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IC38 Mock Test
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1. What is a “deduction” in taxation of insurance?
It is the amount that reduces taxable income.
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2. What does “actuary” mean in insurance?
An actuary calculates risks and premiums.
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3. What does ULIP stand for?
ULIP stands for Unit Linked Insurance Plan.
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4. What is a “grievance redressal mechanism”?
It is a system for resolving customer complaints.
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5. What is an “endowment policy”?
It is a life insurance policy that pays on death or maturity.
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6. Which document provides proof of an insurance contract?
The insurance policy is the document that serves as proof.
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7. What does “IRDAI” stand for?
It stands for Insurance Regulatory and Development Authority of India.
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8. What is the meaning of “reinsurance”?
Reinsurance is insurance for insurance companies.
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9. What does “insurable interest” mean?
It means the insured must have a financial stake in the insured item or person.
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10. What does “proposal form” mean?
It is an application to apply for insurance.
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11. What is the main function of a “nominee” in life insurance?
Nominees receive benefits after the policyholder’s death.
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12. What is the sum assured?
Sum assured is the fixed amount paid on the occurrence of an insured event.
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13. What is the term for the amount paid by the insured to the insurer?
This amount is known as the premium.
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14. What is a “money-back policy”?
It is a policy that returns money periodically.
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15. What is a surrender value in life insurance?
It is the amount paid to the policyholder upon voluntary termination of the policy.
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16. What does “underwriting” mean?
Underwriting involves assessing and accepting risks.
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17. What is the primary goal of insurance?
The primary goal of insurance is to provide financial protection against unforeseen events.
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18. What does indemnity in insurance mean?
Indemnity means compensation for loss or damage.
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19. What is a “claim settlement ratio”?
It measures the percentage of claims an insurer settles.
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20. What is the cooling-off period?
It is the time during which the policyholder can cancel the policy without penalty.
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21. What is the tax benefit under Section 80C?
It provides deductions on life insurance premiums.
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22. Which type of insurance is mandatory for vehicles in India?
Third-party liability insurance is mandatory.
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23. Which principle ensures insurers share risk with reinsurers?
The principle of reinsurance ensures shared risk.
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24. Which principle states that only actual losses are compensated?
The principle of indemnity states this.
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25. What is a beneficiary?
A beneficiary is the person who receives the insurance payout.
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26. Which type of policy pays benefits to survivors after the insured’s death?
Life insurance provides this benefit.
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27. Which of the following is a principle of insurance?
Insurance operates on the principle of utmost good faith.
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28. Who regulates the insurance sector in India?
IRDAI (Insurance Regulatory and Development Authority of India) regulates the sector.
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29. How often is a yearly premium paid?
A yearly premium is paid once per year.
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30. What is the term for the amount paid by the insurer to the insured for a claim?
This amount is called the claim settlement.
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31. Which type of life insurance covers only a fixed period?
Term insurance covers a fixed period.
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32. What is the main purpose of a claim form?
It helps the insured report and request payment for a covered loss.
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33. Which document must be submitted to start a claim process?
The claim form is required.
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34. What does ‘policy lapse’ mean?
A policy lapse occurs when the premium is not paid by the due date.
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35. What is the term for the person who buys insurance?
This person is called the policyholder.
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36. What does “subrogation” mean?
It allows insurers to recover costs from third parties.
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37. What is the grace period in insurance?
It is the extra time allowed for premium payment after the due date.
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38. What is “maturity benefit”?
The benefit received when a policy term ends.
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39. What does “risk pooling” in insurance mean?
It is sharing risks among many policyholders.
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40. What is a “policy rider”?
An optional add-on to enhance the main policy coverage.
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41. Which insurance is required for exporters?
Marine insurance is required for exporters.
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42. Which type of insurance covers losses caused by fire?
Fire insurance covers losses caused by fire.
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43. Which of the following is not a type of general insurance?
Life insurance is not a type of general insurance.
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44. Which type of insurance covers financial loss due to theft?
Theft insurance covers such losses.
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45. In health insurance, what is a deductible?
A deductible is the amount the insured pays before the insurer covers the rest.
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46. What is “whole life insurance”?
It provides coverage for the policyholder’s entire life.
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47. What is the function of an “insurance agent”?
An agent sells insurance policies to customers.
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