ic33 practice test iii

Insurance Institute of India , Pre Agency Examination

Practice Paper 1NameBranch Marks

1 State which of the following statements is correct

a Insurance prevents the risk b Insures compensates losses in fullc Both the above statements are correct d Both the above statements are wrong

2 Insurance is necessary because

a Assets depreciate over time and through usageb Assets may be damaged by external causes c Assets may break down and become unusabled None of the above reasons

3 Insurance works on the principle of

a Sharingb Probabilitiesc Large numbersd All of the above

4 Which one of the following statements is correct in life insurance?

a The principle of good faith continues to operate till the policy becomes a claimb Facts which happen after the policy has commenced, need not be reported c Illnesses after the policy has commenced must be informed to the insurerd All the above three statements are correct.

5 Which one of the following statements is correct, with reference to life insurance?

a The claim payable is subject to the principle of indemnityb The claim payable will depend on the Sum Assured c The claim payable will depend on the income of the deceased persond The claim payable will depend on the size of the family left behind

6 The principle of utmost good faith will operate in an existing policy

a Every time the premium is paidb If the policy has lapsed and it has to be revived c If the insured person falls sick and is admitted to hospitald If the insured person changes his job

7 The premium is loaded because of

a Interest likely to be earnedb Likely expenses c Likely claimsd Age of the insured person

8 Which one of the following statements is correct?

a Bonus is paid along with the survival benefit in a money back policyb Bonus is paid when the money back policy matures c Both the statements above are wrongd Both the statements above are correct.


a The sum of all the premiums paid will be more than the Sum Assuredb The sum of all the premiums paid will be less than the Sum Assuredc Both the above statements are wrong d Both the above statements are correct


a Convertible plan policies do not participate in bonusesb Money back policies are not convertible plan policies c Both the statements above are correctd Both the statements above are wrong


a In industrial assurance plans, the premium is deducted from the pay rollb In salary savings scheme plans, the premium is deducted from the pay roll c Both the statements above are correctd Both the statements above are wrong


a In life insurance, the word ‘rider’ means the person taking part in horse racesb In life insurance, the word ‘rider’ refers to additional clauses c Both the statements above are correctd Both the statements above are wrong

13 State which one of the following statements is correct?

a In group insurance, there is only one proposal to insure many b In group insurance, there is only one policy covering manyc Both the statements above are correct d Both the statements above are wrong


a Convertible plans allow whole life plans to be altered to endowment plans b The option of conversion can be exercised whenever the policyholder chooses toc Both the statements above are wrongd Both the statements above are correct


a The members covered by a group insurance policy changes every yearb The amount of insurance for any member may change from year to yearc Both the statements above are correct d Both the statements above are wrong

16 The system of non – medical underwriting is introduced because

a Medical examiners are not available in all areasb Most of the cases are found to be standard lives acceptable at ORc Of both the above reasons d Of some other reasons

17 Moral hazard may be suspected in cases where

a The life to be insured is oldb The insurance is for a very large amountc In both the above cases d In neither of the above cases


a A ‘clause’ restricts the benefits under the policy b A clause is the same as a riderc Both the statements above are correctd Both the statements above are wrong

19 The FPR is issued when

a The first premium is adjusted in the office b The first premium is deposited in the officec The underwriter makes his decisiond Consent of the proposer is received


a An endorsement may be placed on the policy at the very beginningb The nomination may be made later by an endorsementc Both the statements above are correct d Both the statements above are wrong

21 Which of the following are confidential and will not be given to the proposer?

a The medical reportb The agents’ confidential report to the insurerc The medical referee’s advice d All of the above


a A change of nomination is an alteration requiring insurer’s consent b A change of mode of premium requires insurer’s consentc Both the statements above are correct d Both the statements above are wrong


a The nominee can make a further nomination under the policyb The assignee can make a nominationc Both the statements above are correct d Both the statements above are wrong


a The nominee can make a further nomination under the policyb The assignee can make a nominationc Both the statements above are correct d Both the statements above are wrong


a An assignment is effective as soon as it madeb A nomination is effective when it is registered by the insurerc Both the statements above are correct d Both the statements above are wrong


a In an assignment, property is transferred b When a nomination is made, property is transferredc Both the statements above are correct d Both the statements above are wrong


a Brothers and sisters cannot be beneficiaries under the MWP Act b A policy under the MWP Act is the property of the life insuredc Both the statements above are correct d Both the statements above are wrong

28 Which of these is not enough to claim policy monies?

a Succession certificate

b Probate of willc A court decreed An agreement between the heirs


a Accident and disability benefits are payable along with maturity claimsb Accident and disability benefits are payable along with death claims onlyc Both the statements above are correct d Both the statements above are wrong

30 What is meant by a claim under an insurance policy?

a Any demand made by the policyholder on the insurerb A demand to fulfill the policyholder’s obligationsc A demand to fulfill the insurer’s obligations d All the three above


a Accident and disability benefits are payable along with maturity claimsb Accident and disability benefits are payable along with death claims onlyc Both the statements above are correct d Both the statements above are wrong


a The insurer need not contest court orders relating to policy moneys b The insurers should not sit on judgment between rival claims to policy moneysc Both the statements above are correct d Both the statements above are wrong


a A claim may be paid in instalments only if there is a prior request b A maturity claim may be payable years after the date of maturity c Both the statements above are correct d Both the statements above are wrong


a In ULIPs, the SA must not be less than 1.25 times single premiumb In ULIPs, the SA must not be less than 5 times instalment premiumc Both the above statements are correct d Both the above statements are wrong


a In ULIPs, one can pay additional premium in any year for investment b In ULIPs, if one increases the premium, the SA must also be increased.

c Both the above statements are correct d Both the above statements are wrong


a ULIPs provide for flexibility b ULIPs are better than traditional policiesc Both the above statements are correctd Both the above statements are wrong

37 State which one of the following statements is correct

a An agent should not admit that he does not have a particular informationb An agent cannot know everything that the proposer wants to know c Both the statements above are correct d Both the statements above are wrong

38 Which of the following statements is not correct?

a A life insurance agent should carry the literature with himb A life insurance agent should carry his licence with him alwaysc A life insurance agent should not appear shabbyd All the above statements are correct


a When vital information is not disclosed, the policyholder is benefitedb When a claim is repudiated, the agent’s trustworthiness is affected c Both the statements above are correct d Both the statements above are wrong

