1) What is the organization which spend on funeral expenses in Britain during the middle ages?

a) Professional Associations
b) Commercial Associations
c) Joint Enterprises
d) All Above

1) Main responsibility of the Insurance Ombudsman is,

a) Acting as a negotiator in the insurance field.
b) Agent of an insurance company.
c) Acting as the beneficiary of the insurance policy holders
d) Looking after insurance policy holders.
2) Sri Lankan Insurance industry was nationalized in,
a) 1980
b) 1962
c) 1961
d) 1938
3) Sri Lankan insurance corporation was established in,
a) 1960
b) 1961
c) 1962
d) 1980
4) National Insurance corporation was established in,
a) 1961
b) 1962
c) 1938
d) 1980
5) Who acted as agent in Sri Lanka for overseas insurance companies?
a) Carsons Cumberbatch
b) Global Insurance broker association
c) Agency House
d) Colombia Insurance Brokers
6) After enactment of the Motor Traffic Act in 1938,
a) Public get to know about insurance and 3rd party insurance was mandatory
b) Enables to import vehicles from overseas
c) Increasing foreign exchange
d) Market for life insurance is reduced
7) Main responsibility of the IRCSL is,
a) Administration of the insurance field
b) Introducing new types of insurances for companies
c) Inspecting on the funds of the insurance policy holders
d) Educating general public regarding the insurance field
8) Currently Insurance Industry is controlled under,
a) No.17 of 1982 Companies Act
 b) No.43 of 2000 Regulation of the Insurance Industry Act
c) Motor Traffic Act 1938
d) Monetary Law Act 1949
9) Insurance Regulatory Commision of Sri Lanka established in,
a) 1980
b) 1999
c) 1938
d) 2001
10) First Sri Lankan insurance company is,
a) Sri Lanka insurance corporation
b) Ceylon insurance company
c) Agency House
d) National insurance corporation
11) Sri Lankan insurance institute (SLII) was established in,
a) 1980
b) 1982
c) 1989
d) 2000
12) Insurance Brokers Association was established in,
a) 1980
b) 1982
c) 1989
d) 1990
13) Privatization of insurance industry in Sri Lanka took place in,
a) 1980
b) 1982
c) 1986
d) 2000
14) The monopoly of insurance industry by insurance corporation existed for,
a) 10 Years
b) 18 Years
c) 20 Years
d) 21 Years
15) What was the initial act regulated insurance industry in Sri Lanka?
a) No.25 of 1962 Control of Insurance Act
b) No. 17 of 1982 Companies Act
c) Motor Traffic Act 1938
d) No.43 of 2000 Regulation of the Insurance Industry Act
16) How many principle agents were there for National Insurance Corporation?
a) 6 agents
b) 18 agents
c) 8 agents
d) 10 agents
17) The world's first life insurance was purchased on,
 a) 17th June 1857
b) 15th June 1583
c) 21st June 1902
d) 17th June 1938
18) The Act which formed the Sri Lankan insurance companies enacted in,
a) 1938
b) 1961
c) 1962
d) 1982
19) The person who insured under the world’s first life insurance,
a) Richard Martin
b) Lorance Madonsa
c) William Gibbons
d) Alexander Adams
20) Common objectives of the Sri Lankan Insurance Institute (SLII)
a) Standardize activities in the industry
b) Promote insurance industry
c) Develop the skills of the members
d) Introduce new policies for insurance companies

Most accurate from the above is

i) All Above
ii) a, c and d
iii) a and c
iv) b only

Chapter Two

1) It is not essential for a valid contract,

a) Age
b) Acceptance
c) Consideration
d) Education Qualifications
2) Minors or Children in a life insurance can be
a) Beneficiaries
b) Insured
c) Insured if there is a dependency
d) None of the above
3) A Life Insurance Policy is an,
a) Long term investment
b) An agreement to earn a profit for insurance companies
c) An agreement to provide a specific amount of money depending on human life duration
d) An Agreement provided to beneficiaries because of high living cost due to inflation.
4) If minor is the beneficiary of an insurance plan and at the time of the death of the policy holder
and beneficiary have completed 18 years of age.
a) All the benefits will be credited to beneficiary
b) Nothing will be paid since beneficiary is more than 18 years of age
c) Basic sum assured will be deducted from the benefits.
d) None of the above
5) A person qualifies to obtain a life insurance is
a) Employer on behalf of an employee
b) A minor
c) A person suffering from an illness
d) An individual more than 18 years of age having a sufficient income.
6) Should not commit as an insurance advisor,
a) Obtain a good training and develop skills
b) Expecting the remuneration package
c) Work on behalf of the supervisor
d) Neglecting the supervisors advises and acting on his/her own terms
7) A minor is a human less than,
a) 16 years of age
b) 21 years of age
c) 15 years of age
d) 18 years of age
8) Not relevant for a termination is,
a) Master becomes insolvent
b) Agreement
c) Expire of the time duration
d) Agent performs very well
9) Which is not a remedy for a breach of contract,
a) Frustration
b) Injunction
c) Recession
d) Action for Damages
10) Placing an insurance policy without a medical checkup is,
a) Insurance plan is offered when health concerns are mentioned in the completed
application
b) Insurance plan is offered with limitations to the basic sum assured relying on prima facie
information available in the application
c) Disregard necessity of a medical check up
d) Postpone submission of the application to disregard any medical checkups
11) Express sale by an insurance advisor will,
a) Insurance policy will lapse in a higher pace
b) Unbearable annual premium for the policy holder
c) Unnecessary insurance policy purchase by the policy holder
d) Above all
12) Getting an Injunction order means,
 a) Getting an order from court to stop a breach or continuation of a breach
b) Request permission to ban a current business/organization
c) Request for a court order against a defendant.
d) Above all
13) Below mentioned statements are defined under which statute?
a) Can place a lawsuit for an accident cause by violent and negligent driving within two
years from the date of accident.
b) Time duration to place a claim in court for declining to compensate for a motor vehicle
accident or declining to compensate for a damage occurred due to fire by the insurance
company

