IC 38-Sample Questions: D) Life Insurance

IC 38- Sample Questions
1. Ajay is 35 years old and works for a multinational corporation (MNC). He has a ten-year-old son,
Vijay, whom he dreams will one day become a doctor. Ajay’s spouse is a housewife, and his
parents are retired and dependent on him. Ajay has a home loan and is making monthly
investments for Vijay’s higher studies and marriage and his own retirement. Ajay wants to
ensure that Vijay gets the best of everything and that he himself is not dependent on Vijay
during his retirement in the way that Ajay’s parents are on him. One day while returning home
from the office Ajay has an accident and dies. Which financial product among the following is
most ideally suited to care of Ajay’s requirements?
a) Mutual Funds
b) Fixed Deposits
c) Shares
d) Life Insurance
2. Rakesh Gupta is a sales executive working for a private company. His job involves frequent
travelling to meet various retailers in his region in order to achieve his monthly and quarterly
sales targets. Sometimes he has to travel continuously for days, without any rest. Which of the
following risks is Rakesh exposed to?
a) Premature death
b) Critical Illness
c) Unemployment
d) Risk of living too long
e) All the above said risks.
3. Rishabh Agrawal is a 40-year-old businessman who leads a healthy lifestyle. Every morning he
practices yoga and abstains from smoking, tobacco and alcohol. There is a family medical history
of diabetes and both his parents suffer from it. But Rishabh Agrawal himself has not been
diagnosed with diabetes. Can Rishabh be provided with life insurance?
a) No
b) Yes
IC-38- Sample Questions_V_1.0_Feb_ 2017 Aviva Life Insurance Company India Limited. The information contained in this Training Manual (“Manual”) has been
prepared by the Aviva Life insurance Company India Ltd. (Aviva) solely for the purpose of internal circulation. The Manual is the property of Aviva India and no
unauthorized person shall make extracts/take copies of the Manual without the prior written permission of Aviva India. Any unauthorized use of contents of the
Manual shall be subject to legal proceeding before the court of law the consequences for which shall lie solely with the person who makes such unauthorized use. The
data/information provided in the Manual is for information and illustrative purpose only and is subject to change without any prior notice. Aviva India do not in any
way (directly or indirectly) authenticate as to the completeness or accuracy of the information it contains. Aviva India will not be liable for any direct or indirect loss
arising from the use of the information and the material contained in said Manual. This manual has been prepared as a reference book based on the new IC-33 syllabus
book approved by IRDA. Please refer to the book for more in-depth information on each topic.
Page 1
4. Rakesh Sharma has been diagnosed with a brain tumor at a very advanced stage. The
doctors know that they cannot save him and sadly Rakesh’s death is almost certain in the
near future. Can Rakesh Sharma be provided life insurance?
a) Yes
b) No
5. On 22 May 2010 Air India Express Flight 812 (Dubai – Mangalore) crashed. 158 passengers
were killed. The total insurance claim for Air India is expected to run into crores of rupees for
the plane crash victims. The nature of airline insurance can be categorised into which of the
following categories?
a) High Frequency and High Severity

