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English Mock Test Chapter 1

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Question 1
Which of the below mentioned insurance plans has the least or no amount of savings element?
A
Term insurance plan
B
Endowment plan
C
Whole life plan
D
Money back plan
Question 2
What Should one consider before opting for Insurance?
A
Don't risk more than what you can afford to loose
B
Consider the likely outcomes of the risk carefully
C
Don't risk a lot for little
D
All the Above
Question 3
Risk transfer through risk pooling is called _________
A
Savings
B
Investments
C
Insurance
D
Insurance
Question 4
Origins of modern insurance business can be traced to _________
A
Botta mry
B
Lloyds
C
Rhodes
D
Malhotra Committee
Question 5
Which of the following statements is true?
A
Insurance is a method of sharing the losses of a 'few' by 'many'
B
Insurance is a method of transferring the risk of an individual to another individual
C
Insurance is a method of sharing the losses of a 'many' by a few
D
Insurance is a method of transferring the gains of a few to the many
Question 6
When was Lic formed?
A
2000
B
1999
C
1956
D
1976
Question 7
Which of the below insurance scheme is run by an insurer and not sponsored by the Government?
A
Jan Arogya
B
Employees State Insurance Corporation
C
Crop Insurance Scheme
D
All of the above
Question 8
Which of the below is not an advantage of cash value insurance contracts?
A
Safe and secure investment
B
Lower yields
C
Inculcates saving discipline
D
Inculcates saving discipline
Question 9
Which among the following is the regulator for the insurance industry in India?
A
Insurance Authority of India
B
Life Insurance Corporation of India
C
Insurance Regulatory and Development Authority
D
General Insurance Corporation of India
Question 10
Which among the following is a secondary burden of risk?
A
Business interruption cost
B
Setting aside reserves as a provision for meeting potential losses in the future
C
Goods damaged cost
D
Hospitalisation costs as a result of heart attack
Question 11
How many life insurance companies are operating in India currently ?
A
24
B
26
C
23
D
20
Question 12
Which among the following is a method of risk transfer?
A
Bank FD
B
Equity shares
C
Insurance
D
Real estate
Question 13
Which is the first life insurance company in the world?
A
Bombay Mutual Assurance Society Ltd
B
Lloyds Coffee House
C
Amicable Society for a perpetual Assurance
D
National Insurance Company Limited
Question 14
Which among the following scenarios warrants insurance?
A
A person may lose his wallet
B
The sole bread winner of a family might die untimely
C
Stock prices may fall drastically
D
A house may lose value due to natural wear and tear
Question 15
Two types of risk burdens that one carries are _________
A
Conditional Burden of Risk and Unconditional Burden of Risk
B
Primary Burden of risk and Secondry Burden of risk
C
Positive Burden of Risk and Negative Burden of Risk
D
All the Above
Question 16
Who devised the concept of HLV?
A
Dr. Martin Luther King
B
Warren Buffet
C
Prof hlubener
D
George Soros
Question 17
In insurance context ‘risk retention’ indicates a situation where _____.
A
Possibility of loss or damage is not there
B
Property is covered by insurance
C
One decides to bear the risk and its effects
D
Loss producing event has no value
Question 18
The measures to reduce chances of occurrence of risk are known as _____.
A
Risk retention
B
Risk transfer
C
Loss prevention
D
Risk avoidance
Question 19
By transferring risk to insurer, it becomes possible ___________.
A
To become careless about our assets
B
To make money from insurance in the event of a loss
C
To ignore the potential risks facing our assets
D
To enjoy peace of mind and plan one’s business more effectively
Question 20
Which of the below is not an element of the life insurance business?
A
Asset
B
Risk
C
Subsidy
D
Principle of mutuality
Question 21
Which of the following statement is true?
A
Insurance pays when there is loss of asset
B
Insurance reduces possibilities of loss
C
Insurance prevents its loss
D
Insurance protects the asset
Question 22
Nationionalisation of Insurance was on _______________
A
1st September 1956
B
1st December 1956
C
1 st October 1956
D
10th Sept 1956
Question 23
Out of 400 houses, each valued at Rs. 20,000, on an average 4 houses get burnt every year resulting in a combined loss of Rs. 80,000. What should be the annual contribution of each house owner to make good this loss?
A
Rs.100/-
B
Rs.80/-
C
Rs.200/-
D
Rs.400/-
Question 24
Why do insurers arrange for survey and inspection of the property before acceptance of a risk?
A
To assess the risk for rating purposes
B
To find out how the insured purchased the property
C
find out whether other insurers have also inspected the property
D
To find out whether neighbouring property also can be insured
Question 25
Which among the following is a secondary burden of risk ?
A
Setting a side reserves as a provision for meeting potential losses in the future
B
Business interruption cost
C
Goods damaged cost
D
Hospitalisation cost as a result of heart attack.
Question 26
Which is the first Indian Insurance Company?