• Contract Law
• Individual Business Law
• Prescription Ordinance
• Above all
14) Not a responsibility of an Insurance Advisor is,
a) Discontinue the competencies
b) Accept the directions by the supervisor
c) Work for his/her employer
d) Above all
15) The main responsibility of Insurance Regulations Commision of Sri Lanka is,
a) Register broker companies
b) Administrate the insurance industry
c) Impose income tax for insurance companies
d) Introduce new insurance plans for insurance companies.
16) The required documents for an insurance agreement are,
a) Quotation
b) Insurance Deed
c) Other documents related to the insurance agreement
d) Above all
17) To register under insurance brokers association must satisfy requirement is,
a) A company registered under No.17 of 1982 companies act
b) Being a share holder of an insurance company
c) Having a main office
d) Having a capital of 100 million
18) Which department does valuation for the insurance plans, calculate dividend?
a) Finance Department
b) Life Department
c) Actuarial Department
d) Sales Department
19) What is underwriting?
a) Check for medical testing requirements
b) Reinsurance
 c) Risk Assessment
d) Decide on premium rate for insurance deeds
20) New business development/Customer relationship management/Market research
responsibilities are assigned to,
a) Sales and Marketing Department
b) Insurance Regulatory Commision Sri Lanka
c) Consumer Ministry
d) Above All
21) A remedy for a breach of an insurance agreement/contract.
a) Performance
b) Frustration
c) Action for damages
d) Agreement
22) Structure of a contract according to Law of Insurance is,
a) Acceptance
b) Consideration
c) Form
d) Directors name list
i) Above All
ii) a,b and c
iii) a and d
iv) a,b and d
23) Acceptance is,
a) An advertisement posted by an Insurance company
b) Insurance company agree to an offer made to purchase an insurance
c) Customer agree to additional benefits providing by the insurance company
d) IRCSL accept the insurance plans introduce by the insurance company
24) Who is considered as a person without sufficient capacity to enter into an insurance agreement?
a) People under influence of alcohol
b) People of unsound mind
c) Person who have already obtained an insurance plan
d) Person who have not obtained an insurance plan
e) Person who is less than 18 years

Most Accurate from above is:

i) a,b and c
ii) a and b only
iii) a,b and e only
iv) b and e only
25) What is an injunction order?
a) An order making to insurance by applicant for an insurance plan to accept his offer
b) A statement making by insurance company that they will accept the offer without
conditions
 c) An order by court of law to prevent repetition or recurrence of a breach or any
anticipatory breach.
d) Transfer an insurance policy to another 3rd party
26) The responsibilities of the department which provide the services to customers are,
a) Introduce new insurance systems
b) Handling the documents/calls and complains on behalf of the customers
c) Make amendments in the insurance deeds
d) Release dividends

Most Accurate from above is:

i) b only
ii) All above
iii) a,b and c
iv) a and d
27) Not a method of discharge from a contract is,
a) Recession
b) Agreement
c) Breach
d) Frustration

