Question 1

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

Accepted Answer

A)  The amount of loss to be paid is known before hand.
B)  Promise to pay on the happening of an event.
C)  Both the parties win on happening of an event.
D)  Both are enforceable at law. A

Question 2

Duty to minimize loss is incorporated in the policies through _________

Accepted Answer

A)  warranties.
B)  Conditions.
C)  clauses.
D)  declaratives B

Question 3

If the interest rates in the market are higher, then cost of insurance _________.

Accepted Answer

A)  Increases.
B)  moderate.
C)  Decreases.
D)  no change. C

Question 4

One who shares the risk under an insurance policy or policies is known as __________.

Accepted Answer

A)  Assurer.
B)  Insurer.
C)  Co-insurer.
D)  Agent.

Question 5

When was IRD Act passed?

Accepted Answer

A)  1972.
B)  1999.
C)  1989.
D)  2000.

Question 6

Notification of Alteration in Risk is a condition _____________.

Accepted Answer

A)  precedent to liability.
B)  subsequent to liability.
C)  precedent to the contract.
D)  subsequent to the contract.

Question 7

A policy protecting a group of persons, usually employees of a firm generally called as ___________

Accepted Answer

A)  Fire insurance policy.
B)  Group insurance policy.
C)  Marine insurance.
D)  Automobile insurance.

Question 8

_______ means those risks which involve a situation where there is a possibility of gain.

Accepted Answer

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

Question 9

As the age increases risk on the life _______.

Accepted Answer

A)  Increases.
B)  Decreases.
C)  does not change.
D)  Moderate.

Question 10

Individuals define risk as____________.

Accepted Answer

A)  deviation from some expected return.
B)  a cost of investing.
C)  a quantitative measure.
D)  "losing money."

Question 11

The concept of bancassurance originated in ___________.

Accepted Answer

A)  France.
B)  U.S.A.
C)  Engla

Question 12

The premium actually paid by the policy holder depends upon___________

Accepted Answer

A)  the wealth of the person to be insured.
B)  the level of risk assessed by the insurer.
C)  the tables of rates printed by the insurer.
D)  agents report.

Question 13

A human life is an income-generating asset______________

Accepted Answer

A)  true.
B)  false.
C)  partially true.
D)  partially false.

Exam 2: Insurance Policy and Risk Management: Part B