RNIS COLLEGE OF INSURANCE

NEW IC 33 MODEL TEST 4

1. Insurance needed by a person can be determined by
a. Human Life Value method
b. Life Term proposition method
c. Future Life value method.
d. Human Economic value method Ans. A
2. Insurable interest is not present in the following case
a. A person insuring his own life.
b. A father taking out a life policy on the life of his son.
c. A person insuring his colleague.
d. Employer taking a life insurance policy on his employees. Ans. C
3. State which of the following ones is a transactional product.
a. Bank Deposit. b. Life Insurance c. Shares in stock market. d. Bonds and debentures Ans. A
4. Term Policy is ideally suited for
a. One who needs periodical sums of money in his life?
b. One who has a high insurance budget.
c. One who has a low insurance budget.
d. One who looks for high returns. Ans. c
5. State which is correct.
a. Policyholder cannot earn market rate of interest on his cash value.
b. In universal Life plan policyholder can vary payments of premium.
c. Universal Life plan is a traditional plan of assurance
d. Variable life insurance is a temporary plan of insurance. Ans. b
6. Which one of the below is not a case of annuity?
a. Payment of Rs.10, 000 received today last year on the same day and likely payment of a similar sum by
the insurer next year.
b. Electricity Bill.
c. Car payments made by the loanee car owner.
d. Periodical mortgage payments. Ans. b
7. State the correct statement out of the following ones.
a. Primary care means acute care to a patient in a hospital
b. It means extensive care provided to a patient in a acute setting.
c. First point of contact for health care to a needy person.
d. Care provided by experts to solve a medical problem faced by a patient. Ans. c
8. State the incorrect statement of the following ones.
a. Premium for an MRP as a collateral for a bank loan need not be paid as the bank is expected to pay the
same.
b. Keyman life policy can compensate for losses incurred due to stoppage of work following the absence of
the keyman from work.
c. Keyman life policy proceeds can be set off against lost income from lost business.
d. Keyman can provide compensation to protect profits. Ans. a
9. Mortgage Redemption Insurance is nothing but
a. It is a constant term insurance
b. It is an increasing term insurance.
c. It is savings insurance like universal life insurance.
d. Decreasing Term Insurance Ans. d.
10. Which is correct?
a. Extra benefits are allowed by the insurer in a life policy on payment of an extra premium
b. Double Accident benefit is a free item in a life policy.
c. Permanent Disability, like DAB, is also a free benefit not chargeable.
d. Extra premium for health and extra premium for extra benefits are like each other. Ans. A
11. State the incorrect statement of the following ones.
a. In a term insurance the benefits are fixed throughout the duration.
b. In an MRI the insurance benefit on account of cover will decrease year after year.
c. There is no material difference between a term insurance policy and an MRI as far as benefits are
concerned.
d. MRI is suitable for a loan sought from a bank as a mortgage cover. Ans. c
12. What are the factors in determining premium in a life policy?
a. Policy reserves.
b. Mortality.
c. Expenses.
d. All the above. Ans. d
13. Surplus is defined as
a. Excess value of assets over liabilities.
b. When turnover of the insurer is high.
c. Excess value of liabilities over assets.
d. Excess of liabilities. Ans. a
14. State the correct statements.
a. KYC document is to be collected by the insurer from the proposer.
b. Identity of the proposer is the main purpose of KYC.
c. Pan card is a proof of ones identity while seeking life cover.
d. All the above. Ans. d.
15. Identify the correct statement
a. Bonus is not allowed on surrender of a policy.
b. In compound reversionary bonus it is a percentage of basic benefit and already attached bonus.
c. Terminal bonus and compound bonus are one and the same.
d. Persistence bonus is allowed by the insurer at its discretion in certain cases. Ans. b
16. State which is correct out of the following
a. Horoscope like a certificate of baptism is a standard age proof.
b. Horoscope like certified extract from a family bible as to the date of birth is a standard age proof
c. Horoscope like a marriage certificate issued by a Roman catholic church is a standard age proof.
d. Horoscope is a non-standard proof of age for life insurance purposes. Ans. d
17. What is the incorrect statement out of the following ones?
a. Agents report is not always compulsory.
b. Agents report should contain details of proposers health, habits, occupation, income and family.
c. Agent is a primary underwriter from insurers point of view.
d. Prospectus is a legal document. Ans. a
18. State the incorrect statement.
a. Money laundering is an illegal practice of bringing into nations economy by hiding the source of the
money and the true identity of the person involved.
b. Life Insurance Company will return the entire premium under free look provisions.
c. Moral Hazard is not easily assessable unlike physical risk of the proposer.
d. Standard and non-standard age proofs are not mutually interchangeable. Ans. b.
