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.

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Insurance Policies and Claims Questions

Multiple choice

"Started a family, son attends University, loved ones falls ill, birth of a grand daughter" is the baseline used by____company:

  1. Life Insurance Corporation

  2. General Insurance Corporation

  3. Allianz Bajaj Life Insurance Corporation

  4. Standard Chart Life Insurance Corporation
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

This descriptive baseline was used by Allianz Bajaj Life Insurance to illustrate the various stages of life where insurance provides security. It emphasizes the long-term relationship between the insurer and the policyholder's family.

Multiple choice

Bharti AXA is associated with

  1. Financial Services

  2. Life Insurance

  3. General Insurance

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Bharti AXA is a joint venture between Bharti Enterprises and AXA, primarily focused on life insurance and general insurance products in India.

Multiple choice

Anmol Jeevan is a ........... of the LIC.

  1. Basic Life Insurance Plan

  2. Term Assurance Plan

  3. Children' s Plan

  4. Pension Plan

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Anmol Jeevan is a pure term assurance plan offered by LIC, which provides death benefit coverage without any survival or maturity benefits.

Multiple choice

Which of the following is not a type of pure risk?

  1. Personal Risks

  2. Property Risks

  3. Liability Risks

  4. External Risks

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

External risk is not a type of pure risk as there is chance of gain also along with the loss. External risks are the risk which result from forces outside the business. For instance changes in market conditions, political changes, technological conditions etc are external risks. If there are changes in market conditions and the price is increased of the product, due to increase in demand it would result in profits or gain or vice versa.

Multiple choice

Commercial Value of Life Insurance Policy implies that

  1. It can be used to increase sales

  2. It can be used as a collateral security to raise loans

  3. It can be used to decrease financial burden

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The commercial value of life insurance policy implies that it can be used as a collateral security to raise loans. It improves the continuity and credit-worthiness of business. A businessman can get a life policy on the life of his debtor to ensure repayment of his debt, or replacement of assets in the form of sinking fund policy.

Multiple choice

In Reinstatement Policy

  1. The insurer reserves to himself the right to reinstate or replace the damaged property

  2. The insurer covers for the goods in the process of transport

  3. The insurer covers not only the risk of fire, but also of explosion, and lightning

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In this policy, the insurer himself reserves the right to replace the property destroyed or damaged by fire.In this the property is replaced and cash is not paid as compensation. It is also called replacement policy so it is the right answer here.

Multiple choice

Insurance is a method of

  1. Dividing Risk

  2. Assuming Risk

  3. Shifting of Risk

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Insurance is a method of dividing risk. As insurance is based on the law of large numbers, it is a method of sharing risks. A large number of persons exposed to a risk contribute to a fund which is utilised to compensate the very few who actually suffer the loss from the insured risk.

Multiple choice

Double Insurance is not applied to

  1. Life Insurance

  2. Fire Insurance

  3. Marine Insurance

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When the same risk is insured with two or more insurers, it is known as double insurance.Double Insurance is not applied to life insurance. As a contract of life is not a contract of indemnity and, therefore, double insurance is not applied to life insurance. A person can take any number of policies on his life and recover the full amount. For instance A takes policy of life insurance of Rs 50,000 and Rs 1,00,000 from S and T Companies respectively. On expiry of a fixed period, A can recover Rs 50,000 and Rs 1,00,000 from both the S and T Companies so it is right answer here.

Multiple choice

Which of the following is a non-insurable risk?

  1. Risk out of theft <o:p></o:p>

  2. Risk of price fluctuation <o:p></o:p>

  3. Risk out of fire <o:p></o:p>

  4. Risk out of dishonesty from employees

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Right answer because risk of price fluctuation cannot be insured and no policy is available to cover the risk of changes in price of a product. The uncertainity of change in price cannot be forecasted and so it is a non-insurable risk.

Multiple choice

Contract of Indemnity is not applied to

  1. Fire Insurance

  2. Marine Insurance

  3. Life Insurance

  4. Travel Insurance
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

 Right answer Because the life insurance is not a contract of indemnity, because life cannot be indemnified and the amount for which policy is taken is  recoverable. It is a contingent contract. For instance a policy is taken by Mr W of Rs 2 lakhs and he dies the whole amount of Rs 2 lakhs is recoverable.

Multiple choice

Continuation Clause is used in the

  1. Block Policy

  2. Floating Policy

  3. Blanket Policy

  4. Time Policy
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Right answer becasue in this policy the subject matter is insured for a specified period of time, usually not exceeding one year. It contains a ' continuation clause ' that if the the voyage is not completed within the specified period, the risk shall be covered until the voyage is completed. So continuation clause is in this policy.

Multiple choice

In Fleet Policy of marine insurance

  1. Several ships belonging to the same owner are insured for one sum and one premium

  2. The subject matter is insured for a specified period

  3. Subject matter is insured for a particular for a particular voyage irrespective of time involved in it

  4. The risk on land is also covered
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Right answer because in Fleet Policy several ships belonging to the same owner are insured for one sum and one premium. This saves shipping company from the botheration of arranging a seperate policy for each vessel. For instance a shipping company owns four ships and takes one policy for the four ships.

Multiple choice

Insurance refers to

  1. Spreading of risk among a large number of people

  2. Sale and purchase of goods

  3. Storing of goods

  4. Promotion of products for sale
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Right answer Because  insurance spreads the risk among a large number of people. Suppose 100 people take a policy for risk against fire, and Mr A one of those, suffers a loss of Rs 10,000 due to fire, only he would be compensated among 100 people.

Multiple choice

A appoints B as his agent and authorizes him to procure an insurance policy for Rs 15,000 on the factory. B procures a policy for Rs 15,000 on the factory and another for the same amount on the house. A is

  1. bound to pay the premium for the policy on factory only

  2. bound to pay premium on policies of factory as well as house

  3. bound to reject the whole transaction

  4. none of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 A is bound to pay the premium on factory only, as a separate policy is taken by B on the house. But he did not authorize B to take policy on house and the transaction of factory can be separated from that of house. A is bound to pay the premium on policy of factory, so it is right answer here.

Multiple choice

Which of the following statements is correct?

  1. Insurance contract is an indemnity contract.

  2. Insurance contract is a contingent contract.

  3. Insurance contract is a contract of guarantee.

  4. Insurance contract is a wagering contract.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

According to contract law, insurance contract is contingent contract which depends upon happening or non-happening of the event.