Insurance Awareness Questions – Set 2
1. Insurance works on the principle of:
a) Sharing of losses
b) Probabilities
c) Large numbers
d) Randomness
2. Insurance helps to:
a) Prevent adverse situations from occurring
b) Reduce the financial consequences of adverse situations
c) Negate all consequences of adverse situations
d) Make assets continuously productive
e) All of the above
3. The main purpose of having Life insurance is:
a) As an avenue for long-term investment
b) As a medium for getting income tax benefits from savings
c) As a governmental programme for reducing poverty
d) As an avenue for short-term investment
e) None of the above
4. Which of the following intermediaries do not require IRDA’s licence/
approval to operate in India?
a) Insurance Brokers
b) Insurance Agents
c) Third Party Administrators
d) Surveyors
e) All the above intermediaries require IRDA’s licence/ approval
5. An actuary is expected to:
a) Make an exact forecast of the future liabilities of policies
b) Make a reasonable forecast of the future liabilities of policies
c) Calculate the premium required to cover a risk on a long-term basis
d) Find the probability of an insured event to happen in non-life
policies
e) All the above statements are incorrect
6. As per structured formula under the Motor Vehicle Act, victims of
fatal injuries are paid compensation on the basis of:
a) Age and sex
b) Age and number of dependents
c) Income and size of family
d) Age and income
e) Income and number of dependents
7. As per the Insurance Act, every insurer has to prepare at the end of
financial year
a) Balance Sheet
b) Profit and Loss Account
c) Revenue Account for each class of Insurance business
d) Accounts of receipts and payments in respect of share-holders’ funds
e) All of the above
8. Which of the following is the first legislation governing both Life
Insurance and Non-life insurance?
a) Life Insurance Companies Act, 1912
b) Life Insurance Companies Act, 1920
c) The Insurance Act, 1938
d) Life Insurance Corporation Act, 1956
e) None of these
9. “A contract that pledges payment of an agreed upon amount to the
person (or his/her nominee) on the happening of an event covered against” is
technically known as
a) Death coverage
b) Insurance Premium
c) Life insurance
d) Savings for future
e) Provident fund
10. Which of the following public sector companies/organizations
provides insurance cover to exporters?
a) RBI
b) ECGC
c) NABARD
d) SIDBI
e) IRDA
11. Which of the following principles of Insurance denotes a positive
duty of the person seeking insurance to voluntarily disclose all facts material
to the risk being proposed whether requested or not?
a) Insurable Interest
b) Utmost Good Faith
c) Principle of Contribution
d) Principle of loss Minimization
e) All the above
12. What is the Principle of Insurance called under which the insured
can claim the compensation only to the extent of actual loss either from all
insurers or from any one insurer?
a) Insurable Interest
b) Principle of Subrogation
c) Principle of Contribution
d) Double insurance
e) None of these
13. Insurance contract comes into existence when one party makes an
offer or proposal of a contract and the other party accepts the proposal, this
is said to be
a) Nature of contract
b) Utmost Good Faith
c) Principle of Contribution
d) Double Insurance
e) None of these
14. __________ enables the insured to claim the amount from the third
party responsible for the loss?
a) Insurable Interest
b) Principle of Subrogation
c) Principle of Contribution
d) Double insurance
e) None of these
15. Which of the following principles of Insurance tells that an insured
may not be compensated by the insurance company in an amount exceeding the
insured’s economic loss?
a) Insurable Interest
b) Utmost Good Faith
c) Principle of Contribution
d) Principle of Indemnity
e) Both B and D
Answers:
1. E) 2. B)
3. E) 4. E) 5. B)
6. D) 7. E) 8. C)
9. C) 10. B) 11. B)
12. D) 13. A) 14. B)
15. D)
