
b. Either the assignor or assignee depending on the type of policy involved
c. The assignee in all cases
d. The assignor in all cases


Insurance MCQs


Where annually increasing flexible premiums operate under a life insurance policy, what rate of increase will generally apply ??

a. 7.50%
b. 5.00%
c. 3.00%
d. 2.50%


The main reason why a life insurance proposal form often asks for the proposer’s height is to enable a reasonable comparison with the proposer’s ??

a. Weight
b. Occupation
c. Gender
d. Age


A life insurance policy can only be made paid-up if what particular policy feature exists ??

a. Savings element
b. Rider benefits
c. Nomination facility
d. Indexing contribution


A policy document for a money-back policy includes the statement of the proposal and declaration signed by the proposer form the basis of the contracts. In which the main section of the policy document will this normally appear ??

a. Terms and conditions
b. Preamble
c. Operative clause
d. Attestation


A life insurer issued a quotation on 10 February, guaranteed for 14 days, which was accepted by the customer on day 10. Consequently, the insurer can only decline this risk if the ??

a. Material facts change
b. The marketplace experiences a significant downturn
c. Insurer increases its underlying premium rates
d. The customer submits a second quotation request


Insurance Related Questions


The need for investment advice from an insurance agent normally results from what overriding key factor ??

a. Shortage of available funds
b. Lack of market knowledge
c. Inability to prioritize future financial needs
d. Absence of any long-term goals


Ibrahim recently arranged a life insurance policy under which he is classed as the master policyholder. This addresses his role as ??

a. An employer
b. An employee
c. A debtor
d. A creditor


The main protection need of a 19-year-old is most likely to be ??

a. Protection of children’s future
b. Protection of dependants
c. Home loan protection
d. Self-protection


What normally happens to the sum insured under a life insurance policy once the period of the lien expires ??

a. It is replaced by a newly-underwritten sum insured
b. It is temporarily suspended
c. It increases
d. It reduces


The amount paid out by the insurer under a 30-year life insurance policy exceeded the sum insured plus revisionary bonuses. The excess is likely to result from ??

a. A terminal bonus
b. A tax rebate
c. A frequency loading
d. Charges refunded


Insurance Related Questions


When undertaking financial planning for individuals without capital, what savings need is likely to be addressed in every single case ??

a. House purchase funds
b. Funds for educational costs
c. Funds for children’s savings
d. Emergency funds


Naveen is addressing his income needs by investing directly in corporate bonds. In what form will he receive this income ??

a. Rental payments
b. Interest payments
c. Dividend payments
d. Annuity installments


Which policy referring to policies that provide coverage only for the loss caused by the perils ??

a. All perils
b. All Risk
c. Named Perils
d. Specifies perils


Coverage that protects businesses engaged in electronic commerce from losses caused by hackers is termed as ??

a. Identity theft Insurance
b. Hacker Insurance
c. Hospital Insurance
d. Hospital Insurance


Coverage against loss through stealing by individuals, not in a position of trust is called ??

a. Theft Insurance
b. Group Insurance
c. Hull Insurance
d. Hospital Insurance


Insurance Related Questions


_________ consists of collecting premiums from numerous individuals to compensate the few who may suffer losses ??

b. Guarantee
c. Contract
d. Pooling


The losses of a few are shared amongst many through the mechanism of ??

a. Insurance
b. Government
c. Nuclear family
d. All of the above


Of 400 houses costing each Rs.20, 000 if on average 4 houses are damaged in a fire causing a total loss of Rs80,000 what should be the annual contribution of each house owner ??

a. Rs.400
b. Rs.100
c. Rs.200
d. Rs.800


Which of the below losses are covered under keyman insurance ??

a. Losses caused due to errors and omission
b. General liability
c. Losses related to the extended period when a key person is unable to work
d. Property theft


Which of the following statements are correct?
i. In order to be insurable, a risk must be capable of statistical estimation.
ii. In insurance, only economic or financial losses can be compensated ??

a. Both statements i and ii are correct
b. Statement ii is correct
c. Statement i is correct
d. None of the three


Insurance Related Questions


Secondary burden of risk consists of _________ and _________ one has to bear if exposed to loss situation ??

a. Circumstances, Conflicts
b. Situations, Safeguards
c. Costs, Strains
d. Trials, tribulations


 _________ and _________ refer to measures to reduce chance of occurrence and measures to reduce degree of losses ??

a. Loss Prevention, Loss Reduction
b. Loss advantage, Loss prevention
c. Loss Control, Loss management
d. Loss Prevention, Loss damage


Cost of the risk would _________ with the probability and amount of loss ??

a. Vary
b. Decrease
c. Increase
d. None of the above


_________ means that insurer would assess and compensate only the exact amount of loss ??

a. Certainty
b. Uncertainty
c. Probability
d. Indemnity


Proximate Cause refers to the _________ cause which set in motion a chain of events producing loss ??

a. Efficient
b. Active
c. A & B are correct
d. None of the above


Insurance Related Questions


The changes in healthcare costs over recent years have had what general impact on healthcare insurance ??

a. A strengthening of the insurable interest rules
b. A rise in the need for cover
c. A reduction in underwriting requirements
d. A fall in average premium levels


The main purpose of the guaranteed insurability rider benefit is to give the policyholder the right to ??

a. Maintain cover despite a fall in investment value
b. Increase cover when a key life event occurs
c. Include his parents under the policy
d. Cancel a health-based exclusion after a symptom-free period


An investor holds a wide range of shares. If the Reserve Bank of India announces a series of significant interest rate increases, the prices of these shares are most likely to ??

a. Stagnate
b. Increase
c. Decrease
d. Become volatile


Nikhil is looking for tax-efficient savings methods for his disposable income. He is considering an equity-linked savings scheme, national savings certificates, and an endowment insurance policy. Premiums for which of these investments are allowed to be deducted from his taxable income ??

a. The equity-linked savings scheme, the national savings certificates, and the endowment insurance policy
b. The national savings certificates and the endowment insurance policy only
c. The equity-linked savings scheme and the national savings certificates only
d. The national savings certificates only


________ is the maximum amount an insurance company will pay if an insured asset is deemed a total loss ??

a. Guaranteed Replacement Cost
b. Replacement value
c. Actual value
d. Insurance value


Insurance Related Questions


Insurance works on the principle of ??

a. Randomness
b. Sharing
c. Trust
d. All of the above


Apart from the salary level, what other key feature of Alok’s job is likely to have a major impact on the level of his pension, life insurance, and health insurance needs ??

a. Whether the job is manual or non-manual
b. Whether the job is in the public or private sector
c. The normal retirement age in relation to the job
d. Whether the job is office or field-based


The sole focus during a client’s fact-find session was healthcare requirements and estate planning. Which main life stage is the most likely to fall into ??

a. Retirement
b. Pre-retirement
c. Young married with children
d. Young married


The general need for a pension policy results from the existence of what key problem ??

a. Uncertainty over investment performance
b. Likely deterioration in health
c. Lack of employment opportunities
d. Anticipated fall in income



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