Chapter 03

1) The TRUE statement on life insurance is,

a) One party agrees to pay a given sum on the happening of a particular event, contingent
upon the duration of Human Life
b) A plan purchased because of benefits
c) An agreement can be entering with any senior citizen
d) Weight and height are the only information required for calculation of premium
2) Modern attitude regarding insurance is,
a) Expect long term benefits
b) Expecting to pay premiums only for a shorter period
c) Dividend/Bonus payment expected in relation to inflation
d) Expecting traditional insurance methods with small changed to fulfill personal
requirements
3) What is a whole life insurance plan?
a) The insurance term is limited to 15 years
b) Life insurance will be in force till death of the beneficiaries of the policy owner.
c) Life insurance will be in force till the life span of the policy owner.
d) Life insurance will be terminated at the age of 70
4) Equal Premiums means,
a) The premium amount will not change for the whole insurance agreement term.
b) Premium equivalent to risk
c) The Premium amount is increasing with the insured age
d) None of the above
5) Under a Family income benefit plan
a) Benefits will be provided for critical illnesses
b) The income got by the insured for his/her family is reimbursed.
c) Provide pension benefits
d) Lump sum will be provided at death of the insured.
6) The Proximate Cause is,
a) The reason which directly involve with the incident
b) The reason to have a critical illness
c) The reason to get a life insurance
d) All above
7) What is an “business requirement” regarding Life insurance?
a) Funds for Education
b) Daily expenses for dependents
c) Executive positions
d) Pension Advantages
8) What is the TRUE statement on Group policy?
a) Will provide a maturity benefit
b) Can renew the insurance protection
c) Cannot renew the insurance protection
d) Underwriting in not necessary
9) Which is NOT an insurance principle?
a) Utmost good faith
b) Insurable Interest
c) Proximate Cause
d) Transferring
10) Insurable interest existing only,
a) At the beginning of the insurance agreement
b) To name beneficiaries
c) At the maturity of the insurance plan
d) During the Term of the insurance plan
11) If policy owner obtains a loan from the insurance plan and dies before settling the loan?
a) The premiums paid till the death will be credited back to beneficiaries.
b) The whole loan amount and interest will be settled
c) The due loan amount and interest will be settled.
d) The loan due amount it deducted from paid premiums and credit to the beneficiaries.
12) Under the Life insurance, insured must share,
a) Monthly Income and expenses
b) Family information
c) All the information relevant to health
d) Information on the employment
13) The contribution principle is relevant,
a) When premiums are not settled timely
b) When Indemnity principle is applied
c) When premiums are paid for more than one person
 d) On a group life policy
14) Annum is an,
a) A payment made for a specific time period
b) A time period of 12 months
c) The amount credited at maturity
d) Obtaining a loan basing on an insurance plan
15) What is defines an endowment policy?
a) If policy owner dies during the term pays a compensation
b) Maturity benefits if policy owner lives till end of the term
c) Provide protection for the whole life span of the insured.
d) Above a and b only
16) A True statement on Takaful insurance is,
a) The premium payment is named as a donation
b) The ownership of takaful fund is based with policy holders
c) If there is an excess at end of financial year, distributed among policy holders
d) All Above
17) A basic principle of insurance is,
a) Frustration
b) Agreement
c) Proximity cause
d) Postpone
18) Except Term Assurance other life insurance will have a maturity benefit.
a) True
b) False
c) Probably False
d) None of the above
19) An insurance can be purchased for a company
a) For the competitors
b) For employees, partners and key personals
c) For Share holders
d) Above All
20) In a Term life insurance
a) Protection will be arranged for a specific time period
b) Protection will be arranged only a specific period
c) A short-term protection plan.
d) Maturity benefit will be credited after 15 years
21) The main objective of an insurance plan is to have a better investment and a saving.
a) True
b) False
c) Probably True
d) None of the above
22) Convertible life assurance is,
a) Can request for a claim at any time.
 b) Where there is no evidence regarding the health concerns, can convert into a
permanent assurance.
c) The whole premium must pay at the beginning
d) Above all
23) Which is not a personal requirement under a life insurance.
a) A fund when experience a disability
b) A fund for children's education
c) Income on the retirement
d) Employees benefits
24) The relationship to have an insurable interest is,
a) Between directors of a company
b) Between business partners
c) Between borrower and lender
d) Between Father and Son
e) Between Husband and Wife

Most accurate is:

i) All above
ii) a, b, c and d only
iii) c, d and e only
iv) b, c and e only
25) Whole life assurance is functioning,
a) Only for a specific time period.
b) After 3 years starting the policy.
c) For the whole life span.
d) Only during the period premiums are paid.
26) In a Decreasing Term Assurance,
a) The Premium will be constant during the term, but benefits will decrease with the time.
b) The benefits will remain constant, but premium will be reduced with the time duration.
c) Maturity benefits are provided at end of the term.
d) None of the above.
27) In a Term Assurance,
a) Policy should be active at the time of the death of policy holder
b) Benefits will be provided if the insured dies on any day
c) The death of the insured should happen during the term assured.
d) Policy owner should be alive till maturity of the policy

Most accurate is:

i) b, c and d only
ii) d only
iii) a and c only
iv) a and d only
28) Limited Liability company means,
a) The ownership of the company lies with policy holders
 b) Once shares are divided among shareholders, cannot get contribution from
shareholders for any losses incurred to company.
c) The ownership of the company lies with shareholders
d) The ownership of the company lies with directors.
29) Takaful Insurance means,
a) The ownership of the company lies with beneficiaries.
b) The responsibilities of shareholders are limited.
c) The ownership of the company lies with shareholders.
d) The ownership of the company lies with policy owners.
30) A Decreasing Term Assurance is applicable for,
a) To build a fund for education
b) To have a Home Loan
c) To build a fund for retirement
d) For any personal requirement
31) What will be paid as the death benefit under a Decreasing Term Assurance
a) The Premiums paid till death
b) Whole assured amount
c) Whole loan amount and interest
d) Pending capital and interest
32) If husband insured wife and now if they are divorced when policy is matures,
a) The benefits should pay to husband
b) Insurance company will decline to provide benefits
c) Benefits will be equally distributed among them
d) Depend on a judicial decision.
33) Subrogation principle is relevant when,
a) More than one beneficiary existing for one policy
b) Indemnity principle is relevant
c) Premiums are paid more than one person
d) Transfer of an insurance policy
34) Insurable interest is relevant for Life insurance because of,
a) Legal right to have an insurance policy
b) Legal right to have a profit by and insurance
c) Right to insure any person's life or any economic losses incur due to any incident
d) Above All
35) The percentage of senior citizens will be increase on future and ideal solution for it is,
a) Endowment Insurance
b) Whole life Insurance
c) Pension Plan
d) Accident cover Insurance
36) The difference of Endowment policy from Term assurance is,
a) Get maturity benefits
b) Premiums should pay continuously
c) Benefits will be paid at a death
d) There is a specific covered term
37) The relationships which can have an insurable interest are,
a) Husband to Wife
b) To best friend
c) Own life
d) Business Partners