40 The Insurance Association

a Conducts examination for agentsb Is constituted by the IRDA actc Is constituted by the Insurance Act d Is none of the above


a It is an offence if an agent gives a rebateb It is an offence if an insurer gives a rebatec Both the statements above are correct d Both the statements above are wrong

42 Which of the following matters can be referred to the Ombudsman?

a Dispute on whether a premium had been paid in time or notb Dispute on whether the policy should be treated lapsed or notc Complaint that the enquiries being made are unjustified and delaying the claim

d All of the above

43 Premium CalculationCalculate quarterly premium (rounded off to the next higher rupee) on the basis of the following data.S.A Rs. 50,000/- , Date of maturity 24.12.2036. - Term 30 years.Date of birth - 28.06.1979, Mode rebate for yearly Rs 1.50 per thousand, half yearly Rs. 1.00, quarterly nil and monthly 5 % extra. SA Rebate Rs. 1.50 per thousand for SA Rs. 50,000/- and above.Tabular premium For age nearer birthday 26 -Rs. 26.46 For age nearer birthday 27 -Rs. 27.08 For age nearer birthday 28 -Rs. 28.15

a 312b 320c 331d 339

44 Calculation on PV or SV or LoanFind out loan available at 90% of surrender value on the basis of following data, (the answer to be rounded off to the next lower rupee) SA. Rs 30,000 DOC 15.6.1992 Endowment with profit - 30 years Due date of last premium paid 15-06-2007 mode half yearly Accrued bonus Rs.750/- per thousand SA. SV factor 23%

a 3303b 3388c 7866d None of these

45 Claim Calculation

Calculate death claim amount on the basis of data given below if life assured dies in the 25th year of the policy. Money back policy SA Rs, 50000. Term 25 years Survival benefits of 15% each paid at the end of 5th, 10th, 15th, and 20th years. Accrued bonus Rs 965 per thousand SA. Interim bonus Rs 25 per thousand SA

a 68250b 69500c 98250d 99500

Correct Answers Practice Paper 1

1 d 16 c 31 d2 b 17 c 32 c3 d 18 a 33 b4 b 19 a 34 c5 b 20 c 35 a6 b 21 d 36 a

7 b 22 d 37 b8 b 23 d 38 d9 c 24 d 39 b

10 b 25 c 40 c11 b 26 a 41 c12 b 27 a 42 d13 c 28 d 43 b14 a 29 d 44 c15 c 30 c 45 d

Your Answers Practice Paper 1

1 0 16 0 31 02 0 17 0 32 03 0 18 0 33 04 0 19 0 34 05 0 20 0 35 06 0 21 0 36 07 0 22 0 37 08 0 23 0 38 09 0 24 0 39 0

10 0 25 0 40 011 0 26 0 41 012 0 27 0 42 013 0 28 0 43 014 0 29 0 44 015 0 30 0 45 0

Total Marks 0

RESULT FAIL

Which one of the following statements is correct, with reference to life insurance?

Calculate quarterly premium (rounded off to the next higher rupee) on the basis of the following data.

Date of birth - 28.06.1979, Mode rebate for yearly Rs 1.50 per thousand, half yearly Rs. 1.00, quarterly nil and monthly 5 % extra. SA Rebate Rs. 1.50 per thousand for SA

Term 25 years Survival benefits of 15% each paid at the end of 5th, 10th, 15th, and 20th years.



1 The asset, which is a human being, perishes when

a He diesb He becomes disabled to workc He retires from workd In all the above situations

2 Life insurance is better than other avenues of savings in respect of

a Marketabilityb Liquidity c Transferabilityd All the three above


a Trustb Sharingc Randomnessd All of the above


a People hesitate to buy life insurance because they are not aware of their needsb People hesitate to buy life insurance because they prefer to enjoy the presentc Both the statements are correct d Both the statements are wrong


a Declaration at the end of the proposal form has no legal sanctityb Declaration at the end of the proposal is a warranty c Both the statements are correctd Both the statements are wrong


a Capacity to contract applies to both parties.b Consent to the contract can b e implicitc Both the statements are correct d Both the statements are wrong

7 When interest rates fall, the premium charged by an insurer are likely to

a Increase b Decreasec Remain the samed Neither increase or decrease

8 The premium rates printed in the promotional literature are

a Risk premiumsb Net premiumsc Office premiums d None of the above

9 In life insurance, profit is determined by

a The accountant who prepares the balance sheetb The actuary who makes a valuation c The auditor who certifies the annual accountsd None of the above three persons


a Every plan of insurance is a combination of two basic plans b The name given to a plan indicates the benefits available under the planc Both the statements above are correctd Both the statement s above are wrong

11 Who is benefited if a policy is under the salary savings scheme?

a The policyholderb The insurerc The agentd All the three above


a There is no difference between a term assurance plan and a Whole Life planb A Whole Life plan is a term assurance plan with an indefinite term c Both the statements above are wrongd Both the statements above are correct


a A master policy is issued in a group insurance policy b Each member in a group policy pays the premium directly to the insurerc Both the statements above are correctd Both the statements above are wrong

14 Which one of the following statements is true with regard to Children’s policies?

a The ownership of the policy changes on the deferred dateb The ownership of the policy changes on the vesting date c Both the above statements are wrongd Both the above statements are correct.


a A money back type of policy is a variable insurance policyb A convertible policy is a variable insurance policyc Both the statements above are correctd Both the statements above are wrong


a The agent is expected to make his report commenting on the risk factorsb The agent’s report is important for the underwriterc Both the statements above are correct d Both the statements above are wrong


a The underwriter assesses the riskb No policy can be issued without the underwriter’s decisionc Both the statements above are correct d Both the statements above are wrong


a A ‘clause’ restricts the benefits under the policy b A lien operates for a specific period c Both the statements above are correct d Both the statements above are wrong

