1.

In 1818, India’s first insurance company Oriental

Life Insurance Company has established in which
city ?
[Link] Delhi
[Link]
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
In 1818, Oriental Life Insurance Company started by
Europeans in Calcutta

2. In which year, the Indian Life Assurance Companies

Act came into force ?
1.1910
2.1932
3.1920
4.1912
[Link] of these

Answer & Explanation

Answer – 4.1912
Explanation :
In the year 1912, the Life Insurance Companies Act and
the Provident Fund Act were passed to regulate the
insurance business

3. Which insurance company is the first general

insurance company in India ?
[Link] Oriental Insurance Company

[Link] [Link] [Link]

 [Link] Re
[Link] India Assurance
[Link] Insurance Company Ltd
[Link] of these

Answer & Explanation

Answer – [Link] Insurance Company Ltd

Explanation :
Triton Insurance Company Ltd is the first general
insurance company established in the year 1850 in
Calcutta by the British.

4. What is ULIP ?
[Link]-liked insurance plans
[Link]-linked insurance policy
[Link]-linked insurance plans
[Link]-linked insurance plans
[Link] of these

Answer & Explanation

Answer – [Link]-linked insurance plans

Explanation :
A ULIP or unit linked insurance plan is a market-linked
product that aggregates the very best of investment and
insurance. It is a plan which is linked to the capital market
and offers flexibility to invest in equity or debt funds as
per risk appetite.

5. ______________ is an extension of endowment

plans
[Link] insurance policy
[Link] back policy
[Link] insurance policy

[Link] [Link] [Link]

 [Link] insurance policy
[Link] of these

Answer & Explanation

Answer – [Link] back policy

Explanation :
Money back policies are basically an extension of
endowment plans wherein the policy holder receives a
fixed amount at specific intervals throughout the duration
of the policy.

6. A demand made by the insured, or the insured’s

beneficiary, for payment of the benefits is known as
[Link]
[Link]
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer -[Link]
Explanation :
An insurance claim is a formal request to an insurance
company asking for a payment based on the terms of the
insurance policy. The insurance company reviews the
claim for its validity and then pays out to the insured or
requesting party (on behalf of the insured) once approved.

7. A risk or damage covered by an insurance policy is

called as ______________
[Link]
[Link]
[Link]

[Link] [Link] [Link]

 [Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
Peril is a specific risk or cause of loss covered by an
insurance policy, such as a fire, windstorm, flood, or theft.

8. The maturity age of a whole life policy is

____________
1.100
2.65
3.70
4.80
[Link] of these

Answer & Explanation

Answer – 1.100
Explanation :
A whole life policy is said to “mature” at death or the
maturity age of 100, whichever comes first

9. Which committee is associated with insurance

sector ?
[Link] Committee
[Link] Committee
3.A C Shah Committee
4.A Ghosh Committee
[Link] of these

Answer & Explanation

[Link] [Link] [Link]

 Answer – [Link] Committee
Explanation :
In 1993, the first step towards insurance sector reforms
was initiated with the formation of Malhotra Committee,
headed by former Finance Secretary and RBI Governor
R.N. Malhotra. The committee was formed to evaluate the
Indian insurance industry and recommend its future
direction with the objective of complementing the reforms
initiated in the financial sector.

10. The first ULIP was launched by which of the

following ?
[Link] India Insurance Company
[Link] Trust of India
[Link] India
[Link] Insurance Company
[Link] of these

Answer & Explanation

Answer – [Link] Trust of India

Explanation :
The first ULIP was launched by Unit Trust of India (UTI),
with the Government of India opening up the insurance
sector to foreign investors in 2001

1. Which type of risks are not insurable ?

[Link] risk
[Link] Pure Risk
[Link] risk
[Link] risk
[Link] of these

Answer & Explanation

[Link] [Link] [Link]

 Answer – [Link] risk
Explanation :
Exposure to loss from changes in the environment, such
as fashions, people’s tastes, and regulatory requirements.
Dynamic risks are not insurable.

2. GIVE stands for _______________

[Link] Insurance Value Element
[Link] Individual Value Execution
[Link] Incident Validity Element
[Link] Insurance Value Evaluation
[Link] of these

Answer & Explanation

Answer – [Link] Insurance Value Element

Explanation :
GIVE (Gross Insurance Value Element ) is the amount
payable on death of a policy holder

3. Gratuity is paid when an employee

[Link]
[Link]
[Link]
[Link] or disable due to accident
[Link] of these

Answer & Explanation

Answer -[Link] of these

Explanation :
Gratuity is a part of salary that is received by an employee
from his/her employer in gratitude for the services offered
by the employee in the company. Gratuity is a compulsory

[Link] [Link] [Link]

 benefit to be provided to employees as per the Gratuity
Act, 1972.

4. When a contract ceases to be enforceable at law,

then it is called as
[Link] Contract
[Link] contract
[Link] contract
[Link] contract
[Link] of these

Answer & Explanation

Answer – [Link] contract.

Explanation :
The law relating to contracts in India is governed by The
Indian Contract Act , 1872. A void contract is a contract
which ceases to be enforceable by law.

5. A professional dealing with the assessment and

management of risk for insurance policies is known
as
[Link]
[Link]
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
An actuary is a professional dealing with the assessment
and management of risk for financial investments,

[Link] [Link] [Link]

 insurance policies, and any other ventures involving a
measure of uncertainty.

6. In which year, the General Insurance Business

Nationalization Act was passed in India ?
1.1972
2.1980
3.1991
4.1985
[Link] of these

Answer & Explanation

Answer – 1.1972
Explanation :
The General Insurance Business Nationalization Act was
passed in 1972 to set up the general insurance business.
It was the nationalization of 107 insurance companies into
Four company National Insurance Company, New India
Assurance Company, Oriental Insurance Company and
United India Insurance Company.

7. An Insurance company has been in business for how

many years to launch IPO ?
1.12
2.8
3.5
4.10
[Link] of these

Answer & Explanation

Answer – 4.10
Explanation :

[Link] [Link] [Link]

 If an Insurance company has been in business for 10
years, it can launch IPO( initial public offering)

8. In 2016 , First IPO launched by which insurance

company ?
[Link] Insurance Company Ltd
[Link] Prudential Life Insurance
[Link]
[Link] Re
[Link] of these

Answer & Explanation

Answer – [Link] Prudential Life Insurance

Explanation :
ICICI Prudential Life Insurance’s Rs 6,000-crore initial
public offer (IPO), the first by an insurance company in
India in 2016

9. Which of the following is the only Reinsurer

Company in India ?
[Link]
[Link] Re
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer – [Link] Re
Explanation :
GIC of India (GIC Re) was the sole reinsurance company
in the Indian insurance market with over four decades of
experience until the insurance market was open to foreign

[Link] [Link] [Link]

 reinsurance players by late 2016 including companies
from Germany, Switzerland and France.

10. Government holds ____________% stake in LIC.

1.51%
2.75%
3.100%
4.65%
[Link] of these

Answer & Explanation

Answer – 3.100%
Explanation :
LIC is wholly owned by Government of India and was
established under LIC Act 1956.

1. What is the FDI limit of Insurance Sector ?

1.100%
2.26%
3.35%
4.49%
[Link] of these

Answer & Explanation

Answer – 4.49%
Explanation :
The FDI limit of insurance sector was raised to 49 percent
in June 2016.

2. _____________ is the only public sector company

in the field of life insurance in India
[Link]
[Link]

[Link] [Link] [Link]

 [Link]
[Link] Re
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
There are currently, a total of 24 life insurance companies
in India. Of these, Life Insurance Corporation of India
(LIC) is the only public sector insurance company in the
field of life insurance

3. ULIP is a product offered by

[Link]
[Link] Sector Banks
[Link] Institutions
[Link] companies
[Link] of these

Answer & Explanation

Answer – [Link] companies

Explanation :
A Unit Linked Insurance Plan (ULIP) is a product offered
by insurance companies that, unlike a pure insurance
policy, gives investors both insurance and investment
under a single integrated plan.

4. Which of the following organization provides export

credit insurance support to Indian exporters ?
[Link]
[Link]
[Link]

[Link] [Link] [Link]

 [Link] Re
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
The ECGC Limited (Formerly Export Credit Guarantee
Corporation of India Ltd) is a company wholly owned by
the Government of India based in Mumbai, Maharashtra.
It provides export credit insurance support to Indian
exporters and is controlled by the Ministry of Commerce.

5. The minimum paid up capital for any insurance

business- Life or General is
[Link].50 Cr
[Link].100 Cr
[Link].150 Cr
[Link].200 Cr
[Link] of these

Answer & Explanation

Answer – [Link].100 Cr
Explanation :
The Bill will allow companies, exclusively into the business
of health insurance, to operate with a minimum paid up
capital of Rs 50 crore against the current minimum paid
up capital of Rs 100 crore for any insurance business- Life
or General. For re-insurance business the minimum paid-
up capital will be Rs 200 crore.

6. The Insurance Regulatory and Development

Authority (IRDA) was constituted in
1.2000

[Link] [Link] [Link]

 2.2001
3.2004
4.1999
[Link] of these

Answer & Explanation

Answer – 1.2000
Explanation :
Following the recommendations of the Malhotra
Committee, in 1999 the Insurance Regulatory and
Development Authority (IRDA) was constituted to regulate
and develop the insurance industry and was incorporated
in April 2000.

7. _____________ is the sum paid on the policy’s

maturity date
[Link] Cost
[Link] Value
[Link] Payment
[Link] Amount
[Link] of these

Answer & Explanation

Answer – [Link] Amount

Explanation :
In life insurance, face amount is the sum paid on the
policy’s maturity date, on the death of the insured, or (if
the policy terms permit) on his or her total disability.

8. The free-look period is of how many days ?

1.10
2.15
3.20

[Link] [Link] [Link]

 4.30
[Link] of these

Answer & Explanation

Answer – 2.15
Explanation :
Free look period is a window of opportunity for you to
return your insurance policy if you find that it’s not what
you actually wanted. The free-look period is of 15 days
which starts from the day you receive the policy
[Link] free look period are from 10-60 days
depend on the product sold

9. The temporary assignment of the monetary value of

a life insurance policy is known as
[Link] Value
[Link]
[Link] Surrender value
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
Collateral is temporary assignment of the monetary value
of a life insurance policy as security for a loan

10. Which bank become the first bank to set up a

wholly-owned non-life insurance company ?
[Link] Mahindra Bank
[Link]
[Link]

[Link] [Link] [Link]

 [Link]
[Link] of these

Answer & Explanation

Answer – [Link] Mahindra Bank

Explanation :
Kotak Mahindra Bank became the first bank to set up a
wholly-owned non-life insurance company. The bank is
already the promoter of a life insurance company in
partnership with Old Mutual of South Africa.

1. CMO Stands for

[Link] Money obligation
[Link] mortgage Observation
[Link] Market Obligation
[Link] Mortgage Obligation
[Link] of these

Answer & Explanation

Answer – [Link] Mortgage Obligation

Explanation :
Collateralized mortgage obligation (CMO) refers to a type
of mortgage-backed security that contains a pool of
mortgages bundled together and sold as an investment.’

2. Who will sells both casualty insurance and life

insurance ?
[Link] insurer
[Link] insurer
[Link] insurer
[Link] insurer
[Link] of these

[Link] [Link] [Link]

 Answer & Explanation

Answer – [Link] insurer

Explanation :
Composite insurer refers to an insurance company which
sells both casualty insurance and life insurance against
damage to household contents, automobiles, and travel
plans.

3. The Insurance Act has __________sections and

______ schedules.
1.10, 100
2.8, 120
3.120, 8
4.17, 110
[Link] of these

Answer & Explanation

Answer – 3.120, 8
Explanation :
The Insurance Act has 120 sections and 8 schedules.

4. The insurance act was borrowed from which

country ?
[Link]
[Link]
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :

[Link] [Link] [Link]

 The insurance act was passed in 1938 borrowed heavily
from the British law and covered all sorts of insurance.

5. _____________ is a legal right reserved by most

insurance carriers.
[Link]
[Link]
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
Subrogation is a term denoting a legal right reserved by
most insurance carriers. Subrogation is the right for an
insurer to legally pursue a third party that caused an
insurance loss to the insured.

6. Section 39 of Insurance Act related with which of

the following ?
[Link] by Policyholder
[Link] of assets
[Link] of insurance
[Link] of these
[Link] of these

Answer & Explanation

Answer –[Link] by Policyholder

Explanation :
Section 39 of the Indian Insurance Act, 1938, provides for
nomination of a person (called nominee) who gets the

[Link] [Link] [Link]

 benefits of the policy on death of the person whose life
has been insured

7. Life Insurance Companies cannot reject insurance

claim after how many years ?
[Link]
[Link]
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
No policy of life insurance shall be called in question on
any ground whatsoever after the expiry of three years
from the date of the policy

8. A reinsurance company providing services to

another by insuring the activities of another
reinsurance company is known as
[Link]
[Link]
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
Retrocession is the practice of one reinsurance company
providing services to another by insuring the activities of
another reinsurance company. This is done by accepting

[Link] [Link] [Link]

 business that the other company had agreed to
underwrite.