Most accurate is:

i) All Above
ii) a, c and d only
iii) a, b and d only
iv) a, b and c only
38) The group policy will terminate when,
a) Employer becomes insolvent
b) When premiums are not paid
c) Death of an Employer
d) Above All
39) The main responsibility of the applicant for a life insurance policy
a) Expose all the important information
b) Name the beneficiaries accurately
c) Appoint the spouse as the beneficiary
d) Share the correct age
40) The right to purchase a life insurance policy for an individual,
a) For Customers
b) For Director Board
c) Partner of a joint enterprises
d) For Parents
41) _______________ is not a principle on insurance.
a) Proximate Cause
b) Utmost good faith
c) Insurable Interest
d) Having Dependents
42) Select the Primary life insurance types,
a) Term Assurance
b) Takaful Insurance
c) Endowment Insurance
d) Whole Life Insurance
e) Group Policies
f) Annuities and Pensions
i) Above All
ii) a, c, d and f only
iii) a, b, c and d only
iv) a, c, d, e and f only
43) Dependents will get expenses at a sudden death of the main income person in the family,
a) Under protection
 b) Under investment
c) Under Pension
d) Above All
44) What can make an influence when calculating existing risk with utmost good faith?
a) Information need to expose
b) Unnecessary medical reports
c) Bank deposits
d) None of the above
45) The main categories existing in life insurance is,
a) Funeral expenses and Investments
b) Personal Requirements and Business requirements
c) Educational Requirements and Business Requirements
d) Retirement Funds and Business Requirements
46) Integral persons assurance is important for,
a) Individuals who cannot purchase a life insurance
b) For your own self
c) Integral persons in a company
d) Persons with permanent disabilities
47) The difference of group Insurance plan from an individual assurance is
a) Group insurance will cover a group of people
b) Premiums should be paid at once for group insurance policy
c) Group insurance should be purchased by the company head
d) For people with disabilities
48) Paying several installment premiums once per term or during the lifetime or as agreed for a
single payment or for a series of payments in,
a) Term Assurance
b) Convertible Term Assurance
c) Annuities Assurance
d) Endowment Assurance
49) In a convertible Term Assurance, policy holder can change the plan without information about
health to,
a) A permanent Insurance.
b) A term assurance.
c) An Endowment Insurance
d) Above all
50) The TRUE statement on mortgage redemption is,
a) An insurance plan cannot obtain for a join enterprise
b) The only policy can obtain as a Group insurance plan
c) If debtor dies, debt amount will be recovered
d) Above All
51) Credit Life can be obtained,
a) If the debtor dies before the settlement of a loan, the due amount will be settled to
lender.
b) For banks
 c) When a loan is completely settled
d) For financial institutions
52) The primary characteristic of a Decreasing Term Assurance is,
a) The benefits will be provided if the insured dies during the covered term.
b) Benefits will be paid during the covered term.
c) The premiums will be constant during the covered term period
d) Above All
53) Level Term Assurance is,
a) The premium will be constant during the term
b) The benefits will be remained constant during the term.
c) The benefits will be settled if insured dies within the term
d) Above All
54) The premiums paid for a Takaful Insurance is considered as,
a) Takaful Fund
b) Life Assurance Premium
c) Donations
d) All above
55) Takaful insurance is created for,
a) Any person
b) Sri Lankans
c) Tamils Nationals
d) Muslim Nationals
56) How the premiums can be settled in a long-term care insurance?
a) Pre-funding/Immediate funding
b) Half Annually/Annually
c) Monthly/Annually
d) Annually/As a lump sum
 Chapter 04

1) Consider as a critical illness,

a) Pain in blood
b) Pain in Heart
c) Hernia condition
d) Organ Transplant
2) Personal accidents or diseases assurance,
a) The accidents taking place within a year term
b) The diseases cause within a year term
c) Accidents
d) Intentionally committed injuries are excluded
3) The liability of the insurance company decided upon,
a) Accidents
b) The deaths taking place on a shorter period
c) Suiciding