19 The date of issue of the FPR indicates

a The date when the risk effectively begins b The date when the next premium falls duec The date when the policy will commenced None of the above


a An endorsement may be placed on the policy at the very beginningb The nomination may be made later by an endorsementc Both the statements above are correct d Both the statements above are wrong


a The proposal must be signed in the language in which it is printedb The proposal can be signed in any language c Both the statements above are correctd Both the statements above are wrong


a The policy has to be given to the insurer at the time of surrenderb The policy has to be given to the insurer at the time of taking a loanc Both the statements above are correct d Both the statements above are wrong


a On revival, the relevant SA for underwriting is the original SAb On revival, the relevant SA for revival is the original SA less paid up value c Both the statements above are correctd Both the statements above are wrong


a Vested bonus is also reduced along with SA in paid up casesb Paid up option is effective from date of first unpaid premium c Both the statements above are correctd Both the statements above are wrong


a No alteration can be made without the request of the policyholderb Some kind of alterations do not require the consent of the insurerc Both the statements above are correct d Both the statements above are wrong


a Foreclosure can be done only with the consent of the policyholder b Foreclosure can be done only after informing the policyholder c Both the statements above are correct d Both the statements above are wrong


a If the nominee is a minor, the claim can be paid to the guardianb If the nominee dies, the claim can be paid to the heirs of the nomineec Both the statements above are correct d Both the statements above are wrong


a If there is an assignment, the will is not valid

b If there is a nomination, the will is not validc Both the statements above are correct d Both the statements above are wrong


a The death claim is settled in favour of the nominee in MWP Act casesb The death claim is settled in favour of the trustee in MWP Act cases c Both the statements above are correct d Both the statements above are wrong

30 If the heirs allege that the insured person is mentally deranged, the insurer should

a Ask the heirs to produce a stay order from the court b Ignore the allegation and pay the maturity claimc Apply to the court for appropriate directionsd Ask the insured person for his observations


a An indemnity bond is asked for when there is no clear proof of titleb An indemnity bond is not necessary when there is a probate of a willc Both the statements above are correct d Both the statements above are wrong


a The claim may be repudiated, if the age is found to be differentb Insurer need not wait for formal death intimation c Both the statements above are correct d Both the statements above are wrong

33 Before paying a claim, which of the following have to be verified?

a Premiums paid till dateb Balance of loan, if anyc Title of claimantd All the three mentioned above


a ULIPs cannot be issued as participating policiesb Loans are not given under ULIPsc Both the above statements are correct d Both the above statements are wrong


a In ULIPs, the best benefits come from growth fundsb In ULIPs, the best benefits come from the balanced funds

c Both the above statements are correctd Both the above statements are wrong


a In ULIPs, the best benefits come from growth fundsb In ULIPs, the best benefits come from the balanced fundsc Both the above statements are correctd Both the above statements are wrong

37 A person is an insurance agent because of

a The licence given to himb His knowledgec His duties d His salary

38 Which of the following statements is not correct?

a An agent should be able to suggest a total financial package for the prospectb An agent should be an expert only with regard to life insurance c An agent should be up-to-date on the tax lawsd An agent should be aware of the IRDA regulations

39 A licence for insurance agency will not be given unless the person

a Has passed an examination prescribed by the IRDAb Is 21 years of agec Has undergone trainingd Satisfies all the above conditions

40 The Insurance Association is

a A trade union of insurance employeesb A voluntary association of insurers to negotiate with the IRDAc A body constituted by the IRDA Actd None of the above


a The consumer forum can summon witnesses b The Ombudsman can summon witnessesc Both the statements above are correct d Both the statements above are wrong


a A rural area is defined in the Constitution of Indiab Business in the rural areas can be done only by rural agentsc Both the statements above are correct

d Both the statements above are wrong

43 Calculate monthly premium (rounded off to next higher rupee) SA Rs 60,000/- endowment - 39 years, date of maturity 28.09.2045,Large sum assured rebate Rs. 1.50 for Rs. 50,000 and above. Date of Birth - 26.12. 1976 Premium per thousand SA For age next birthday 29 -Rs 27.46, 30-Rs 28.83, 31-Rs 29.37

a 137b 140c 141d 142

44 Given the following information, indicate which of the four options given below would be the correct premium to be deducted from the salary of a person born on 28.6.1974, who has taken an endowment policy on his life.Sum assured Rs. 40,000 Term 35 years Date of maturity 24.12.2037Tabular premium for age nearest birthday 27- Rs.27.46 per thousand Tabular premium for age nearest birthday 28- Rs.27.83 per thousand Tabular premium for age nearest birthday 29- Rs.28.37 per thousand Premium adjustment - 5% extra for monthly mode, Re. 1 less for half yearly mode and Rs. 1.50 less for yearly mode SA Rebate Rs. 1.50 less for Rs. 50,000 and above

a 87.77b 89.57c 92.80d 97.41

45 Find out the loan payable at 90% of surrender value as on 5.4.2007 on the basis of following data, (the answer to be rounded off to the next higher rupee) SA. Rs 40,000 DOC 15.09.1991Endowment without profit - 31 years Due date of last quarterly premium paid 15-12-2006Bonus vested Rs.34, 000 -, SV factor duration 14 yrs 22%, 15 yrs 25%, 16 yrs 30%



1 d 16 c 31 c2 d 17 c 32 b3 d 18 c 33 d4 c 19 a 34 c5 b 20 c 35 d6 c 21 b 36 d

7 a 22 c 37 c8 c 23 b 38 b9 b 24 b 39 d

10 a 25 c 40 d11 d 26 b 41 a12 b 27 d 42 d13 a 28 a 43 a14 b 29 b 44 c15 d 30 a 45 b


1 0 16 0 31 02 0 17 0 32 03 0 18 0 33 04 0 19 0 34 05 0 20 0 35 06 0 21 0 36 07 0 22 0 37 08 0 23 0 38 09 0 24 0 39 0

10 0 25 0 40 011 0 26 0 41 012 0 27 0 42 013 0 28 0 43 014 0 29 0 44 015 0 30 0 45 0

Total Marks 0

RESULT FAIL



1 Which of the following events are insurable in a life insurance policy?

a The child to be a born is not a male childb The child, when born, has physical deformitiesc Neither of the above situationsd Both the above situations

2 A human being’s value is measured by

a The income that he generatesb The value of the goods that he producesc His academic qualificationsd All of the above


a Risk, if certain, cannot be insured.b Risk refers to the loss that happens c Both the above statements are correct d Both the above statements are wrong

4 In the case of life insurance, the risks

a Can be avoidedb Cannot be avoided c Are avoidable through medical scienced Are avoidable through proper food habits


a Life insurance helps people to get loans for car or houseb Life insurance helps policyholders to save income taxc Both the above statements are correct d Both the above statements are wrong


a A person with an established business does not need life insuranceb Life insurance is necessary to save income taxc Both the above statements are correctd Both the above statements are wrong