9. In IBNR, R represent which term ?

[Link]
[Link]
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
In insurance, incurred but not reported (IBNR) claims is
the amount owed by an insurer to all valid claimants who
have had a covered loss but have not yet reported it.

10. Which type of insurance can covers two or more

items or location ?
[Link] Insurance
[Link] Insurance
[Link] Insurance
[Link] of these
[Link] of these

Answer & Explanation

Answer – [Link] Insurance

Explanation :
Blanket Insurance’ A single policy on an insured property
that covers more than one type of property at the same
location, the same kind of property at more than one
location, or two or more kinds or property at two or more
locations.

[Link] [Link] [Link]

 1. __________________ is /are the monopoly of
General Insurance Company
[Link] Insurance
[Link] Insurance
[Link] Insurance
[Link] of these
[Link] of these

Answer & Explanation

Answer – : [Link] Insurance

Explanation :
In India Crop insurance is the monopoly of General
Insurance Company

2. Which of the following is true ?

[Link] is the business carried on by an organisation
[Link] is the sum of money that is borrowed
[Link] is the business that can provide some
services
[Link] is a collective bearing of risk
[Link] of these

Answer & Explanation

Answer – [Link] is a collective bearing of risk

Explanation :
Collective Bearing of Risk:Insurance is a device to share
the financial loss of few among many others.

3. Which type of insurance policy provides additional

coverage to easily movable property ?
[Link] Insurance
[Link] Insurance
[Link] Insurance

[Link] [Link] [Link]

 [Link] Liability Insurance
[Link] of these

Answer & Explanation

Answer – [Link] Insurance

Explanation :
Floater Insurance is a type of insurance policy that covers
property that is easily movable and provides additional
coverage over what normal insurance policies do not. This
can cover anything from jewelery to expensive stereo
equipment.

4. ________________ is some amount of money will

paid before insurance will pay 100% for an
individual’s health-care expenses.
[Link]-of-Pocket Limit
[Link]
[Link]-of-Service Plan
[Link] Injury Protection
[Link] of these

Answer & Explanation

Answer – [Link]-of-Pocket Limit

Explanation :
An out-of-pocket maximum is the most you’ll have to pay
during a policy period (usually a year) for health care
services. Once you’ve reached your out-of-pocket
maximum, your plan begins to pay 100 percent of the
allowed amount for covered services.

5. Which of the following require IRDA licence to start

its functioning in India ?
[Link] Brokers

[Link] [Link] [Link]

 [Link]
[Link] Agents
[Link] party administrators
[Link] of these

Answer & Explanation

Answer – [Link] of these

Explanation :
All insurance intermediaries require IRDA licence .

6. Which insurance company has formed a specialist

subsidiary Agricultural Insurance Corporation (AIC)
?
[Link] India Assurance
[Link] Insurance Company
[Link] Insurance Corporation
[Link] Insurance Corporation
[Link] of these

Answer & Explanation

Answer – [Link] Insurance Corporation

Explanation :
The General Insurance Corporation (GIC) of India has
formed a specialist subsidiary, Agricultural Insurance
Corporation (AIC) in order to provide a
company/institutional focus for this class of business.

7. Which is the provision of insurance products by a

bank. ?
[Link]
[Link]
[Link]

[Link] [Link] [Link]

 [Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
Bancassurance is a term referring to the selling of
insurance through a bank’s established distribution
channels. In other words, we can say Bancassurance is
the provision of insurance (assurance) products by a
bank.

8. Which of the following is the biggest non-life insurer

in the entire Afro-Asia region ?
[Link] Insurance Corporation of India
[Link] Insurance Company
[Link] India Insurance Company
[Link] India Assurance
[Link] of these

Answer & Explanation

Answer – [Link] India Assurance

Explanation :
New India Assurance is the biggest non-life insurer in the
entire Afro-Asia region except Japan. New India Assurance
is the first ever Indian general insurance company to
reach Rs. 18371 Cr. gross premium.

9. The headquarters of General Insurers Public Sector

Association of India (GIPSA) is situated in
[Link] Delhi
[Link]
[Link]

[Link] [Link] [Link]

 [Link]
[Link] of these

Answer & Explanation

Answer – [Link] Delhi

Explanation :
After opening up of the insurance sector and de-linking
from GIC in 2000, the four General Insurance Companies,
namely, National Insurance Company, New India
Assurance Company, Oriental Insurance Company, and
United India Insurance Company, are functioning
independently. They have formed an association known as
General Insurers Public Sector Association of India
(GIPSA) with headquarters in Delhi.

10. IFRS stands for

[Link] Financial Reporting Standards
[Link] Financial Reporting Standards
[Link] Finance Reporting System
[Link] Financial Regulation Section
[Link] of these

Answer & Explanation

Answer – [Link] Financial Reporting

Standards
Explanation :
International Financial Reporting Standards (IFRS) is a set
of accounting standards developed by an independent,
not-for-profit organization called the International
Accounting Standards Board (IASB).

1. Insurance is listed in which schedule of the Indian

constitution ?

[Link] [Link] [Link]

 [Link] Schedule
[Link] Schedule
[Link] Schedule
[Link] Schedule
[Link] of these

Answer & Explanation

Answer – [Link] Schedule

Explanation :
Insurance refers to the market for insurance in India
which covers both the public and private sector
organisations. It is listed in the Constitution of India in the
Seventh Schedule as a Union List subject, meaning it can
only be legislated by the Central government.

2. Which of the following will provide “insurance

repository” services ?
[Link]
[Link] Bank
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
“Insurance Repository” means a company formed and
registered under the Companies Act, 1956 (1 of 1956) and
which has been granted a certificate of registration by
Insurance Regulatory and Development Authority (IRDA)
for maintaining data of insurance policies in Electronic
form on behalf of Insurers.

[Link] [Link] [Link]

 3. Which act was the first legislation governing all
forms of insurance to provide strict state control
over insurance business ?
[Link] Act of 1938
[Link] Insurance Business Act of 1972
[Link] Insurance Corporation Act
[Link] Act of 1988
[Link] of these

Answer & Explanation

Answer – [Link] Insurance Act of 1938

Explanation :
The Insurance Act of 1938 was the first legislation
governing all forms of insurance to provide strict state
control over insurance business

4. The Institute of Insurance and Risk Management is

located in _________________
[Link]
[Link]
[Link] Delhi
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
The Institute of Insurance and Risk Management,
Hyderabad, was established by the regulator IRDA. The
institute offers Postgraduate diploma in Life, General
Insurance, Risk Management and Actuarial Sciences

[Link] [Link] [Link]

 5. In which year, the Actuaries Act was passed by
Indian government ?
1.2000
2.2006
3.1999
4.1985
[Link] of these

Answer & Explanation

Answer – 2.2006
Explanation :
In 2006, the Actuaries Act was passed by parliament to
give the profession statutory status on par with Chartered
Accountants, Notaries, Cost & Works Accountants,
Advocates, Architects and Company Secretaries.

6. The Indian insurance industry is governed by which

of the following act ?
[Link] Act 1999
[Link] Insurance Corporation Act, 1956
[Link] Insurance Business(Nationalisation) Act, 1972
[Link] Act, 1978
[Link] of these

Answer & Explanation

Answer – [Link] of these

Explanation :
The Indian insurance industry is governed by
the Insurance Act, 1978, the General Insurance
Business(Nationalisation) Act, 1972, Life
Insurance Corporation Act, 1956 and Insurance
Regulatory and Development Authority Act, 1999.

[Link] [Link] [Link]

 7. The head office of Insurance Institute of India is in
[Link]
[Link]
[Link]
[Link] Delhi
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
The Insurance Institute of India is an insurance education
society of professionals established in 1955 in Mumbai for
the purpose of imparting insurance education to persons
engaged or interested in insurance

8. In which state, the Institute of Actuaries of India is

situated ?
[Link]
[Link]
[Link]
[Link] Delhi
[Link] of these

Answer & Explanation

Answer –[Link]
Explanation :
The Institute of Actuaries of India, is the sole professional
body of actuaries in India, and was formed in September
1944. It was formed by the conversion of the Actuarial
Society of India into a body corporate by virtue of the
Actuaries Act, [Link] is located in Mumbai, Maharashtra.

[Link] [Link] [Link]

 9. What is the minimum capital required to set up an
insurance business ?
[Link].500 Cr
[Link].100 Cr
[Link].200 Cr
[Link].400 Cr
[Link] of these

Answer & Explanation

Answer – [Link].400 Cr
Explanation :
A minimum capital of US$80 million(Rs.400 Crore) is
required by legislation to set up an insurance business.

10. National Insurance Academy is located in which

city of India ?
[Link]
[Link]
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
National Insurance Academy, Pune, specialized in
teaching, conducting research and providing consulting
services in the insurance sector. NIA offers a two-year
PGDM programme in insurance. NIA was founded as
Ministry of Finance initiative with capital support from the
then public insurance companies, both Life (LIC) and Non-
Life (GIC, National, Oriental, United & New India).

[Link] [Link] [Link]

 1. A method of valuing insured property, or
the value computed by that method is known as
[Link] cost validity
[Link] cash value
[Link] cash value
[Link] cost value
[Link] of these

Answer & Explanation

Answer – [Link] cash value

Explanation :
Actual Cash Value (ACV) is a method of valuing insured
property, or the value computed by that method. Actual
Cash Value (ACV) is not equal to replacement
cost value (RCV). ACV is computed by subtracting
depreciation from replacement cost.

2. _____________ is the maximum amount an

insurance company will pay if an insured asset is
deemed a total loss.
[Link] value
[Link] value
[Link] value
[Link] Replacement Cost
[Link] of these

Answer & Explanation

Answer – [Link] value

Explanation :
Define insurance value is the maximum amount an
insurance company will pay if an insured asset is deemed
a total loss.

[Link] [Link] [Link]

 3. SEF is abbreviated as _____________________
[Link] Endorsement Form
[Link] Endorsement Form
[Link] Envelope Form
[Link] Endorsement Fair
[Link] of these

Answer & Explanation

Answer – [Link] Endorsement Form

Explanation :
SEF – Standard Endorsement Form Can be added to an
Automobile Insurance policy and serve the purpose of
either adding or removing coverage from the policy.

4. Which of the following is a combination of insurance

as well as investment ?
[Link] back policy
[Link] plan
[Link] Link Insurance Plan
[Link] Funds
[Link] of these

Answer & Explanation

Answer – [Link] Link Insurance Plan

Explanation :
Unit Link Insurance Plan is basically a combination of
insurance as well as investment, while mutual funds are a
pure investment avenue

5. Investment in ULIPs is related to which section of

the Income Tax Act ?
1.58C
2.65B

[Link] [Link] [Link]

 3.78A
4.80C
[Link] of these

Answer & Explanation

Answer – 4.80C
Explanation :
Investment in ULIPs is eligible for tax benefit up to a
maximum of Rs 1.5 lacs under Section 80C of the Income
Tax Act.

6. Which of the following is an example of Broad Form

Insurance ?
[Link] insurance
[Link] insurance
[Link] insurance
[Link] insurance
[Link] of these

Answer & Explanation

Answer – [Link] insurance

Explanation :
An automobile insurance is an example of Broad Form
Insurance .A customer may require glass insurance as the
driver is frequently on the highway and obtains a lot of
chips in the front window.

7. Which policy referring to policies that provide

coverage only for loss caused by the perils ?
[Link] perils
[Link] Perils
[Link] Risk

[Link] [Link] [Link]

 [Link] perils
[Link] of these

Answer & Explanation

Answer – [Link] Perils

Explanation :
Named Perils is a property insurance term referring to
policies that provide coverage only for loss caused by the
perils specifically listed as covered.

8. Which type of insurance usually requires higher

premium ?
[Link] Form insurance
[Link] life insurance
[Link] insurance
[Link] insurance
[Link] of these

Answer & Explanation

Answer – [Link] Form insurance

Explanation :
‘Broad Form Insurance’ is an Insurance coverage that
extends beyond the basics to include rare events that may
be of serious risk to the insured. This type of insurance
usually requires that a higher premium, and often a
deductible, be paid

9. What is PAC ?
[Link]-Authorized Cheque
[Link]-Authorized Chequing
[Link]-Authorized Chequing
[Link]-Authorized Checking
[Link] of these

[Link] [Link] [Link]

 Answer & Explanation

Answer – [Link]-Authorized Chequing

Explanation :
Pre-Authorized Chequing is an authorization by the
insured to allow the Insurance Company to automatically
withdrawal their insurance payments from their chequing
account.

10. Which of the following form is designed to be

used by many different insurers and has exactly the
same provisions ?
[Link] Replacement Form
[Link] insurance Form
[Link] Endorsement Form
[Link] Policy Form
[Link] of these

Answer & Explanation

Answer – [Link] Policy Form

Explanation :
Standard Policy Form is an insurance policy form that is
designed to be used by many different insurers and has
exactly the same provisions, regardless of the insurer
issuing the policy.

1. Which government body regulates Insurance

Industry?
A. NFCG
B. IRDAI
C. CII
D. FICCI

Answer

[Link] [Link] [Link]

 B. IRDAI
Explanation:
Insurance Regulatory and Development Authority of India
(IRDAI) is an autonomous apex statutory body which
regulates and develops the insurance industry in India. It
was constituted by a Parliament of India act called
Insurance Regulatory and Development Authority Act,
1999. In 2014, IRDA has been renamed as “Insurance
Regulatory and Development Authority of India”.

