General Insurance Question Answers for competitive exams . This mock test having 40 questions in General Insurance, with four choices. On each click on answers system will tell you where the answers is correct or incorrect. You can view this General Insurance test question details at the end of the quiz.
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General Insurance questions answers are applicable for any kind of Insurance related exam preparation in India like LIC, IRDA Agent. You can practice as much as you can to gather knowledge of how to answers Insurance critical type papers in short time and this can be a big factor for cracking all India level exam.
Insurance Questions and Answers
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Question 1 |
Which among the following is the regulator for the insurance industry in India?
Insurance Authority of India | |
Insurance Regulatory and Development Authority | |
Life Insurance Corporation of India | |
General Insurance Corporation of India |
Question 1 Explanation:
Insurance Regulatory and Development Authority is the regulator for the insurance industry in India.
Question 2 |
Which among the following is a secondary burden of risk?
Business interruption cost | |
Goods damaged cost | |
Setting aside reserves as a provision for meeting potential losses in the | |
Hospitalisation costs as a result of heart attack |
Question 2 Explanation:
The need for setting aside reserves as a provision for potential losses in the future is a secondary burden of risk.
Question 3 |
Which among the following is a method of risk transfer?
Bank FD | |
Insurance | |
Equity shares | |
Real estate |
Question 3 Explanation:
Insurance is a method of risk transfer.
Question 4 |
Which among the following scenarios warrants insurance?
The sole bread winner of a family might die untimely | |
A person may lose his wallet | |
Stock prices may fall drastically | |
A house may lose value due to natural wear and tear |
Question 4 Explanation:
The bread winner of a family might die untimely leaving the entire family to fend for itself, such a scenario warrants purchasing of life insurance.
Question 5 |
Which of the below insurance scheme is run by an insurer and not sponsored by the Government?
Employees State Insurance Corporation | |
Crop Insurance Scheme | |
Jan Arogya | |
All of the above |
Question 5 Explanation:
The Jan Arogya insurance scheme is run by an insurer and not sponsored by the Government.
Question 6 |
How does diversification reduce risks in financial markets?
Collecting funds from multiple sources and investing them in one place | |
Investing funds across various asset classes | |
Maintaining time difference between investments | |
Investing in safe assets |
Question 6 Explanation:
Diversification aims to reduce risks in financial markets by spreading investments across various asset classes.
Question 7 |
Which among the following is an example of coercion?
Ramesh signs a contract without having knowledge of the fine print | |
Ramesh threatens to kill Mahesh if he does not sign the contract | |
Ramesh uses his professional standing to get Mahesh to sign a contract | |
Ramesh provides false information to get Mahesh to sign a contract |
Question 7 Explanation:
Ramesh threatening to kill Mahesh if he does not sign the contract is an example of coercion.
Question 8 |
Which among the following options cannot be insured by Ramesh?
Ramesh’s house | |
Ramesh’s spouse | |
Ramesh’s friend | |
Ramesh’s parents |
Question 8 Explanation:
Ramesh does not have insurable interest in his friend’s life and hence cannot insure the same.
Question 9 |
Which among the following would you recommend in order to seek protection against unforeseen events?
Insurance | |
Transactional products like bank FD’s | |
Shares | |
Debentures |
Question 9 Explanation:
Insurance provides protection against unforeseen events
Question 10 |
When is the best time to start financial planning?
Post retirement | |
As soon as one gets his first salary | |
After marriage | |
Only after one gets rich |
Question 10 Explanation:
As soon as one gets his first salary one should start financial planning.
Question 11 |
Which among the following is not an objective of tax planning?
Maximum tax benefit | |
Reduced tax burden as a result of prudent investments | |
Tax evasion | |
Full advantage of tax breaks |
Question 11 Explanation:
Tax evasion is not an objective of tax planning.
Question 12 |
Which among the following is an intangible product?
Car | |
House | |
Life insurance | |
Soap |
Question 12 Explanation:
Life insurance is an intangible product.
Question 13 |
The premium paid for whole life insurance is _____________ than the premium paid for term assurance.
Higher | |
Lower | |
Equal | |
Substantially higher |
Question 13 Explanation:
The premium paid for whole life insurance is higher than the premium paid for term assurance.
Question 14 |
Which among the following is a non-traditional life insurance product?