The most accurate from above answers is,

i) All Above
ii) a only
iii) a and c only
iv) b and c only
4) Waiver of premium means,
a) Part of the basic assurance
b) Rider benefit of a life insurance
c) Benefit relevant to an accident cover insurance
d) A way of a daily income
5) “Total permanent disability” means,
a) Critically insured spend the rest of the life on a bed
b) Disability existing for more than one month
c) No longer insured will be able to continue his profession or have a source of income
d) Insurance company will pay premiums until insured completely recover
6) A situation excluded from waiver of premium rider is,
a) The injuries caused when insured is in active war
b) Injuries caused when travelling in airplane as a passenger
c) Some side effect diseases/sickness
d) paralyze
7) Rider Cover are,
a) Against the basic principles of insurance.
b) Include additional benefits for the Life insurance
c) Benefits provided free of charge
d) Additional component for life insurance
8) The correct statement on waiver of premium
 a)
This will be activated from the moment, get to know about total permanent disability
b)
The Life insurance will function till the maturity.
c)
The premiums will be waived off during the disability period
d)
Dividend/Bonus will continuously be added.
i) a,b and d only
ii) b,c and d only
iii) a,b and c only
iv) d only
9) What is the “waiting period” under waiver of premium rider,
a) The time duration between the disability causation and activating the Waiver of
premium benefit
b) The sponsored time duration given for the policy owner
c) The time period which is due to pay premiums
d) The grace period given to express the disagreement towards paying the premium
10) Under Accident death benefit,
a) Agrees to pay multiply or an amount equivalent to basic sum assured.
b) Death of the insured should take place during a specific time period.
c) Death must be caused due to grievous bodily harms by the accident.

The most accurate statement/s from above,

i) All above
ii) B and c only
iii) C only
iv) A only
11) Under critical illness rider,
a) Enables to claim for benefits from the date of purchase of the life insurance policy
b) Adding the premiums payments for maturity benefit.
c) Specific list of surgeries and illnesses will be covered.
d) Settling only hospital bills
12) Accident benefit will be paid if,
a) Death by a heart attack
b) On a suicide
c) Death by a vehicle accident
d) Above All
13) Not excluded in a claim,
a) The bodily harm causing by the insured to his/her own self
b) Injuries related to war activities
c) The illnesses suffering for a long time
d) Accident caused on offshore.
14) A death by an accident means,
a) A suicide
b) Death by a coronary attack
c) Death by suffering from a sickness
d) A death by injuries cause by an accident by a 3rd party
15) The waiting period under waiver of premium is,
a) 30 days
b) 3 months to 6 months
c) One year
d) None of the above
16) The rider covers to have health benefits are,
a) Critical Illness
b) Hospital bill reimbursing cover
c) The daily income loss due to hospitalization
d) Disabilities

The most accurate from above is,

i) Above all
ii) B and c only
iii) A and d only
iv) B,c and d only
17) The benefits that not included in rider covers are,
a) Surrender Value
b) Bonus/Dividend
c) Paid up value
d) Maturity amount
18) The premiums are waived off only at insured age
a) 20 years to 55 years
b) 18 years to 55 years
c) 18 years to 60 years
d) 18 years to 65 years
19) To claim for a total permanent disability, it should be existing for
a) At least 01 year
b) Minimum 06 months
c) Minimum 01 month
d) Minimum 03 months
 Chapter 05

1) Life insurance agreement is a very important document since,

a) It is a long-term agreement
b) The initial agreement document is required for a claim
c) The only evidence for existing of an insurance plan
d) Above All
2) The beneficiary of a life insurance can be named,
a) Only once during the term
b) Any time during the term period
c) On the maturity of the policy
d) On the beginning of the insurance policy
3) “If premium was not settled during the grace period, Policy will be lapse from the due date”.
This statement is,
a) True
b) False
c) Only applicable for Term assurance policies
d) Can't specifically say
4) “Life insurance policy will have a surrender value”
a) Life insurance policy will get an economical value
b) Insured can withdraw the insurance policy
c) Not required to deposit premiums further
d) If policy owner desires, can withdraw the insurance

Most accurate from above statements:

i) All Above
ii) A and d only
iii) A,c and d only
iv) A only
5) If insured death takes place during the grace period?
a) No benefits will be provided
b) Only the paid-up value will be settled
c) The premiums due will be deducted from benefit amount and rest will be settled.
d) Only the surrender value is settled.
6) Surrender value means,
a) A monetary value calculated by the time duration of the policy and the years that
premiums was paid
b) A monetary value calculated by subtracting total investment amount from dividend and
bonus.
c) The monetary value of the policy after subtracting premiums paid in the first three years
d) The amount paid to policy owner by subtracting company expenses from the premiums
payments
7) An insurance plan with a profit means,
a) There will be a dividend on every year for the insurance policy
b) Assurance of the maturity benefit.
c) Policy owners will get divided when profits are announced
d) Policy owners also get a payment equivalent to profit divided among share holders
8) What is the statement not relevant to surrender value?
a) Obtains a loan
b) If policy owner couldn’t deposit the premium on a financial crisis, insurance company
will provide an assurance that customer haven’t lost everything
c) Manipulate customer to terminate existing insurance plans and to purchase a new
insurance plan from a different service provider
d) None of the above
9) What is the most accurate statement defining “Cannot be Challenged”?
a) When policy is actively in force for two or more years insurance company cannot
challenge the validity of the plan, even if it hasn’t covered a crucial fact
b) The minimum two years considered during the life span of the insured
c) An insurance policy issued with limitations, cannot be challenged for validity
Most Accurate statement/s
i) A Only
ii) A and c only
iii) All above
iv) A and b only
10) In a normal revival,
a) All due premiums should be paid with the interest
b) A separate payment must be made for revival
c) Need to submit evidence regarding good health
d) Above all
11) Revival of an Insurance policy means,
a) Surrender the policy
b) Convert policy as a paid-up policy
c) Reactivate a lapsed policy
d) Obtain a loan basing on the insurance policy
12) When a loan is taken from an insurance policy,
a) Loan amount must be equivalent to sum assured in the policy
b) Loan must not be more than 90% of the surrender value
c) Policy owner have a right to request for a loan from his/her insurance policy.
d) The insurance policy will be considered as secured for the loan

