Principles Of Insurance Set 4

Bachelor of Commerce (B Com)

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This set of Principles of Insurance Multiple Choice Questions & Answers (MCQs) focuses on Principles Of Insurance Set 4

Q1 | Occupation is important for risk classification because of:
  • Income earned by individual
  • Tension, stress and worries given by workplace
  • damage caused by pollution at work place
  • both b and c
Answer: both b and c
Q2 | A complete proposal form contains the information about
  • Moral hazard
  • Physical hazard
  • Personal history of proposer and identity of the property insurance
  • All of the above
Answer: Physical hazard
Q3 | Valuation in life insurance means
  • The process of arriving at the profit of a life insurance company
  • The process of determining the net premium for a life insurance policy
  • The process of arriving at the bonus in a life insurance company
  • The process by which the value of all the existing policies is ascertained in a life insurance company.
Answer: The process by which the value of all the existing policies is ascertained in a life insurance company.
Q4 | Endorsement can be used in a policy giving effect to
  • Renewal
  • Change in Premium
  • Change in subject matter of insurance
  • All of the above
Answer: All of the above
Q5 | Fire Insurance is based on the principle of ?
  • Utmost good faith
  • Insurable interest
  • Indemnity
  • Co-operation
Answer: Indemnity
Q6 | Which is the consequential loss in the fire insurance?
  • loss of profit on account of fire
  • property damaged by matter used for extinguishing fire
  • loss due to collapse of walls at the time of fire.
  • none
Answer: loss of profit on account of fire
Q7 | Fire insurance is a personal contract because
  • it is a contract of utmost good faith
  • it is a contract of insurable interest
  • the contract does not insure the safety of the property but only the insured from pecuniary loss due to fire
  • none
Answer: the contract does not insure the safety of the property but only the insured from pecuniary loss due to fire
Q8 | Which of the statements is correct? Under a fire policy A. Insurance is a transfer of risk mechanism. B. Insurance gives physical protection to assets.
  • Statement A. is correct
  • Statement B. is correct
  • Both are correct
  • Neither is correct
Answer: Statement B. is correct
Q9 | Which of the following is an accidental loss by fire?
  • loss of profit on account of fire
  • loss on account of delay
  • Damage caused by a fire brigade in carrying out its fire fighting operation.
  • Loss of market
Answer: loss on account of delay
Q10 | The major law governing marine insurance in India is
  • English Marine Insurance Act, 1906
  • Marine Insurance Act, 1963
  • IRDA Act, 1999
  • General Insurance Nationalisation Act, 1972
Answer: IRDA Act, 1999
Q11 | Can a marine policy be assigned?
  • Can be assigned before the loss
  • Can be assigned after the loss
  • cannot be assigned
  • both a and b
Answer: cannot be assigned
Q12 | Constructive total loss in marine insurance means
  • same as total loss
  • a partial loss
  • the loss caused is so huge that the cost of repairs would exceed the actual amount, so it is adjudged as a total loss
  • a loss which is not covered
Answer: same as total loss
Q13 | Group insurance is ideally suited for covering
  • Affluent persons in the society
  • Weaker sections of the society
  • Employer-employee groups
  • Both B. and C.
Answer: Both B. and C.
Q14 | Unemployment insurance is a component of
  • ESI Act
  • Social Security Act
  • Worker’s Compensation Act
  • None of the above
Answer: Social Security Act
Q15 | Which is the right time for taking life insurance?
  • When you are about to get married
  • Soon after you have got married
  • Just when you are joined a new job
  • All the three ‘times’ are right
Answer: All the three ‘times’ are right
Q16 | Which type of insurance protects the policyholder against loss or damage to a ship or its cargo on the high seas?
  • Hazards
  • Inland
  • Transportation
  • Mariney
Answer: Mariney
Q17 | Which of the following is not covered under General Insurance?
  • Theft insurance
  • Marine insurance
  • Life insurance
  • Fire insurance
Answer: Life insurance
Q18 | Which principle suggests that insured should try to minimize the loss of his property even if it is insured?
  • Principle of indemnity
  • Principle of Mitigation
  • Principle of Proximate Cause
  • Principle of contribution
Answer: Principle of Mitigation
Q19 | Group insurance is ideally suited for covering
  • Affluent persons in the society
  • Weaker sections of the society
  • Employer-employee groups
  • Both B. and C.
Answer: Weaker sections of the society
Q20 | Fire insurance can be taken in respect of __________
  • movable property only
  • immovable property only
  • both movable and immovable properties
  • persons only
Answer: both movable and immovable properties
Q21 | All of the following can be classified as casualty insurance Except____________.
  • marine insurance.
  • general liability insurance.
  • workers compensation insurance.
  • burglary and theft insurance.
Answer: marine insurance.
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