8 The addition to the life fund arises because of the

a Loading in the premium for bonusb The practice of charging level premiums c Not having paid the claims on timed All the above reasons




a Convertible plan policies do not participate in bonusesb Money back policies are not convertible plan policies c Both the statements above are correctd Both the statements above are wrong


a The cover in a group policy could depend on the ages of the lives insuredb The cover could be a uniform flat rate for all employees of a certain categoryc Both the statements above are correct d Both the statements above are wrong


a If the option of conversion is not exercised, the policy will come to an endb If the option of conversion is not exercised, the policy will continue as before c Both the statements above are wrongd Both the statements above are correct


a Only participating policies are entitled to the benefit of bonus b A bonus is the return of additional premium paid by a participating policyc Both the statements above are correctd Both the statements above are wrong


a An annuity policy guarantees a pension b An annuity policy is issued only after a medical examinationc Both the statements above are correctd Both the statements above are wrong


a A premium waiver option is allowed as a rider b The premium on all riders depend on the age of the insured personc Both the statements above are correctd Both the statements above are wrong

16 Under the system of non-medical underwriting

a There is no restriction on ageb There is no restriction on SAc There is restriction on both the SA and age d Only some towns are covered


a Working women are treated on par with menb Educated women are treated on par with menc Both the statements above are correct d Both the statements above are wrong


a If the underwriter feels that the risk is more, he will accept at ORb If the underwriter feels that the risk is more, he may impose a lien c Both the statements above are correctd Both the statements above are wrong


a A policy is specific and relevant only to a particular contract b A policy is a specimen, applicable to all cases under a specified planc Both the statements above are correctd Both the statements above are wrong


a Once the FPR is issued, the policyholder cannot back out of the contractb Policies can be back dated to any date within the financial year c FPR is evidence of the insurance contract d All the three statements above are wrong


a In the case of SSS policies, the employer gets the renewal premium receiptsb In the case of SSS policies, FPRs are not issuedc Both the statements above are correctd Both the statements above are wrong


a A policy which is foreclosed can be reinstated b Wife is automatically the beneficiary under a MWP Act policy c Both the statements above are correct d Both the statements above are wrong

23 If a policy is under the MWP Act,

a It can be surrendered by the beneficiariesb A loan can be taken by the trusteesc It can be made paid up d It can be assigned

24 A policy which has been assigned, will revert to the assignor

a If the assignor survives till maturityb Whenever the assignor demands itc When the conditions specified in a conditional assignment happen d On maturity of the policy

25 When a policy is foreclosed, it benefits

a The policyholderb The insurerc Both the policyholder and the insurerd Neither the policyholder nor the insurer

26 If the age proof submitted along with proposal is later found to be false, the insurer

a May declare the policy null and void ab initiob May revise the premium on the basis of the actual age from the commencementc May revise the premium and other terms of the contract d May do any one of the three suggested above


a On revival, the original terms of the policy will not be affectedb On revival, the original terms of the policy may be changed c Both the statements above are correctd Both the statements above are wrong

28 In which of the above cases, is the claimant likely to feel most anxious?

a Death claim within two years

b Surrender casesc Applications for loansd Survival benefit cases


a If there is an assignment, the will is not valid b If there is a nomination, the will is not validc Both the statements above are correct d Both the statements above are wrong


a The insurer need not contest court orders relating to policy moneys b The insurers should not sit on judgment between rival claims to policy moneysc Both the statements above are correct d Both the statements above are wrong


a When a claimant produces the original will, no further proof is necessaryb An affidavit filed before a court by the heirs is adequate evidence of titlec Both the statements above are correct d Both the statements above are wrong

32 If a claim is made in January 2007 under a policy, which commenced in May 2002, stating that the life insured had died in April 2004,

a Section 45 of the Act will not applyb The claim can be treated as an early claimc Foul play must be suspectedd All the three statements above are correct


a Frauds are more likely in death claim cases than in maturity casesb If the life insured had died one month before maturity date, it is a death claimc Both the statements above are correct d Both the statements above are wrong


a In ULIPs, the premium will be invested as per the offer price b The offer price will always be higher than the bid pricec Both the above statements are correctd Both the above statements are wrong


a In ULIPs the entire premium paid is invested in the chosen fund.b The entire premium less cost of insurance is invested in the chosen fund



a In ULIPs the entire premium paid is invested in the chosen fund.b The entire premium less cost of insurance is invested in the chosen fundc Both the above statements are correctd Both the above statements are wrong

37 When is the job of a life insurance agent over?

a As soon as the policy is issuedb When the claim arises under the policyc When the claim is paid under the policyd It is not over as long as the policyholder or any member of his family is alive

38 Which of the following laws affect the working of an insurance agent?

a The Insurance Actb The Contract Actc The Income Tax Actd All the three mentioned above




a The tax provisions are the same for all kinds of savingsb The tax provisions are included in the Constitutionc Both the statements above are correct d Both the statements above are wrong


a Agents are appointed separately to work in the rural sectorb Any agent can do business from the rural areas c Both the statements above are correctd Both the statements above are wrong

42 The Insurance Act deals with

a Registration of insurersb Investments of insurance fundsc Licensing of agents

d All of the above

43 On the basis of the following data S.A. Rs. 1, 00,000/- tabular premium. Rs. 33.10Rebate Rs. 2/- per thousand for yearly mode. Re 1/- for half yearly, none for quarterly.SA Rebate Rs. 3/- per thousand for Rs. 1, 00,000 and above.DAB Re. 1/- per thousand Occupation extra Rs. 4/- per thousand.Calculate the yearly premium.

a 2810b 3110c 3310d 3360

44 Find out the loan payable at 90% of surrender value on the basis of following data, (the answer to be rounded off to the next higher rupee) SA. Rs 1, 00,000 DOC 14.11.2001Endowment without profit - 20 years Due date of last premium paid 14-05-2007 mode half yearly, SV factor 32%


45 Given the following data, state which of the following is the correct amount of the claim payable under the policy.Plan and term Endowment 38 yearsSum assured Rs. 50,000Date of commencement 20.05.1989Date of death of life assured 18.8.2002

Bonus vested Rs. 36000.Interim bonus declared after valuation on 31.3.2001. Rs. 68 per thousand

a 85360b 88760c 86320d 89720


1 c 16 c 31 d2 a 17 c 32 d3 c 18 b 33 c4 b 19 a 34 a5 c 20 b 35 d6 d 21 d 36 d

Quarterly premium Rs. 320 due in August 2002 paid on 6th August 2002.