Term assurance | |
Universal life insurance | |
Endowment insurance | |
Whole life insurance |
Question 14 Explanation:
Universal life insurance is a non-traditional life insurance product.
Question 15 |
Which of the below statement is incorrect?
Variable life insurance is a temporary life insurance policy | |
Variable life insurance is a permanent life insurance policy | |
The policy has a cash value account | |
The policy provides a minimum death benefit guarantee |
Question 15 Explanation:
The statement “Variable life insurance is a temporary life insurance policy” is
incorrect. The correct statement is “Variable life insurance is a permanent life insurance
policy”.
Question 16 |
Which of the below statement is incorrect?
Variable life insurance is a temporary life insurance policy | |
Variable life insurance is a permanent life insurance policy | |
The policy has a cash value account | |
The policy provides a minimum death benefit guarantee |
Question 16 Explanation:
The statement “Variable life insurance is a temporary life insurance policy” is
incorrect. The correct statement is “Variable life insurance is a permanent life insurance
policy”.
Question 17 |
Who provides public pensions?
State | |
Employers | |
Insurers | |
NGO’s |
Question 17 Explanation:
Public pension is provided by the State.
Question 18 |
Who bears the investment risk in a fixed benefit annuity?
Insurer | |
Insured | |
State | |
Risk pool |
Question 18 Explanation:
Insurer bears the investment risk in a fixed benefit annuity.
Question 19 |
Which among the below statements is true? Statement I: Every pension is an annuity Statement II: Every annuity is a pension
I and II are true | |
I and II are false | |
I is true and II is false | |
I is false and II is true |
Question 19 Explanation:
Statement I is true and II is false.
Question 20 |
Health insurance is designed to handle which of the following risks?
Mortality | |
Morbidity | |
Infinity | |
Serendipity |
Question 20 Explanation:
Health insurance can be used to address the risk of morbidity
Question 21 |
What is the objective behind Mortgage Redemption Insurance?
Facilitate cheaper mortgage rates | |
Provide financial protection for home loan borrowers | |
Protect value of the mortgaged property | |
Evade eviction in case of default |
Question 21 Explanation:
MRI provides financial protection for home loan borrowers.
Question 22 |
What does a policy lapse mean?
Policyholder completes premium payment for a policy | |
Policyholder discontinues premium payment for a policy | |
Policy attains maturity | |
Policy is withdrawn from the market |
Question 22 Explanation:
Policyholder discontinuing premium payment for a policy is termed as policy lapse.
Question 23 |
Who bears the investment risk in case of ULIPs?
Insurer | |
Insured | |
State | |
IRDA |
Question 23 Explanation:
Insured bears the investment risk in case of ULIP.
Question 24 |
During the _________ period, if the policyholder has bought a policy and does not want it, he / she can return it and get a refund.
Free evaluation | |
Free look | |
Cancellation | |
Free trial |
Question 24 Explanation:
During the free look period, if the policyholder has bought a policy and does not want it, he / she can return it and get a refund.
Question 25 |
What does a first premium receipt (FPR) signify? Choose the most appropriate option.
Free look period has ended | |
It is evidence that the policy contract has begun | |
Policy cannot be cancelled now | |
Policy has acquired a certain cash value |
Question 25 Explanation:
FPR is evidence that policy contract has begun.
Question 26 |
Under what circumstances would the policyholder need to appoint an appointee?
Insured is minor | |
Nominee is a minor | |
Policyholder is not of sound mind | |
Policyholder is not married |
Question 26 Explanation:
Where the nominee is a minor, the policyholder needs to appoint an appointee.
Question 27 |
Which of the following cases is likely to be declined or postponed by a life insurer?
Healthy 18 year old | |
An obese person | |
A person suffering from AIDS | |
Housewife with no income of her own |
Question 27 Explanation:
A person suffering from AIDS is most likely to be declined life insurance cover.
Question 28 |
Which of the following is an example of moral hazard?
Stunt artist dies while performing a stunt | |
A person drinking copious amounts of alcohol because he is inured | |
Insured defaulting on premium payments | |
Proposer lying on policy document |
Question 28 Explanation:
A person drinking copious amounts of alcohol because he is inured is an example of moral hazard.
Question 29 |
Why is heredity history of importance in medical underwriting?
