2018

BALIC IC 38 Mock Test

MOCK TEST 2
AGENCY TRAINING
Test 2

Multiple Choice
Identify the choice that best completes the statement or answers the question.

1. What facility do insurers use to cover risks beyond their exposure limits?
a. Bancassurance c. Both a & b
b. Reinsurance d. Neither a nor b

ANSWER: B

2. Which market areas do Micro Insurance product concentrate?

a. People with large families c. People employed with the government
b. People with low income d. People with high income

ANSWER: B

3. What is IRDA stands for & year of Incorporation?

a. Insurance Regulatory and c. IRDA is an independent body
Development Authority (IRDA). The constituted to address the grievances
IRDA was incorporated as an of the insurance policy holder
autonomous body in April 1999
b. Insurance Regulatory and d. None of the above
Development Authority (IRDA) was
constituted in 1956

ANSWER: A

4. A human being's value is measured by?

a. The income that he generates c. His academic qualification
b. The value of the goods that he d. All of the above
produces

ANSWER: A

5. The business of insurance affects?

a. Availability of capital for business c. The safety of equipment in factories
b. The life span of individuals d. All of the above

ANSWER: A

6. An agent is intermediary between?

a. Client and insurance company c. Client and IRDA
b. Insurance Company & IRDA d. Insurance and Reinsurance Company
 ANSWER: A

7. Which of the following statement is correct?

a. Lung cancer is peril and smoking is a c. Both the statements are correct
hazard
b. Smoking is peril and lung cancer is d. Both the statements are incorrect
hazard

ANSWER: A

8. Ramkumar is habitual car racer. What kind of hazard is this?

a. Physical hazard c. Moral hazard
b. Fraudulent representations d. Peril

ANSWER: A

9. Which of following refers to specific event which might cause a loss?

a. Peril c. Physical hazard
b. Hazard d. Uncertainty

ANSWER: B

10. Which risk is associated with those events which are not in control of an individual and
no possibility of making profit?
a. Pure risk c. Financial risk
b. Particular-risk d. Insurable risk

ANSWER: A

11. Insurance Contract without any Insurable Interest will result in?
a. Wagering Contract c. Void Contract
b. Legal Contract d. All of the above

ANSWER: A

12. To be a valid contract, the declaration is necessary in which document?

a. Policy Document c. FPR
b. proposal form d. RPR

ANSWER: B

13. Changes in policy can be made by?

a. Issuing a new policy c. Corrections on the policy
 b. Endorsement d. Not allowed

ANSWER: B

14. In which kind of policy the insurable interest should exist at the time of claim only?
a. Motor insurance c. Liability insurance
b. Marine insurance d. Travel insurance

ANSWER: B

15. What are the factors involved in calculating surrender value?

a. Number of year's premium paid c. Sum assured
b. Number of premium payable d. All of above

ANSWER: D

16. Policies as he was regularly paying the premium. What is your suggestion?
a. Due to regular premium he can take c. No loan from money back but can take
loan from both the policies loan from whole life
b. He can surrender whole life and take d. He can't take loan from whole life
loan from money back policy policy but can avail loan from money
back policy

ANSWER: C

17. Ramlal is an insurance policyholder. He has recently shifted his home from New Delhi to
Noida. He wants the address to be changed. This change in policy document will be
effective through?
a. Terms & condition c. Endorsement
b. Preamble d. Schedule

ANSWER: C

18. Moral hazard reflects the?

a. Intentions and attitude of proposer c. Occupation and residence of proposer
b. Habits and Hobbies of proposer, d. Medical and personal history of
proposer

ANSWER: A

19. Mr. Gupta is recently detected with lung cancer. He would like take an insurance. What
is your suggestion?
a. Time of death is uncertain, so c. He can take insurance after submitting
insurance can be given health certificate
 b. only lung is affected so health d. Cannot be given insurance for health
insurance can be given reason

ANSWER: D

20. 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 of
40?
a. term plan c. endowment plan
b. health plan d. traditional plan

ANSWER: A

21. Open market option under annuity policy would extend which of the following benefit?
a. Ensure better annuity rate c. increase in return
b. Increase in range d. Switch of funds

ANSWER: B

22. A lump sum withdrawal allowed as commutation in pension plan is?

a. 1/3 of accumulated fund c. 1/2 of accumulated fund
b. 114 of accumulated fund d. Full withdrawal is allowed

ANSWER: A

23. If a person chooses Cumulative deposit than Recurring deposit, difference will be in?
a. frequency of interest calculation c. Interest tax
b. Tax d. Tenure

ANSWER: A

24. Rahul switch from direct holding of shares to equity based mutual funds. The impact on
risk would be?
a. Less transparent c. Less return
b. More diversified d. Steep rise

ANSWER: B

25. What is similarity between recurring deposits and cumulate deposit in a bank?
a. Guarantee c. Tenure
b. Taxation d. Lock in periods

ANSWER: A
26. In cumulative bank deposit the interest unit is normally compound on what basis?
a. Monthly c. Half yearly
b. Quarterly d. Annually