7 c 22 a 37 d8 b 23 c 38 d9 c 24 c 39 d

10 b 25 d 40 d11 c 26 d 41 b12 b 27 b 42 d13 a 28 a 43 c14 a 29 a 44 b15 a 30 c 45 b


1 0 16 0 31 02 0 17 0 32 03 0 18 0 33 04 0 19 0 34 05 0 20 0 35 06 0 21 0 36 07 0 22 0 37 08 0 23 0 38 09 0 24 0 39 0

10 0 25 0 40 011 0 26 0 41 012 0 27 0 42 013 0 28 0 43 014 0 29 0 44 015 0 30 0 45 0

Total Marks 0

RESULT FAIL

If a claim is made in January 2007 under a policy, which commenced in May 2002, stating that the life insured had died in April 2004,

Given the following data, state which of the following is the correct amount of the claim payable under the policy.



1 The business of insurance affects

a Availability of capital for businessb The life span of individualsc The safety of equipments in factoriesd All these three

2 Insurance benefits replace

a All physical losses, in fullb All physical losses, partlyc All monetary losses, in fulld The monetary losses, but only to some extent

3 In a life insurance contract, the beneficiary may be the

a The policyholderb The life insuredc The dependents of the life insuredd All the three mentioned above


a The principle of utmost good faith applies only to life insurance b The principle of utmost good faith applies only to non-medical cases c The principle of utmost good faith is operative only for two yearsd All the above statements are incorrect

5 An insurance contract is valid because

a It is not a wagering contract b It promotes socially desirable causesc It takes care of the destituted It provides Government with large funds


a It is difficult to accurately value a human life.b It is possible to reasonably estimate the value of a human life.c Both the statements are correct d Both the statements are wrong

7 The premium printed on the schedule of the policy is worked out from

a Net premiumsb Risk premiumsc Office premiums d None of the above

8 The addition to the life fund arises because of the

a Loading in the premium for bonusb The practice of charging level premiums c Not having paid the claims on timed All the above reasons


a The premium collected in the early years is less than what is requiredb The premium collected in the early years is more than what is required c The premium collected in any year is exactly what is requiredd All the above statements are correct


a Convertible plans allow whole life plans to be altered to endowment plans b The option of conversion can be exercised whenever the policyholder chooses toc Both the statements above are wrongd Both the statements above are correct


a A group insurance contract is between the insurer and the insured personsb The extent of insurance cover is chosen by each individual memberc Both the statements above are correctd Both the statements above are wrong

12 Which of the following could be the basis of the cover in a group policy?

a Amount of annual incomeb Level in the hierarchyc Age of the persond All the three above


a The ownership of the policy changes on the deferred dateb The ownership of the policy changes on the vesting date c Both the above statements are wrongd Both the above statements are correct.


a Risk cover begins on or after vesting dateb Risk cover begins immediately after the policy commencesc Both the statements above are wrong d Both the above statements are correct

15 For the same age, SA and term, the premium under an Endowment policy

a Will be the same as in a limited payment Endowment policyb Will be more than in a limited payment Endowment policy c Will be less than in a limited payment Endowment policy d Can be same, more or less than in a limited payment Endowment policy


a In the case of a lien, the amount payable on death will vary from year to year b A lien operates till the policy matures c Both the statements above are correct d Both the statements above are wrong


a An underwriter acts in the interests of the policyholders as a wholeb An underwriter acts in the interests of the insurance companyc Both the statements above are correct d Both the statements above are wrong


a In some cases, the underwriter consults the reinsurers before deciding b The numerical method of underwriting is the best method c Both the statements above are correct d Both the statements above are wrong


a If policy document is lost, the insurance contract becomes void b The family history appears in the personal statement c Both the statements above are correct d Both the statements above are wrong

20 The FPR is issued when

a The first premium is adjusted in the office b The first premium is deposited in the officec The underwriter makes his decisiond Consent of the proposer is received

21 The FPR is important

a Till the policy is issued b Till the claim is settledc As evidence of contract in case the original policy is lostd To know the terms of acceptance


a Assignee is free from the assignor’s obligations under the policy b A nomination is automatically cancelled when a loan is taken under the policyc Both the statements above are correct d Both the statements above are wrong

23 When a policy is foreclosed, the insurer will

a Pay the balance moneys to the nomineeb Offer to reinstate the policy on original termsc Pay balance surrender after adjustment of all outstanding duesd Do none of the above


a The amount of loan can be more than the surrender valueb Loans are available on paid up policies c Both the statements above are correct d Both the statements above are wrong


a The Insurance Act does not protect those who try to cheat the insurerb Section 45 does not apply if the policy had been revived within a year c Both the statements above are correct d Both the statements above are wrong


a When a loan is taken under the policy the nomination is cancelledb A loan will be paid only when the policy is assigned to the insurerc Both the statements above are correct d Both the statements above are wrong

27 If a policy is under the MWP Act,

a It can be surrendered by the beneficiariesb A loan can be taken by the trusteesc It can be made paid up d It can be assigned


a A death claim within two years of revival is treated as an early claim

b A death claim within two years of an alteration is treated as an early claimc Both the statements above are correct d Both the statements above are wrong


a A survival benefit is paid only to the life insuredb A death claim can be paid only to the nomineec Both the statements above are correct d Both the statements above are wrong

30 In the case of a life insured who is a defence personnel and is missing in action

a Presumption of death is automaticb Presumption of death depends on the certificate of the military unit c Presumption of death depends on the court ordersd Presumption of death will have to wait for seven years


a No claim can be paid without either the original or the duplicate policyb No maturity claim can be paid without the life insured’s signaturec Both the statements above are correct d Both the statements above are wrong

32 In which of the following cases, is the maximum documents asked for?

a Death claim b Maturity claimc Survival benefitsd Annuity cases


a Rival claimants to policy moneys should resolve the dispute themselves b The insurer need not examine the validity of rival claims to policy moneysc Both the statements above are correct d Both the statements above are wrong


a In ULIPs, loans are availableb In ULIPs, partial withdrawals are permitted periodically c Both the above statements are correctd Both the above statements are wrong


a In ULIPs, the death benefit may be ‘integrated’b In ULIPs, the death benefit will be the basic SA only




37 A person is an insurance agent because of

a The nature of his duties b His designationc The training given to himd All the three mentioned above