2. The headquarters of IRDAI is located in _______

A. Mumbai
B. Chennai
C. Pune
D. Hyderabad

Answer

D. Hyderabad
Explanation:
The headquarters of IRDAI is located in Hyderabad,
Telangana. The Headquarters was shifted from Delhi in
2001.

3. ________ is the sole reinsurance company in the

Indian Insurance market with over four decades of
experience.
A. NICL
B. LIC
C. Oriental Insurance
D. GIC Re

Answer

[Link] [Link] [Link]

 D. GIC Re
Explanation:
GIC Re is a wholly owned company of Government of
[Link] a sole re-insurer in the domestic reinsurance
market, GIC Re provides reinsurance to the direct general
insurance companies in the Indian [Link] of 2012 GIC
Re ranked 14th largest Re insurer and 5th largest Aviation
Re insurer in the world

4. The headquarters of LIC is located in _______

A. Mumbai
B. Chennai
C. Pune
D. Hyderabad

Answer

A. Mumbai
Explanation:
Life Insurance Corporation (LIC) is a state-owned
insurance group and investment company head quartered
in Mumbai. It is the largest insurance company in the
country which was formed in 1956.

5. The headquarters of National Insurance Company

Ltd (NIC) is located in _______
A. Mumbai
B. Chennai
C. Pune
D. Kolkata

Answer

D. Kolkata
Explanation:

[Link] [Link] [Link]

 National Insurance Company Ltd (NICL) is a state owned
general insurance company head quartered in Kolkata was
established in 1906 and nationalised in 1972. Apart from
India, National Insurance Company also serves in Nepal

6. The headquarters of New India Assurance is located

in _______
A. Mumbai
B. Chennai
C. Pune
D. Hyderabad

Answer

A. Mumbai
Explanation:
Mumbai based General Insurance Provider, New India
Assurance is the largest general insurance company of
India on the basis of gross premium collection inclusive of
foreign [Link] was founded by Sir Dorabji Tata in
1919, and was nationalised in 1973.

7. The headquarters of United India Insurance Ltd is

located in _______
A. Mumbai
B. Chennai
C. Pune
D. Hyderabad

Answer

B. Chennai
Explanation:
United India Insurance Company Limited (UIICL) head
quartered in Chennai was founded on 18th February 1938.

[Link] [Link] [Link]

 The company has more than seven decades of experience
in Non-life Insurance business.

8. The headquarters of Oriental Insurance Company is

located in _______
A. Mumbai
B. New-Delhi
C. Pune
D. Hyderabad

Answer

B. New-Delhi
Explanation:
Oriental Insurance Company Ltd. is one of the public
sector non-life insurance company in India. The
headquarters of the company is located in New Delhi with
30 regional offices and more than 1800 active branches
across the country.

9. The headquarters of Agriculture Insurance Company

is located in _______
A. Mumbai
B. New-Delhi
C. Pune
D. Hyderabad

Answer

B. New-Delhi
Explanation:
Agriculture Insurance Company of India Limited is head
quartered in New [Link] offers yield-based and weather-
based crop insurance programs in almost 500 districts of
India.

[Link] [Link] [Link]

 10. The headquarters of Export Credit Guarantee
Corporation of India is located in _______
A. Mumbai
B. New-Delhi
C. Pune
D. Hyderabad

Answer

A. Mumbai
Explanation:
ECGC Limited is a company wholly owned by the
Government of India based in Mumbai. It provides export
credit insurance support to Indian exporters and is
controlled by the Ministry of Commerce.

1. “We know Healthcare” is the tagline of ______

A. LIC
B. Apollo Munich
C. UIICL
D. Oriental Insurance

Answer

B. Apollo Munich
Explanation:
Apollo Munich Insurance is a joint venture between Apollo
Hospitals Group and Munich Health, a world leader in the
field of health insurance. Apollo Munich Health Insurance
offers health insurance and other products.

2. “Yogakshemam Vahamyaham” is the tagline of

which insurance company?
A. LIC
B. New India Assurance

[Link] [Link] [Link]

 C. UIICl
D. Oriental Insurance

Answer

A. LIC
Explanation:
Life Insurance Corporation (LIC) is a state-owned
insurance group and investment company head quartered
in Mumbai. It is the largest insurance company in the
country which was formed in 1956.

3. “Leadership and Beyond” is the tagline of which

insurance company?
A. LIC
B. New India Assurance
C. UIICL
D. Oriental Insurance

Answer

B. New India Assurance

Explanation:
Mumbai based General Insurance Provider, New India
Assurance is the largest general insurance company of
India on the basis of gross premium collection inclusive of
foreign [Link] was founded by Sir Dorabji Tata in
1919, and was nationalised in 1973.

4. “Rest Assured with Us” is the tagline of which

insurance company?
A. LIC
B. New India Assurance
C. UIICL
D. Oriental Insurance

[Link] [Link] [Link]

 Answer

C. UIICL
Explanation:
United India Insurance Company Limited (UIICL) head
quartered in Chennai was founded on 18th February 1938.
The company has more than seven decades of experience
in Non-life Insurance business.

5. “THODA SIMPLE SOCHO” is the tagline of which

insurance company?
A. LIC
B. New India Assurance
C. National Insurance
D. Oriental Insurance

Answer

C. National Insurance
Explanation:
National Insurance Company Ltd (NICL) is a state owned
general insurance company head quartered in Kolkata was
established in 1906 and nationalised in 1972. Apart from
India, National Insurance Company also serves in Nepal

6. “Prithvi, Agni, Jal, Akash, Sabki Suraksha Hamare

Paas” is the tagline of which insurance company?
A. LIC
B. New India Assurance
C. National Insurance
D. Oriental Insurance

Answer

[Link] [Link] [Link]

 D. Oriental Insurance
Explanation:
Oriental Insurance Company Ltd. is one of the public
sector non-life insurance company in India. The
headquarters of the company is located in New Delhi with
30 regional offices and more than 1800 active branches
across the country.

7. “Sampann Bharath ki pehchan,Beemith Phasal

Khusal Kisan”is the tagline of which insurance
company?
A. LIC
B. New India Assurance
C. National Insurance
D. Agricultural Insurance

Answer

D. Agricultural Insurance
Explanation:
Agriculture Insurance Company of India Limited is head
quartered in New [Link] offers yield-based and weather-
based crop insurance programs in almost 500 districts of
India.

8. “You Focus on Exports. We recover the risks.”is the

tagline of which insurance company?
A. LIC
B. New India Assurance
C. National Insurance
D. ECGC

Answer

[Link] [Link] [Link]

 D. ECGC
Explanation:
ECGC Limited is a company wholly owned by the
Government of India based in Mumbai. It provides export
credit insurance support to Indian exporters and is
controlled by the Ministry of Commerce.

9. “With Us, You’re Sure” is the tagline of which

insurance company?
A. SBI Life
B. New India Assurance
C. National Insurance
D. ECGC

Answer

A. SBI Life
Explanation:
SBI Life Insurance is a joint venture life insurance
company between State Bank of India (SBI), the largest
state-owned banking and financial services company in
India, and BNP Paribas Cardiff. SBI owns 74% of the total
capital and BNP Paribas Cardiff the remaining 26% of the
capital.

10. “Zimmedari ka humsafar” is the tagline of which

insurance company?
A. SBI Life
B. ICICI Prudential Life
C. National Insurance
D. ECGC

Answer

[Link] [Link] [Link]

 B. ICICI Prudential Life
Explanation:
ICICI Prudential Life Insurance Company is one of the
leading life insurance players in India which has assets
held over Rs. 100,000 crore. The company is a joint
venture between ICICI Bank and Prudential plc, a leading
international financial services group headquartered in the
United Kingdom.

1. ___________ is the insurance of human life values

against the risks of death, injury, illness or against
expenses incidental to the latter.
A. Personal Insurance
B. Commercial Insurance
C. Industrial Insurance
D. Liability Insurance

Answer & Explanation

A. Personal Insurance
Explanation:
Insurance purchased for personal or family protection
purposes is known as Personal Insurance.

2. __________ is the insurance of commercial

property that protects the property from such perils
as fire, theft and natural disaster.
A. Personal Insurance
B. Commercial Insurance
C. Industrial Insurance
D. Liability Insurance

Answer & Explanation

[Link] [Link] [Link]

 B. Commercial Insurance
Explanation:
It is used to cover any type of commercial property.

3. An individual who sells, services, or negotiates

insurance policies either on behalf of a company or
independently is called ________
A. Seller
B. Agent
C. Service Provider
D. Aggregate

Answer & Explanation

B. Agent
Explanation:
An agent is a person who represents an insurance firm
and sells insurance policies on its behalf or independently.

4. A demand made by the insured, or the insured’s

beneficiary, for payment of the benefits as provided
by the policy is known as ______
A. Claim
B. Request
C. Demanding
D. Aggregate

Answer & Explanation

A. Claim
Explanation:
An insurance claim is a formal request to an insurance
company asking for a payment based on the terms of the
insurance policy.

[Link] [Link] [Link]

 5. A person who investigates claims and recommends
settlement options based on estimates of damage
and insurance policies held is called _____
A. Adjuster
B. Agent
C. Service Provider
D. Aggregate

Answer & Explanation

A. Adjuster
Explanation:
The person who investigates insurance claims to
determine the extent of the insuring company’s liability.
That particular person also known as Claim Adjuster

6. Coverage for bodily injury and property damage

incurred through ownership or operation of a
vehicle is called _________
A. Personal Insurance
B. Commercial Insurance
C. Industrial Insurance
D. Automobile Liability Insurance

Answer & Explanation

D. Automobile Liability Insurance

Explanation:
Automobile Liability Insurance covers injuries or damages
to third parties and their property, not to the driver or the
driver’s property.

7. Who among the following can take Fire policy?

A. Godown Keepers.
B. Shop Keepers.

[Link] [Link] [Link]

 C. Educational/ Research Institutions.
D. All of the Above

Answer & Explanation

D. All of the Above

Explanation:
Fire insurance is insurance that is used to cover damage
to a property caused by fire. It is a specialized form of
insurance beyond the property insurance. It is designed to
cover the cost of replacement, reconstruction or repair
which all are not covered by the property insurance policy.

8. An individual who may become eligible to receive

payment due to will, life insurance policy,
retirement plan, annuity, trust, or other contract is
known as _________
A. Adjuster
B. Beneficiary
C. Service Provider
D. Aggregate

Answer & Explanation

B. Beneficiary
Explanation:
A person who derives advantage from something,
especially a trust, will, or life insurance policy etc., is
called beneficiary

9. Coverage for property taken or destroyed by

breaking and entering the insured’s premises,
burglary or theft, forgery or counterfeiting, fraud,
kidnap and ransom, and off-premises exposure is
known as _______

[Link] [Link] [Link]

 A. Fire Policy
B. Burglary Policy
C. Jewellers Block Policy
D. None of the Above

Answer & Explanation

B. Burglary Policy
Explanation:
Insurance against loss or damage resulting from or
following the unlawful breaking and entering of designated
premises or places of safekeeping is known as Burglary
policy. This Policy is designed to cover business premises
only like godown, factory, office etc.,

10. A form of liability insurance providing coverage

for negligent acts and omissions such as workers
compensation, errors and omissions, fidelity, crime,
glass, boiler, and various malpractice coverages is
called ________
A. Casualty Insurance
B. Commercial Insurance
C. Industrial Insurance
D. Automobile Liability Insurance

Answer & Explanation

A. Casualty Insurance
Explanation:
Casualty Insurance is not directly concerned with life
insurance, health insurance, or property insurance. It is
mainly liability coverage of an individual or organization
for negligent acts or omission.

[Link] [Link] [Link]

 1. The person who receives the proceeds or the
benefits under the plan when the nominee is less
than 18 years of age is called _____
A. Adjuster
B. Appointee
C. Service Provider
D. Aggregate

Answer & Explanation

B. Appointee
Explanation:
Where the nominee is a minor, the policyholder is advised
to appoint another elder person as an ‘Appointee’.

2. __________ is an actual ownership interest in a

specific asset or group of assets.
A. Fund
B. cover
C. Equity
D. Liquidity

Answer & Explanation

C. Equity
Explanation:
An instrument that signifies an ownership position, or
equity, in a corporation, and represents a claim on its
proportionate share in the corporation’s assets and profits.

3. The amount which is payable by you during the

premium paying term at regular intervals for a
limited period as specified in the plan schedule is
called________
A. Fund

[Link] [Link] [Link]

 B. cover
C. Limited premium
D. Liquidity

Answer & Explanation

C. Limited premium
Explanation:
A limited premium payment plan is a plan where you pay
the premium for a shorter span of time and enjoy the
benefits of an insurance cover for a long time.

4. _______ plans provide for a “pension” or a mix of a

lump sum amount and a pension to be paid to the
policyholder or his spouse.
A. Fund
B. cover
C. Annuity
D. Liquidity

Answer & Explanation

C. Annuity
Explanation:
A contract sold by an insurance company designed to
provide payments to the holder at specified intervals.