Most accurate statement is,

i) A,c and d only

ii) D only
iii) B,c and d only
iv) B only
13) Grace period means,
 a) Grace period is not applicable for the first premium of a policy.
b) Generally, the grace period is for 30 days
c) All the benefits are active during the grace period
d) Above All
14) “Any amendment for the policy can be taken place only with the consent of the policy owner”
a) False
b) True
c) Sometimes it's True
d) None of the above
15) “If age mentioned in the policy is not accurate, the premiums payments will be calculated for
the real age and beneficiaries will get the benefits.”
a) True
b) False
c) Cannot be specific.
d) None of the above
16) “One year is excluded from the month of revival, if there is a suicide death have taken place”
a) Sometimes it's true
b) True
c) Completely incorrect
d) Cannot be specific.
17) The base factors for calculating the premium is,
a) The sum assured and age
b) The premium amounts of the competitive companies in the industry
c) Mortality ration, expenses and investment interest.
d) Mortality ratio
18) Paid up value means,
a) The amount of paid premiums and bonus payments.
b) The amount of paid premium payment after deducting premium for life risk.
c) When premiums payments are made for three years or more, the amount assured
depending on the paid premiums
d) The amount of premiums paid up till paid up status.
19) Assignment of a life insurance policy to a third party can be done with consideration.
a) True
b) False
c) True or False
d) None of the above.
20) On a death of policy holder and beneficiary both, death benefit will be paid to,
a) Alternate Beneficiary
b) Insurance Company
c) The party as per court order
d) None of the above
21) To take further steps in a written notice for an assignment,
a) Beneficiaries are binding
b) Insurance company is not binding
 c) The agent is binding
d) Board of insurance is binding
22) Once an insurance policy becomes a paid-up policy,
a) All the rider covers will be continuously in force
b) The bonus payments till policy being paid-up will be paid at maturity of the policy or at a
death of the insured.
c) Paid-up value can be withdrawn at any time with bonus payments till the policy changed
to paid-up status
d) Bonus will be added to the policy even after paid-up
23) In a special revival,
a) The policy started day will be amended.
b) Policy can be activated just by paying a one premium payment.
c) If premiums were not paid for more than six months, term of the policy will be extended
relatively.
d) Above All
24) Majority of the insurance policies will have a surrender value after a specific duration,
a) Policy holders will pay premiums during the initial stage more than the expectation.
b) Insurance policies is in force for a while will create a surplus that can be withdrawn.
c) The premiums collected from the newly purchased policies, will be released for the
policies that continued in force for a while.
d) The returns on annual investments will be released as surrender values
25) “On an assignment of an insurance policy, assignee can claim for benefits”. This statement is
a) True
b) False
c) Depending on the terms and conditions for assignment
d) None of the above.
26) “The rights of the assignee are less than rights vested with insured” means,
a) Assignee will get benefit only after recovering all the due payments.
b) Can take actions or further steps depending on discretion of the insured.
c) False
d) None of the above
27) Fixed period option means,
a) Payments and interest will be paid as installments during the agreed time period.
b) A single payment made covering the whole agreement.
c) Benefits will be paid annually or during the agreed time intervals.
d) A payment made once on every 4 or 5 years during the policy term.
28) Lump sum settlement means,
a) Agreed amount will be paid in installment as far as having capacity to pay.
b) Lumpsum will be paid as performance of the contract.
c) A payment made once for 4 to 5 years during the term
d) Pay as installments during an agreed time period.
29) Non forfeiture benefit means,
a) Policy holder have the right to amend the agreement.
b) All the rights will be not expired when there are due premium payments.
 c) The policy holder cannot surrender the policy ad get the value.
d) Above all
30) Transferring the burden of expense of life insurance premium means,
a) A collection to cover all connected expenses
b) A reserve for unexpected additional expenses
c) A reserve to cover additional mortality
d) A reserve for insured to obtain a profit
31) Settlement options are,
a) Paying the benefit amount and interest as installments till funds are remaining.
b) Paying an interest annually or for an agreed time period.
c) Paying the benefit amount and interest as installments during an agreed time period.
d) Paying by a Lump sum.

