Principles Of Insurance Set 2 MCQs

Q1 | Which of the following is the similarity between insurance and gambling:

The amount of loss to be paid is known before hand.

Promise to pay on the happening of the event

Both the parties win on happening of an event.

Both are enforceable at law.

Q2 | The business of insurance is related to protection of:

savings

status

profits

economic value of assets

Q3 | The concept of insurance is

to share losses by many

to make money out of death

to earn interest

to earn a status

Q4 | Insurance covers the risk of the most certain event -

Death of a person

protection of the childhood

protection of old age

all of the above

Q5 | Insurance cover

Protects assets

prevents loss

reduces the impact of loss

insures immortality

Q6 | The company doing insurance business is called:

mutual funds

non-banking firm

banking company

an insurance company

Q7 | All of the following are disadvantages of using insurance EXCEPT

There is an opportunity cost because premiums must be paid in advance.

Considerable time and effort must be spent selecting and negotiating coverages.

It results in considerable fluctuations in earnings after a loss occurs.

Attitudes toward loss control may become lax.

Q8 | All of the following can be classified as casualty insurance EXCEPT

Marine insurance.

General liability insurance.

Workers compensation insurance.

Burglary and theft insurance.

Q9 | Insurance eliminates or decreases the uncertainty associated with occurrence of an event

Correct

Wrong

Partially correct C.

Totally misleading

Q10 | The insurance plays a role in the economic development of the country in following ways:

Release capital for new investments.

The job potential increases

Money collected is invested in infrastructure

All of the above

Q11 | Insurance brokers are governed by

Sale of Goods Act

Agency Law

IRDA Act. 1999

Mercantile Law

Q12 | A reinsurance of insurance refers to ________.

line.

retention.

retrocession.

cession.

Q13 | IRDA Act. 1999 defines insurance intermediary as one including also

Insurance broker

UTI Agent

Sarpanch

Medical Examiner

Q14 | Insurance reduces the extent of financial loss connected with uncertain events

TRUE

FALSE

To the extent of insurance cover

Does not reduce the loss at all

Q15 | The business of insurance is related to protection of

Savings

Status

Profits

Economic value of assets

Q16 | Which of the following is the similarity between insurance and gambling?

The amount of loss to be paid is known beforehand

Promise to pay on the happening of an event

Both the parties win on happening of an event

Both are enforceable at law

Q17 | What is underwriting in Insurance ?

Process of investing the premiums which insurance provider collect from insured parties.

A claim arises on the occurrence of a specified event

Process by which insurers select the risks to insure and decide how much in premiums to charge for

The ratio of losses and expenses to premium

Q18 | Insurance Sector in India is regulated by IRDA. What is full name of IRDA?

Insurance Regulating and Development Agency

Insurance Rules and Development Authority

Insurance Rules and Deployment Authority

Insurance Regulatory and Development Authority

Q19 | When was IRDA Act passed?

1972

1999

1989

2000

Q20 | Which of the following is the main objective of IRDA:

To take care of the policy holder interest

To open the insurance sector for private sectors

To supervise the activities of intermediaries

All of above

Q21 | The general insurance business in India was nationalized in the year.

1976

1956

1983

1972

Q22 | The main role of an underwriter in a non-life insurance company is normally to

assess the acceptability of particular risks

certify a loss when claims are submitted.

design the structure of the products to be offered.

negotiate with the industry regulator.

Q23 | Akshat is a relatively cautious person. In insurance terms, this will normally increase thelikelihood that he will

be considered an above average insurance risk.

be considered a below average insurance risk.

require insurance cover.

require reinsurance cover.

Q24 | Which of the statements is correct? A. Insurance is a transfer of risk mechanism. B. Insurance gives physical protection to assets.

Statement A.

Statement B.

Both the statements.

Neither of the statements

Q25 | Transfer of rights and remedies of the insured to the insurer after indemnity has beeneffected is called __________.

Insurable interest.

Subrogation

Proximate clause.

Money back policy.