5. Which is used to determine the actual cash value of

property at time of loss?
A. appreciation
B. Depreciation
C. Realization
D. Recognition

Answer & Explanation

[Link] [Link] [Link]

 B. Depreciation
Explanation:
Depreciation is a measure of age and condition, with a
given lifetime. It may be referred to as a value (in
dollars), or a percentage, or a number of years.

6. __________is the period between the date of

subscription to an insurance-cum-pension policy
and the time at which the first instalment of pension
is received.
A. appreciation
B. Depreciation
C. Deferment
D. Recognition

Answer & Explanation

C. Deferment
Explanation:
Period between the subscription date of an insurance-
cum-pension policy and the time at which the first
instalment of pension is received is called as deferment
period.

7. _________ is a type of reinsurance in which the re-

insurer can accept or reject any risk presented by an
insurance company seeking reinsurance.
A. Treaty Insurance
B. Health Insurance
C. Facultative Insurance
D. None of the Above

Answer & Explanation

[Link] [Link] [Link]

 C. Facultative Insurance
Explanation:
Facultative insurance is reinsurance for a single risk or a
defined package of risks.

8. A policy which has terminated and is no longer in

force due to non-payment of the premium due is
called ______
A. key man policy
B. Lapsed Policy
C. Indemnity
D. Fiduciary

Answer & Explanation

B. Lapsed Policy
Explanation:
A policy that has been cancelled due to lack of payment of
the premiums.

9. ________ is the amount you pay to the insurance

company to buy a policy.
A. Fund
B. Premium
C. Annuity
D. Liquidity

Answer & Explanation

B. Premium
Explanation:
Premium is an amount paid periodically to the insurer by
the insured for covering his risk.

[Link] [Link] [Link]

 10. Which principle specifies an insured should not
collect more than the actual cash value of a loss?
A. Indemnity
B. Premium
C. Annuity
D. Liquidity

Answer & Explanation

A. Indemnity
Explanation:
The principle of indemnity is such principle of insurance
stating that an insured may not be compensated by the
insurance company in an amount exceeding the insured’s
economic loss.

1. The person in whose name the insurance policy is

made is referred to as __________
A. Insured or Policyholder
B. Nominee or Beneficiary
C. Insurer
D. Agent

Answer & Explanation

A. Insured or Policyholder
Explanation:
A person or group in whose name an insurance policy is
held is known as Insured or Policyholder.

2. The one who will get the insured amount if you die,
is referred to as __________
A. Insured or Policyholder
B. Nominee or Beneficiary

[Link] [Link] [Link]

 C. Insurer
D. Agent

Answer & Explanation

B. Nominee or Beneficiary
Explanation:
A person who receives the benefit in case of death of the
insured person is a nominee.

3. __________ refers to the insurance company that

offers the policy.
A. Insured or Policyholder
B. Nominee or Beneficiary
C. Insurer
D. Agent

Answer & Explanation

C. Insurer
Explanation:
Insurance company that issues a particular insurance
policy to an insured.

4. ________ is the amount of money an insurance

policy guarantees to pay before any bonuses are
added.
A. Fund
B. Annuity
C. Sum Assured
D. Maturity Value

Answer & Explanation

[Link] [Link] [Link]

 C. Sum Assured
Explanation:
Sum Assured is the guaranteed amount the policyholder
will receive.

5. __________ is the amount the insurance company

has to pay you when the policy matures that would
also include the sum assured and the bonuses.
A. Fund
B. Annuity
C. Sum Assured
D. Maturity Value

Answer & Explanation

D. Maturity Value
Explanation:
Maturity value is the amount the insurance company has
to pay an individual when the policy matures.

6. Which of the following is an optional feature that

can be added to a policy?
A. Rider
B. Annuity
C. Sum Assured
D. Maturity Value

Answer & Explanation

A. Rider
Explanation:
A rider is a provision of an insurance policy that is
purchased separately from the basic policy and that
provides additional benefits at additional cost.

[Link] [Link] [Link]

 7. If you stop paying the premium, but do not
withdraw the money from your policy, then the
policy is referred to as ________
A. Surrender Value
B. Paid-up value
C. Sum Assured
D. Maturity Value

Answer & Explanation

B. Paid-up value
Explanation:
Paidup value is the reduced amount of sum assured paid
by the insurer in case of discontinuation of the payment of
premiums.

8. If you might want to discontinue the policy, and

take whatever money is due to you. The amount the
insurance company then pays is known as
_________
A. Surrender Value
B. Paid-up value
C. Sum Assured
D. Maturity Value

Answer & Explanation

A. Surrender Value
Explanation:
The amount payable to a person who surrenders the
insurance policy.

9. The Payment to the policyholder at the end of the

stipulated term of the policy is called _______
A. Surrender Value

[Link] [Link] [Link]

 B. Paid-up value
C. Sum Assured
D. Maturity Claim

Answer & Explanation

D. Maturity Claim
Explanation:
The Payment to the policyholder at the end of maturity
date is known as maturity claim.

10. The payment of sum assured to the insured

person which has become due by instalments under
a money back policy is known as ______
A. Surrender Value
B. Paid-up value
C. Sum Assured
D. Survival Benefit

Answer & Explanation

D. Survival Benefit
Explanation:
survival benefits are benefit given to the policy holder
during or upon completion of the policy tenure.

1. An individual receiving benefits under an annuity is

called ________
A. Insured or Policyholder
B. Nominee or Beneficiary
C. Insurer
D. Annuitant

Answer & Explanation

[Link] [Link] [Link]

 D. Annuitant
Explanation:
An annuitant is a person who receives the benefits of an
annuity or pension.

2. To use life insurance policy benefits as collateral for

a loan is called ______
A. Surrender Value
B. Paid-up value
C. Collateral Assignment
D. Maturity Claim

Answer & Explanation

C. Collateral Assignment
Explanation:
A collateral assignment of life insurance is a conditional
assignment appointing a lender as the primary beneficiary
of a death benefit to use as collateral for a loan.

3. Insurance coverage for more than one item of

property at a single location, or two or more items
of property in different locations is known as
_________
A. Blanket Coverage
B. Blanket Value
C. Blanket Assign
D. Blanket Bond

Answer & Explanation

A. Blanket Coverage
Explanation:
Blanket coverage refers to a category of business

[Link] [Link] [Link]

 insurance policies covering multiple properties that are
similar in nature but not at the same location.

4. ________ is a fidelity bond that covers all

employees of a given class and may also cover perils
other than infidelity.
A. Blanket Coverage
B. Blanket Value
C. Blanket Assign
D. Blanket Bond

Answer & Explanation

D. Blanket Bond
Explanation:
Blanket bond refers to insurance coverage carried by
banks and brokerage houses that protects against any
losses incurred by unlawful or dishonest activity on the
part of employees. It is also called a blanket fidelity bond
or a fidelity bond.

5. __________ in insurance, is the splitting or

spreading of risk among multiple parties.
A. Reinsurance
B. Coinsurance
C. Blanket Assign
D. Blanket Bond

Answer & Explanation

B. Coinsurance
Explanation:
splitting or spreading of risk among multiple parties.

[Link] [Link] [Link]

 6. _______ is the age at which the receipt of pension
starts in an insurance-cum-pension plan.
A. Surrender age
B. Starting age
C. Vesting age
D. Maturity age

Answer & Explanation

C. Vesting age
Explanation:
The age at which you start receiving pension in an
insurance-cum-pension plan is known as vesting age.

7. The ratio of losses incurred to premiums earned

actually experienced in a given line of insurance
activity in a previous time period is called ______
A. Actual Loss Ratio
B. Acts Of God
C. Actuarial Cost Assumptions
D. Combined Ratio

Answer & Explanation

A. Actual Loss Ratio

Explanation:
Loss Ratio in insurance is the ratio of total amount paid
out in claims plus adjustment expenses divided by the
total earned premiums.

8. Percentage of each premium rupee a

property/casualty insurer spends on claims and
expenses is called _______
A. Actual Loss Ratio
B. Acts of God

[Link] [Link] [Link]

 C. Actuarial Cost Assumptions
D. Combined Ratio

Answer & Explanation

D. Combined Ratio
Explanation:
The combined ratio is defined as the sum of incurred
losses and operating expenses measured as a percentage
of earned premium.

9. Perils that cannot reasonably be guarded against,

such as floods and earthquakes is known as
________
A. Actual Loss Ratio
B. Acts of God
C. Actuarial Cost Assumptions
D. Combined Ratio

Answer & Explanation

B. Acts of God
Explanation:
An act of God is a legal term for events outside human
control, such as sudden natural disasters, for which no
one can be held responsible.

10. _________are assumptions about rates of

investment earnings, mortality, turnover and
distribution or actual ages at which employees are
likely to retire.
A. Actual Loss Ratio
B. Acts of God
C. Actuarial Cost Assumptions
D. Combined Ratio

[Link] [Link] [Link]

 Answer & Explanation

C. Actuarial Cost Assumptions

Explanation:
A method used by actuaries to calculate the amount a
company must pay periodically to cover its pension
expenses.

1. An agreement between an insurance company and

an agent, granting the agent authority to write
insurance from that company is called ________
A. Affirmative Warranty
B. Aggregate Limits
C. Aleatory contract
D. All-Risk Agreement

Answer & Explanation

A. Affirmative Warranty
Explanation:
An affirmative warranty is a statement regarding a fact at
the time the contract was made.

2. Once an insurance company has paid up to the limit,

it will pay no more during that year is known as
_______
A. Affirmative Warranty
B. Aggregate Limits
C. Aleatory contract
D. All-Risk Agreement

Answer & Explanation

B. Aggregate Limits
Explanation:

[Link] [Link] [Link]

 An aggregate limit is the maximum dollar amount your
insurer will pay to settle your claims.

3. _______ is legal contract in which the outcome

depends on an uncertain event.
A. Affirmative Warranty
B. Aggregate Limits
C. Aleatory contract
D. All-Risk Agreement

Answer & Explanation

C. Aleatory contract
Explanation:
An aleatory contract is a contract in which the
performance of one or both parties is contingent upon the
occurrence of a particular event.

4. A property or liability insurance contract in which all

risks of loss are covered is called _______
A. Affirmative Warranty
B. Aggregate Limits
C. Aleatory contract
D. All-Risk Agreement

Answer & Explanation

D. All-Risk Agreement
Explanation:
A property or liability insurance contract in which all risks
of loss are covered except those specifically excluded.

5. The party to whom the rights of the insured under a

policy are transferred is known as _______
A. Policyholder

[Link] [Link] [Link]

 B. Appointee
C. Assignee
D. Agent

Answer & Explanation

C. Assignee
Explanation:
A person to whom a right or liability is legally transferred.

6. A clause that allows the transfer of rights under a

policy from one person to another, usually by means
of a written document is called _____
A. Assignment
B. Automatic Treaty
C. Arbitration
D. Appraisal

Answer & Explanation

A. Assignment
Explanation:
Assignment is the means by which a life insurance policy
holder can transfer rights of the policy to the assignee, in
accordance with some terms and conditions.

7. A contract, such as an insurance contract, requiring

that certain acts be performed if recovery is to be
made is known as _______
A. Conditional Contract
B. Conditional Receipt
C. Conditional Renewable
D. Consequential loss

Answer & Explanation

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 A. Conditional Contract
Explanation:
A conditional contract is an agreement or contract
conditional upon a specific event, the occurrence of which,
at the date of the agreement, is uncertain.

8. A document given to an applicant for life insurance

stating that the company’s acceptance is contingent
upon determination of the applicant’s insurability is
known as _______
A. Conditional Contract
B. Conditional Receipt
C. Conditional Renewable
D. Consequential loss

Answer & Explanation

B. Conditional Receipt
Explanation:
A receipt involved in life, health and certain property
insurance contracts; if the insured is deemed to be
covered by the insurer, the coverage begins on the date
the insured receives the conditional binding receipt.

9. A policy that can be cancelled or have the premiums

raised by the insurer on a specific anniversary date,
subject to certain reasons written into the policy is
known as ________
A. Conditional Contract
B. Conditional Receipt
C. Conditional Renewable
D. Consequential loss

Answer & Explanation

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 C. Conditional Renewable
Explanation:
A contract of health insurance stating that the policy is
renewable under certain conditions as defined in the
contract.

10. Losses other than property damage that occur as

a result of physical loss to a business for example,
the cost of maintaining key employees to help
reorganize after a fire is called ________
A. Conditional Contract
B. Conditional Receipt
C. Conditional Renewable
D. Consequential loss

Answer & Explanation

D. Consequential loss
Explanation:
Consequential loss is considered an indirect loss as
compared to losses from the direct damage.

1. Coverage for losses incurred as a result of the

failure of an insured object on the insured’s
premises is referred as ______
A. Conditional Contract
B. Conditional Receipt
C. Conditional Renewable
D. Consequential Damage Endorsement

Answer & Explanation

D. Consequential Damage Endorsement

Explanation:
Consequential damages are an indirect result of a direct

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 [Link] for losses incurred as a result of the failure
of an insured object on the insured’s premises.

2. A person named in a life insurance contract to

receive the benefits of the policy if other named
beneficiaries are not living is referred as _______
A. Contingent Beneficiary
B. Contingent Liability
C. Contractual Liability
D. Convertible

Answer & Explanation

A. Contingent Beneficiary
Explanation:
A contingent beneficiary is specified by an insurance
contract holder who will receive the benefits if the primary
beneficiary has died at the time the benefit is to be paid.

