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English Mock Test Chapter 13

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Question 1
Which of the below statement is false with regards to nomination?
A
A nominee has full rights on the whole of the claim
B
Nomination can be changed by making an endorsement in the policy
C
Nomination can be done at the time of policy purchase or subsequently
D
Policy nomination is not cancelled if the policy is assigned to the insurer in return for a loan
Question 2
In order for the policy to acquire a guaranteed surrender value, for how long must the premiums be paid as per law?
A
Premiums must be paid for at least 5 consecutive years
B
Premiums must be paid for at least 4 consecutive years
C
Premiums must be paid for at least 3 consecutive years
D
Premiums must be paid for at least 2 consecutive years
Question 3
When is a policy deemed to be lapsed?
A
If the premiums are not paid on due date
B
If the premiums are not paid before the due date
C
If the policy is surrendered
D
If the premium has not been paid even during days of grace
Question 4
Which of the below statement is correct with regards to grace period of an insurance policy?
A
The standard length of the grace period is 30 days.
B
The standard length of the grace period is one month or 31 days.
C
The standard length of the grace period is one month or 30 days.
D
The standard length of the grace period is one month.
Question 5
What will happen if the policyholder does not pay the premium by the due date and dies during the grace period?
A
The insurer will pay the claim after deducting the unpaid premium
B
The insurer will consider the policy void due to non-payment of premium by the due date and hence reject the claim
C
The insurer will pay the claim and waive off the last unpaid premium
D
The insurer will pay the claim after deducting the unpaid premium along with interest which will be taken as 2% above the bank savings interest rate
Question 6
During the revival of a lapsed policy, which of the below aspect is considered most significant by the insurance company? Choose the most appropriate option.
A
Revival of the policy leading to increase in risk for the insurance company
B
Payment of unpaid premiums with interest
C
Evidence of insurability at revival
D
Insured submitting the revival application within a specified time frame
Question 7
For an insurance policy nomination is allowed under _________ of the Insurance Act, 1938.
A
Section 38
B
Section 39
C
Section 45
D
Section 10
Question 8
Which of the below statement is incorrect with regards to a policy against which a loan has been taken from the insurance company?
A
The policy will have to be assigned in favour of the insurance company
B
The nomination of such policy will get cancelled due to assignment of the policy in favour of the insurance company
C
The nominee’s right will affected to the extent of the insurer’s interest in the policy
D
The policy loan is usually limited to a percentage of the policy’s surrender Value
Question 9
Which of the below statement is incorrect with regards to assignment of an insurance policy?
A
In case of Absolute Assignment, in the event of death of the assignee, the title of the policy would pass to the estate of the deceased assignee.
B
The assignment of a life insurance policy implies the act of transferring the rights right, title and interest in the policy (as property) from one person to another.
C
In case of Absolute Assignment, the policy vests absolutely with the assignee till maturity, except in case of death of the insured during the policy tenure, wherein the policy reverts back to the beneficiaries of the insured.
D
It is necessary that the policyholder must give notice of assignment to the insurer.
Question 10
Which of the below alteration will be permitted by an insurance company?
A
Extension of the premium paying term
B
Splitting up of the policy into two or more policies
C
Change of the policy from with profit policy to without profit policy
D
Increase in the sum assured
Question 11
Under what circumstances would the policyholder need to appoint an appointee?
A
Nominee is a minor
B
Insured is minor
C
Policyholder is not of sound mind
D
Policyholder is not married
Question 12
Every life insurance contract undertakes to pay the death benefit on the condition that the premiums have been paid up to date and the policy is in force. The _____________________________ clause grants the policyholder an additional period of time to pay the premium after it has become due.
A
Presumption of death
B
Due date
C
“Grace Period”
D
policy lapse
Question 13
__________________ is the process by which a life insurance company puts back into force a policy that has either been terminated because of non-payment of premiums or has been continued under one of the non-forfeiture provisions.
A
“Grace Period”
B
policy lapse
C
Reinstatement
D
Presumption of death
Question 14
We have already seen that a policy may be said to be in ________________ condition if premium has not been paid even during the days of grace. The good news is that practically all the permanent life insurance contracts permit reinstatement (revival) of a lapsed policy.
