Banking Financial Awareness · General Awareness

Insurance Policies and Claims

1,580 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

Multiple choice organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

State the following statement is True or False:
Insurance means protection against possible risk of loss.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Uncertainties have led to the formation of the concept of insurance. Insurance is a contract where one party agrees to indemnify the loss of other party at the time of loss, for a consideration. The principle of indemnity in an insurance contract safeguards the insured to put him in the same position that he/she would have been in if the loss had not occurred. However, the principle of indemnity does not apply to life insurance contracts. Thus insurance is a protection against possible risk of loss.

Multiple choice organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

Insurance is a form of risk management.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Insurance is a form of risk management. It is a substitution of the premium for a risk of large possible loss. Such loss is spread over a large number of policyholders exposed to the same risk.

Multiple choice organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

The fee charged by insurance companies is commonly known as 'premium'.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Uncertainties have led to the formation of the concept of insurance. Insurance is a contract where one party agrees to indemnify the loss of other party at the time of loss, for a consideration. Such consideration is generally called as 'premium'. It is the fee charged by insurance companies on the value insured.

Multiple choice organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

State the following statement is True or False:
Premium is a regular payment made by he insured to insurer.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Insurance is a contract where one party agrees to indemnify the loss of other party at the time of loss, for a consideration. Such consideration is generally called as 'premium'. It is the fee charged by insurance companies on the value insured. Premium is paid to the insurer at regular intervals.

Multiple choice organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

State the following statement is True or False:
The amount payable by the insured to the insurer in installments for protection against risk is premium.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Insurance is a contract where one party agrees to indemnify the loss of other party at the time of loss, for a consideration. Such consideration is generally called as 'premium'. It is the fee charged by insurance companies on the value insured. Premium is paid in installments to the insurer at regular intervals.

Multiple choice organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

State the following statement is True or False:
The principle of insurance under which the compensation paid to the insured which is equal to the actual loss is indemnity.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
According to the concept of indemnity, the insurer undertakes to put the insured, in the event of loss, in the same position that he occupied immediately before the happening of the uncertain event. In other words the insurer undertakes to compensate the insured for the loss caused to him/her due to damage or destruction of property insured. 
The compensation payable and the loss suffered are to be measured in terms of money. The principle of indemnity is not applicable to life insurance.
Multiple choice organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

State the following statement is True or False:
A document containing terms and conditions of insurance contract is called policy.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Insurance policy is a formal and legal document issued by the insurance company to the insured. It describes the terms and conditions relating to the particular policy. 

It includes details about the risks covered, duration of coverage, amount of premium, mode of payment of premium, etc.

Multiple choice organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

One who calculates insurance and annuity premium is known as _____.

  1. Investor

  2. Insurer

  3. Actuary

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

One who calculate insurance and annuity premium is known as actuary. Actuary basically deals with management and measurement of risks and uncertainty. An actuary is often described as an business professional.

Multiple choice organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

Which one of the following generalisations can be drawn from the principle of subrogation?

  1. It is the principle by which the insurer, after having paid the loss to the insured, steps into the shoes of the insured person and acquires all rights and remedies as the insured would have enjoyed regarding the said loss

  2. A person who keeps a stock of inflammable material in his premises

  3. The insured can get only the compensation against the actual loss and he can't make profit out of insurance

  4. In marine insurance the immediate cause and not the remote cause shall be considered for bearing the loss
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In principle of subrogation the insurer, after having paid the loss to the insured, steps into the shoes of the insured and acquires all rights and remedies as the insured would have enjoyed regarding the said loss. 


It basically means that insurer has a legal right to claim any future gains from the property after the said loss for any recovery/settlement. 

Multiple choice business organisation and correspondence commerce and modern civilization history of commerce in india hindrances of commerce historical background of commerce in the sub-continent

Insurance removes the hindrance of __________.

  1. time

  2. finance

  3. threat

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

Hindrance of person refers to the problem of contact between producers and consumers commerce removes. This hindrance is removed by trade. 

Hindrance refers to the problem of distribution of goods at distant places without loss. Commerce removes this hindrance by transportation.

Multiple choice commercial studies industrial relations, trade unions and social security concept, scope and social security in india concept of social security insurance - introduction and importance

Which of the following is an example of group insurance in India?

  1. Workers Compensation Insurance

  2. Group Pension/Superannuation Plans

  3. Public Liability Insurance

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Following are examples of group insurance in India:
a) Workers Compensation Insurance
b) Group Pension/Superannuation Plans
c) Public Liability Insurance
Group insurance policy is a type of policy by which a group of people subscribe for one single policy. Usually group insurance offers discounts on the basis of number of members.
Multiple choice commercial studies industrial relations, trade unions and social security concept, scope and social security in india concept of social security insurance - introduction and importance

_____ policy compensates the insured groups members in case they meet with an accident during their employment.

  1. Group Personal Accident Insurance Cover

  2. Group Health Cover

  3. Group Term Life Cover

  4. Workers Compensation Insurance
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Group Personal Accident Insurance Cover policy compensates the insured groups members in case they meet with an accident during their employment. This policy provides full coverage in the event of death or disablement of the policy holder. Group Personal Accident Insurance Cover policy also provides discount on the number of members.

Multiple choice commercial studies industrial relations, trade unions and social security concept, scope and social security in india concept of social security insurance - introduction and importance

____ covers the hazards faced by travelers, including theft of documents and luggage.

  1. Term Life Cover

  2. Health Cover

  3. Travel Insurance

  4. Personal Accident Insurance Cover
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Travel insurance covers the hazards faced by travelers, including theft of documents and luggage.Travel insurance covers all the costs and losses associated with traveling. It is a useful protection for those travelling domestically or abroad.

Multiple choice accountancy accounting using data base management system (dbms) applications of dbms in generating accounting information accounting and database management system accounting and database system

Which category do you think an insurance loan would go under?

  1. Assets

  2. Liabilities

  3. Expenses

  4. Income
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

An insurance loan represents an amount borrowed against an insurance policy, which is a debt that must be repaid, thus classifying it as a liability.

Multiple choice book keeping and accountancy reserve and fund meaning and characteristics of reserves reserves provisions and reserves

In the case of marine insurance reserve for unexpired risk is _______.

  1. 50%

  2. 100%

  3. 40%

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

There is an unexpired liability under various policies which may occur during the remaining term of the policy beyond the year and therefore, a provision for unexpired risks is made at normally 50% in case of Fire Insurance and 100% of in case of Marine Insurance.