3. _________ is the liability of individuals,

corporations, or partnerships for accidents caused
by people other than employees for whose acts or
omissions the corporations or partnerships are
responsible.
A. Contingent Beneficiary
B. Contingent Liability
C. Contractual Liability
D. Convertible

Answer & Explanation

B. Contingent Liability
Explanation:
A contingent liability is a potential obligation that may be
incurred depending on the outcome of a future event.

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 4. ___________ is the liability arising from contractual
agreements in which it is stated that some losses, if
they occur, are to be borne by specific parties.
A. Contingent Beneficiary
B. Contingent Liability
C. Contractual Liability
D. Convertible

Answer & Explanation

C. Contractual Liability
Explanation:
The liability assumed when entering into a contract in
which either party to the contract fails to perform in
accordance with the terms, otherwise known as a breach
of contract.

5. A term policy that can be converted to permanent

coverage rather than expiring on a specific date is
called _________
A. Contingent Beneficiary
B. Contingent Liability
C. Contractual Liability
D. Convertible

Answer & Explanation

D. Convertible
Explanation:
Convertible Insurance is a type of life insurance that
allows the policyholder to change a term policy into a
whole or universal policy without going through the health
qualification process again.

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 6. Commercial coverage against losses resulting from
the failure of business debtors to pay their
obligation to the insured, usually due to insolvency
is termed as ______
A. Credit Insurance
B. Contingent Liability
C. Contractual Liability
D. Convertible

Answer & Explanation

A. Credit Insurance
Explanation:
Credit insurance is a type of life insurance policy
purchased by a borrower that pays off one or more
existing debts in the event of a death, disability, or in rare
cases, unemployment.

7. The ratio of losses incurred to premiums earned;

anticipated when rates are first formulated is
termed as_______
A. Expected Loss Ratio
B. Expense Ratio
C. Extended Coverage
D. Extra Expense Insurance

Answer & Explanation

A. Expected Loss Ratio

Explanation:
It is a technique used to determine the projected amount
of claims relative to earned premiums.

8. Percentage of each premium rupee that goes to

insurers’ expenses including overhead, marketing,

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 and commissions is called_________
A. Expected Loss Ratio
B. Expense Ratio
C. Extended Coverage
D. Extra Expense Insurance

Answer & Explanation

B. Expense Ratio
Explanation:
The expense ratio is a measure of profitability calculated
by dividing the expenses associated with acquiring,
underwriting and servicing premiums by the net premiums
earned by the insurance company.

9. An endorsement added to an insurance policy, or

clause within a policy, that provides additional
coverage for risks other than those in a basic policy
is termed as ______
A. Expected Loss Ratio
B. Expense Ratio
C. Extended Coverage
D. Extra Expense Insurance

Answer & Explanation

C. Extended Coverage
Explanation:
Extended coverage is a term used in the property
insurance business. All insurance policies have exclusions
specific causes of loss also called “perils” that are not
covered by the insurance company.

10. The consequential property insurance that covers

the extra expense incurred by the interruption of a

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 business is called _________
A. Expected Loss Ratio
B. Expense Ratio
C. Extended Coverage
D. Extra Expense Insurance

Answer & Explanation

D. Extra Expense Insurance

Explanation:
Extra expense insurance is designed to cover a business
from expenses that it may incur while normal business
operations are disrupted.

1. In a life insurance contract, the stated sum of

money to be paid to the beneficiary upon the
insured’s death is termed as _______
A. Face Amount
B. Expense Ratio
C. Extended Coverage
D. Extra Expense Insurance

Answer & Explanation

A. Face Amount
Explanation:
In life insurance, face amount is the sum paid on the
policy’s maturity date, on the death of the insured.

2. A coverage that protects businesses engaged in

electronic commerce from losses caused by hackers
is termed as _______
A. Hospital Insurance
B. Hull Insurance

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 C. Hacker Insurance
D. Identity theft Insurance

Answer & Explanation

C. Hacker Insurance
Explanation:
A coverage that protects businesses engaged in electronic
commerce from losses caused by hackers.

3. A single policy covering a group of individuals,

usually employees of the same company or
members of the same association and their
dependants is called __________
A. Hospital Insurance
B. Hull Insurance
C. Group Insurance
D. Identity theft Insurance

Answer & Explanation

C. Group Insurance
Explanation:
A group insurance policy gives you advantages of
standardised coverage and very competitive premium
rates.

4. A seller’s market in which insurance is expensive

and in short supply is termed as _______
A. Hard Market
B. Soft Market
C. Alternative Market
D. None of the Above

Answer & Explanation

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 C. Alternative Market
Explanation:
A term commonly used in risk financing to refer to one of
a number of risk funding techniques is known as
Alternative Market.

5. An environment where insurance is plentiful and

sold at a lower cost, also known as a Buyers market
is called ________
A. Hard Market
B. Soft Market
C. Alternative Market
D. None of the Above

Answer & Explanation

B. Soft Market
Explanation:
A period of time during which insurance companies assess
low premiums and therefore achieve relatively low profits.

6. Coverage against loss through stealing by

individuals not in a position of trust is called
________
A. Hospital Insurance
B. Hull Insurance
C. Group Insurance
D. Theft Insurance

Answer & Explanation

D. Theft Insurance
Explanation:
Insurance against loss or damage of property resulting
from theft is called theft insurance.

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 7. Insurance that indemnifies the owner of real estate
in the event that his or her clear ownership of
property is challenged by the discovery of faults in
the title is called _______
A. Hospital Insurance
B. Hull Insurance
C. Group Insurance
D. Title Insurance

Answer & Explanation

D. Title Insurance
Explanation:
Title insurance protects real estate owners and lenders
against any property loss or damage they might
experience because of liens, encumbrances or defects in
the title to the property.

8. The result of the policyholder’s failure to buy

sufficient insurance is termed as ________
A. Hospital Insurance
B. Hull Insurance
C. Under Insurance
D. Title Insurance

Answer & Explanation

C. Under Insurance
Explanation:
Under insurance is the state of an individual having some
form of health insurance that does not offer complete
financial protection.

9. Term insurance that covers a specific period of time

and which cannot be renewed is called ________

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 A. Straight Life Annuity
B. Straight term
C. Structured Settlement
D. Subjective Risk

Answer & Explanation

B. Straight term
Explanation:
Straight term insurance is a term insurance that covers a
specific period of time and which cannot be renewed.

10. The legal process by which an insurance

company, after paying a loss, seeks to recover the
amount of the loss from another party who is legally
liable for it is termed as _____
A. Straight Life Annuity
B. Subrogation
C. Structured Settlement
D. Subjective Risk

Answer & Explanation

B. Subrogation
Explanation:
Subrogation is the right for an insurer to pursue a third
party that caused an insurance loss to the insured.

1. A whole life policy in which premiums are payable

as long as the insured lives is called ________
A. Straight Life Annuity
B. Subrogation
C. Straight Life
D. Subjective Risk

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 Answer & Explanation

C. Straight Life
Explanation:
A straight life insurance policy is a type of permanent
insurance that provides a guaranteed death benefit and
has fixed premiums. This traditional life insurance is
sometimes also known as whole life insurance or cash
value insurance.

2. A life annuity in which there is no refund to any

beneficiary at the death of the annuitant is termed
as ________
A. Straight Life Annuity
B. Subrogation
C. Straight Life
D. Subjective Risk

Answer & Explanation

A. Straight Life Annuity

Explanation:
An insurance product that makes periodic payments to the
annuitant until his or her death, at which point the
payments stop completely. These products do not allow
annuitants to designate a beneficiary.

3. A standing agreement between insurers and re-

insurers. Under a treaty each party automatically
accepts specific percentages of the insurer’s
business is termed as _______
A. Catastrophe Reinsurance
B. Excess of Loss Reinsurance

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 C. Facultative Reinsurance
D. Treaty Reinsurance

Answer & Explanation

D. Treaty Reinsurance
Explanation:
A pre-negotiated agreement between the primary and the
reinsurer.

4. A form of reinsurance that indemnifies the ceding

company for the accumulation of losses in excess of
a stipulated sum arising from a single catastrophic
event or series of events is termed as _______
A. Catastrophe Reinsurance
B. Excess of Loss Reinsurance
C. Facultative Reinsurance
D. Treaty Reinsurance

Answer & Explanation

A. Catastrophe Reinsurance
Explanation:
Catastrophe insurance is Insurance to protect businesses
and residences against natural disasters such as
earthquakes, floods and hurricanes, and against man-
made disasters such as terrorist attacks.

5. A type of reinsurance in which the re-insurer

indemnifies the ceding company for losses that
exceed a specified limit is called _______
A. Catastrophe Reinsurance
B. Excess of Loss Reinsurance
C. Facultative Reinsurance
D. Treaty Reinsurance

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 Answer & Explanation

B. Excess of Loss Reinsurance

Explanation:
Excess of loss reinsurance is a type of reinsurance in
which the reinsurer indemnifies the ceding company for
losses that exceed a specified limit. Excess of loss
reinsurance is a form of non-proportional reinsurance.

6. _______ is a form of non-proportional reinsurance.

A. Catastrophe Reinsurance
B. Excess of Loss Reinsurance
C. Facultative Reinsurance
D. Treaty Reinsurance

Answer & Explanation

B. Excess of Loss Reinsurance

Explanation:
Excess of loss reinsurance is a form of non-proportional
[Link] this type of Reinsurance premium is
calculated independently of the premium charged to the
insured.

7. ________ is reinsurance for a single risk or a

defined package of risks.
A. Catastrophe Reinsurance
B. Excess of Loss Reinsurance
C. Facultative Reinsurance
D. Treaty Reinsurance

Answer & Explanation

C. Facultative Reinsurance
Explanation:

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 Facultative insurance is reinsurance for a single risk or a
defined package of risks.

8. ________ is a type of life insurance policy that

provides coverage for a certain period of time, or a
specified “term” of years
A. Catastrophe Reinsurance
B. Excess of Loss Reinsurance
C. Facultative Reinsurance
D. Term Insurance

Answer & Explanation

D. Term Insurance
Explanation:
Term insurance is a life insurance product offered by an
insurance company which offers financial coverage to the
policy holder for a specific time period.

9. A policy that cannot be cancelled by the insurer

prior to a certain age is called ________
A. No-Fault
B. Negligence
C. Non-cancellable
D. None of the Above

Answer & Explanation

C. Non-cancellable
Explanation:
A policy contract that specifies that the insured may
continue coverage by paying the premiums for a specific
time frame.

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 10. A single insurance policy that combines several
coverages previously sold separately is termed as
__________
A. Package Policy
B. Multiple Policy
C. Combined Policy
D. None of the Above

Answer & Explanation

A. Package Policy
Explanation:
Insurance policy that combines coverage from two or
more types of insurance (such as property and liability)
into one policy.

1. A risk transfer mechanism whereby one party

assumes the liability of another party by contract is
known as ______
A. Hold-Harmless Agreement
B. Incontestability Provision
C. Level Premium Insurance
D. Limited Payment Life Insurance

Answer & Explanation

A. Hold-Harmless Agreement
Explanation:
A Hold Harmless Agreement is a contract between two
parties designed to release one or both parties from legal
claims.

2. A life insurance and annuity provision limiting the

time within which the insurer has the legal right to
void the contract on grounds of material

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 misrepresentation in the policy application is termed
as ________
A. Hold-Harmless Agreement
B. Incontestability Provision
C. Level Premium Insurance
D. Limited Payment Life Insurance

Answer & Explanation

B. Incontestability Provision
Explanation:
A provision in a life or Health Insurance policy that
precludes the insurer from alleging that the policy, after it
has been in effect for a stated period typically 2 or 3
years, is void because of misrepresentations made by the
insured in the application for it.

3. A Life insurance policy for which the cost is equally

distributed over the term of the premium period,
remaining constant throughout is called _____
A. Hold-Harmless Agreement
B. Incontestability Provision
C. Level Premium Insurance
D. Limited Payment Life Insurance

Answer & Explanation

C. Level Premium Insurance

Explanation:
A policy for which the premiums do not change for the
entire duration of the policy.

4. A form of whole-life insurance with a pre-defined

number of premiums to be paid is known as
________

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 A. Hold-Harmless Agreement
B. Incontestability Provision
C. Level Premium Insurance
D. Limited Payment Life Insurance

Answer & Explanation

D. Limited Payment Life Insurance

Explanation:
A form of life insurance for which premiums are paid for a
designated number of years.

5. Reinsurance placed with a company not authorized

in the reporting company’s state of domicile is
called _______
A. Universal Life Insurance
B. Unauthorized Reinsurance
C. Underwriter
D. Underwriting Risk

Answer & Explanation

B. Unauthorized Reinsurance
Explanation:
Reinsurance placed with a non-admitted reinsurer which is
not licensed or approved in the jurisdiction in question.

6. A person who identifies, examines and classifies the

degree of risk represented by a proposed insured in
order to determine whether or not coverage should
be provided and, if so, at what rate. That person is
known as _______
A. Universal Life Insurance
B. Unauthorized Reinsurance

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 C. Underwriter
D. Underwriting Risk

Answer & Explanation

C. Underwriter
Explanation:
An underwriter is a company or other entity that
administers the public issuance and distribution of
securities from a corporation or other issuing body.