38 Which of the following statements is true?

a An insurance agent is a full time employee of the insurerb An insurance agent is a part time employee of an insurerc An insurance agent is not an employee of an insurer d An insurance agent is not allowed to have any other employment


a Ethical behaviour leads to improved business and earningsb Ethical behaviour is automatic when the policyholder’s interest are kept in mindc Both the statements above are correct d Both the statements above are wrong

40 Which of the following matters can be referred to the Ombudsman?

a A complaint that the extra charged is not reasonableb Grievance against the decision of a consumer forumc Dispute on the amount offered by the insurer to settle a claim d All of the above


a Tax benefits are part of policy conditions.b Tax benefits available in the first year of the policy, do not change thereafterc Both the statements above are correct d Both the statements above are wrong


a Life insurance policies provide savings in taxes b The income tax relief will be the same throughout the policy termc Both the statements above are correct


43 Calculate half yearly premium on the basis of the following data Date of birth 28.06.1978. Date of maturity 24.12.2041, SA Rs 1, 00,000 term 35 years.Tabular premium for age next birthday- age 27 Rs. 27.46, for age 28 Rs. 27.83 & for age 29 Rs. 28.37. Rebate 5 % extra for monthly, less Rs. 1/- for half yearly, Rs. 1.50 for yearly, SA rebate Rs. 1.50 for SA Rs. 50000/- and above.

a 1266.50b 1267.00c 1293.50d 1294.00

44 Find out surrender value on 01.09.2007, on the basis of following data (the answer to be rounded off to the next lower rupee).SA Rs.50, 000 DOC- 13.7.2001,Endowment without profit 25 years Due date of last premium paid 13.07.2006 : Yearly mode SV factor 5 yrs 23.91%, 6 yrs 24.63%, 7 yrs 26.48%


45 The life assured under an endowment without profits policy for 20 years for Rs.1, 00,000/- SA. with DAB rider died on 30th June 2007 committing suicide. The policy was taken on 21st March 2007 and was backdated to 1st April 2006. Determine the amount of claim payable

a Nothingb 100,000c 200,000d Return of premium


1 a 16 a 31 d2 d 17 c 32 a3 d 18 a 33 a4 d 19 b 34 b5 a 20 a 35 c6 c 21 a 36 a

7 c 22 d 37 a8 b 23 c 38 c9 b 24 b 39 c

10 a 25 c 40 c11 d 26 c 41 d12 d 27 c 42 a13 b 28 a 43 c14 c 29 d 44 b15 c 30 b 45 a


1 0 16 0 31 02 0 17 0 32 03 0 18 0 33 04 0 19 0 34 05 0 20 0 35 06 0 21 0 36 07 0 22 0 37 08 0 23 0 38 09 0 24 0 39 0

10 0 25 0 40 011 0 26 0 41 012 0 27 0 42 013 0 28 0 43 014 0 29 0 44 015 0 30 0 45 0

Total Marks 0

RESULT FAIL



1 The business of insurance has

a Social implicationsb Impact on economic development of the countryc Impact on the economic well being of familiesd All the above implications d

2 The competition for the business of life insurance is

a Non-life insuranceb Small savingsc House propertyd None of these three d


a Risk is uniform for all assets b Life insurance improves standards of living c Both the above statements are correct ad Both the above statements are wrong a


a Duty to disclose applies till the claim arises in life insuranceb Insurers are responsible for adverse selection c Both the statements are correctd Both the statements are wrong c

5 Which one of the following statements is correct, with reference to life insurance?

a The claim payable is subject to the principle of indemnityb The claim payable will depend on the Sum Assured c The claim payable will depend on the income of the deceased persond The claim payable will depend on the size of the family left behind b

6 Which of the following statements is correct?

a The principle of indemnity does not apply to life insurance policiesb The principle of indemnity does not apply to insurance on human beingsc The principle of indemnity does not apply to third party motor insurancesd All the above statements are wrong


a The annual premium must be twelve times the monthly premiumb The annual premium may be less than twelve times the monthly premium c Both the above statements are wrongd Both the above statements are correct

8 The premium printed on the schedule of the policy is worked out from

a Net premiumsb Risk premiumsc Office premiums d None of the above


a The life fund belongs to the policyholders b The life fund belongs to the shareholdersc Both the statements above are correctd Both the statements above are wrong

10 A plan of insurance is said to be different from another if

a The date of maturity is differentb The date of commencement of risk is differentc The underwriter decides to charge extra premium in one cased The conditions when the sum assured becomes payable are different


a On the deferred date, the insured child has to be at least 15 years oldb On the deferred date, the insured child need not be a major c On the deferred date, the policy must have been in force for at least ten yearsd All the statements above are wrong

12 In what ways does group insurance differ from salary savings schemes?

a Number of persons insured under a policyb Responsibility of employerc Issue of premium receiptsd In all the above three respects


a There is no difference between a term assurance plan and a Whole Life planb A Whole Life plan is a term assurance plan with an indefinite term c Both the statements above are wrongd Both the statements above are correct

14 Who pays for the premium in the group policy?

a The insured persons onlyb The person who has the master policy onlyc Both the insured persons and policyholder jointlyd Any one of the three ways above




a By writing a truthful report, the agent is helping the insurerb By writing a truthful report, the agent is helping the life to be insuredc Both the statements above are correct d Both the statements above are wrong


a The underwriter assesses the riskb No policy can be issued without the underwriter’s decisionc Both the statements above are correct d Both the statements above are wrong


a An underwriter is an actuaryb An underwriter uses financial and medical data c Both the statements above are correctd Both the statements above are wrong


a The declaration in the proposal makes the principle of good faith operational b The declaration in the proposal establishes insurable interestc Both the statements above are correctd Both the statements above are wrong


a A copy of the proposal has to be given to the proposer b A copy of the medical report has to be given to the proposerc Both the statements above are correctd Both the statements above are wrong


a The policy is the basis of the insurance contractb The proposal is the basis of the insurance contract c Both the statements above are correctd Both the statements above are wrong


a A lapse is effectively a case of adverse selectionb A lapse should make the agent reflect on the correctness of the salec Both the statements above are correct d Both the statements above are wrong


a A nominee must be above 18 years of ageb A nominee must be a close relativec Both the statements above are correct d Both the statements above are wrong