b) High Frequency and Low Severity
c) Low Frequency and Low severity
d) Low Frequency and High Severity
6. On 26 January 2001, one of the worst earthquakes in India’s history hit Gujarat. Thousands of
people lost their lives in this tragic event. Lakhs of people were injured and property worth
thousands of crores of rupees was destroyed. Which of the following is the correct matching
of Peril and Hazard in the above said case?
a) Poorly constructed Houses are the peril and earthquake represents the hazard
b) Earthquake is the peril and poorly constructed houses represent the hazard
c) Both matchings are incorrect
7. While insurance cannot prevent the peril from happening, the resulting loss from
the occurrence of the peril can be insured against. This statement is:-
a) True
b) False
Manual shall be subject to legal proceeding before the court of law the consequences for which shall lie solely with the person who makes such unauthorized use.
The data/information provided in the Manual is for information and illustrative purpose only and is subject to change without any prior notice. Aviva India do not in
any way (directly or indirectly) authenticate as to the completeness or accuracy of the information it contains. Aviva India will not be liable for any direct or indirect
loss arising from the use of the information and the material contained in said Manual. This manual has been prepared as a reference book based on the new IC-33
syllabus book approved by IRDA. Please refer to the book for more in-depth information on each topic.
Page 2
8. Raghav Mishra is an accountant who works with a local firm. He is married with two children.
His wife Kavya is a housewife. His elderly father, Suhas, also lives with them. Suhas Mishra is
a farmer and owns a small piece of farmland. However, income from the farmland is not
sufficient to help him meet his expenses. Hence he is reliant on Raghav. Which of the
following is not a contingency for which Raghav needs to provide for?
a) Loss of life
b) Disability and Disease
c) Retirement
d) Foreign tour with family
9. It is illegal for a husband to insure his wife’s life, and then to kill her and present it as a case
of accidental death in order to benefit from the claim amount that he will receive as the legal
beneficiary. The said scenario is an example of:-
a) Physical Hazard
b) Medical Hazard
c) Occupational Hazard
d) Moral Hazard
10. Jigar makes a proposal to an insurance company for life insurance cover of Rs. 75 lakhs with a
premium payment of Rs.12000. During the medical check-up the company finds out that Jigar is
suffering from a disease and considers that he presents a higher than normal risk. The
insurance company therefore tells him that the premium chargeable will be Rs.15000 instead of
Rs.12000. How will you treat the above scenario in terms of offer and acceptance?
a) Jigar has made the offer.

b) The insurance company has made the offer.
c) Jigar has made an offer and the insurance company has made a counter offer.
d) None of the above
11. Ganesh is a 30-year-old man working for a multinational company (MNC). Ganesh’s wife works
for a domestic firm and she is a co-applicant in the loan on their home together with Ganesh.
Whilst Ganesh has a well-paid job, as well as managing the monthly living expenses he has a
running home loan and a car loan to take care of. Ganesh has worked hard to build these
assets. Between Ganesh and his wife, who requires insurance?
Page 3
a) Ganesh alone needs insurance
b) Ganesh’s wife alone needs insurance
c) Both need insurance
d) Neither of them need insurance
12. At the age of 35 Arjun wants to take out another policy (term insurance) but he is now a
diabetic. Arjun will have to disclose that he is suffering from diabetes. Such a disclosure is
required on the basis of:-
a) Principle of Insurable Interest

b) Principle of Utmost Good Faith
c) Principle of indemnity
13. Suresh has taken out an individual health insurance policy with a sum insured of Rs. 2, 00,000.
Suresh falls ill and has to be hospitalised, resulting in a hospital bill of Rs. 40,000. The insurance
company will compensate Suresh with Rs. 40,000.

14. Rajesh has taken out an individual health insurance policy with a sum insured of Rs. 1, 00,000.
Rajesh also has health cover of Rs.1, 00,000 from his employer. Rajesh falls ill and has to be
hospitalised, resulting in a hospital bill of Rs. 25,000. So in this case Rajesh cannot make a claim
of Rs. 25,000 from both insurers. Rajesh will get a total claim of only Rs. 25,000. The application
of which principle of insurance ensure that insurance is not being used to make a profit?

Page 4
15. Manish has taken out a whole of life policy from insurance company ABC for Rs. 15,00,000 and
an endowment policy for Rs. 10,00,000 from insurance company XYZ. In the event of his death,
within the policy term, both insurance companies will pay Manish’s nominee. The above
example clearly illustrates that principle of is not applicable in case of life
insurance.