7. A section of the risk-based capital formula

calculating requirements for reserves and premiums
is termed as _____
A. Universal Life Insurance
B. Unauthorized Reinsurance
C. Underwriter
D. Underwriting Risk

Answer & Explanation

D. Underwriting Risk
Explanation:
Underwriting risk refers to the potential loss to an insurer
emanating from faulty underwriting.

8. An adjustable life insurance under which premiums

and coverage are adjustable, company’s expenses
are not specifically disclosed to the insured but a
financial report is provided to policyholders annually
is called _____
A. Universal Life Insurance
B. Unauthorized Reinsurance
C. Underwriter
D. Underwriting Risk

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 Answer & Explanation

A. Universal Life Insurance

Explanation:
Under the terms of the policy, the excess of premium
payments above the current cost of insurance is credited
to the cash value of the policy.

9. Which include claims that have been incurred but

not reported?
A. Universal Life Insurance
B. Unauthorized Reinsurance
C. Underwriter
D. Unpaid losses

Answer & Explanation

D. Unpaid losses
Explanation:
The amount of the discounted unpaid losses as of the end
of any taxable year shall be the sum of the discounted
unpaid losses.

10. An amount of premium for which payment has

been made by the policyholder but coverage has not
yet been provided is known as ______
A. Universal Life Insurance
B. Unauthorized Reinsurance
C. Unearned Premium
D. Unpaid losses

Answer & Explanation

C. Unearned Premium
Explanation:

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 Unearned premium is the premium corresponding to the
time period remaining on an insurance policy.

1. The period during which the owner of a deferred

annuity makes payments to build up assets is called
_______
A. Affinity sales
B. Annuity Accumulation Phase
C. Annuitization
D. Proximate Clause

Answer & Explanation

B. Annuity Accumulation Phase

Explanation:
A period of time when an annuity investor is in the early
stages of building up the cash value of the annuity. This is
followed by the annuitization phase where payments are
paid out to the annuitant.

2. A survey to determine a property’s insurable value,

or the amount of a loss is termed as ______
A. Affinity sales
B. Pure Risk
C. Annuitization
D. Appraisal

Answer & Explanation

D. Appraisal
Explanation:
The act of estimating or judging the nature or value of
something or someone.

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 3. In Insurance, CGL stands for__________
A. Commercial General Liability
B. Common General Liability
C. Captive General Liability
D. Control General Liability

Answer & Explanation

A. Commercial General Liability

Explanation:
A type of insurance policy that provides coverage to a
business for bodily injury, personal injury, and property
damage caused by the business’ operations, products, or
injury that occurs on the business’ premises.

4. A person who holds something in trust for another

is known as_________
A. Affinity sales
B. Pure Risk
C. Annuitization
D. Fiduciary

Answer & Explanation

D. Fiduciary
Explanation:
A fiduciary is a person who holds a legal or ethical
relationship of trust with one or more other parties.

5. A person who represents only one insurance

company and is restricted by agreement from
submitting business to any other company is termed
as _______
A. Seller
B. Captive Agent

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 C. Service Provider
D. Aggregate

Answer & Explanation

B. Captive Agent
Explanation:
An insurance agent who only works for one insurance
company. A captive agent is paid by that one company
either with a combination of salary and commissions or
with just commissions.

6. Which term referring to property coverages for the

perils of burglary, theft and robbery?
A. Personal Insurance
B. Commercial Insurance
C. Industrial Insurance
D. Crime Insurance

Answer & Explanation

D. Crime Insurance
Explanation:
Crime insurance is insurance to manage the loss
exposures resulting from criminal acts such as robbery,
burglary and other forms of theft. It is also called fidelity
insurance.

7. IDC stands for ______

A. Insured Declared Value
B. Insurer Declared Value
C. Insurance Declared Value
D. Interest Declared Value

Answer & Explanation

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 A. Insured Declared Value
Explanation:
Insured Declared Value is the maximum Sum Assured
fixed by the insurer which is provided on theft or total loss
of vehicle.

8. What is the Full form of GIVE?

A. Gross Insured Value Element
B. Gross Insurer Value Element
C. Gross Insurance Value Element
D. Gross Interest Value Element

Answer & Explanation

C. Gross Insurance Value Element

Explanation:
A lump sum amount known as the Gross Insurance Value
Element (GIVE) is payable to the nominee/ heirs of the
pensioner.

9. If the insurance policy is taken from more the one

underwriter where period of insurance, subject
matter of insurance and sum insured are same is
termed as ________
A. Double Insurance
B. Commercial Insurance
C. Industrial Insurance
D. Liability Insurance

Answer & Explanation

A. Double Insurance
Explanation:
Double insurance is a situation in which a person,

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 dependent, or property is insured by two or more
companies.

10. The conversion of insurance companies from

mutual companies owned by their policyholders into
publicly traded stock companies is termed as _____
A. Affinity sales
B. Demutualization
C. Annuitization
D. Fiduciary

Answer & Explanation

B. Demutualization
Explanation:
Demutualization is the process through which a member-
owned company becomes shareholder-owned; frequently
this is a step toward the initial public offering (IPO) of a
company.

1. A period of up to one month during which the

purchaser of an annuity can cancel the contract
without penalty is known as ______
A. Lock Period
B. Demutualization
C. Annuitization
D. Free Lock Period

Answer & Explanation

D. Free Lock Period

Explanation:
A period where a new insurance policy owner is able to
terminate the contract without penalties such as surrender
charges is termed as Free Lock Period.

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 2. An auto-mobile insurance option, available in some
states, that covers the difference between a car’s
actual cash value when it is stolen or wrecked and
the amount the consumer owes the leasing or
finance company is called ______
A. Double Insurance
B. Commercial Insurance
C. Industrial Insurance
D. Gap Insurance

Answer & Explanation

D. Gap Insurance
Explanation:
GAP insurance is the difference between the actual cash
value of a vehicle and the balance still owed on the
financing (car loan, lease). GAP coverage is mainly used
on new and used small vehicles (cars and trucks) and
heavy trucks.

3. Which of the following insurance is mainly used for

leased cars?
A. Double Insurance
B. Commercial Insurance
C. Industrial Insurance
D. Gap Insurance

Answer & Explanation

D. Gap Insurance
Explanation:
GAP insurance is the difference between the actual cash
value of a vehicle and the balance still owed on the
financing (car loan, lease). GAP coverage is mainly used

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 on new and used small vehicles (cars and trucks) and
heavy trucks.

4. A legal concept that holds gun manufacturers liable

for the cost of injuries caused by guns. Several
cities have filed lawsuits based on this concept is
termed as ______
A. Gun Liability
B. Commercial Insurance
C. Industrial Insurance
D. Gap Insurance

Answer & Explanation

A. Gun Liability
Explanation:
Gun liability insurance as a means to offset the economic
costs of gun violence.

5. _________ is a coverage for glass breakage caused

by all risks.
A. Glass Insurance
B. Commercial Insurance
C. Industrial Insurance
D. Gap Insurance

Answer & Explanation

A. Glass Insurance
Explanation:
An insurance policy that provides coverage for damage to
an expensive piece of glass.

6. __________ is a coverage for expenses incurred as

the result of an identity theft.

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 A. Glass Insurance
B. Commercial Insurance
C. Identity Theft Insurance
D. Gap Insurance

Answer & Explanation

C. Identity Theft Insurance

Explanation:
Identity theft insurance means any insurance policy that
pays benefits for costs, including travel costs, notary fees,
and postage costs, lost wages, and legal fees and
expenses associated with efforts to correct and ameliorate
the effects and results of identity theft of the insured
individual.

7. A provision added to a home owners insurance

policy that automatically adjusts the coverage limit
on the dwelling each time the policy is renewed to
reflect current construction costs is termed as
_____
A. Double Insurance
B. Inflation Guard Clause
C. Industrial Insurance
D. Gap Insurance

Answer & Explanation

B. Inflation Guard Clause

Explanation:
A provision that gradually and continuously increases the
limit of insurance by a specified percentage over a
specified time period.

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 8. This broad type of coverage was developed for
shipments that do not involve ocean transport is
known as ______
A. Double Insurance
B. Inflation Guard Clause
C. Inland Marine Insurance
D. Gap Insurance

Answer & Explanation

C. Inland Marine Insurance

Explanation:
Insurance provided to cover the loss to movable or
moving property that is a subset of ocean marine
insurance.

9. An organization such as a bank or insurance

company that buys and sells large quantities of
securities is called __________
A. Major Investor
B. Minor Investor
C. Institutional Investor
D. Giant

Answer & Explanation

C. Institutional Investor
Explanation:
Institutional investor is a term for entities which pool
money to purchase securities, real property, and other
investment assets or originate loans. Institutional
investors include banks, insurance companies, pensions,
hedge funds, investment advisors, endowments, and
mutual funds.

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 10. ________ is a coverage designed to protect
businesses from liabilities that arise from the
conducting of business over the Internet, including
copyright infringement, defamation, and violation of
privacy.
A. Internet Liability Insurance
B. Inflation Guard Clause
C. Inland Marine Insurance
D. Gap Insurance

Answer & Explanation

A. Internet Liability Insurance

Explanation:
Internet liability insurance covers very specific wrongful
acts as defined by the policy forms. Here are some
examples of such coverages: Infringement or
unauthorized use of any advertising material, copyright,
slogan, trademark, etc., through the Internet.

1. A single Insurance company offers both life and

non-life policies is known as _________
A. Service Provider
B. Composite Insurer
C. Mutual Insurance Company
D. None of the Above

Answer & Explanation

B. Composite Insurer
Explanation:
Composite Insurer refers to an insurance company which
sells both casualty insurance and life insurance against

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 damage to household contents, automobiles, and travel
plans.

2. Peril specifically mentioned as covered in an

insurance policy is called __________
A. Service Provider
B. Named Peril
C. Un-named Peril
D. None of the Above

Answer & Explanation

B. Named Peril
Explanation:
A named peril insurance policy covers only what is
specifically noted in the policy. It is usually less expensive
than an all-risk or open peril insurance policy. A typical
broad form named peril policy would cover fire, wind-
storm, hail, aircraft, riot, vandalism, explosion and smoke.

3. Auto insurance coverage that pays for each driver’s

own injuries, regardless of who caused the accident
is called __________
A. No Fault
B. No Pay
C. Default
D. None of the Above

Answer & Explanation

A. No Fault
Explanation:
A system of auto-mobile insurance where a party who is
injured in an auto-mobile accident recovers damages up

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 to a specific amount against his own insurance company
regardless of who was responsible for the accident.

4. ________covers operators of nuclear reactors and

other facilities for liability and property damage in
the case of a nuclear accident and involves both
private insurers and the federal government.
A. Internet Liability Insurance
B. Kidnap/Ransom Insurance
C. Inland Marine Insurance
D. Nuclear Insurance

Answer & Explanation

D. Nuclear Insurance
Explanation:
An insurance policy providing coverage to an individual or,
more frequently, a company in the event of a lawsuit
resulting from personal or property damage due to nuclear
energy.

5. Insurance Policy which is provided as an additional

layer of security to those who are at risk for being
sued for damages to other people’s property or
injuries caused to others in an accident is known as
______
A. Internet Liability Insurance
B. Kidnap/Ransom Insurance
C. Inland Marine Insurance
D. Umbrella Insurance

Answer & Explanation

D. Umbrella Insurance
Explanation:

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 Umbrella insurance is extra liability insurance. It is
designed to help protect you from major claims and
lawsuits and as a result it helps protect your assets and
your future

6. A form of long-term care policy that covers a

policyholder’s stay in a nursing facility is called
_______
A. Nursing Home Insurance
B. Kidnap/Ransom Insurance
C. Inland Marine Insurance
D. Nuclear Insurance

Answer & Explanation

A. Nursing Home Insurance

Explanation:
The Long Term Care Benefit Plan will convert any form of
life insurance to pay directly for the costs of long term
care in a nursing home, assisted living and home
healthcare.

7. Insurance that pays claims arising out of incidents

that occur during the policy term, even if they are
filed many years later is known as _____
A. Nursing Home Insurance
B. Kidnap/Ransom Insurance
C. Inland Marine Insurance
D. Occurrence Policy

Answer & Explanation

D. Occurrence Policy
Explanation:
An Occurrence policy protects you from any covered

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 incident that “occurs” during the policy period, regardless
of when a claim is filed. An occurrence policy will respond
to claims that come in – even after the policy has been
canceled – so long as the incident occurred during the
period in which coverage was in force.

8. _______ is a life insurance policy that remains in

force for the policyholder’s lifetime.
A. Nursing Home Insurance
B. Ordinary Life Insurance
C. Inland Marine Insurance
D. Occurrence Policy

Answer & Explanation

B. Ordinary Life Insurance

Explanation:
“ordinary life,” is a life insurance policy which is
guaranteed to remain in force for the insured’s entire
lifetime, provided required premiums are paid, or to the
maturity date.

9. Risks that affect simultaneously a great number of

policyholders is called ______
A. Partial Risk
B. Static Risk
C. Covariant Risk
D. Pure Risk

Answer & Explanation

C. Covariant Risk
Explanation:
A risk that affects all households in a locality and arises

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 out of factors that prevail on all the households equally
such as rainfall and market price conditions.

