Mock Test #1 [PDF]

1. The measures to reduce chances of occurrence of risk are known as ________. Risk retention Loss prevention Risk Transfer Risk Avoidance 2. Origins of modern insurance business can be traced on ________. Bottomry Lloyds Rhodes Malhotra Committee 3. Which of the following statement is true? Insurance protects the asset Insurance prevents its loss Insurance reduces possibilities of loss Insurance pays when there is loss of asset 4. Before acceptance of a risk, the insurer arranges a survey and inspection of the property. Why? To assess the risk for rating purposes To find out how the insured purchased the property To find out whether other insurers have also inspected the property To find out whether neighbouring property also can be insured 5. Moral hazard means: Dishonesty or character defects in an individual Honesty and values in an individual Risk of religious beliefs Hazard of the property to be insured 6. ________ is not an example of risk. Damage to car due to accident Damage of cargo due to rain water Damage to car tyre due to wear and tear Damage to property due to fire 7. Earthquake is an example of: Catastrophic risk Dynamic risk Marginal risk Speculative risk 8. An example of a fact which need not be disclosed unless asked for is ________ by the insurer. Age of the insured Presence of fire extinguisher Heart ailment Other insurance details 9. ____________ refers to the body of the ship Hull Cargo Piracy Piracy 10. Classification of customers into various market segments, having common features is known as ________. Sales Segmentation Marketing Prospecting 11. Which of the following is not part of sales process? Prospecting Sales interview Loss assessment Closing 12. Insurance is part of ________ industry Manufacturing Financial services Consumer goods Share market 13. Appointment as an insurance agent is done by ________. General Insurance Corporation (GIC) Insurance Regulatory & Development Authority of India (IRDAI) By the respective insurance company Finance Ministry 14. Minimum qualification required for an insurance agent is ________ Graduate As per Board Approved Policy of each insurer Post-Graduate 7th 15. ________ may deal with all Life Insurance Companies and /or general insurance companies. Agent Broker Corporate Agent Retail Agent 16. If an agent is found guilty of criminal misappropriation, the designated person will ________. Terminate the agency appointment Issue a duplicate appointment letter Renew the existing appointment Take some fees from the agent 17. ________ is the maximum limit of liability of insurer under the policy Sum insured Premium Surrender value Amount of loss 18. ________ is the consideration or price paid by insured under a contract. Claim amount Surrender value Maturity amount Premium 19. A document which provides an evidence of contract of insurance is called________ Policy Cover note Endorsement Certificate of insurance 20. Insurance agents who hold licence to act as an agent for both a life insurer and a general insurer are called ________. Common insurance agents Composite insurance agents Multiple insurance agents General insurance agents 21. A warranty Is a condition expressly stated in the policy Has to be complied with Both a and b None of the above 22. ________ decides whether to accept or not to accept the risk. Assured Underwriter Agent Surveyor 23. Hazards are: Factors that increase the impact of losses Factors that increases the frequency of loss Factors that increase the impact and severity of losses Factors that decrease the impact and severity of losses 24. Which of the following is true? Physical Hazards: Are not important for rate making Cannot be ascertained Can be calculated from the balance sheet Can be ascertained from information given in a proposal form 25. In motor insurance one of the warranties is: The vehicle should be washed daily The vehicle should not be used for speed testing The vehicle should not be used for carrying luggage for personal use The vehicle should not be run more than 200 km per day 26. Insured's declared value in motor insurance includes: Registration Manufacturer's cost price Manufacturer's selling price Arbitrary price component 27. In householder's insurance Gold and silver ornaments are covered Content's of one's shop is covered Cars owned by the family are covered Parcels sent by post are covered during transit 28. Householder's insurance covers Only the structure of the home Only the Contents of the home Both the structure and contents Both Structure and contents only when insured is not at home 29. In shop keeper's insurance, which of the following are not covered? Machinery breakdown Malicious damage Business interruption Willful destruction by insured 30. In Engineering insurance CAR stands for Motor Car Contractors All Risks Company's All Risks Companies All Requirements 31. Policy which covers loss or damage to aircraft is ________. Statutory liability Property insurance Aviation insurance Money insurance 32. Fire Insurance Policy does not cover damage