How are perils and hazards normally distinguished under term insurance policies?
A. Perils are medical factors which influence the risk of dying and hazards are lifestyle activities which influence the risk of dying.
B. Perils are risks that policyholders will die before a specified date and hazards are factors which could influence that risk.
C. Perils are factors which affect the risk being insured and hazards are the size of the risk being insured.
D. Perils are factors which could influence an insured event occurring and hazards are the actual events which will trigger a payout
2. In the context of financial planning, how is the difference between real needs and perceived needs best described?
A. Real needs are financial needs and perceived needs are non-financial needs.
B. Real needs are actual needs and perceived needs are based on a client’s thoughts and desires.
C. Real needs are identified by the insurance agent and perceived needs are identified by the client.
D. Real needs are needs which satisfy an objective and perceived needs are needs which do not satisfy an objective.
3. If a person is concentrating more on health plan and retirement plan then at which stage of life is he in.
A. Young unmarried
B. Young married
C. Young married with Kids
D. Pre retirement
4. The Institute of insurance and risk management along with insurance education does what more
A. Regulation
B. Redressal
C. Research
D. Repository
5. If the client does not wish to proceed with the recommendations right at the moment the agent should
A. Insist on taking the product right away
B. Should ask for the reason for not going with the recommendation
C. Should ask for a future date from the client
D. Should review once again
6. Suresh has adequate reserve capital with him and he wishes to protect his income, moreover he feels that if he does not die then he would need the amount. What type of plan should he opt for?
A. Term Insurance Plan
B. Endowment plan
C. Return of premium plan
D. Pension plan
7. A claim was paid in a policy and it was advertised in the newspaper also. This indicates that the policy was.
A. It was assigned.
B. It was paid up.
C. It was lost.
D. It was surrendered.
8. An indemnity bond was signed in a policy when the claim was paid. This indicates that the policy was.
A. It was lost.
B. It was paid up.
C. It was lapsed.
D. It was surrendered.
9. Manish and Manisha is a married couple with one child. They want to plan for savings, child education/marriage and their retirement and protection of income. Which should be their lowest priority?
A. Marriage.
B. Savings.
C. Education.
D. Protection.
10. While calculating HLV along with future income, no of years of work, increments in salary what is also to be taken in to account?
A. Inflation.
B. Interest.
C. Discount rate
D. Compounding.
11. If RBI increases the interest rates then what will be the effect on share prices.
A. Shares will be more attractive.
B. Shares will be less attractive.
C. Fixed deposits will be more attractive.
D. Fixed deposits will be less attractive.
12. Vishal and sandeep applied for a health plan in XYZ Life Insurance Company. Vishal is asked to undergo a medical checkup but Sandeep is not asked to do so. What will be most possible reason?
A. Sandeep has taken another policy from XYZ Life Insurance Company
B. Vishal is older than Sandeep
C. Sandeep is earning more then Vishal
D. Vishal is working in a MNC
13. During fact finding, What will be the next step after Identifying clients need
A. Quantify clients need
B. Priorities Clients Need
C. Recommending Product
D. Fill up the proposal form
14. What is purpose of investing money in debt mutual fund?
A. Easy access
B. Fixed income
C. Tax Benefits
D. Liquidity
15. Mr. shailsh has an endowment policy with 30 years policy term, he has paid for eight years. The sum assured Rs.8,00,000/- and accumulated bonus Rs.60,000/-. What is the paid up value?
A. 213333
B. 229333
C. 273333
D. 293333
16. What is the similarity between Recurring Deposits & cumulative deposits in a bank
A. Guarantees
B. Taxation
C. Tenure
D. Lock in periods
17. Mrs. Sheela received some amount out of her husband’s death. In such a situation what will be her prime focus?
A. Savings
B. Insurance
C. Investment management
D. Planning for pension
18. Mr. Kunal used to participate in Car race. While taking up the Insurance policy he disclosed this information. What kind of hazard does it refers to
A. Physical hazard
B. Fraudulent representation
C. Moral hazard
D. Peril
19. Which of the following falls under voidable contract?
A. Misrepresentation
B. Lack of insurable interest
C. Fraud
D. None of the above
20. Law of large numbers is worked out by which of the following?
A. Pooling of risk
B. Maintaining insurable interest
C. With utmost good faith
D. Randomness
21. If a client wants to compare between all financial products then the best person he can approach is
A. Individual agent
B. Corporate agent
C. Bank
D. Broker
22. If a person want to maintain emergency funds the best place is a bank or
A. Equity market
B. ULIP
C. Debt mutual fund
D. FD
23. During a fact finding process the need analyzed were income replacement and children’s education. But the customer insists on only a child plan for the time being and asks the agent to give him a child plan. The agent should.
A. Do the fact finding exercise again
B. Insist with the client to take a term plan
C. Give a child plan and revisit the client on a later date
D. Give the lead to another agent
24. If a case is already before the consumer forum, then the ombudsman should
A. Give a recommendation
B. Give a joint decision with the consumer forum
C. Dismiss the case
D. Give an award.
25. If the sum assured remains the same, what will be impact of net premium if the age of the policyholder increases
A. It rises
B. It falls
C. It remains constant
D. Gross premiums increases
26. What is the advantage of converting physical gold assets to gold ETFs.
A. Liquidity
B. More gold in value
C. Purity
D. More conversion value
27. For which of the following reasons, the underwriter should ask beyond agent’s confidential report.
A. Physical Hazard
B. Moral Hazard
C. SA is too high
D. Pure Risk
28. After doing the need analysis of the client, the agent advised the client to opt for TROP product. But the client refused. According to ethical business practices what will the agent do ?