16. Nitish Sharma completes the proposal form and hands it to Mr. Kumar who asks Nitish for
his High School Mark Sheet as proof to certify his age. Nitish says that he will have to look for
the same. Which other documents can Nitish submit to prove his age?
a) Passport
b) Birth Certificate
c) School College Certificate
d) Any of the above
17. Nitish Sharma submits his valid age proof, address proof and photograph to his agent
Mr.Kumar. He also gives him a cheque, in favour of the insurance company, for the
premium. He asks Kumar how and when he will hear whether or not his proposal has been
accepted.
a) As per IRDA guidelines, the insurer has convey its decision within 3 weeks
b) As per IRDA guidelines, the insurer has convey its decision within 2 weeks
c) As per IRDA guidelines, the insurer has convey its decision within 15 days
d) As per IRDA guidelines, the insurer has convey its decision within 30 days
18. Before the agent, Mr. Kumar sends Nitish Sharma’s proposal, premium and proofs to the
insurance company, Nitish has one last question. What happens if I change my mind after taking out
the insurance policy? Kumar is most likely to explain about:-
a) Paid up value
b) Surrender value
c) Freelook period
d) Endorsement
Page 5
19. As part of his discussions with his agent Mr. Kumar, Nitish Sharma wants to know if he would
be allowed to make any changes to the method and frequency of premium payment or change
his nominee. Kumar is expected to explain about
a) Paid up value
b) Surrender value
c) Freelook period
d) Endorsement
20. Mr. Kumar the agent informs Nitish Sharma that if he is not able to pay the premiums for
any reason and the policy lapses, the insurance company still offers the policyholder a
chance to revive the policy on the same terms as the original or modified terms within a
certain period. Such a revival can be done within:-
a) 3 months from the date of 1st unpaid premium

b) 6 months from the date of 1st unpaid premium
c) 1 year from the date of 1st unpaid premium
d) 2 year s from the date of 1st unpaid premium
21. Rakesh Sharma has recently being diagnosed with diabetes. He is only 38 years old. Rakesh is
very keen to get insurance cover and is willing pay a high premium. Rakesh Sharma’s main intention
in taking out an insurance plan is to transfer the cost of the medical expenses that are likely to occur
in the near future to the insurance company. Also, in case he dies, the claim from the life insurance
company should be sufficient for his family to maintain a decent life style. If people like Rakesh
Sharma are selected by the insurance company in large numbers, this could lead to:-
a) Fair selection
b) Unfair selection
c) Adverse Selection
22. Mukesh Gupta is 31 years old and wants to take out a life insurance plan from IGP insurance
company. The company in their initial enquiry finds out that Mukesh is underweight. IGP
insurance company categorises Mukesh as falling into the high risk category. The company
agrees to provide insurance to Mukesh, in spite of his risk profile, if he agrees to pay a higher
Page 6
premium. Mukesh instead asks for a lien to be imposed, and so IGP Life Insurance Company
imposes a decreasing lien of 15% for three years. If Mukesh were die in second policy year,
what percentage of sum assured would be paid to his nominee?
a) 85 percent
b) 90 percent
c) 95 percent
d) 100 percent
23. Ashok's protection needs do not depend on
a) Age
b) Dependants
c) Assets and Liabilities
d) Income
e) Depends on all the above said factors
24. Which of the following documents are not required as a part of the KYC norms?
a) Identity proof
b) Address proof
c) Photograph
d) All the above
25. Which of the following aspects have no impact on persistency?
a) Flexibility in premium payment

b) Reminder about due dates
c) Regular communication with Policyholder
d) All the above said aspects impact persistency
26. In case of ULIPs, if the maturity benefit is not paid in a lump sum but as installments over a
period of time. Such a facility is called:-
a) Partial Withdrawal
Page 7
b) Fund Switch
c) Systematic Withdrawal
d) Settlement Option
27. Which of the following claim can be payable to the nominee or assignee?
a) Death Claim
b) Maturity Claim
c) Both
d) Neither
28. Withholding material information can lead to:-
a) Increase in premium
b) Decrease in premium
c) Insurer may declare the policy null and void
d) Insured may declare the policy null and void.
29. Ramesh is an insurance agent. After presenting solution to his client start filling out the
application form and asks the client for his last name. Which method of closing is being used
by Ramesh?
a) Implied consent
b) Offering alternatives
c) Confirmation method
d) None of these
30. Shalini wished to file a complaint against an insurance company and is seeking a
compensation amount RS 20 Lac. Who among the following can be helpful?
a) State Commission
b) National Commission
c) District Forum
d) Any one of the above
Page 8
31. Which of the following consumer dispute redressal agencies entertain appeal against the
order of any state commission?
a) IRDA
b) District Forum
c) National Commission
d) SAT
32. Suraj was responsible for 20% of company’s profit when he was temporarily disabled resulting in
reduced profitability, which policy would have compensated for the losses?
a) Life insurance
b) Mortgage insurance
c) Keyman insurance
d) None of the above.
33. Which among the following is not a limitation of traditional life policy?
a) Cash value component

