S01 Principles of Insurance - Previous Exam Questions (Set 3 & Set 5)
41. Which of the following is not a characteristic of insurance?
A. Risk sharing B. Risk avoidance C. Risk transfer D. Risk pooling
Answer: B
42. In which type of policy is the sum insured reinstated after a claim?
A. Marine B. Reinstatement C. Declaration D. Floating
Answer: B
43. What is the maximum period for revival of lapsed life insurance policy?
A. 2 years B. 3 years C. 5 years D. 1 year
Answer: C
44. Which section of Insurance Act 1938 deals with licensing of agents?
A. Section 40 B. Section 42 C. Section 45 D. Section 38
Answer: B
45. Which policy pays a fixed amount on the occurrence of an event?
A. Indemnity policy B. Benefit policy C. Reinsurance policy D. Group policy
Answer: B
46. What is 'excess' in general insurance?
A. Premium discount B. Part of claim not paid by insurer C. Full sum insured D. Profit share
Answer: B
47. Fire insurance policies are generally issued for?
A. 6 months B. 1 year C. 3 years D. 5 years
Answer: B
48. Which type of insurance covers losses from dishonest employees?
A. Fidelity guarantee B. Liability C. Fire D. Marine
Answer: A
49. Principle of indemnity does not apply to?
A. Fire insurance B. Marine insurance C. Motor insurance D. Life insurance
Answer: D
50. In double insurance, how is claim settled?
A. One insurer pays all B. Shared proportionately C. Only first insurer pays D. Rejected
Answer: B
51. A person can take insurance on life of spouse due to?
A. Profit motive B. Insurable interest C. Moral hazard D. Free consent
Answer: B
52. The document issued before final policy is?
A. Endorsement B. Cover note C. Receipt D. Reinsurance
Answer: B
53. Term insurance provides?
A. Maturity benefit only B. Both benefits C. Death benefit only D. Bonus only
Answer: C
54. Which policy provides coverage for multiple risks?
A. Floating policy B. Composite policy C. Comprehensive policy D. Package policy
Answer: D
55. Nomination can be changed by?
A. Nominee B. Assignee C. Policyholder D. Insurer
Answer: C
56. Which policy pays out at the end of a fixed term or on death?
A. Whole life B. Term plan C. Endowment plan D. Group plan
Answer: C
57. IRDAI is headquartered in?
A. Mumbai B. Hyderabad C. Delhi D. Kolkata
Answer: B
58. Which principle supports the concept of no profit no loss?
A. Utmost good faith B. Indemnity C. Contribution D. Subrogation
Answer: B
59. Who bears the loss in under-insurance?
A. Insurer B. Reinsurer C. Policyholder D. Government
Answer: C
60. Which of the following is not a type of marine insurance policy?
A. Voyage B. Time C. Hull D. Reinstatement
Answer: D
61. What is surrender value in life insurance?
A. Bonus B. Claim amount C. Paid-up value D. Cash value on early termination
Answer: D
62. General insurance companies are regulated by?
A. RBI B. IRDAI C. SEBI D. Finance Ministry
Answer: B
63. A proposal is accepted only after?
A. Proposal sent B. Underwriting C. Cover note issued D. Inspection
Answer: B
64. Health insurance covers?
A. Property B. Marine cargo C. Medical expenses D. Vehicles
Answer: C
65. Reinsurance reduces?
A. Risk exposure B. Agent commission C. Premium D. Profit
Answer: A
66. Indemnity is based on?
A. Loss minimization B. Replacement cost C. Actual loss D. Sum insured
Answer: C
67. Free look period in life insurance is?
A. 30 days B. 7 days C. 15 days D. 45 days
Answer: C
68. Who can cancel agent's license?
A. Insurance company B. Court C. IRDAI D. Nominee
Answer: C
69. Which insurance product has investment and protection?
A. Endowment B. Term C. Whole Life D. Fire
Answer: A
70. Life insurance premium is based on?
