RNIS COLLEGE OF INSURANCE

NEW IC 33 MODEL TEST 3

1. What fee is payable by the aggrieved person to the District Consumer Forum while filing his complaint?
a. Rs.250
b. Rs.100
c. 10% of the relief sought and given.
d. No fee is payable. Ans. d
2. State the correct position.
a. If dispute is not settled through mediation, ombudsman will pass an award within 3 months of receipt of
the compliant.
b. If the award is acceptable to the insured it is binding on the insurer to implement the award.
c. If the insured does not accept the award, it is not implementable at insurers level.
d. All the above. Ans. d
3. State the incorrect sentence.
a. In a non-medical case risk cannot be assessed in the absence of medical report.
b. Risk assessment is possible in a non-medical proposal.
c. More than 90% of people who submit proposals on their lives are accepted at ordinary rates.
d. In preferred lives the level of anticipated mortality is likely to be lower than even standard lives. Ans. A
4. State the correct position
a. In Money Back Claim on maturity the balance sum alone is payable along with attached bonus, if any.
b. In the above case full sum assured is payable.
c. Nothing more is payable after the instalments are paid to the assured.
d. On death before the end of the policy in the above case the balance sum is payable. Ans. A
5. As per IRDA Regulations 2002, a decision in a claim is to be taken by the insurer within how many days of
submission of requirements by the claimant?
a. 6 months.
b. 3 months.
c. 45 days.
d. 30 days. Ans. d
6. State the correct position out of the following.
a. No licence is actually needed by the agent if he is authorised by the Insurer.
b. No agent can do insurance business without a valid licence under sec.42 of the Insurance Act 1938.
c. An agent of insurance works for salary in an Insurance company.
d. A Director of an Insurance company can be an insurance Agent. Ans. b
7. Fees payable to the IRDA for issue of licence to act as an agent of an insurance company are
a. Rs.500 b. Rs.100 c. Rs.250 d. Rs.1000 Ans. c
8. Pick out the correct statement.
a. Educational qualification for becoming an agent in all circumstances is 12 th std pass.
b. Educational qualification for becoming an agent in all cases is 10th STD pass.
c. There is no minimum educational qualification for becoming an agent of an insurer.
d. None of the above. Ans. d
9. Pick out the incorrect statement from the below mentioned statements.
a. Insurance agent represents his client in the first place.
b. Insurance agent represents his company in the first place and always.
c. There is a difference between an agent and a broker.
d. Broker represents his client unlike an agent. Ans. a
10. What are the correct statements?
a. Bancassurance model can either be a bank forming an insurance company on its own or acting as an
agent for another Insurance company without capital participation.
b. Such an agency of bank acting for an insurer is known as corporate agency.
c. A commercial bank is not barred from acting as an agent for insurance companies.
d. All the above. Ans. d.
11. Success in life insurance agency career depends on
a. Self-motivation for accepting challenges in the profession with fire in his belly.
b. Positive self-image with high morale.
c. A spirit of entrepreneurial skill
d. All the above. Ans. d.
12. Four major areas of unethical behaviour are
a. Misrepresentation.
b. Illustrations without giving both optimistic and conservative estimation of returns.
c. Replacement of an existing policy by a fresh policy without any specific need.
d. All the above Ans. d.
13. Which is correct
a. Prospecting is building list of persons who can be approached for life insurance.
b. Marketing includes an exercise to meet the account holders of a bank.
c. Meeting known and familiar people who can give an agent interview for life insurance purposes is
useful.
d. All the above. Ans. d.
14. Qualified prospects are those people who
a. Have a need for life insurance.
b. Meet the underwriting requirements.
c. Can be approached for this purpose.
d. All the above. Ans. d
15. In Needs-analysis the following act is done
a. Location of areas where people need life insurance protection.
b. Identifying people who may work as agents.
c. Estimating assets of prospects.
d. Estimating the net worth of prospects. Ans. a
16. What is not a true index of service quality?
a. Reliability b. Smartness c. Empathy and understanding. d. Responsiveness. Ans. b
17. Identify the incorrect statement.
a. In interview of the prospect agent is knowledge alone is not important.
b. Listening is not important as the prospect may not know much about life insurance.
c. The agent should avoid being judgmental. Ans. b.
d. It is necessary for the agent to pay attention to what the prospect says as also to his body language.