24 How does automatic advance of premium differ from extended term assurance?

a In the duration for which the policy will remain in force b In the amount of SA payable on deathc In the ease of reviving the policy to original termsd Likelihood of terminating without any cash payment to the policyholder

25 In which of the following aspects do the three non-forfeiture options differ?

a The extent of insurance coverb The amount of debt on the policyc The amount payable on maturityd On all the above three


a Outstanding amounts of loans are deducted from the claim amount b Fresh loans cannot be taken till the earlier loan is repaid c Both the statements above are correct d Both the statements above are wrong


a Age is material information and may affect the terms of underwriting b If age is found to be different, the only effect is on the premium rate c Both the statements above are correctd Both the statements above are wrong


a The claim may be repudiated, if the age is found to be different

b Insurer need not wait for formal death intimation c Both the statements above are correct d Both the statements above are wrong

29 When a court orders that a missing insured person is presumed to be dead,

a The premiums paid since his disappearance are returned along with the claimb The date of death is taken to be the date of court order c Enquiries will be made as in the case of early death claimsd Suicide clause will operate if the person was missing within one year of policy

30 In which of the above cases, will the help of the agent be most useful?

a Death claims b Maturity claimsc Survival benefits d Annuity cases

31 When a court orders that a missing insured person is presumed to be dead,

a The premiums paid since his disappearance are returned along with the claimb The date of death is taken to be the date of court order c Enquiries will be made as in the case of early death claimsd Suicide clause will operate if the person was missing within one year of policy


a Rival claimants to policy moneys should resolve the dispute themselves b The insurer need not examine the validity of rival claims to policy moneysc Both the statements above are correct d Both the statements above are wrong


a The insurer makes enquiries only in the case of death claims b The insurer makes enquiries in the case of maturity claims alsoc Both the statements above are correct d Both the statements above are wrong


a In ULIPs, if the policy is terminated earlier, a charge has to be paidb In ULIPs, an administrative charge has to be paid every yearc Both the above statements are correctd Both the above statements are wrong


a In ULIPs, the death benefit may be ‘integrated’b In ULIPs, the death benefit will be the basic SA only



a In ULIPs, one can pay additional premium in any year for investment b In ULIPs, if one increases the premium, the SA must also be increased.c Both the above statements are correct d Both the above statements are wrong


a Unethical behaviour can affect the settlement of the claim, if it is early b Ethical behaviour is beneficial to the policyholder, but not to the agent c Both the statements above are correct d Both the statements above are wrong

38 Which of the following laws affect the working of an insurance agent?

a The Insurance Actb The Contract Actc The Income Tax Actd All the three mentioned above


a An agent has to ensure that nominations are changed whenever necessaryb An agent is the agent of the proposer / policyholderc Both the statements above are correct d Both the statements above are wrong


a A rural area is defined in the IRDA Actb A rural area is an area outside municipal limitsc Both the statements above are correctd Both the statements above are wrong

41 state which one of the following statements is correct?

a A consumers forum is set up exclusively for insurance mattersb There is no appeal against the decision of the consumer forum c Both the statements above are correct d Both the statements above are wrong


a Every insurer has to do a minimum SA of business from the rural areasb Every insurer has to do a minimum number of policies from the rural areas c Both the statements above are correct


43 Given the following information, indicate which of the four options given below shows the monthly premium (rounded off to the nearest rupee) to be paid by a person born on 28.6.1974, who has taken an endowment policy on his life.Sum Assured Rs. 40,000 Term 35 years Date of maturity 24.12.2037Tabular premium for age nearest birthday 27 - Rs.27.46 per thousand Tabular premium for age nearest birthday 28 - Rs.27.83 per thousand Tabular premium for age nearest birthday 29 - Rs.28.37 per thousand Premium adjustment - 5% extra for monthly mode, Re. 1 less for half yearly mode and Rs 1.50 less for yearly mode SA Rebate Rs. 1.50 less for Rs. 50,000 and above

a 97.00b 97.40c 97.50d None of the above a

(a) 97.00 (b) 97.40 (c) 97.50 (d) None of the above

44 Find out the loan payable at 90% of surrender value on the basis of following data, (the answer to be rounded off to the next higher rupee) SA. Rs 50,000 DOC 19.02.2002Endowment without profit - 20 years Due date of last unpaid premium 19-02-2006 mode yearly Bonus declared Rs.60/- per thousand SA. Every year since 2001, SV factor 32%


45 Given the following data, state which of the following is the correct amount of the claim payable under the policy.Plan and term Endowment 40 yearsSum assured Rs. 50,000Date of commencement 20.02.1989Date of death of life assured 18.02.2002

Bonus vested Rs. 36,000.Interim bonus declared after valuation on 31.3.2001. Rs. 68 per thousand

a 86000b 89400c 86300d 89700


1 d 16 c 31 b2 d 17 c 32 a3 b 18 b 33 a4 d 19 a 34 c5 b 20 a 35 c6 a 21 b 36 a

Quarterly premium Rs. 300 due in February 2002 paid on 6th February 2002.

7 b 22 c 37 a8 c 23 d 38 d9 a 24 a 39 c

10 d 25 d 40 d11 b 26 a 41 d12 d 27 a 42 b13 b 28 b 43 a14 d 29 b 44 a15 a 30 a 45 d


1 Correct 16 0 31 02 Correct 17 0 32 03 0 18 0 33 04 0 19 0 34 05 Correct 20 0 35 06 0 21 0 36 07 0 22 0 37 08 0 23 0 38 09 0 24 0 39 0

10 0 25 0 40 011 0 26 0 41 012 0 27 0 42 013 0 28 0 43 Correct14 0 29 0 44 015 0 30 0 45 0

Total Marks 4

RESULT FAIL

Given the following data, state which of the following is the correct amount of the claim payable under the policy.




a Trustb Sharingc Randomnessd All of the above

2 Insurance is legitimate

a when an adverse happening is likelyb When an adverse happening is unlikelyc When an adverse happening is certaind In all the above three situations

3 Insurance benefits replace

a All physical losses, in fullb All physical losses, partlyc All monetary losses, in fulld The monetary losses, but only to some extent


a People hesitate to buy life insurance because they are not aware of their needsb People hesitate to buy life insurance because they prefer to enjoy the presentc Both the statements are correct d Both the statements are wrong

5 Which is the right time for taking life insurance?

a When you are about to get marriedb Soon after you have got marriedc Just when you are joined a new jobd All the three ‘times’ are right