to property even as add-on cover due to________. floods earthquake fire boming due to war 33. Consequential Loss (Fire Policy) covers: Loss of profit due to damage to factory Loss of Goodwill Material wear & tear in machinery Losses due to foreign exchange fluctuations 34. Premium in Burglary depends on: Security measures Location of Premises Nature of property All of the above 35. Money Insurance Policy covers: Cash in hand Money invested in Mutual Fund Money lying in Saving Bank Money deposited with post office 36. Which of the below statement is correct with regards to a hospitalization expenses policy? Only hospitalization expenses are covered Hospitalization as well as pre and post hospitalization expenses are covered Hospitalization as well as pre and post hospitalization expenses are covered and a lump sum amount is paid to the family members in the event of insured's death Hospitalization expenses are covered from the first year and pre and post hospitalization expenses are covered from the second year if the first year is claim free. 37. Identify which of the below statement is correct? Health insurance deals with morbidity Health insurance deals with mortality Health insurance deals with morbidity as well as mortality Health insurance neither deals with morbidity or mortality 38. Which of the below statement is correct with regards to cashless service provided in health insurance? It is an environment friendly go-green initiative started by insurance companies to promote electronic payments so that circulation of physical cash notes can be reduced and trees can be saved. Service is provided free of cost to the insured and no cash is to be paid as the payment is made by the Government to the insurance company under a special scheme All payments made by insured have to be made only through internet banking or cards as cash is not accepted by the insurance company The insured does not pay and the insurance company settles the bill directly with the hospital 39. Identify the correct full form of PPN with regards to hospitals in health insurance. Public Preferred Network Preferred Provider Network Public Private Network Provider Preferential Network 40. Identify which of the below statement is incorrect? An employer can take a group policy for his employees A bank can take a group policy for its customers A shopkeeper can take a group policy for its customers A group policy taken by the employer for his employees can be extended to include the family members of the employees 41. Though the duration of cover for pre-hospitalization expenses would vary from insurer to insurer and is defined in the policy, the most common cover is for ________ prehospitalization. Fifteen days Thirty days Forty Five days Sixty days 42. As per IRDA guidelines, a ________ grace period is allowed for renewal of individual health policies. Fifteen days Thirty days Forty Five days Sixty days 43. Which of the following factor does not affect the morbidity of an individual? Gender Spouse job Habits Residence location 44. According to the principle of indemnity, the insured is paid for ________. The actual losses to the extent of the sum insured The sum insured irrespective of the amount actually spent A fixed amount agreed between both the parties The actual losses irrespective of the sum assured 45. The first and the primary source of information about an applicant, for the underwriter is his ________. Age proof documents Financial documents Previous medical records Proposal form 46. The underwriting process is completed when ________. All the critical information related to the health and personal details of the proposer are collected through the proposal form All the medical examinations and tests of the proposer are completed The received information is carefully assessed and classified into appropriate risk categories The policy is issued to the proposer after risk selection and pricing. 47. Which of the following statements about the numerical rating method is incorrect? Numerical rating method provides greater speed in the handling of a large business with the help of trained personnel. Analysis of difficult or doubtful cases is not possible on the basis of numerical points without medical referees or experts. This method can be used by persons without any specific knowledge of medical science. It ensures consistency between the decisions of different underwriters. 48. Underwriting is the process of ________. Marketing insurance products Collecting premiums from customers Risk selection and risk pricing Selling various insurance products 49. The principle of utmost good faith in underwriting is required to be followed by ________. The insurer The insured Both the insurer and the insured The medical examiners 50. Insurable interest refers to ________. Financial interest of the person in the asset to be insured The asset which is already insured Each insurer's share of loss when more than one company covers the same loss The amount of the loss that can be recovered from the insurer Check Answers