ANSWER: B

27. What frequencies can one take in annuity?

a. Monthly, quarterly, half yearly, c. Fortnightly, monthly ,half yearly,
yearly yearly
b. Fortnightly, quarterly, monthly, d. None of the above
yearly

ANSWER: A

28. What are the Special features of Health plan?

a. Covers disease expenses c. Covers hospitalization cost
b. Helps in Tax Benefits d. All of the above

ANSWER: D

29. How do riders help the customer in life insurance?

a. Allow policy holders to customise c. It adds to operative clause
their insurance cover with additional
benefit
b. Rider is like an additional clause d. Rider is like a preamble

ANSWER: A

30. The sole focus during a client’s fact-find session was healthcare requirements and estate
planning. Which main life stage is he most likely to fall into?
a. Young married couple c. Pre-retirement.
b. Young married with children. d. Retirement

ANSWER: D

31. With profit policies can be given to?

a. surety c. partner
b. keyman d. Individual

ANSWER: D

32. A couple has 7 year old son. What solution would they be looking for?
 a. Retirement c. Child education
b. Health care d. Life cover

ANSWER: C

33. Mrs. Sheela received some amount out of her husband's death. In such a situation what
will be her prime focus?
a. Saving c. Investment management
b. Insurance d. Planning for pension

ANSWER: C

34. Under S 80C the maximum tax deduction that can be gain premium paid Rs._in a
financial year?
a. Rs. 75,000 c. Rs. 1,20,000
b. Rs. 1, 10,000 d. Rs. 1,00,000

ANSWER: D

35. Perceived needs are?

a. Short term needs c. Imagined to be important by client
b. Imagined to be important by advisor d. Long term needs

ANSWER: C

36. Fact find process helps to?

a. Ensure a sales is achieved c. Create an audit trail for future
complaints
b. Identify client need d. Provide regulatory body about agents
database

ANSWER: B

37. Which type of questioning is very useful to gather information from clients?
a. Close ended question c. Interrogative question
b. Open ended question d. Clarification question

ANSWER: B

38. Higher persistency to the insurer ensures what?

a. More productivity c. Higher Profits
b. Higher attrition d. Higher S.A

ANSWER: C
39. An agent reveals his commission received from insurance sale to X and Y. Both plans
are of same duration but he received higher commission of X. Why is his commission of
X higher than that of Y?
a. 'X' has bought other limited premium c. ‘X’ is married
product
b. 'Y' has bought a single premium d. 'Y' is single
product

ANSWER: A

40. Amit & Rashmi are newly married. Both are working couple, They want to invest their
savings of Rs. 1, 00,000 annually to build corpus. They make down payment for their
house in 5 years from now, an adviser sold them a Ulip to meet their requirement this
may result in:
a. Ruining the long term reputation of c. Bad reputation of individual adviser
company
b. Opportunity of new business for d. Financial burden on the couple
adviser

ANSWER: B

41. Without submitting any form of claim, a life insurance policy holder received payments
of maturity then what type of policy he is holding?
a. ULIP c. Money Back
b. Term d. Health

ANSWER: C

42. What is the maximum time in which the insurer should settle a claim when all documents
are submitted?
a. 3 days c. 30 days
b. 15 days d. 10 days

ANSWER: C

43. The delay in settling claim by any insurance company as per IRDA norms has to pay _%
if the bank rate was 5.2% during the claim pd.
a. 0.07 c. 0.072
b. 0.09 d. 0.08

ANSWER: C
44. An indemnity bond was signed in a policy when the claim was paid. This indicates that
the policy was?
a. Lost c. Lapsed
b. Paid up d. Surrendered

ANSWER: A

45. Mr. Bhaskar had taken a term plan in 2008 for Rs. 7 lac. He has an ADB rider worth RS.
4 lac. Unfortunately Bhaskar died in 2017 in a car accident. How much will be the death
claim?
a. Total 7 lac will be paid as death claim c. Total 11 lac will be paid
b. Total 4 lac will be paid as death claim d. Total 7 lac will be paid without any
due to car accident. deduction

ANSWER: C

46. In a MWP policy the beneficiaries under the plan, other than wife can be?
a. Ex wife c. Parents
b. Sibling d. Children

ANSWER: D

47. Board of Insurance is related to?

a. SEBI c. Insurance Association
b. IRDA d. None of the above

ANSWER: B

48. A policy has been rejected by the company under direct intimation to the customer and
copy to the Agent, what is the next action of the Agent?
a. He has to inform the customer that the c. He has to explain the reasons for
company has broken relationship with rejection to the customer
the customer
b. He plans to change the plan d. He takes up with the higher authorities

ANSWER: C

49. Sh. Gayaram, an insurance advisor, advised his customer to close the old policy and take
a new one. But new policy does not provide any extra benefits to the customer. It will,
however, give more commission to Sh. Gayaram. This kind of practice is called?
a. Switching c. Redirecting
b. Churning d. Shifting

ANSWER: B