10. ________ is the total benefit an insured person

will receive at the time of claim.
A. Total Insured Benefit
B. Fire Insurance
C. Escrow Account
D. Earned Premium

Answer & Explanation

A. Total Insured Benefit

Explanation:
Total Insured Benefit is the total benefit an insured person
will receive at the time of claim.

1. Insurance companies’ ability to pay the claims of

policyholders is termed as _______
A. Solvency
B. Schedule
C. Retrospective Rating
D. credit life

Answer & Explanation

A. Solvency
Explanation:
Solvency refers to an enterprise’s capacity to meet its
long-term financial commitments.

2. ________ is an insurance to cover problems

associated with travelling, generally including trip
cancellation due to illness, lost luggage and other
incidents.

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 A. Nursing Home Insurance
B. Kidnap/Ransom Insurance
C. Inland Marine Insurance
D. Travel Insurance

Answer & Explanation

D. Travel Insurance
Explanation:
Travel insurance is insurance that is intended to cover
medical expenses, trip cancellation, lost luggage, flight
accident and other losses incurred while travelling.

3. A form of annuity contract that gives purchasers the

freedom to choose among certain optional features
in their contract is known as ______
A. Salvage
B. Schedule
C. Retrospective Rating
D. Unbundled Contracts

Answer & Explanation

D. Unbundled Contracts
Explanation:
By using unbundled contracts, we can choose optional
features in the contract.

4. Risks for which it is difficult for someone to get

insurance is called ______
A. Partial Risk
B. Uninsurable Risk
C. Covariant Risk
D. Pure Risk

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 Answer & Explanation

B. Uninsurable Risk
Explanation:
A situation that you cannot protect yourself against by
buying insurance because it is impossible to calculate how
likely it is to happen, or how much damage it will cause.

5. Portion of an auto insurance policy that protects a

policyholder from uninsured and hit-and-run drivers
is known as _______
A. Nursing Home Insurance
B. Kidnap/Ransom Insurance
C. Inland Marine Insurance
D. Uninsured Motorist Coverage

Answer & Explanation

D. Uninsured Motorist Coverage

Explanation:
Uninsured motorist coverage is designed to provide the
injured party with compensation above what is allotted by
the at-fault party’s policy.

6. A policy that combines protection against premature

death with a savings account that can be invested in
stocks, bonds, and money market mutual funds at
the policyholder’s discretion is called _______
A. Variable Life Insurance
B. Kidnap/Ransom Insurance
C. Inland Marine Insurance
D. Uninsured Motorist Coverage

Answer & Explanation

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 A. Variable Life Insurance
Explanation:
A form of permanent life insurance, Variable life insurance
provides permanent protection to the beneficiary upon the
death of the policy holder.

7. _______ is a policy contract that for some reason

specified in the policy becomes free of all legal
effect.
A. Salvage
B. Schedule
C. Retrospective Rating
D. Void

Answer & Explanation

D. Void
Explanation:
A policy or other contract that has no legal validity is
described as void. When an insurance company voids a
life insurance policy, it is usually due to the discovery of
misrepresentation of material facts by the person insured.
It is as though the voided policy was never in effect since
all premiums paid are usually returned to the policy
owner.

8. Which of the following insurance compensates for

the cost of repairing or replacing defective products
past the normal warranty period provided by
manufacturers?
A. Warranty Insurance
B. Kidnap/Ransom Insurance
C. Inland Marine Insurance
D. Uninsured Motorist Coverage

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 Answer & Explanation

A. Variable Life Insurance

Explanation:
A form of permanent life insurance, Variable life insurance
provides permanent protection to the beneficiary upon the
death of the policy holder.

9. Which of the following is the first life insurance

company in India?
A. United India Insurance
B. Oriental Insurance
C. LIC
D. New India Assurance

Answer & Explanation

B. Oriental Insurance
Explanation:
Oriental Life Insurance Company started by Europeans in
Kolkata was the first life insurance company on Indian
Soil.

10. National Insurance Academy located in ________

A. Chennai
B. Calcutta
C. Pune
D. Hyderabad

Answer & Explanation

C. Pune
Explanation:
The National Insurance Academy (NIA) is situated in Pune,
India. Founded in 1980 by the Finance Department of the

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 Indian government with capital patronage from LIC and
public sector general insurance industry.

1. The portion of an insurance premium that reflects

the basic costs of loss, not including over-head or
profit is called ______
A. Mixed Premium
B. Pure Premium
C. Impure Premium
D. None of the Above

Answer & Explanation

B. Pure Premium
Explanation:
Part of the premium which is sufficient to pay losses and
loss adjustment expenses only, but not other expenses.

2. A type of insurance often used for high frequency

low severity risks where risk is not transferred to an
insurance company but retained and accounted for
internally is known as ______
A. Hospital Insurance
B. Hull Insurance
C. Group Insurance
D. Self Insurance

Answer & Explanation

D. Self Insurance
Explanation:
insurance of oneself or one’s interests by maintaining a
fund to cover possible losses rather than by purchasing an
insurance policy.

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 3. Which Insurance is a compulsory insurance plan
administered by a government agency with the
primary emphasis on social adequacy?
A. Hospital Insurance
B. Hull Insurance
C. Group Insurance
D. Social Insurance

Answer & Explanation

D. Social Insurance
Explanation:
Form of compensation provided and controlled by a
government for elderly, disable, or unemployed people.

4. Which is a liability coverage for contents within a

renter’s residence?
A. Renters Insurance
B. Hull Insurance
C. Group Insurance
D. Social Insurance

Answer & Explanation

A. Renters Insurance
Explanation:
Renters’ insurance is an insurance policy which provides
most of the benefits of homeowners’ insurance.

5. Insurance that is renewable for a limited number of

successive terms by the policyholder and is not
contingent upon medical examination is called
______
A. Hospital Insurance
B. Renewable Term Insurance

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 C. Group Insurance
D. Social Insurance

Answer & Explanation

B. Renewable Term Insurance

Explanation:
Renewable Term is a clause in a term insurance contract
that allows the beneficiary to extend the coverage term
for a set period of time without having to re qualify for
coverage.

6. A form of life insurance coverage payable to a third

party lender/mortgagee upon the death of the
insured/mortgagor for loss of loan payments is
termed as ______
A. Hospital Insurance
B. Renewable Term Insurance
C. Mortgage Insurance
D. Multi-Peril Insurance

Answer & Explanation

C. Mortgage Insurance
Explanation:
Mortgage Insurance also known as mortgage guarantee
and home-loan insurance is an insurance policy which
compensates lenders or investors for losses due to the
default of a mortgage loan.

7. Personal and business property coverage combining

several types of property insurance in one policy is
called ______
A. Hospital Insurance
B. Renewable Term Insurance

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 C. Mortgage Insurance
D. Multi-Peril Insurance

Answer & Explanation

D. Multi-Peril Insurance
Explanation:
Multiple-peril insurance coverage is a kind of insurance
that bundles together multiple coverages that typically
would be needed with each other.

8. A policy purchased by, for the benefit of, a business

insuring the life or lives of personnel integral to the
business operations is called ______
A. Hospital Insurance
B. Renewable Term Insurance
C. Key-Person Insurance
D. Multi-Peril Insurance

Answer & Explanation

Key-Person Insurance
Explanation:
Key person insurance is simply life insurance on the key
person in a business. In a small business, this is usually
the owner, the founders or perhaps a key employee or
two.

9. A generic term applying to all types of insurance

indemnifying or reimbursing for losses caused by
bodily injury or illness including related medical
expenses is called _______
A. Health Insurance
B. Renewable Term Insurance

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 C. Key-Person Insurance
D. Multi-Peril Insurance

Answer & Explanation

A. Health Insurance
Explanation:
Health insurance is a type of insurance coverage that pays
for medical and surgical expenses incurred by the insured.

10. Which of the following insurance is a coverage for

damage to a vessel or aircraft and affixed items?
A. Renters Insurance
B. Hull Insurance
C. Group Insurance
D. Social Insurance

Answer & Explanation

B. Hull Insurance
Explanation:
Generally Hull Insurance refers to an insurance policy that
provides coverage for the physical integrity of a ship.

1. The person other than the insured or insurer who

has incurred losses or is entitled to receive payment
due to acts or omissions of the insured is called
_______
A. First Person
B. Second Person
C. Third Person
D. Last Person

Answer & Explanation

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 C. Third Person
Explanation:
“Third-party” in the case of automotive insurance would
be the driver of the other vehicle, since that person is not
the first party (Insured) in the insurance policy. Second
Party refers the Insurer(Insurance Company).

2. The process of determining the cost of an insurance

policy based on the actual loss experience
determined as an adjustment to the initial premium
payment is termed as _______
A. Universal Life Insurance
B. Unauthorized Reinsurance
C. Unearned Premium
D. Retrospective Rating

Answer & Explanation

D. Retrospective Rating
Explanation:
An insurance policy with a premium that adjusts according
to the losses experienced by the insured company, rather
than according to an industry-wide loss experience is
called Retrospective Rating.

3. The portion of risk that a reinsurance company

cedes or amount of insurance the company chooses
not to retain is called ______
A. Universal Life Insurance
B. Unauthorized Reinsurance
C. Retro cession
D. Retrospective Rating

Answer & Explanation

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 C. Retro cession
Explanation:
A transaction wherein a re-insurer cedes the reinsurance
they have assumed to another re-insurer.

4. _______ is an insurance coverage protecting the

manufacturer, distributor, seller of a product
against legal liability resulting from a defective
condition causing personal injury, or damage, to any
individual or entity, associated with the use of the
product.
A. Product Liability
B. Unauthorized Reinsurance
C. Retro cession
D. Retrospective Rating

Answer & Explanation

A. Product Liability
Explanation:
Product liability insurance protects against claims of
personal injury or property damage caused by products
sold or supplied through your business.

5. Circumstance including possibility of loss or no loss

but no possibility of gain is termed as ______
A. Product Liability
B. Pure Risk
C. Pure Premium
D. Retrospective Rating

Answer & Explanation

B. Pure Risk
Explanation:

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 Pure risk, also called absolute risk, is a category of threat
that is beyond human control and has only one possible
outcome: loss. Pure risk includes such things as natural
disasters, fire or untimely death.

6. Event covered under insured’s policy agreement is

called _____
A. Product Liability
B. Pure Risk
C. Provisions
D. Proximate Clause

Answer & Explanation

D. Proximate Clause
Explanation:
Proximate cause identifies for insurance purposes, which
event is the probable cause of a particular event, leading
to a loss.

7. Contingencies outlined in an insurance policy is

called ________
A. Product Liability
B. Pure Risk
C. Provisions
D. Proximate Clause

Answer & Explanation

C. Provisions
Explanation:
A provision is a legal clause or condition contained within
a contract that requires or prevents either one or both
parties to perform a particular requirement by some
specified time.

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 8. An insurance company not licensed to do business
within a given state is called _____
A. Product Liability
B. Pure Risk
C. Non-admitted Insurer
D. Proximate Clause

Answer & Explanation

C. Non-admitted Insurer
Explanation:
An insurance company that is “non-admitted” has not
been approved by the state’s insurance department.

9. Selling insurance through groups is called ________

A. Affinity sales
B. Pure Risk
C. Non-admitted Insurer
D. Proximate Clause

Answer & Explanation

A. Affinity sales
Explanation:
The sale of insurance through groups such as business or
professional associations is known as Affinity sales

10. The conversion of the account balance of a

deferred annuity contract to income payments is
termed as ________
A. Affinity sales
B. Pure Risk
C. Annuitization
D. Proximate Clause

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 Answer & Explanation

C. Annuitization
Explanation:
Annuitization is a single, one-time event that occurs
between the accumulation and payout phases in an
annuity.

1. Insurance premiums are payable in advance but the

insurance company does not fully earn them until
the policy period expires is termed as _____
A. Affinity sales
B. Demutualization
C. Annuitization
D. Earned Premium

Answer & Explanation

D. Earned Premium
Explanation:
The amount of a premium which is considered by the
insurance company to have already been earned by them.

2. Funds that a lender collects to pay monthly

premiums in mortgage and home owners insurance,
and sometimes to pay property taxes is called ____
A. Affinity sales
B. Demutualization
C. Escrow Account
D. Earned Premium

Answer & Explanation

C. Escrow Account
Explanation:

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 An escrow account is a temporary pass through account
held by a third party during the process of a transaction
between two parties.

3. A provision in an insurance policy that eliminates

coverage for certain risks, people, property classes,
or locations is called _____
A. Affinity sales
B. Exclusion
C. Escrow Account
D. Earned Premium

Answer & Explanation

B. Exclusion
Explanation:
Exclusions are the cases for which the insurance company
does not provide coverage. These are the conditions
excluded from the insured event to avoid losses to the
company.

4. A written form attached to an insurance policy that

alters the policy’s coverage, terms, or conditions is
termed as _______
A. Endorsement
B. Exclusion
C. Escrow Account
D. Earned Premium

Answer & Explanation

A. Endorsement
Explanation:
An endorsement is a legal term that refers to the signing

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 of a document which allows for the legal transfer of a
negotiable from one party to another.