19. State the incorrect statement
a. In the event of loss of policy document, no fresh proposal needed.
b. The insurer will in such an event issue a duplicate policy without making any change in the contract.
c. No fresh underwriting is involved for issue of a duplicate policy.
d. The assured has to approach a competent court of law and obtain an order directing the insurer to issue
a duplicate policy. Ans. d.
20. The first part of the policy document deals with
a. Policy claim settlement procedure.
b. Policy schedule.
c. Standard provisions.
d. Specific policy provisions. Ans. b
21. State the incorrect of the following.
a. Amount of premium need not be shown; only sum assured is to be shown.
b. There is no provision for name of the nominee in the policy.
c. Mode of payment of claim is also shown in the policy.
d. Date of birth of the assured has to be shown in the policy. Ans. c.
22. Out of the following what is the specific provision in a policy?
a. First Pregnancy clause.
b. General provisions.
c. Policy schedule.
d. Standard provisions. Ans. a
23. What is correct
a. Loan is a privilege available only in some policies.
b. If interest on loan is not paid, it becomes part of the loan.
c. Nomination can be made by the proposer in the proposal itself.
d. All the above. Ans. d.
24. Pick out the correct statement.
a. Extension of premium paying period is normally allowed as an alteration in a policy.
b. Increase in sum assured will be welcomed as a preferred alteration in a policy.
c. Splitting of a policy into two or more is allowed as an alteration.
d. Notice is not always necessary in an assignment to be given by the assured to the insurer. Ans. c.
25. What is the duration of grace period in a policy?
a. 30 days. b. One month c. One month or 30 days. d. 31 days. Ans. d.
26. Pick out the correct ones.
a. Nomination can be changed at will by the assured during the course of the policy.
b. Assignment can also be changed at will by the assured without referring to the assignee
c. Witness for an assignment is not mandatorily required.
d. Like nomination, assignment can also be effected in the proposal Ans. a
27. Who of the following may not qualify for a non-medical underwriting?
a. An IT manager in TCS.
b. A bank officer for a large sum proposed.
c. A worker aged 50 in an underground coal mine.
d. A manager in a shopping mall. Ans. c
28. In which case is the moral hazard present?
a. A Bank manager with moderate occasional consumption of alcohol.
b. A race goer with betting habits and usually a heavy consumer of alcohol.
c. A university professor asking for a large cover on his life.
d. Where in a proposal the nominee is a near dependant of the proposer. Ans. b.
29. Pick out the correct statement.
a. Personal history and family history of a proposer are equally important.
b. In a non-medical proposal family history is not asked for.
c. Large sum assured is not a factor to be considered in non-medical underwriting.
d. Moral Hazard is not relevant in non-medical underwriting . Ans. a
30. What is defined an early claim?
a. Whenever the claim arises before the end of the policy term it is an early claim.
b. If the claim arises after 5 years, it is an early claim.
c. All death claims are early claims.
d. A claim by death within three years of commencement. Ans. d
31. State the incorrect sentence
a. No Maturity claim is paid on the close of Term insurance.
b. In Money Back policy interim payments are made after certain frequencies.
c. In Money back policy on death within the policy duration full sum assured is payable without deducting
the interim instalments already paid.
d. There is no such thing as rider benefit in a policy contract. Ans. d.
32. In a ULIP claim before the date of maturity will give
a. Higher of the sum assured or the fund value.
b. Lower of the sum assured or the fund value.
c. Return of premiums with savings bank rate of interest.
d. Surrender value. Ans. a
33. State which is correct.
a. There is no difference between an individual agent and a corporate agent as both of them represent an
insurance company.
b. An agent can work for a life insurer as also a non-life insurer, either individually or together.
c. A composite agent means an agent working for one life and one non-life insurer.
d. All the above. Ans. d.