A. Enquire about the refusal from the client
B. Suggest an alternative plan
C. Pass on to the superior
D. Pass on to the other agent
29. Generally insurance companies do not hold the premium in case of a fraud or misrepresentation. However, due to which of the following circumstances the insurer can retain the premium of the policyholder
A. Fraudulent claim
B. Indisputability clause
C. Redressal procedure
D. Pending decision from Ombudsman
30. According to IRDA agent’s code of conduct, what is the best method of showing the amount of commission earned by the advisor
A. Signed copy of sales illustration
B. Brochure
C. Sales Communication
D. Press releases
31. With pooling of risks an insurance company pools the premium collected from several individuals to insure them against similar risks. At what circumstances will the insurance companies pool the risk of a life insurance and health insurance together?
A. Under no circumstances
B. Under conditions of the reinsurer
C. As directed by actuary
D. As per company policy
32. In case the customer has stopped making payment for the premium of the policy. What are the two most important things required in order to reinstate the policy?
A. Reinstatement Fee and Proof of continuing good health
B. Premium cheque and health declaration
C. Only health certificate
D. Premium cheque with arrears
33. If the customer has invested money in a pension plan from company A and buys an annuity from company B, what is the nature of transaction?
A. Life Long Annuity
B. Open Market
C. Reinsuring Annuity
34. If a policy holder buys a policy from the advisor and lodges a complaint, it should be treated as :
A. Same for all policies sold by advisor
B. Same for all policies sold by the advisor except corporate clients
35. An investor holds a wide range of shares. If the Reserve Bank of India announces a series of significant interest rate increases, the prices of these shares are most likely to
A. Become volatile
B. Decrease
C. Increase
36. In life insurance business if a person is working in calculating premium rates of insurance products, then he is mostly likely a member of
A. institutes of actuaries of India
B. insurance institute of India
C. Charted institute of insurance
D. Insurance institute of risk management
37. In a life insurance policy it is later found that the person doesn’t have insurable interest then the contract is
A. expired
B. reviewed
C. Void
D. Valid
38. If both parents of proposer died in their thirties due to heart attack what is the kind of peril or hazard the proposer has?
A. Insurable hazard
B. moral hazard
C. non insurable hazard
D. Physical hazard
39. Raunak earns 80,000 per month as salary. He has taken a House loan of Rs. 500000. What will be the maximum amount of EMI that can be charged by the Bank to recover the loan amount?
A. Rs. 32000 per month
B. Rs. 24000 per month
C. Rs. 40000 per month
D. Rs. 48000 per month
[Chapter 6/13 - Care should be taken to ensure that EMIs do not exceed 40% of the monthly take home salary.]
40. Frequent switching is not advisable in ULIP plan because it increase
A. Investment Risk
B. Risk of death
C. Uncertainty of return
D. Chances of lapse
41. According to insurance terminology which of the following is correct?
A. Lung cancer is a hazard whereas smoking is a peril
B. Smoking is a hazard and lung cancer is a peril
C. Lung cancer is a peril and smoking is a moral hazard
D. Smoking is a moral hazard whereas lung cancer is a peril.
[Chapter 2/5 - If lung cancer is a peril then smoking can be a hazard that may increase the chance that the peril (lung cancer) will occur.]
42. An insurance agent sold two policies to two different persons having the same policy term. He declares the commission to each of them. The commission of one of the policy is more than the other. What should be the reasons for this difference?
A. Risk profile of both the policyholder are different
B. Age of both the candidate are different
C. One has chosen Single premium policy and other has chosen regular premium policy
D. Both have chosen different kind of policies.
43. Open market option under Annuity policy would extend which of the following benefit?
A. Ensure Better annuity rate
B. Increase in the range
C. Increase in return
D. Switch of Funds
44. Akash is an Unmarried person and employed with company ABC and drawing a handsome salary. He has no liabilities. What kind of plan can be suggested to him?
A. Money Back
B. Term Plan
C. Endowment Plan
D. ULIP
45. What should an agent do in order to understand the mental state of client in respect to his investments in saving products
A. Fact finding
B. Consulting the client’s parents
C. Consulting the family of the client
D. Reviewing his existing investments
46.
47. Net premium is equal to
A. Premium plus interest earning
B. Risk premium plus interest earning
C. Premium minus interest earning
D. Risk premium minus interest earning
48. Pooling of risk in insurance means
A. The premium collected & deposited in a pool
B. All similar risks are pooled together
C. Premium is pool to make claims
D. Contribution of insurance company
49. Principle of utmost good faith will operate in existing policy
A. Every time premium is paid
B. If the policy has lapsed and it has to be revived.
C. If the insured person falls sick and is admitted to hospital.
D. If the insured person changes his job.
50. Both the parties to a contract must agree and understand the same thing and in the same sense which is called
A. Consideration.
B. Legality of an object.
C. Consensus ad idem.
D. Acceptance.