Deck 2: Insurance Terminology and Principles

Question 1

Insurance business is based on __________.

A)Newtons Law
B)Boyles Law
C)The Theory of Probability and Law of large numbers
D)Parkinsons Law

Answer 1

The Theory of Probability and Law of large numbers

Question 2

Gross Premium means Net Premium plus___________

A)Margin
B)Profit
C)Expense Loading
D)Loss

Answer 2

Expense Loading

Question 3

_____________ is pricing of insurance products driven by market forces

A)De-tariffing
B)Fixed Pricing
C)Tariffing
D)Penetration Pricing

Answer 3

De-tariffing

Question 4

Insurance helps to:

A)Prevent adverse situations from occurring
B)Reduce the financial consequences of adverse situations
C)Negate all consequences of adverse situations
D)Make assets continuously productive

Question 5

An actuary is expected to:

A)Make an exact forecast of the future liabilities of policies
B)Make a reasonable forecast of the future liabilities of policies
C)Calculate the premium required to cover a risk on a long-term basis
D)Find the probability of an insured event to happen in non-life policies

Question 6

The principle of average applies when the value is _____________ in the proposal

A)Understated
B)Overstated
C)Not ascertainable
D)Negligible

Question 7

Fidelity Guarantee Policies cover losses due to fraud by ____________

A)Employees
B)Customers
C)Borrowers
D)Suppliers

Question 8

CTL as used in insurance

A)Contributory Total Loss
B)Constructive Total Loss
C)Construction Totally Lost
D)Contractors' Total Loss

Question 9

GA as used in insurance

A)General Assurance
B)General Average
C)General Adjustment
D)Guaranteed Assurance

Question 10

Which of the following terms matches closest with 'Family Floater'?

A)Health insurance
B)Property insurance
C)Accidental injury
D)Consequential loss

Question 11

In cases where a Life Insurance Agent collects the premium from the policyholder and remits it to the insurer's office, he is acting as an agent of _____

A)IRDA
B)the Insurance Company
C)the Policyholder
D)the broker

Question 12

A policy where the policyholder makes a one-time payment of premium, is known as a ______________:

A)Money-back policy
B)Single premium policy
C)Salary Savings Scheme policy
D)Half-yearly policy

Question 13

i. State which of the statements given below is correct .

A)An organisation can exist only with employees
B)An organisation can exist only with different sections
C)An organisation can exist only with its own office building
D)An organisation can exist without a purpose

Question 14

……… may be described as a social device to reduce or eliminate risk of loss to life and property.

A)investment
B)saving
C)insurance
D)loan

Question 15

State which of the statements given below is correct

A)People generally feel that life related risks are imminent
B)Religious beliefs interfere with the purchase of life insurance
C)People are always keen to buy insurance
D)Life insurance cannot be denied to anyone at any time

Question 16

Compared to the premium for a Whole Life plan, the premium for an Endowment plan will be ____________ for the same age

A)more
B)less
C)the same
D)double

Question 17

Select the expanded form of SA as commonly used in life insurance

A)Sum Assured
B)Surrender of Assurance
C)Supplementary Assurance
D)Stamp Act

Question 18

Select the expanded form of OR as commonly used in life insurance

A)Oral Rehydration
B)Once Renewed
C)Ordinary Rates
D)Ordinary Renewal

Question 19

Select the expanded form of SV as commonly used in life insurance

A)Summary Valuation
B)Selected Value
C)Surrender Value
D)Stamp Value

Question 20

Which of the following terms matches closest with 'Automatic Teller Machines'?

A)Divisional Offices
B)Branch Offices
C)Agents
D)Information Kiosks

Question 21

Which of the following terms matches closest with 'Foreclosure'?

A)Surrender Value
B)Nominee
C)Death Claim
D)Maturity Claims

Question 22

Find out which of the given statements is incorrect

A)An organisation must have a purpose
B)An organisation is identified by its actions
C)An organisation is identified by the building it occupies
D)A organisation can sue and be sued