b) Poor coverage
c) Surrender value is difficult to ascertain
d) All three are limitations of a traditional life policy
34. Which among the following is not a risk reduction measure?
a) Education and training

b) Avoidance
c) Separation
d) Change in environment
35. _planning involves deciding how much you should save for you after
working life and where you should invest theses funds?
a) Estate planning
b) Retirement planning
Page 9
c) Education planning
d) Tax planning
36. Why insurance cannot be sold to minors?
a) Minors have no money

b) Minors cannot understand the terms and conditions
c) Minors are not allowed to enter into a contract
d) Minors are dependent on parents
37. Who among the following is likely to be charged the lowest applicable premium rate by
the insurance company?
a) Standard lives
b) Preferred lives
c) Substandard lives
d) Declined lives
38. If an insurance agent is trying to get the prospect’s consent for a face to face interview then he
is in the .
a) Prospecting stage
b) Pre-interview stage
c) Solution design stage
d) Presentation stage
39. Mandeep has bought a policy with critical illness rider. He had made absolute assignment of the
policy in favour of Ramesh .Mandeep suffers from critical illness. There is claim of Rs 60000
under the rider. Who will receive the claim?
a) Mandeep
b) Ramesh
c) Either of them
d) Neither of them
Page 10
40. With regards to the valuation of assets by insurance companies, what is the value at which life
insurer has purchased its assets?
a) Discounted future value

b) Discounted present value
c) Market value
d) Present value
41. Which of the following bodies regulates surveyors?
a) IRDA
b) General Insurance Council
c) Life Insurance Council
d) GOI
42. Which of the following procedures can be carried out as a day care procedure?
a) Cataract
b) CABG
c) Valve Replacement
d) Organ Transplant
43. Anticipate the effect of failure to pay life insurance premium a)
a) Judicial action
b) Blacklisting
c) Withdrawal of policy
d) Policy lapse
44. The principle of indemnity is applicable to
a) General Insurance
b) Life Insurance
c) Both
d) Neither
Page 11
45. Ram is presenting the benefits of investment in a variable insurance plan to his client. In his
illustration he presents only optimistic scenario, what kind of practice is it?
a) Ethical Practice
b) False practice
c) Mis-selling
d) Mis-representation
46. How many people can be nominated under a life insurance policy?
a) Only 1
b) Only 2
c) Only 3
d) One or more than one
47. Who is a key man?
a) A person who has the office key

b) A person who has left the business
c) A person who is about to join the business
d) A person who is critical for the business
48. Ramesh has transferred the ownership of his life insurance policy to Mahesh. Which of
the following options explain Ramesh’s action the best?
a) Nomination
b) Assignment
c) Transfer
d) Surrender
49. Let’s assume that an insurance company charges a 5% frequency loading for a monthly
premium plan. The annual gross premium has been calculated as Rs. 25,000. So the monthly
gross premium that the policyholder will have to pay will be:
a) 2200
b) 2188
c) 2300
d) 2400
Page 12
50. Prashant takes a pure term insurance plan from insurance company ABC for a sum insured of
Rs.
75 lakhs for 30 years. The policy document specifies that if Prashant dies at any time during
the policy term of 30 years, the insurance company will pay Prashant’s nominee a sum of Rs.
75 lakhs. What will Prashant receive if he survives the entire policy term?
a) Sum Assured
b) All premiums returned
c) Sum Assured plus Bonus
d) Nothing
51. Prashant takes a plan from insurance company ABC for a sum insured of Rs. 75 lakhs for 30
years. The policy document specifies that if Prashant survives the entire policy term of 30
years, the insurance company will pay Prashant a sum of Rs. 75 lakhs on the maturity of the
policy. However, if Prashant dies during the policy term of 30 years then he will not get any
death cover. Prashant’s policy can be best described as:-
a) Pure term plan

