Banking Financial Awareness · General Awareness
Insurance Policies and Claims
1,514 Questions
Insurance policies provide financial protection against specific perils, involving concepts like deductibles, premiums, and claim settlements. Banking and insurance aspirants need a solid grasp of policy types, coverage limits, and claim procedures. Practice these questions to understand how different insurance principles apply in real scenarios.
Deductible clausesInsurance perilsTravel insurance coveragePolicy conversion rightsClaim dispute avoidanceSubrogation principles
Insurance Policies and Claims Questions
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higher cover would help any family member in case of high cost treatment
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premiums are considerably lower than where cover is taken for individual members
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Both (1) and (2)
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Either (1) or (2)
C
Correct answer
Explanation
Higher cover and lower premiums are the reasons why it is advantageous to go for a family floater rather than non-floater.
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Date of commencement, date of maturity and due date of last premium
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Name of the nominee
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The rights and privileges and other conditions which are applicable under the contract
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The signature of the authorized signatory and policy stamp
C
Correct answer
Explanation
In a standard insurance policy document, the standard provisions section will have all the information regarding the rights and privileges and other conditions which are applicable under the contract.
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When sum insured is very small
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When sum insured is very large
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When income is very small
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When income is very high
B
Correct answer
Explanation
An underwriter is an investment bank that helps companies introduce their new securities to the market. In the insurance business, an underwriter is a company liable for insured losses in return for a fee (premium).
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Risk prevention aims at avoidance of loss through insurance.
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Chances of risk are reduced by retention of risk.
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Loss prevention is nothing but retention of risk.
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Chances of occurrence of risk are achieved through transfer of such risks.
A
Correct answer
Explanation
Risk prevention aims at avoidance of loss through insurance.
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Sum insured
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Sum insured less survival benefits paid already
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Bonus
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Nothing is payable.
A
Correct answer
Explanation
Death claim under a money back plan is sum insured.
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Endowment
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Pure endowment
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Group insurance
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Term assurance
A
Correct answer
Explanation
An endowment policy is a life insurance contract to pay a lump sum after a specific term (on its 'maturity') or on death. It does not need a medical examination.
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policyholder, unitholder
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insurance company, unitholder
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insurance company, insurance company
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policyholder, insurer
B
Correct answer
Explanation
In traditional life insurance policies, the investment risk is borne by the insurance company, while in unit linked plans, the investment risk is borne by the unitholder.
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gathering the names of people who may be interested in insurance
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preparing a list of all the persons in a city
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enlisting all the policyholders of a branch office
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preparing a list of all the agents in a neighborhood
A
Correct answer
Explanation
In insurance sales terminology, prospecting specifically means identifying and gathering potential customers who may be interested in buying insurance. It's the first step in the sales cycle focused on finding leads, not creating exhaustive lists of all people, existing policyholders, or agents.
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Development officer
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Insured
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Agent
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Insurer
C
Correct answer
Explanation
Agent is known as primary underwriter. He or she is in the best position to ascertain if the facts being presented are true, since he or she is in the direct contact with the proposed life.
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At the time of taking policy
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At the time of claim
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Both (1) and (2)
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None of the above
A
Correct answer
Explanation
At the time of taking policy, the insurable interest should be present in a life insurance contract.
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Early death claim
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Non-early claim
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Maturity claim
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Surrender
A
Correct answer
Explanation
In early death claim, the insurer orders an investigation.
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Life insurance selling is different from selling other items.
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Life insurance involves concept of selling and hence, is challenging.
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An agent has to create, in his client’s mind, a need for life insurance.
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All of the above
D
Correct answer
Explanation
All of the above are the facts of LIC.
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customer
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insurance company
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government
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IRDA
B
Correct answer
Explanation
An insurance agent is a representative of insurance company.
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Money laundering is an illegal practice of bringing money into nation’s economy by hiding its source and the true identity of the person involved.
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Life Insurance Company will return the entire premium under free look provisions.
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Moral hazard is not easily assessable unlike physical risk of the proposer.
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Standard and non-standard age proofs are not mutually interchangeable.
B
Correct answer
Explanation
A free look period is where a new insurance policy owner is able to terminate the contract without penalties such as surrender charges.
If you have bought a policy and realise you don’t want it, you can return it and get a refund. There are conditions though.
This applies only to life insurance policies and to health insurance policy that are for a term of at least 3 years.
You can exercise this option within 15 days of receiving the policy document
You have to communicate to the company in writing.
The premium refund will be adjusted for proportionate risk premium for the period on cover, expenses incurred by the insurer on medical examination and stamp duty charges.
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IRDA (Licencing of Agents) Regulations, 2000
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IRDA (Protection of Policyholders' Interests) Regulations, 2002
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Insurance Act, 1938
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Government of India directives
B
Correct answer
Explanation
IRDA (Protection of Policyholders' interests) Regulations, 2002 deals with claims.