A. Vehicle age B. Property type C. Mortality D. Marine risk
Answer: C
91. What is the principle behind life insurance?
A. Indemnity B. Sharing of loss C. Assurance D. Contribution
Answer: C
92. What is meant by utmost good faith?
A. Sharing risk B. Full disclosure C. Legal contract D. Subrogation
Answer: B
93. Which insurance is compulsory under Motor Vehicles Act?
A. Own Damage B. Third Party Liability C. Comprehensive D. None
Answer: B
94. Who is the first party in insurance contract?
A. Insurer B. IRDA C. Policyholder D. Nominee
Answer: C
95. What is paid-up value?
A. Full sum assured B. Reduced value for stopped premiums C. Bonus amount D. Double benefit
Answer: B
96. Contract without free consent is?
A. Voidable B. Valid C. Illegal D. Enforceable
Answer: A
97. IRDAI regulates?
A. Banks B. Insurance companies C. Mutual Funds D. Stock Exchange
Answer: B
98. Group insurance is issued to?
A. Individuals B. Families C. Corporate bodies D. Nominees
Answer: C
99. What is the policy that covers risks during construction?
A. Engineering policy B. Fire policy C. Marine policy D. Package policy
Answer: A
100. What is the function of proposal form?
A. Proof of insurance B. Request for insurance C. Policy receipt D. Premium certificate
Answer: B
101. Which type of general insurance provides compensation for stolen goods?
A. Fire B. Marine C. Burglary D. Liability
Answer: C
102. Risk in insurance means?
A. Opportunity B. Profit C. Uncertainty of loss D. Investment
Answer: C
103. Assignment in life insurance means?
A. Cancellation B. Risk sharing C. Transfer of rights D. Bonus payment
Answer: C
104. Which document modifies the policy terms?
A. Proposal form B. Endorsement C. Cover note D. Claim form
Answer: B
105. Marine insurance covers loss due to?
A. Vehicle damage B. Theft of ship C. Perils of sea D. Fire
Answer: C
106. Life insurance can be taken on?
A. Dead person B. No one C. Person with insurable interest D. Bank
Answer: C
107. What is the waiting period in health insurance?
A. Premium period B. Time before coverage begins C. Refund period D. Grace period
Answer: B
108. Indemnity principle applies to?
A. Fire insurance B. Life insurance C. Health insurance D. Endowment plans
Answer: A
109. Keyman insurance is taken by?
A. Employee B. Insurer C. Employer on key employee D. Agent
Answer: C
110. Who is the beneficiary under nomination?
A. Agent B. Insurer C. Nominee D. Underwriter
Answer: C
111. What is proximate cause?
A. Immediate cause of loss B. Far reason C. Final payment D. Future claim
Answer: A
112. Surrender value is paid when?
A. Death occurs B. Policy lapses C. Policy voluntarily closed D. Loan taken
Answer: C
113. Fire policy does not cover?
A. Accidental fire B. Intentional fire C. Lightning D. Explosion
Answer: B
114. What is moral hazard?
A. Risk of financial loss B. Behavior increasing risk C. Accident by chance D. Natural disaster
Answer: B
115. Subrogation is used in?
A. Life B. Fire C. Motor D. General insurance
Answer: D
116. Which document confirms the contract?
A. Proposal B. Receipt C. Policy document D. Premium note
Answer: C
117. Anti-selection means?
A. Poor underwriting B. Better risk C. Risk classification D. Bad risks seeking insurance
Answer: D
118. What is the main role of an agent?
A. Collect claims B. Underwrite C. Solicit insurance business D. Process loans
Answer: C
119. What is the principle of contribution?
A. Prevent profit B. Multiple policies share loss C. Refund premium D. Policy bonus
Answer: B
120. Group health policies are usually?
A. Renewable yearly B. Life-long C. Five-year D. Once only
Answer: A