A
“Grace Period”
B
lapse
C
Reinstatement
D
Presumption of death
Question 15
A revival of the policy cannot however be an unconditional right of the insured. It can be accomplished only under certain conditions:
A
No increase in risk for insurer
B
Creation of reserve
C
Revival application within specific time period
D
All of the above
Question 16
A revival of the policy cannot however be an unconditional right of the insured. It can be accomplished only under certain conditions:
A
increase in risk for insurer
B
no Creation of reserve
C
Revival application within specific time period
D
All of the above
Question 17
A revival of the policy cannot however be an unconditional right of the insured. It can be accomplished only under certain conditions:
A
No increase in risk for insurer
B
No Creation of reserve
C
Surrender application within specific time period
D
All of the above
Question 18
A revival of the policy cannot however be an unconditional right of the insured. It can be accomplished only under certain conditions:
A
No increase in risk for insurer
B
Creation of reserve
C
Surrender application within specific time period
D
All of the above
Question 19
A revival of the policy cannot however be an unconditional right of the insured. It can be accomplished only under certain conditions:
A
No increase in risk for insurer
B
Creation of reserve
C
Satisfactory evidence of continued insurability
D
All of the above
Question 20
A revival of the policy cannot however be an unconditional right of the insured. It can be accomplished only under certain conditions:
A
No increase in risk for insurer
B
No Creation of reserve
C
Dissatisfactory evidence of continued insurability
D
All of the above
Question 21
A revival of the policy cannot however be an unconditional right of the insured. It can be accomplished only under certain conditions:
A
increase in risk for insurer
B
No Creation of reserve
C
Satisfactory evidence of continued insurability
D
All of the above
Question 22
_______________________________: Revival of a policy cannot result in an increase in risk for the insurance company
A
No increase in risk for insurer
B
Creation of reserve
C
Satisfactory evidence of continued insurability
D
Revival application within specific time period
Question 23
A revival of the policy cannot however be an unconditional right of the insured. It can be accomplished only under certain conditions:
A
No increase in risk for insurer
B
Payment of overdue premiums with interest
C
Satisfactory evidence of continued insurability
D
All of the above
Question 24
A revival of the policy cannot however be an unconditional right of the insured. It can be accomplished only under certain conditions:
A
increase in risk for insurer
B
Payment of overdue premiums with interest
C
Satisfactory evidence of discontinued insurability
D
All of the above
Question 25
A revival of the policy cannot however be an unconditional right of the insured. It can be accomplished only under certain conditions:
A
No increase in risk for insurer
B
Payment of overdue premiums with interest
C
Payment of outstanding loan
D
All of the above
Question 26
A revival of the policy cannot however be an unconditional right of the insured. It can be accomplished only under certain conditions:
A
increase in risk for insurer
B
Payment of overdue premiums without interest
C
Payment of outstanding loan
D
All of the above
Question 27
_______________________________: The policyholder must pay such amount of premiums with interest, as would lead to creation of the same reserve it would have accumulated if the policy had not lapsed.
A
No increase in risk for insurer
B
Creation of reserve
C
Satisfactory evidence of continued insurability
D
Revival application within specific time period
Question 28
_______________________________: The insured must present to the insurance company satisfactory evidence of continued insurability of the insured. Not only must her health be satisfactory but other factors such as financial income and morals must not have deteriorated substantially.
A
No increase in risk for insurer
B
Creation of reserve
C
Satisfactory evidence of continued insurability
D
Revival application within specific time period
Question 29
_______________________________: The policy owner must complete the revival application within the time frame stated in the provision for such reinstatement. In India revival must be affected within a specific time period, say five years, from the date of lapse.
A
No increase in risk for insurer
B
Creation of reserve
C
Satisfactory evidence of continued insurability
D
Revival application within specific time period
Question 30
_____________________________: The policy owner is required to make payment of all overdue premiums with interest from due date of each premium.
A
No increase in risk for insurer
B
Payment of overdue premiums with interest
C
Payment of outstanding loan
D
Revival application within specific time period
Question 31
_____________________________: The insured must also pay any outstanding policy loan or reinstate any indebtedness that may have existed.
A
No increase in risk for insurer
B
Payment of overdue premiums with interest
C
Payment of outstanding loan
D
Revival application within specific time period
Question 32
Which of the below is a type of revival?
A
Ordinary revival
B
Special revival
C
Loan cum revival
D
All of the above
Question 33
Which of the below is a type of revival?
A
Ordinary revival
B
Special revival
C
Instalment revival
D
All of the above
Question 34
Which of the below is a type of revival?
A
Ordinary revival
B
Special revival
C
Instalment revival
D
All of the above
Question 35
________________________ : The simplest form of revival is one that involves payment of arrears of premium with interest. This has been termed as ordinary revival and is affected when the policy has acquired surrender value. The insurer would also call for a declaration of good health or some other evidence of insurability like a medical examination.
