1.Which one of the following statements is correct?
- A life insurance policy is a contract, enforceable in a court of law *
- A life insurance policy is not required to be stamped
- Both the statements are correct
- Both the statements are wrong
2. Which one of the following statements is correct?
- The Principle of Utmost Good Faith applies only to life insurance
- The Principle of Utmost Good Faith applies only to non-medical cases
- The Principle of Utmost Good Faith is operative only for two years
- All the above statements are incorrect *
3. The Principle of Utmost Good Faith is meant to protect the interests of
- the insurer
- the community of policyholders *
- the shareholders
- none of the above
4. The Principle of Utmost Good Faith is important to ensure
- that the premium charged is correct
- that no one gets an undue advantage
- that there is no adverse selection
- all the three factors mentioned above *
5. The responsibility to comply with The Principle of Utmost Good Faith rests with
- the agent
- the proposer *
- the life to be insured
- all the three
6. The Principle of Utmost Good Faith does not apply to
- facts of common knowledge
- facts of law
- facts which are not material for underwriting
- all the three kinds of facts mentioned above *
7. Which one of the following statements is correct?
- Capacity to contract applies to both parties.
- Consent to the contract can b e implicit
- Both the statements are correct *
- Both the statements are wrong
8. Which one of the following statements is correct in life insurance?
- The Principle of Good Faith continues to operate till the policy becomes a claim
- Facts which happen after the policy has commenced, need not be reported *
- Illnesses after the policy has commenced must be informed to the insurer
- All the above three statements are correct.
9. A life insurance policy becomes invalid if
- there is a change in occupation after the policy has commenced
- if the policyholder changes his residence to another country
- the statements in the proposal are found to be substantially wrong *
- the insured person becomes sick after issue of policy
10. The Principle of Utmost Good Faith will operate in an existing policy
- every time the premium is paid
- if the policy has lapsed and it has to be revived *
- if the insured person falls sick and is admitted to hospital
- if the insured person changes his job
11. If the life to be insured falls sick, that fact has to be informed to the insurer
- if it happens within two years of commencement of risk
- if it happens before the First Premium Receipt is issued *
- if it happens before the policy document is issued
- only if there is a specific query from the insurer
12 Which one of the following statements is correct?
- Duty to disclose applies till the claim arises in life insurance
- Insurers are responsible for adverse selection
- Both the statements are correct
- Both the statements are wrong *
13. The existence of insurable interest is decided by
- the interest which the proposer has in the asset being insured
- the relationship between the proposer and the object of insurance
- the legal decisions on these matters
- all of the above *
14. Which of the following risks are insurable?
- Speculative
- Economic *
- Sure to happen
- All of the above
15. Insurable interest is
- defined in the Insurance Act
- defined in the Contracts Act
- defined by the IRDA
- not defined in any written law *
16. In the case of life insurance, insurable interest should exist
- at the inception of the policy *
- at the time of a claim
- at the time of every renewal premium payment
- all the above occasions
17. In the case of life insurance, the principle of insurable interest operates
- in the same way as in marine insurance
- in the same way as in fire insurance
- in the same way as in motor insurance
- differently than in other forms of insurances *
18. Which of the following statements is correct?
- The principle of indemnity does not apply to life insurance policies *
- The principle of indemnity does not apply to insurance on human beings
- The principle of indemnity does not apply to Third Party Motor insurances
- All the above statements are wrong
19 Which one of the following statements is correct?
- Declaration at the end of the proposal form has no legal sanctity
- Declaration at the end of the proposal is a warranty *
- Both the statements are correct
- Both the statements are wrong
20. Because of the principle of indemnity,
- there would be difficulties in settling claims in general insurance
- there are frequent disputes at the time of settling claims
- there may be attempts to exaggerate the claims
- all the above three may happen *
21. Which one of the following statements is correct, with reference to life insurance?
- The claim payable is subject to the principle of indemnity
- The claim payable will depend on the SA *
- The claim payable will depend on the income of the deceased person
- The claim payable will depend on the size of the family left behind
22. Which one of the following statements is correct, with reference to life insurance?
- The claim can be paid only after verification of the income of the deceased person
- The claim amount should not exceed the loss of income to the family
- The claim amount payable should be determined by a surveyor.
- None of the above statements is true *
23. An insurance contract is valid because
- It is not a wagering contract *
- It promotes socially desirable causes
- It takes care of the destitute
- It provides government with large funds
24. Retention of risk may be done conveniently by
- large corporations *
- small companies
- single individuals
- none of the three
25. In the case of life insurance, the risks
- can be avoided
- cannot be avoided *
- are avoidable through medical science
- are avoidable through proper food habits
26. Which one of the following statements is correct?
- It is difficult to accurately value a human life.
- It is possible to reasonably estimate the value of a human life.
- Both the statements are correct *
- Both the statements are wrong
27. Which one of the following statements is correct?
- The needs of people are different
- The needs of people vary according to life styles
- The needs of people depend on their upbringing
- All the three statements are correct *
28. Which one of the following statements is correct?
- A person who has just retired from a lucrative job may not need life insurance
- A person who has spent twenty years in Dubai may not need life insurance
- A person who has just taken up his first job needs life insurance *
- All the above statements are wrong
29. Which is the right time for taking life insurance?
- When you are about to get married
- Soon after you have got married
- Just when you are joined a new job
- All the three ‘times’ are right *
30. Which one of the following statements is correct?
- A person whose children are well settled does not need life insurance
- A person who has no family does not need life insurance
- Both these statements are correct
- Both these statements are wrong *
31. Which one of the following statements is correct?
- Life insurance helps when one wants to take a loan for a house
- Life insurance helps one to retire a comfortable retired life
- Both these statements are correct *
- Both these statements are wrong
32. In which of the following situations will a life insurance policy come in handy?
- When you want to set up an independent business
- When you want to buy a new house
- In neither of the above situations
- In both the above situations *
33. Which one of the following statements is correct?
- People hesitate to buy life insurance because they are not aware of their needs
- People hesitate to buy life insurance because they prefer to enjoy the present
- Both the statements are correct *
- Both the statements are wrong
34. Which one of the following statements is correct?
- A person with an established business does not need life insurance
- Life insurance is necessary to save income tax
- Both the above statements are correct
- Both the above statements are wrong *
35. Which of the following needs can be met though life insurance?
- Providing for family in the event of sudden death
- To lead a comfortable life in one’s old age
- Completing one’s investment plans
- All the above *
36. Which one of the following statements is correct?
- Many people think that they do not need life insurance
- Many people think that there is no hurry to buy life insurance
- Both the above statements are correct *
- Both the above statements are wrong
37. Which one of the following statements is correct?
- Life insurance helps people to get loans for car or house
- Life insurance helps policyholders to save income tax
- Both the above statements are correct *
- Both the above statements are wrong
38. Which one of the following statements is correct?
- People do not see the need for life insurance as top priority
- People are unwilling to set aside immediate pleasures to secure life insurance
- Both the above statements are correct *
- Both the above statements are wrong
39. Which one of the following statements is correct?
- Term insurance policies are suitable for elderly adults
- A nominee must have insurable interest in the life insured
- Both the statements are correct
- Both the statements are wrong *
40. Which one of the following statements is correct?
- Retention of risk is an alternative to insurance
- Insurable interest exists between partners
- Both the statements are correct *
- Both the statements are wrong
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