18. For effective interaction for one with his workers and customers what special ability is needed?
a. Hard skills of being a good taskmaster.
b. Soft skills
c. Negotiating skills for better outcomes.
d. Questioning skills. Ans. b
19. What is the jurisdictional limit of a District Forum in Consumer Disputes case?
a. Rs.20 lakhs.
b. Rs.50 lakhs.
c. Rs.100 lakhs.
d. There is no limit. Ans. a
20. Deficiency in service giving rise to a customer dispute arises in the following situations.
a. If the shopkeeper charges a price higher than MRP.
b. Faulty products including expiry date crossed while selling.
c. Allergy warning not stated clearly on the front of a drug bottle.
d. All the above. Ans. d.
21. Which is incorrect?
a. Ombudsman is appointed by the central Govt under powers of the Insurance Act38 and under
Redressal of Public Grievance Rules 1998.
b. The recommendations of the Ombudsman are always binding on the insured
c. The Ombudsman can act as a mediator by mutual agreement between the insurer and the insured.
d. If mediated, the decision of the Ombudsman is final whether to accept or reject the compliant. Ans. b.
22. Which is correct
a. By transferring risks to an insurer one can be careless about ones assets.
b. If there is a loss it can lead to payment of money by the insurer.
c. Potential loss to assets can be ignored.
d. If assets are insured the owner of such assets can have comfort of peace of mind and look after his
business without worries. Ans. D
23. Identify the correct statement
a. Assets are protected by insurance
b. Insurance prevents loss to assets.
c. Insurance compensates for the loss of the value of assets.
d. Probabilities of loss are considerably reduced by insurance. Ans. C
24. Of 400 houses costing each Rs.20, 000 if on an average 4 houses are damaged in fire causing a total loss of
Rs80,000 what should be the annual contribution of each house owner.
a. Rs.800
b. Rs.200
c. Rs.100
d. Rs.400 Ans. b
25. Which is correct
a. In insurance subsidy plays a part in fixing premium.
b. Losses are shared by subsidy.
c. A few persons have to share the loss of many.
d. Losses of a few persons are shared by many persons thus reducing the burden of contribution to loss
compensation. Ans. d
26. Which of the following statement is correct?
a. Endowment assurance has no saving element.
b. Whole Life Plan has no saving element at all.
c. Term Insurance has little or no saving element.
d. Money Back plan has no savings element. Ans. c
27. Choose the incorrect sentence out of the following ones.
a. Life Insurance policies are contracts of indemnity.
b. Life insurance contracts are valued contracts and not contracts of indemnity.
c. In Non-Life contacts there is no assurance.
d. There is no certainty of risk occurrence in non-Life contracts. Ans. A
28. Which is an advantage in cash value contracts?
a. Reduced returns on account of inflation.
b. Low accumulation in earlier years.
c. Lower yields.
d. Secure and safe investment Ans. D
29. Pressure applied on parties to the contract through criminal means are
a. Fraud
b. Undue influence
c. Coercion
d. Mistake. Ans. c.
30. Define the concept of Uberrima Fides.
a. Not disclosing medical facts and information in the proposal.
b. Not revealing all material facts known only to the proposer in the proposal.
c. Paying premium in time and as and when it is due.
d. Fully disclosing all material facts about the proposed by him in the proposal. Ans. D
31. Which of the following is not a valid consideration for a contract?
a. Bribe.
b. Property.
c. Jewellery.
d. Money cannot. Ans. A
32. Which of the two decisions are involved in a savings proposition?
a. Retention of risk and reduced consumption.
b. Gifting and accumulation
c. Spending and accumulation
d. Postponement of consumption and parting with liquidity. Ans. D
33. Which of the following is a contingency product
a. Shares
b. Bonds
c. Life insurance
d. Bank Deposits. Ans. c
34. Discretionary income is not maximised by
a. Debt restructuring
b. Transfer of loans.