34. Who will issue licence to an applicant on his certification as per regulations?
a. Designated person in the insurers office as authorised by the IRDA.
b. An officer of the IRDA.
c. Controller of Insurance in the Ministry of Finance.
d. An official of the Insurance Institute of India. Ans. a
35. Identify the incorrect statement out of the following ones.
a. There is a bar on appointment of a minor as agent of an insurance company.
b. A person found guilty of fraud or any criminal offence is ineligible for appointment as agent of an
insurer.
c. A minor can be appointed agent of a life insurance company.
d. No applicant is exempt from mandatory training before appointment as agent. Ans. c
36. What is correct?
a. Agency licence is to be renewed once in 3 years.
b. An agents licence has to be renewed after 5 years of issue.
c. A licence has to be renewed once in 10 years.
d. There is provision for life time licence, once issued. Ans. a
37. Identify the correct options.
a. Life insurance selling is different from selling of other items.
b. Life insurance involves concept selling and hence challenging.
c. An agent has to create in his clients mind need for life insurance.
d. All the above. Ans. d.
38. Identify two most important and basic qualities for a good and successful agent.
a. Self-respect and high knowledge.
b. Empathy and ego drive.
c. Wealth and desire to increase it through life insurance agency.
d. Blessings of elders and help from bosses. Ans. b
39. Direct marketing involves
a. Bancassurance
b. Insurance agents.
c. Telemarketing
d. All the above categories. Ans. c
40. An agent can work on the following basis for successful results.
a. Natural market is a source of market for a life insurance agent.
b. A satisfied client can be an effective referral to an agent for further references.
c. Family and friends can offer an easy opportunity for being contacted for life insurance selling.
d. All the above. Ans. d.
41. Pick out the incorrect statement.
a. Being open, confident and positive is not so important for an agent.
b. Being punctual for appointments is important for an agent.
c. Presenting oneself appropriately is important for an agent.
d. Being fully prepared for the interview with facts and details is important. Ans. a
42. Active listening is
a. Paying close attention to the speaker and occasionally smiling or nodding ones head.
b. Giving ones comments on the points raised by the other party.
c. While being attentive to the speaker, giving occasional nod and smile along with feedback.
d. All the above. Ans. d
43. Which of the following is not a tangible good?
a. Life Insurance.
b. A television set.
c. Iphone.
d. A farmhouse. Ans. a
44. In Need Analysis the steps followed are
a. Analysis of present and future needs of the client
b. Financial value of the above needs.
c. Gap between funds needed for goals fulfilment and the available funds with the client.
d. All the above. Ans. d.
45. Identify the incorrect statements.
a. Consumer Disputes involving private insurance companies can be heard by Consumer Forum or
commission.
b. Life Insurance does not come under Consumer Protection Act 1986.
c. Complaints can be lodged against private insurers as also public sector companies/corporation like LIC.
d. Complaints can be lodged only life insurance companies as also non-life insurance companies. Ans. b.
46. The limit of the National Consumer Disputes Commission is
a. Rs.100 lakhs.
b. Rs. No limit[.Unlimited ]
c. Rs.150 lakhs only.
d. Rs.75 lakhs. Ans. b
47. Which is incorrect statement?
a. Complainant has to approach a consumer forum before moving the Ombudsman.
b. The complaint has to be lodged with in two year of the insurer rejecting the compliant.
c. There is no separate financial limit of various forum and commissions
d. All the above. Ans. d.
48. State which of the following sentences is correct.
a. There is an Ombudman for defined territorial limits.
b. There is one Ombudsman for each state in India.
c. There is only one Chief Ombudsman for the whole country.
d. Ombudsman has no upper financial limit. Ans. a
49. Identify the correct option out of the following.
a. Licence for agency is issued by the Insurance company.
b. Licence for a non-life insurance agency is issued by SEBI.
c. Life Insurance agency licence is issued by Life Insurance Council.
d. Agency licence in all cases is issued by the IRDA through the Designated Parson of the Insurer. Ans. d
50. Identify the correct statement.
a. Closing a sale is the art of persuading the prospect to buy now based on the recommendation of the
agent.
b. Offering alternatives as to mode of payments will quicken the closing.
c. Undue pressure tactics on the prospect are to be always avoided in a close of sales interview.
d. All the above Ans. d.