5. Legal responsibility of a fiduciary to safeguard

assets of beneficiaries is termed as________
A. Endorsement
B. Fiduciary Liability
C. Escrow Account
D. Earned Premium

Answer & Explanation

B. Fiduciary Liability
Explanation:
A fiduciary is a person who holds a legal or ethical
relationship of trust with one or more other.

6. Contract under which the ultimate liability of the

reinsurer is capped and on which anticipated
investment income is expressly acknowledged as an
underwriting component is called ________
A. Finite Risk Reinsurance
B. Fire Insurance
C. Escrow Account
D. Earned Premium

Answer & Explanation

A. Finite Risk Reinsurance

Explanation:
Finite risk reinsurance is a form of reinsurance that
specifically incorporates the time value of money.

7. _______ is a Coverage protecting property against

losses caused by a fire or lightning that is usually

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 included in home owners or commercial multiple
peril policies.
A. Finite Risk Reinsurance
B. Fire Insurance
C. Escrow Account
D. Earned Premium

Answer & Explanation

B. Fire Insurance
Explanation:
A fire insurance is a contract under which the insurer in
return for a consideration (premium) agrees to indemnify
the insured for the financial loss which the latter may
suffer due to destruction of or damage to property or
goods, caused by fire, during a specified period.

8. _______ is a coverage for the policyholder’s own

property or person.
A. First Party Coverage
B. Second Party Coverage
C. Third Party Coverage
D. None of the Above

Answer & Explanation

A. First Party Coverage

Explanation:
First Party insurance coverage insures against loss or
damage sustained by the insured (person for whom the
policy is written to protect and/or person or business
entity who purchases the insurance).

9. _______ is a coverage for flood damage is available

from the federal government under the National

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 Flood Insurance Program but is sold by licensed
insurance agents.
A. Flood Insurance
B. Commercial Insurance
C. Industrial Insurance
D. Liability Insurance

Answer & Explanation

A. Flood Insurance
Explanation:
Flood insurance denotes the specific insurance coverage
against property loss from flooding.

10. ________ is an insurance purchased by a bank or

creditor on an uninsured debtor’s behalf so if the
property is damaged, funding is available to repair
it.
A. Flood Insurance
B. Forced Place Insurance
C. Industrial Insurance
D. Liability Insurance

Answer & Explanation

B. Forced Place Insurance

Explanation:
Forced place insurance is intended to ensure that the
property remains insured, protecting both the home owner
and the lien holder.

1. _____ is a coverage up to specific limits for the cost

of ransom or extortion payments and related
expenses
A. Internet Liability Insurance

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 B. Kidnap/Ransom Insurance
C. Inland Marine Insurance
D. Gap Insurance

Answer & Explanation

B. Kidnap/Ransom Insurance
Explanation:
Kidnap/Ransom insurance provides protection, risk
mitigation, and crisis management for a wide range of
crisis-related risks.

2. The Complaint to Insurance Ombudsman must be

registered within ____ year(s)
A. 4
B. 3
C. 2
D. 1

Answer & Explanation

D. 1
Explanation:
We must file the complaint with the ombudsman within a
year of the rejection of our claim by the insurer.

3. A technique that consists of staggering the maturity

dates and the mix of different types of bonds is
termed as _______
A. Laddering
B. Fire Insurance
C. Escrow Account
D. Earned Premium

Answer & Explanation

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 A. Laddering
Explanation:
Laddering means you buy multiple smaller policies that
custom tailor your needs rather than one large policy.

4. _______ is a coverage for bodily injury or property

damage caused by an intoxicated person who was
served liquor by the policyholder.
A. Liquor Liability
B. Inflation Guard Clause
C. Inland Marine Insurance
D. Gap Insurance

Answer & Explanation

A. Liquor Liability
Explanation:
Any business that sells or serves alcoholic beverages,
including restaurants, nightclubs, and bars, can be held
liable for damages or injuries caused by intoxicated
patrons.

5. What is the maximum claim amount for an

Insurance Ombudsman complaint?
A. 10 lakh
B. 15 lakh
C. 5 lakh
D. 20 lakh

Answer & Explanation

D. 20 lakh
Explanation:
Ombudsman’s powers are restricted to insurance contracts
of value not exceeding Rs. 20 lakhs.

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 6. Which section of the Indian Insurance Act 1938
provides for nomination of a person?
A. Section 39
B. Section 38
C. Section 37
D. Section 36

Answer & Explanation

A. Section 39
Explanation:
Section 39 of the Indian Insurance Act, 1938, provides for
nomination of a person (called nominee) who gets the
benefits of the policy on death of the person whose life
has been insured.

7. A professional liability coverage for physicians,

lawyers, and other specialists against suits alleging
negligence or errors and omissions that have
harmed clients is termed as _______
A. Malpractice Insurance
B. Inflation Guard Clause
C. Inland Marine Insurance
D. Gap Insurance

Answer & Explanation

A. Malpractice Insurance
Explanation:
A type of professional liability insurance purchased by
health care professionals and sometimes by other types of
professionals like lawyers.

8. Any insurance risk resulting from a human decision

is called _____

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 A. Partial Risk
B. Static Risk
C. Dynamic Risk
D. Pure Risk

Answer & Explanation

C. Dynamic Risk
Explanation:
Integral part of a speculative decision where only three
alternatives are possible: gain, loss, or break even.
Dynamic risks are not insurable.

9. ______ is a coverage that guarantees bondholders

timely payment of interest and principal even if the
issuer of the bonds defaults.
A. Internet Liability Insurance
B. Kidnap/Ransom Insurance
C. Municipal Bond Insurance
D. Gap Insurance

Answer & Explanation

C. Municipal Bond Insurance

Explanation:
Municipal bond insurance companies guarantee that the
interest and principal of a municipal bond will be paid on
time if the bond issuer is unable to do so.

10. A company owned by its policyholders that

returns part of its profits to the policyholders as
dividends is known as ______
A. Service Provider
B. Composite Insurer

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 C. Mutual Insurance Company
D. None of the Above

Answer & Explanation

C. Mutual Insurance Company

Explanation:
A mutual insurance company is an insurance company
owned entirely by its policyholders. Any profits earned by
a mutual insurance company are rebated to policyholders
in the form of dividend distributions or reduced future
premiums.

1. A state tax on premiums paid by its residents and

businesses and collected by insurers is
called________
A. Income Tax
B. Direct Tax
C. Premium Tax
D. Indirect Tax

Answer & Explanation

C. Premium Tax
Explanation:
Premium – The price of an insurance policy, typically
charged annually or semiannually.
A state tax on premiums paid by its residents and
businesses and collected by insurers is known as Premium
Tax.

2. ________covers professionals for negligence and

errors or omissions that injure their clients.
A. Nursing Home Insurance
B. Kidnap/Ransom Insurance

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 C. Inland Marine Insurance
D. Professional Liability Insurance

Answer & Explanation

D. Professional Liability Insurance

Explanation:
Professional liability insurance is a specialty coverage that
is not provided under homeowners’ endorsements, in-
home business policies or business-owners’ policies.

3. A form of annuity that ends payments when the

annuitant dies is termed as ______
A. Annuity
B. No Pay
C. Pure Life Annuity
D. None of the Above

Answer & Explanation

C. Pure Life Annuity

Explanation:
Annuity that pays periodic income over the life of an
annuitant, and stops only with his or her death. Payments
may be fixed or variable.

4. A policy that is made mandatory for the customer to

buy is called _______
A. Annuity
B. Compulsory Cover
C. Pure Life Annuity
D. None of the Above

Answer & Explanation

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 B. Compulsory Cover
Explanation:
Any type of insurance an individual or business is legally
required to buy. Compulsory insurance is mandatory for
individuals and businesses that want to engage in certain
financially risky activities, such as operating an auto-
mobile or operating a business with employees.

5. The reinsurance bought by re-insurers to protect

their financial stability is termed as ______
A. Retention
B. Retrocession
C. Pure Life Annuity
D. None of the Above

Answer & Explanation

B. Retrocession
Explanation:
A transaction in which a reinsurer transfers risks it has
reinsured to another reinsurer.

6. The amount of risk retained by an insurance

company that is not reinsured is termed as ______
A. Retention
B. Retrocession
C. Pure Life Annuity
D. None of the Above

Answer & Explanation

A. Retention
Explanation:
Assumption of risk of loss by means of non-insurance,

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 self-insurance, or deductibles. Retention can be intentional
or, when exposures are not identified, unintentional.

7. A method of permitting the final premium for a risk

to be adjusted, subject to an agreed-upon maximum
and minimum limit based on actual loss experience
is called _________
A. Retention
B. Retrocession
C. Retrospective Rating
D. None of the Above

Answer & Explanation

C. Retrospective Rating
Explanation:
A type of plan sometimes used when the insured is a large
entity. Under this type of plan, the final premium of a
policy is not calculated until close to the end of the
coverage period.

8. Insurance companies that band together as self-

insurers and form an organization that is chartered
and licensed as an insurer in at least one state to
handle liability insurance is called_____
A. Retention
B. Retrocession
C. Retrospective Rating
D. Risk Retention Groups

Answer & Explanation

D. Risk Retention Groups

Explanation:
A risk retention group (RRG) is an alternative risk transfer

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 entity created by the federal Liability Risk Retention Act
(LRRA). RRGs must form as liability insurance companies
under the laws of at least one state.

9. An insurance cover that is linked with credit

activities and aims to protect the credit is called
______
A. claims
B. Retrocession
C. Retrospective Rating
D. credit life

Answer & Explanation

D. credit life
Explanation:
Insurance that covers such a loan is known as credit
life/credit disability.

10. Which refers damaged property an insurer takes

over to reduce its loss after paying a claim?
A. Salvage
B. Schedule
C. Retrospective Rating
D. credit life

Answer & Explanation

A. Salvage
Explanation:
Salvage refers Damaged property an insurer takes over to
reduce its loss after paying a claim. Insurers receive
salvage rights over property on which they have paid
claims, such as badly-damaged cars.

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 1. Which is a fixed amount for a covered service in
health sector ?
[Link]
[Link]
[Link]
[Link] Insurance
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
A copayment or copay is a fixed amount for a covered
service, paid by a patient to the insurance company before
patient receives service from physician.

2. A deductible is usually mentioned in

[Link]
[Link]
[Link]
[Link] currency
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
A deductible is usually a fix dollar amount that you have
to pay out of your own pocket before the insurance will
cover the remaining eligible expenses

3. The amount of risk retained by an insurance

company that is not re-insured is called
[Link]
[Link] risk

[Link] [Link] [Link]

 [Link] risk
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
Retention is the amount of risk retained by an insurance
company that is not re-insured.

4. The Coinsurance is specified by

[Link] of the below
[Link]
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
Coinsurance refers to money that an individual is required
to pay for services, after a deductible has been paid.
Coinsurance is often specified by a percentage.

5. In BCAR, C related with __________

[Link]
[Link]
[Link]
[Link]
[Link] of these

Answer & Explanation

[Link] [Link] [Link]

 Answer – [Link]
Explanation :
Best’s Capital Adequacy Relativity (BCAR) – This
percentage measures a company’s relative capital
strength compared to its industry peer composite

6. _________is a sum of money paid by an employer

to an employee for services rendered in the
company
[Link]
[Link]
[Link]
[Link]
[Link] of these

Answer & Explanation

Answer – [Link]
Explanation :
Gratuity is a benefit payable under the Payment of
Gratuity Act passed in the year 1972. Gratuity is a sum of
money paid by an employer to an employee for services
rendered in the company.

7. What is lapse in insurance ?

[Link] of an insurance policy due to the insured’s
failure to pay the premium.
[Link] is a policy that does not pay benefits to the
beneficiary if the cause of death is an accident
[Link] is a policy that pays benefits to the beneficiary if any
emergency occur
[Link] is a policy that pays benefits to the beneficiary if the
cause of death is an accident
[Link] 1 and 2

[Link] [Link] [Link]

 Answer & Explanation

Answer – [Link] 1 and 2

Explanation :
The term lapse refers to a “lapse in coverage”, meaning
the life insurance contract will no longer pay a death
benefit or provide any insurance coverage for the insured
person

8. Mortality Charge is the

amount charged _____________ by the insurer
[Link] month
[Link] year
[Link] day
[Link] 6 months
[Link] of these

Answer & Explanation

Answer – [Link] year

Explanation :
Mortality Charge is the amount charged every year by the
insurer to provide the life cover to the policyholder on the
life of the Life Insured. It can otherwise be called the Cost
of Insurance.

9. __________________ is an insurance product

typically sold or issued by life insurance companies.
[Link] term policy
[Link] Insurance
[Link] Annuity
[Link] Insurance
[Link] of these

Answer & Explanation

[Link] [Link] [Link]

 Answer – [Link] Annuity
Explanation :
A life annuity is an annuity, or series of payments at fixed
intervals, paid while the purchaser (or annuitant) is alive.
A life annuity is an insurance product typically sold or
issued by life insurance companies.

10. What is TPA ?

[Link] Party Administrators
[Link] Power Administrators
[Link] Party Accelerators
[Link] Power Administrators
[Link] of these

Answer & Explanation

Answer – [Link] Party Administrators

Explanation :
Third Party Administrators or TPAs are a vital link between
health insurance companies, policyholders and health care
providers

[Link] [Link] [Link]