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Insurance Awareness Practice Set 16

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Insurance Awareness Practice Set 16

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What is an Insurance? According to the dictionary and different insurance policies, Insurance is defined as “an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for the payment of a specified premium.” Thus, Insurance is a means of protection from financial loss. Insurance, in short, is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. The insurance provider is known as an insurer, insurance company, insurance carrier or underwriter. Insurance Awareness is an important section in several recruitment exams in India, primarily in the insurance sector.
Insurance Awareness Practice Set 16 includes Questions and Answers related to the following topics: History of Insurance sectors in India, Insurance Organizations in India, Important Insurance Terms, Insurance Abbreviations & Insurance related information. Insurance Awareness Practice Set 16 is extremely important for aspirants of Insurance related recruitments such as UIIC, OICL, LIC, HFL, AAO, etc.

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1. A type of car insurance contract under which insureds and its passengers’ are indemnified by their own insurance company in case of car accident, regardless of who caused the accident, is known as_____
    A. Freebie Insurance B. No Fault Insurance C. Affectionate Insurance D. Remedial Insurance

Answer: Option B
2. A type of risk where large group of policy holders are adversely affected by a single phenomenon such as a natural disaster is known as________
    A. Particular Risk B. Speculative Risk C. Specific Risk D. Covariant Risk

Answer: Option D
3. The IRDAI has raised the compulsory personal accident coverage for owner-driver to Rs _____ lakh
    A. Rs 15 lakhs B. Rs 10 lakhs C. Rs 20 lakhs D. Rs 5 lakhs

Answer: Option A
4. ICR is the measure of total value of all claims paid by the company divided by the total amount of premium collected in a financial year. Expand ICR.
    A. Immediate Claims Rectified B. Insured Claims Rendered C. Incurred Claims Ratio D. Insurance Claims Rate

Answer: Option C
5. When an Agent collects the premium from the policyholder and remits it to the insurer’s office, he is acting as an agent of __________
    A. IRDAI B. Insurance Company C. Policy Holder D. Insured

Answer: Option B
1. The premium for a Whole Life plan is always ________ than compared to the premium for an Endowment plan for the same age
    A. Less B. Half C. Double D. More

Answer: Option D
2. IRDAI has mandated all insurance companies to maintain a minimum Solvency ratio of _______ percent to minimise the risk of bankruptcy
    A. 75% B. 100% C. 150% D. 90%

Answer: Option C
3. Which of the following rates are used by an actuary to determine the premiums to be charged to customers for likelihood of getting a disease?
    A. Mortality rates B. Morbidity rates C. Valuation rates D. Policy rates

Answer: Option B
4. A nomination can be made in favour of ______
    A. Any individual B. spouse C. children D. parents

Answer: Option A
5. ________ is a type of an extra liability insurance to provide an additional layer of security to the insured against significant claims and lawsuits and protect insured’s assets and the business future.
    A. Special Protection Insurance B. Parasol Insurance C. Patronage Insurance D. Umbrella Insurance

Answer: Option D
1. BCAR is a rating agency that focuses on the insurance industry. What does R stands for in BCAR?
    A. Ratings B. Ratio C. Relativity D. Rate

Answer: Option C
2. __________ is a basic measure of how financially sound an insurer is and its ability to pay claims.
    A. Covered Ratio B. Incurred Claim Ratio C. Preference Ratio D. Solvency Ratio

Answer: Option D
3. Insurance companies limit their losses by not taking on certain risks that are very likely to result in a loss. Such risks are known as___________
    A. Horizon Risk B. Uninsurable Risk C. Concentration Risk D. Longevity Risk

Answer: Option B
4. The tax imposed by each state on gross premium written by insurers to risks located in that state is known as___________
    A. Premium Tax B. Insurance Tax C. Policy Tax D. Indirect Tax

Answer: Option A
5. The Annuity that pays periodic income over the life of an annuitant, and stops only with his or her death is called:
    A. Time annuity B. Fixed annuity C. Pure Life annuity D. Subsequent annuity

Answer: Option C

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