Most accurate is,

i) B,c and d only

ii) All Above
iii) A,b, and C only
iv) A,c and d only
32) Grace period is for,
a) 40 Days
b) 30 Days
c) 60 Days
d) 90 Days
33) The advice which should give to a policy owner who haven’t paid the premium for six years after
policy obtained a surrender value and no longer doesn’t have capacity to settle the premiums.
a) Request to return all the paid premiums
b) Make policy a paid-up policy
c) Surrender the policy and purchase a new policy
d) Submit to the insurance board Sri Lanka
34) Burden of proof for a suicide lies with,
a) Beneficiaries of the policy
b) Insurance Company
c) Insurance policy holder
d) Insurance Board of Sri Lanka
35) The “Policy Document’ of Life insurance is important because,
a) It is necessary to submit policy document when claiming for a benefit
b) The Beneficiaries are mentioned in it
c) The Life insurance if a Long-term agreement
d) A and B only
 Chapter 06

1. What is the option available on a situation where insurance provider cannot accept the offer by
the Life insurance applicant?
a. Accept the offer without any exclusions
b. Reject the offer
c. Accept the offer with an additional premium payment
d. Post pone the acceptance

Most accurate from above,

i. A,b and d only

ii. A,b and c only
iii. A,c and d only
iv. Above All
2. What is the TRUE statement on life insurance proposal?
a. It’s the base of the life insurance agreement
b. The requester must sign on it with the date
c. The application should be completed by applicant himself
d. Above All
3. The additional information regarding the assessment of risk in a life insurance proposal can be
obtained from,
a. A doctor recommended by the life insurance company
b. The employer of the life insurance requester.
c. The family doctor of the life insurance requester.
d. The beneficiaries of the life insurance requester

The most accurate is,

i. A and c only
ii. A,c and d only
iii. All Above
iv. C only
4. What is mean by “Public Policy” in life insurance industry?
a. An accepted condition by law in the country
b. The compensation by a life insurance should be credited to beneficiaries or dependents.
c. A law which prohibits enforcing a life insurance policy against the public benefit.
d. Above All
5. The responsibility of an underwriter is,
a. Assessment as whether insured can obtain the life insurance policy.
b. An assurance as the premiums will be credited accordingly
c. Look after the insured whereas to get new business opportunities.
d. Assessment whether policy holder can pay the premiums timely.
6. Most relevant information in financial underwriting is,
a. The information regarding the beneficiary is unavailable
 b. The occupation of proposed insure person is highly risk.
c. The insurance covers are high in nature.
d. The method of paying premium is not mentioned.
7. What is the TRUE statement on Sub-standard risks?
a. Can be insured with additional terms and conditions
b. This need to be considered for insurable interest
c. Cannot be insured in most of the situations

Most accurate from above

i. A only
ii. B only
iii. C only
iv. None of the above
8. The main responsibilities of the applicant on an initiation of a life insurance policy
a. Provide information about family
b. Explain expenses and income information
c. Provide information on bank accounts
d. Communicate all the important information
9. What is insurance underwriting?
a. Reinsurance
b. Assessment of available risks
c. Try to commit a fraud
d. Prepare doctor’s reports
10. If answer is “Yes” on certain questions in the life insurance application form.
a. No explanations are required.
b. A complete explanation is required with specific time periods
c. Insurance company will reject the application for insurance
d. Insurance company will accept the application for insurance
11. The importance of the accurate age in the insurance policy is,
a. It is a crucial factor deciding the insurance premium
b. It’s necessary to decide on medical inspections
c. It’s a fact that affects the term of an insurance plan
d. None of the above
12. “Most of the situations life insurance is prepared without medical reports” The meaning of this
is,
a. Any life insurance proposal is accepted without medical reports
b. Underwriter can continue the further steps from the information on the insurance
application and proposal form without additional medical reports
c. When underwrite accepts the insurance application without medical reports, even
though high life cover is requested
d. All the insurance applications are directly accepted without any medical reports.
13. If birthday is unknow by the applicant but the year of birth is mentioned in the application,
birthday is considered as
a. 1st of January on that relevant year
 b. 1st of July on that relevant year
c. 31st of December on that relevant year
d. 30th of June on that relevant year
14. “The insurance agreement cannot be amended or cancel the insurance policy once it is in force
except if policy owner has not exposed crucial information”. This statement is,
a. False
b. Not so sure
c. True
d. None of the above
15. The questions mentioned in a life insurance application or a proposal is very limited due to,
a. Competition
b. Efficiency
c. Discretion of the insurance provider
d. Above a and b only
16. What is the most accurate statement on “Incontestability”?
a. Insurance provider can claim for compensations or damages during the term.
b. If the insurance policy was in force for more than two years insurance provider cannot
terminate the policy except on a situation is where policy holder has failed to expose
crucial information.
c. The minimum 2 year should be calculated after surrender value.
d. None of the above
17. Twisting means,
a. Surrender an existing insurance plan
b. Portion from the commission will be credited to insured
c. Obtain a loan from the insurance plan
d. Inappropriately re-propose life insurance policy
18. Important facts to decide on the responsibility of the insurance company.
a. Surprising factors or suspicious reasons
b. Accidents
c. Suiciding
d. Above All
19. If it proved that Beneficiary killed the insured,
a. The total death benefits will be credited to beneficiaries
b. The compensation will be done according to terms and conditions of the policy
c. Under the public policy existing the country beneficiary cannot benefit.
d. Sympathetically death benefit will be credited to beneficiary.
20. Which is not relevant to provide a proper service for customers,
a. Continuous training
b. Flexible framework
c. Co-operate culture
d. Provide multiple insurance policies for a single customer
21. What is the statement describe why “Customer service is important”?
a. To maintain loyalty of the customers
b. To have a better productivity and profit
 c. Above a and b
d. None of the above
22. What is the TRUE statement on life insurance policy?
a. A lapsed policy can be reinitiate/revival only within five years
b. The grace period is for 30 days
c. The suicide is excluded from insurance policy for one year
d. Above All
23. The insurance application should be filled by,
a. The person who request for a life insurance
b. Insurance advisor
c. Underwriter
d. All Above
24. The TRUE statement on life insurance application is,
a. It must be filled by the person who request for an insurance
b. It must be signed by the applicant with the date.
c. It’s a source of data for underwriting
d. Above All
25. When applicant's application cannot be accepted under a standard risk
a. Postpone the application.
b. Accepting the policy with a loading.
c. Reject the application.
d. Accept the application with exclusions.