b) Pure Endowment plan
c) Endowment plan
d) Money back plan
52. Prashant takes out an endowment insurance plan from insurance company ABC for a sum
insured of Rs. 75 lakhs for 30 years. The policy document specifies that if Prashant survives the
entire policy term of 30 years, the insurance company will pay him a sum of Rs. 75 lakhs and
the accumulated bonus, if any, on the maturity of the policy. However, if Prashant dies during
the policy term of 30 years and before the maturity of the policy, his nominee/beneficiary will
get death cover of Rs. 75 Lakhs and the policy will be closed.Prashnat’s policy cab best
described
as:-
a) Pure term plan

b) Endowment plan
c) Pure Endowment plan
53. Insurance Company ABC offers a life insurance plan offering protection up to the age of 100.
Such a plan is commonly referred to as:-
Page 13
a) Pure term plan
b) Whole life plan
c) Endowment plan
d) Money back plan
54. Chetan Mishra has taken out a 20 year money-back policy from ABC insurance company. The
sum insured is Rs. 20,00,000. He chose to take out a money-back policy as he wanted to enjoy a
return on his savings while he is alive. He has nominated his wife Sumedha to be the beneficiary
of the policy. Under the money-back policy that he has taken out he will receive 25% of the
survival benefit after 5, 10 and 15 years and the remaining balance of 25% of the survival
benefit will be payable in the 20th year. However, tragedy strikes the family. Chetan dies in a
car accident. Sumedha is a housewife and was financially dependent on Chetan. Chetan’s death
occurred in the 11th year after he took out the policy. He had already received a percentage of
the survival benefit (Rs. 10, 00,000) in the 5th and 10th years. In this case Sumedha will receive
percentage of the sum assured.
a) 50 percent of the Sum Assured

b) 100 percent of the Sum Assured
c) 150 percent of the Sum Assured
d) None of these
55. Rajesh is retired and enjoys spending time with his grandson. Unfortunately, a year ago Rajesh
had an accident and had to be hospitalised for his injuries. The small amount of money Rajesh
had saved for his retirement had to be spent in paying the hospital bill and wiped out his only
source of income, leaving Rajesh dependant on his son for the remainder of his life. What kind
of plan would have helped Rajesh?
a) Life Insurance plan

b) Investment plan
c) Money back plan
d) Health Insurance plan
Page 14

IC 38-Sample Questions: D) Life Insurance

Uploaded by

Copyright:

Available Formats

You might also like

IC 38-Sample Questions: D) Life Insurance

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

IC 38-Sample Questions: D) Life Insurance

Uploaded by

Copyright:

Available Formats

IC 38- Sample Questions

a) High Frequency and High Severity

a) Jigar has made the offer.

a) Principle of Insurable Interest

a) Principle of Insurable Interest

a) Principle of Insurable Interest

a) Principle of Insurable Interest

a) 3 months from the date of 1st unpaid premium

23. Ashok's protection needs do not depend on

25. Which of the following aspects have no impact on persistency?

a) Flexibility in premium payment

28. Withholding material information can lead to:-

a) Cash value component

34. Which among the following is not a risk reduction measure?

a) Education and training

36. Why insurance cannot be sold to minors?

a) Minors have no money

a) Discounted future value

41. Which of the following bodies regulates surveyors?

43. Anticipate the effect of failure to pay life insurance premium a)

44. The principle of indemnity is applicable to

47. Who is a key man?

a) A person who has the office key

a) Pure term plan

a) Pure term plan

a) 50 percent of the Sum Assured

a) Life Insurance plan

You might also like