Question 1

First private life insurance company was registered in India in……….

Accepted Answer

A)  1999
B)  2000
C)  2002
D)  1978 B

Question 2

Premium of a policy is calculated on the basis of……

Accepted Answer

A)  Income of the insured
B)  Agent's report
C)  Risk associated with the policy
D)  None of the above C

Question 3

Spreading of risk otherwise termed as _________

Accepted Answer

A)  Shifting of risk.
B)  Acceptance of risk.
C)  Reduction of risk.
D)  Spreading of risk. D

Question 4

The business of insurance is related to protection of…………

Accepted Answer

A)  Status
B)  Economic value of asset
C)  Savings
D)  Profit

Question 5

Unemployment, war, inflation, earthquakes etc., are the examples of ________

Accepted Answer

A)  Pure risk.
B)  Particular risk.
C)  Personal risk.
D)  Fundamental risk.

Question 6

Direct or Consequential losses refer to _________

Accepted Answer

A)  Dynamic risk.
B)  Particular risk.
C)  Property risk.
D)  Pure risk.

Question 7

Any risk involved a situation where there is a possibility of gain refers to ________

Accepted Answer

A)  Liability risk.
B)  Personal risk.
C)  Pure risk.
D)  Speculative risk.

Question 8

………… Clause generally inserted in all general insurance contract to discourage under insurance

Accepted Answer

A)  Specific clause
B)  General clause
C)  Valuation clause
D)  Average clause

Question 9

…………..is concerned with the conversion of a firms asset and earning power against risk of accidental loss.

Accepted Answer

A)  Risk retention
B)  Risk management
C)  Risk control
D)  Risk identification

Question 10

Maximum period of a policy in case of insurance other than life insurance is…..

Accepted Answer

A)  12 months
B)  24 months
C)  No limit
D)  None of these

Question 11

…………….. is a policy where the insurer undertakes to make good the loss upto the amount mentioned in the policy

Accepted Answer

A)  Specific policy
B)  Valued policy
C)  Average policy
D)  None of these

Question 12

________ involved those losses that occur even if there were no changes in the economic environment.

Accepted Answer

A)  Dynamic risk.
B)  Static risk.
C)  Fundamental risk.
D)  Particular risk.

Question 13

When did Government of India nationalized life insurance business.

Accepted Answer

A)  1956
B)  1978
C)  1991
D)  2002

Question 14

Who pays premium under social security group insurance?

Accepted Answer

A)  Every member of the group
B)  Government
C)  LIC
D)  None of the above

Question 15

_________ is concerned with the conversion of a firm's asset and earning power against risks of accidental loss.

Accepted Answer

A)  Risk retention.
B)  Risk management.
C)  Risk control.
D)  Risk identification.

Question 16

If the market interest rate is higher, the cost of insurance…

Accepted Answer

A)  Increases
B)  Moderate
C)  Decreases
D)  No change

Question 17

As age increases risk on the life………..

Accepted Answer

A)  Increases
B)  Decreases
C)  No change
D)  None of the above

Question 18

"Human life is an income generating asset". The statement is……

Accepted Answer

A)  True
B)  Partly true
C)  False
D)  Partly false

Question 19

Fundamental risk is also termed as _________

Accepted Answer

A)  Particular risk.
B)  Speculative risk.
C)  Group risk.
D)  Pure risk.

Exam 3: Insurance Fundamentals