Rich parents have healthy kids | |
Certain diseases can be passed on from parents to children | |
Poor parents have malnourished kids | |
Family environment is a critical factor |
Question 29 Explanation:
Certain diseases can be passed on from parents to children and hence heredity history needs to be considered in medical underwriting.
Question 30 |
Which of the below statement best describes the concept of claim? Choose the most appropriate option.
A claim is a request that the insurer should make good the promise specified in the contract | |
A claim is a demand that the insurer should make good the promise specified in the contract | |
A claim is a demand that the insured should make good the commitment specified in the agreement | |
A claim is a request that the insured should make good the promise specified in the agreement |
Question 30 Explanation:
A claim is a demand that the insurer should make good the promise specified in the contract.
Question 31 |
Which of the below statements is correct?
The prime purpose of insurance regulation is to protect the insurance
companies | |
The prime purpose of insurance regulation is to protect the policyholder | |
The prime purpose of insurance regulation is to protect the insurance
intermediaries | |
The prime purpose of insurance regulation is to protect the Government |
Question 31 Explanation:
The prime purpose of insurance regulation is to protect the policyholder.
Question 32 |
Which of the below statement is correct?
If agent loses the licence, then no duplicate licence is issued. The agent has
to wait till the time of renewal, when another copy is issued | |
If agent loses the licence, then the Authority may issue a duplicate licence
free of cost. | |
If agent loses the licence, then the Authority may issue a duplicate licence
only after a FIR is lodged and a waiting period of 30 days. | |
If the agent loses the licence, then the Authority may issue a duplicate
licence on payment of a fee of rupees fifty. |
Question 32 Explanation:
If the agent loses the licence, then the Authority may issue a duplicate licence on payment
a fee of rupees fifty.
Question 33 |
Which of the below statements is incorrect?
An individual insurance agent is a representative of the insurance company
and is governed by the agent-principal relationship. | |
An individual insurance agent's primary relationship and responsibility is to
the insurance buyer and not the insurance company. | |
Insurance broker, who represents the insured, generally does not have any
contractual agreement to exclusively serve any one insurance company | |
Insurance broker is expected to represent the customer’s interest when
choosing the right product and company that would best fit the customer’s
particular needs. |
Question 33 Explanation:
The statement “An individual insurance agent's primary relationship and
responsibility is to the insurance buyer and not the insurance company” is
incorrect.
Question 34 |
Proportion of policies remaining in force at the end of the period out of the total policies in force at the beginning of the period is referred to as
Persistency | |
Consistency | |
Uniformity | |
Reliability |
Question 34 Explanation:
Proportion of policies remaining in force at the end of the period out of the
total policies in force at the beginning of the period is referred to as
persistency.
Question 35 |
Which of the below statement best describes a “testimonial”?
An endorsement from a satisfied customer | |
Test result for a product in a benchmarking test | |
List of tests that a product must pass | |
Money required to test a product |
Question 35 Explanation:
A testimonial is an endorsement from a satisfied customer.
Question 36 |
What is meant by customer lifetime value?
Sum of costs incurred while servicing the customer over his lifetime | |
Rank given to customer based on business generated | |
Sum of economic benefits that can be achieved by building a long term
relationship with the customer | |
Maximum insurance that can be attributed to the customer |
Question 36 Explanation:
Sum of economic benefits that can be achieved by building a long term
relationship with the customer is referred to as customer lifetime value.
Question 37 |
In a customer’s mind, there are two types of feelings and related emotions that
arise with each service failure on part of the insurance company. These feelings
are
Confusion and empathy | |
Dishonesty and revenge | |
Ignorance and sympathy | |
Sense of unfairness and hurt ego |
Question 37 Explanation:
In a customer’s mind, there are two types of feelings and related emotions that
arise with each service failure on part of the insurance company. These feelings
are: sense of unfairness and hurt ego
Question 38 |
Which among the following is not an element of active listening?
Paying good attention | |
Being extremely judgmental | |
Empathetic listening | |
Responding appropriately |
Question 38 Explanation:
Being extremely judgmental is not an element of active listening.
Question 39 |
The ______________ has jurisdiction to entertain complaints, where value of
the goods or services and the compensation claimed is up to Rs.20 lakhs.
District Forum | |
State Commission | |
Zilla Parishad | |
National Commission |
Question 39 Explanation:
The District Forum has jurisdiction to entertain complaints, where value of the
goods or services and the compensation claimed is up to Rs. 20 lakhs.
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