A
Bombay Mutual Assurance Society Ltd.
B
Life Insurance Corporation of India
C
National Insurance Company Ltd.
D
The oriental Life Insurance Company Ltd.
Question 27
Which is the first Insurance Company in India?
A
Bombay Mutual Assurance Society Ltd.
B
Life Insurance Corporation of India
C
National Insurance Company Ltd.
D
The oriental Life Insurance Company Ltd.
Question 28
The cause of the risk event is known as __________________
A
risk
B
hazard
C
pooling
D
peril
Question 29
The Asset May Be
A
Physical
B
Non Physical
C
Personal
D
All the Above
Question 30
When an insurer enters into an Insurance Contract with each person who seeks to participate in the Scheme. Such a participant is known as _____________
A
Insurer
B
Insured
C
Both a and b
D
None of the Above
Question 31
How does diversification reduce risks in financial markets?
A
Investing funds across various asset classes
B
Collecting funds from multiple sources and investing them in one place
C
Maintaining time difference between investments
D
Investing in safe assets
Question 32
Collecting numerous individual contributions From various People. These people have similar assets which are exposed to similar risks. This process is known as _____________
A
Peril
B
Pooling
C
Risk
D
Asset
Question 33
____________ Refers to protection against an event that will happen
A
Insurance
B
Micro Insurance
C
Assurance
D
Bancassurance
Question 34
Which of the below is an advantage of cash value insurance contracts?
A
Secure investment
B
Returns subject to corroding effect of inflation
C
Low accumulation in earlier years
D
Lower yields
Question 35
Which is one of the major forms of Risk Transfer
A
Insurance
B
Assurance
C
Fixed deposit
D
Mutual Fund
Question 36
Which among the following is a wealth accumulation product?
A
Bank Loans
B
Shares
C
Term Insurance Policy
D
Savings Bank Account
Question 37
Which of the below mentioned insurance plans has the savings element?
A
Endowment plan
B
Term insurance plan
C
All the Above
D
None of the Above
Question 38
Out of 800 houses, each valued at Rs. 40,000, on an average 10 houses get burnt every year resulting in a combined loss of Rs. 80,000. What should be the annual contribution of each house owner to make good this loss?
A
Rs.100/-
B
Rs.80/-
C
Rs.500/-
D
Rs.400/-
Question 39
Which of the below cannot be categorised under risks?
A
Natural wear and tear
B
Dying too young
C
Dying too early
D
Living with disability
Question 40
Which of the below option best describes the process of insurance?
A
Sharing the losses of few by many
B
Sharing the losses of many by a few
C
One sharing the losses of few
D
Sharing of losses through subsidy
Question 41
10 Which of the following is true with regards to Life insurance selling
A
Not selling any tangible product but only an idea
B
The sales person doesnot go to the prospect, the prospect visits the sales person
C
Mass marketed through malls and other retail sales outlets
D
Salesman role is sharing hard medical information with a professional
Question 42
Which of the below statement is true?
A
Life insurance policies are contracts of indemnity while general insurance policies are contracts of assurance
B
The certainty of risk event in case of general insurance increases with time
C
In case of general insurance the risk event protected against is certain
D
Life insurance policies are contracts of assurance while general insurance policies are contracts of indemnity
Question 43
Which among the following cannot be termed as an asset?
A
Air
B
Car
C
Human Life
D
House
Question 44
Pradip wants to invest in wealth Accumulation Products. In Below of the which product he should invest.
A
Bank FD
B
Life Insurance
C
Shares
D
General Insurance
Question 45
What does unbundling of life insurance products refers to?
A
Separation of the protection and savings element
B
Correlation of life insurance products with bonds
C
Amalgamation of protection and savings element
D
Separation of the protection and savings element
Question 46
Ramesh, 16 years old has proposed for a Life insurance contract in  ABC insurance company. He is a student and he has no income. His father was expired in 40 years of age. But the proposal has been declined by the insurance company. What is the major reason?
A
He has no income
B
His father was expired on 40 years of age
C
Ramesh is a minor
D
He is a student
Question 47
Which among the following is a limitation of traditional life insurance products?
A
Yields on these policies is high
B
Clear and visible method of arriving at surrender value
C
Rate of return is not easy to ascertain
D
Well defined cash and savings value component
Question 48
___________________ was the first legislation enacted to regulate the conduct of insurance companies in India
A
The Insurance Act 1938
B
The Life lnsurnce companies Act 1938
C
Provident Fund Act 1912
D
The Insurance Act 2000
Question 49
Which of the below is the most appropriate explanation for the fact that young people are charged lesser life insurance premium as compared to old people?
A
Young people are mostly dependant
B
Old people can afford to pay more
C
Mortality is inversely related to age
D
Mortality is related to age
Question 50
With regards to valuation of assets by insurance companies, __________ is the value at which the life insurer has purchased or acquired its assets.
A
Book value
B
Discounted future value
C
Discounted present value
D
Market value
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