A
Ordinary revival
B
Special revival
C
Instalment revival
D
All of the above
Question 36
_____________________________ : What do we do when the policy has run for less than three years and has not acquired minimum surrender value (i.e. the accumulated reserves or cash value is insignificant) but the period of lapse is large?, say the policy is coming up for revival after a period of one year or more since the date of first unpaid premium. One way to revive it is through a scheme known as special revival (which is for instance prevalent in LIC of India). Here it is as though a new policy has been written, whose date of commencement is within two years of the original date of commencement of the lapsed policy. The maturity date shall not exceed the original stipulated period as applicable to certain lives at the time of taking the policy.
A
Ordinary revival
B
Special revival
C
Instalment revival
D
All of the above
Question 37
____________________________:Finally we have instalment revival which is allowed when the policyholder is not in a position to pay arrears of premium in a lump sum and neither can the policy be revived under special revival scheme. The arrears of premium in such case would be calculated in the usual manner as under an ordinary revival scheme. Depending on the mode of payment (quarterly or half yearly) the life assured may be required to pay one half yearly or two quarterly premiums. The balance of arrears to be paid would then be spread so as to be paid with future premiums on premium due dates, during a period of two years or more, including the current policy anniversary year and two full policy anniversaries thereafter. A condition may be imposed that there should be no outstanding loan under the policy at the time of revival.
A
Ordinary revival
B
Special revival
C
Instalment revival
D
All of the above
Question 38
_____________________________:Life insurers normally have a chart that lists the surrender values at various times and also the method that will be used for calculating the surrender values. The formula takes into account the type and plan of insurance, age of the policy and the length of the policy premium-paying period. The actual amount of cash one gets in hand on surrender may be different from the surrender value amount prescribed in the policy. This is because paid up additions, bonuses or dividend accumulations, advance premium payments or gaps in premiums, policy loans etc. may result in additions or subtractions from the cash surrender value accrued. What the policyholder ultimately receives is a net surrender value.Surrender Value is a percentage of paid-up value. Surrender Value arrived as a percentage of premiums paid is called Guaranteed Surrender Value.
A
Surrender values
B
Policy loans
C
Nomination
D
All of the above
Question 39
___________________ :Life insurance policies that accumulate a cash value also have a provision to grant the policyholder the right to borrow money from the insurer by using the cash value of the policy as a security for the loan. The policy loan is usually limited to a percentage of the policy’s surrender value (say 90%). Note that the policyholder borrows from his own account. He or she would have been eligible to get the amount if the policy had been surrendered.
A
Surrender values
B
Policy loans
C
Nomination
D
All of the above
Question 40
____________________ is where the life assured proposes the name of the person(s) to whom the sum assured should be paid by the insurance company after their death.
A
Surrender values
B
Policy loans
C
Nomination
D
All of the above
Question 41
The life assured can nominate ______________ person as nominees.
A
one or more than one
B
only one
C
Always more than one
D
Two
Question 42
Nominees are entitled for valid discharge and have to hold the money as a __________________ on behalf of those entitled to it.
A
trustee
B
Legal heir
C
Surrender values
D
None of the above
Question 43
Nomination is not applicable at __________________________.
A
Section 6 of MWP Act
B
Assignment to a person other than the insurer
C
Death of the nominees
D
All of the above
Question 44
Nomination is applicable at __________________________.
A
Section 6 of MWP Act
B
Assignment to a person other than the insurer
C
Death of the nominees
D
Assignment to the insurer
Question 45
The term _____________________ ordinarily refers to transfer of property by writing as distinguished from transfer by delivery. The ownership of property consists of various rights in respect of such property, which are vested in one or more persons.
A
assignment
B
Surrender values
C
Policy loans
D
Nomination
Question 46
On assignment, _______________________ is cancelled, except when assignment is made to insurance company for a policy loan.
A
Surrender values
B
Policy loans
C
Nomination
D
None of the above
Question 47
_________________________ provides that the policy shall revert back to the life assured on his or her surviving the date of maturity or on death of the assignee.
A
Conditional assignment
B
Absolute assignment
C
Nomination
D
All of the above
Question 48
_____________________ provides that all rights, title and interest which the assignor has in the policy are transferred to the assignee without reversion to the former or his/her estate in any event. The policy thus vests absolutely with the assignee. The latter can deal with the policy in whatever manner he or she likes without the consent of the assignor.
A
Conditional assignment
B
Absolute assignment
C
Nomination
D
All of the above
Question 49
Which of the below is a condition of assignment?
A
The person executing it (the assignor) must have absolute right and title or assignable interest to the policy being assigned.
B
It is necessary that the assignment be supported by valuable consideration, which may include love and affection.
C
It is imperative that the assignment is not opposed to any law in force. For example the assignment of a policy to a foreign national residing in another country may contravene exchange control regulations.
D
All of the above
Question 50
______________________ can be made only by the lifeassured on the policy of his own life.
A
Conditional assignment
B
Absolute assignment
C
Nomination
D
All of the above
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