Most Accurate from above is,

i. All Above
ii. C only
iii. B only
iv. B and d only
26. The amendments to insurance policy must be done with high awareness because,
a. Further reinsurance might be required
b. Further underwriting assessments might be required
c. May cause conflicts
d. Above All
27. If insured died during a very short period from the initiation of the insurance plan, it will be
subjected to high scrutiny
a. Since policy is still in the stage where insurer can challenge.
b. There can be a fraud
c. Above a and b
d. None of the above
28. Additional information can be obtained to assess the proposed risk,
a. By the family doctor of the applicant
b. A doctor conducts a medical checkup on the request by the insurer
c. Employer of the applicant
d. Above a and b
29. The TRUE statement on the sub-standard risk is,
a. It can be insured with specific exclusions.
b. It is a risk that cannot be insured
c. Insurance handouts are required to consider insurability.
d. Accepting subjected to conditions
30. A circumstance where insurance company will add loadings,
a. When there is a risk in the employment.
b. The request sum assured is higher
c. When the method of premium payment is not mentioned
d. Above All
31. Cooling off period means,
a. The time period given for the policy holders to rethink about the requested or applied
life insurance plan.
b. The time period given to include a beneficiary
c. The grace period given to settle the premium payment
d. Above All
32. The Age is considered in life insurance for,
a. Decide on the premium
b. To decide on necessity of medical reports
c. To calculate the risk of the insured
d. Above All
33. What is considered in financial underwriting?
a. The value of the insurance cover for the insured
b. The possibility to pay premiums on time
c. The amount of risks with life insured
d. Above All
34. A decision can take for sub-standard life insurance request is,
a. Accept with a loading
b. Post pone
c. Rejection
d. Accept with exclusions

Most accurate statements from above is,

i. A,b and c
ii. Above All
iii. A,c and d
iv. C only
35. Which is not a common rule when an application is filled,
a. The answer for all the questions must be submitted by the applicant
b. An explanation is required when answer is “Yes”.
c. The sign of the applicant must be there.
d. When an incorrect answer is submitted, crosscut the incorrect answer and applying
applicants' signature and date is not necessary.
36. Which is not a medically checking requirement,
 a. The applicant is overage
b. When the sum assured is high
c. When applicant have health concerns
d. Consent of the applicant
37. When there is an amendment to the insurance agreement, it must be subjected to greater
scrutiny,
a. Because it may have a requirement for reinsurance
b. The underwriting need must be completed
c. There can be legal conflicts

The most accurate statement is,

i. All Above
ii. A and b only
iii. B and c only
iv. A and c only
38. When there is a death claim in a very short period after purchasing the insurance plan it will
subjected to greater scrutiny,
a. Due to a non-disclosure of information.
b. Due to a fraud.
c. Since it can be challenged
d. Beneficiaries can take legal actions.

Most accurate statement is,

i. A,b and c only

ii. Above All
iii. D only
iv. C only

Chapter 07

1. The primary expectation of and employment is satisfaction. The reason is,

a. Company Operations
b. Personal relationship
c. Leadership status
d. The immediate supervisor
 The most accurate statement is,

i. Above All
ii. A,b and c only
iii. A and b only
iv. D only
2. The primary need for a professional life insurance selling,
a. Professional attitude
b. Selling Skills
c. Knowledge on products
d. Knowledge about company

The most important from above is,

i. A only
ii. A and b only
iii. C and d only
iv. C only
3. The requirement to follow a code of ethics by an insurance adviser.
a. Will enable to work efficiently, successfully and respectfully on the assumed
responsibilities in the profession.
b. Will enable to sell more insurance policies to the clients of other insurance companies
c. Will enable to have a good understanding on professional attitudes.
d. Can build good interpersonal relationships and build the leadership skills
4. The main two reasons for satisfaction from an employment is,
a. Leadership
b. Company
c. Personal relationships
d. Company operations

Most accurate is,

i. A and b only
ii. A and c only
iii. C and d only
iv. A and d only
5. The priority in basic requirement for life insurance sale is,
a. Training
b. The nature of insurance plans
c. The company where being an agent
d. Professional Attitude