c. Restructuring of investment
d. Purchase of insurance policy. Ans. D
35. State which is correct sentence in the following ones.
a. Higher premium will give the beneficiary higher benefits at the time of claim.
b. With lower premium in a life insurance policy higher benefits are available to the beneficiary in a claim.
c. Higher premium in a life policy will result in lower benefits to the claimant.
d. None of the above. Ans. a
36. What is the essential purpose of Life Insurance?
a. it is tax rebates.
b. It is a good investment.
c. It is protection for loss of economic value of human life in the event of death or disability.
d. It leads to wealth accumulation. Ans. c
37. State the correct statement out of the following ones.
a. Credit Life Insurance policy is an endowment plan.
b. Mortgage Redemption plan is also an endowment plan.
c. Whole life plan is also an endowment plan.
d. Money Back plan is a kind of endowment plan. Ans. d
38. Which is correct
a. Inter-temporal allocation of resources refers to timing of such decisions for better returns.
b. It refers to temporary allocation of resources.
c. It refers to allocation of resources over time
d. In this method resources are diversified in allocation. Ans. C
39. State the incorrect statement
a. Cash value is not guaranteed
b. Minimum death benefit is guaranteed in variable insurance plans.
c. Where to keep the money invested is the decision of the policyholder
d. Flexible premium payments are allowed in such policies. Ans. b
40. Unbundling of life insurance products refers to
a. Correlation of life insurance with bonds.
b. Correlation of life insurance with equities.
c. Combination of protection with savings element.
d. Separation of protection and savings element. Ans. d
41. State the correct option
a. Amount of annuity depends on duration of annuity payments, principal sum of money, investment
period and rate of return
b. Amount of annuity does not depend on the principal sum of money.
c. Investment period has no relation to the amount of annuity.
d. Annuity is independent of rate of return. Ans. a
42. State the correct statement out of these.
a. Every pension is a kind of annuity
b. Every annuity is also a pension
c. Pension and annuity are one and the same
d. Every pension is not an annuity. Ans. A
43. Which of the following schemes have an element of Govt admn?
a. Insurance pension fund
b. Public pension fund
c. Private pension fund.
d. Market pension fund. Ans. B
44. Pick out the correct sentence from the flowing ones.
a. Family floater policy does not cover parents
b. Family floater is for self and spouse only.
c. Family floater policy covers self, spouse, parents and dependants
d. Uncle and aunt can be covered in a family floater. Ans. C
45. Which is correct
a. It may lead to community rating.
b. It may lead to abuse of health insurance cover.
c. Moral Hazard in health insurance would mean adverse selection
d. Risk pooling will be there in moral hazard. Ans. c
46. Identify the correct statement out of the following ones.
a. In emergencies insurer may waive preauthorisation for entering into a hospital for treatment.
b. In all cases preauthorisation either by the insurer or TPA is a must before getting admitted into a
hospital.
c. There is no provision for nomination in a health insurance cover.
d. Summary of benefits, terms and conditions for each product in a health cover is not mandatory. Ans. A
47. In keyman insurance policy the basis for issue of such a policy is
a. Income of the keyman.
b. History of the business.
c. Profitability of the business and the role of the keyman in that profitability.
d. State of the national economy and rate of inflation. Ans. c
48. What is the jurisdictional limit of a District Forum in Consumer Disputes case?
a. Rs.20 lakhs.
b. Rs.50 lakhs.
c. Rs.100 lakhs.
d. There is no limit. Ans. a
49. Which is incorrect of the following?
a. Being judgmental is the opposite of listening.
b. Sometimes prospects objection to accepting the agents recommendation may arise out of past
experience of hurt ego and unfair dealings by some others connected with insurance.
c. Genuine interest in the other person is always respecting him in social relationships as also in insurance
dealings.
d. Prospect should feel obliged to the agent for being enlightened on life insurance. Ans. D
50. Pick out the incorrect statement.
a. Life insurance is sold, not bought.
b. Selling is neither a science nor an art.
c. In prospecting for life insurance, members of a community association will be classified as a natural
market.
d. Loss assessment is not part of sales process. Ans. b