6 Retention of risk may be done conveniently by

a Large corporations b Small companiesc Single individualsd None of the three

7 A valuation is done by a life insurer because

a It is a statutory requirementb It is necessary to be able to declare dividends to shareholdersc It tells the insurer how well it is managing the businessd All of the above

8 The reason for charging level premiums is

a Risk increases as age increasesb It is convenient to the policyholderc It is convenient to the insurerd All the above reasons

9 What does a premium depend upon?

a The place of worship visited by the person to be insured b The state of health of the policyholderc The decision of the underwriter d The report of the agent


a In group insurance, a single policy is issued covering many persons b A master policy covers servants of a masterc Both the statements above are correctd Both the statements above are wrong


a In a limited payment policy, there is a maximum limit to the SAb In a limited payment policy, there is a maximum limit to the term c Both the statements above are wrong d Both the statements above are correct


a On vesting, the insured person has an option to change the term of the policyb On vesting the insured person has an option to increase the SAc Both the statements above are wrong d Both the statements above are correct


a Height of the life insuredb Age of the life insured c Size of the insured’s familyd All the three above


a On vesting, the insured person has an option to change the term of the policyb On vesting the insured person has an option to increase the SAc Both the statements above are wrong d Both the statements above are correct


a Every plan of insurance is a combination of two basic plans b The name given to a plan indicates the benefits available under the planc Both the statements above are correctd Both the statement s above are wrong


a Underwriting is done only when there is a medical examinationb Medical examination is necessary before a policy can be issuedc Both the statements above are correctd Both the statements above are wrong


a The underwriter determines the premium to be chargedb The underwriter is an employee of the insurerc Both the statements above are correct d Both the statements above are wrong


a If the underwriter feels that the risk is more, he will accept at ORb If the underwriter feels that the risk is more, he may impose a lien c Both the statements above are correctd Both the statements above are wrong


a The schedule of a policy is not altered after the policy is issuedb Changes in the terms of the policy are made through endorsementsc Both the statements above are correct d Both the statements above are wrong

20 The date of issue of the FPR indicates

a The date when the risk effectively begins b The date when the next premium falls duec The date when the policy will commenced None of the above


a In the case of SSS policies, renewal premium receipts are issuedb In the case of SSS policies, FPRs are issued c Both the statements above are correctd Both the statements above are wrong


a Assignee is free from the assignor’s obligations under the policy b A nomination is automatically cancelled when a loan is taken under the policyc Both the statements above are correct d Both the statements above are wrong


a The beneficiaries under the MWP Act can be any member of the familyb A policy can be taken under the MMWP Act for the benefit of parentsc Both the statements above are correct d Both the statements above are wrong


a Foreclosure can be done only with the consent of the policyholder b Foreclosure can be done only after informing the policyholder c Both the statements above are correct d Both the statements above are wrong


a Revivals are not done unless the entire outstanding premium is paidb Revivals are not done unless the underwriter agreesc Both the statements above are correctd Both the statements above are wrong


a Foreclosure action cannot be taken till a notice is served on the policyholderb When a foreclosure action is taken, nothing is payable to the policyholderc Both the statements above are correct d Both the statements above are wrong




a A presumption of death is not the same as proof of death

b Presumption of death allows inheritance of propertyc Both the statements above are correct d Both the statements above are wrong

29 When does a claim arise under an insurance policy?

a Whenever the policyholder feels the need for moneyb When the insured events happen c When a premium is not paidd Whenever any of the three things mentioned above happen


a Maturity claim cheques are paid to the trustees in a MWP Act case b Maturity claim cheques are paid to the beneficiaries in a MWP Act casec Both the statements above are correct d Both the statements above are wrong

31 If a claim is made in January 2007 under a policy, which commenced in May 2002, stating that the life insured had died in April 2004,

a Section 45 of the Act will not applyb The claim can be treated as an early claimc Foul play must be suspectedd All the three statements above are correct


a A policy reported to be lost, may actually have been assigned b A policy has no value after the payment of survival benefitsc Both the statements above are correct d Both the statements above are wrong


a The foreign exchange regulations apply if the life insured is a non-residentb The foreign exchange regulations apply if the claimant is a non-residentc Both the statements above are correct d Both the statements above are wrong




a In ULIPs, the offer bid spread is the difference between the two pricesb In ULIPs, the offer bid spread, will in some cases be zero



a In ULIPs the insurance cover must be a minimum multiple of the premium b ULIPs can be surrendered after two yearsc Both the above statements are correctd Both the above statements are wrong


a Life insurance is the best savings scheme for all personsb Life insurance is the best investment scheme for young personsc Both the statements above are correct d Both the statements above are wrong

38 Which of the following statements is correct?

a An insurance agent has fixed working hoursb An insurance agent has to mark his attendance in office every dayc An insurance agent works according to his schedule d An insurance agent cannot do any other work




a The social sector is not only in the urban areasb The social sector includes the unorganized sectorc Both the statements above are correct d Both the statements above are wrong


a The Ombudsman’s authority is limited to claims matters onlyb The Ombudsman is not a judicial authority c Both the statements above are correct d Both the statements above are wrong


a The tax provisions are the same for all kinds of savingsb The tax provisions are included in the Constitutionc Both the statements above are correct


43 A proposal for SA of Rs. 10 lakhs with DAB for monthly mode under SSS.Proposer had a previous policy of Rs. 5 lakhs with DAB. Proposal was accepted with health extra of Rs. 2.75 per thousand SA premium for DAB Re 1 per thousand. 5% extra for monthly mode. large SA rebate of Rs 2/- per thousand for 1 lakh and above. Tabular premium Rs. 48.20 maximum total SA on which DAB is allowed is Rs. 10/- lakhs. Find monthly (SSS) premium, rounded off to the next higher rupee

a 4102b 4121c 4183d 4195

44 Find out surrender value on the basis of following data (the answer to be rounded off to the next lower rupee). SA Rs.30, 000 DOC- 15.6.1992,Endowment with profit - 30 years Due date of last premium paid 15-06-2007 mode half yearly Accrued bonus Rs.750/- per thousand SA. SV factor 23%


45 A money back policy for SA. of Rs.50,000/- Matured after 25 years.

and 20th years. Bonus had accrued at Rs.965/- per Rs.1000/- SA. Interim bonus @ Rs.25/- per thousand SA is payable. What is the maturity claim amount?

a 68250b 69500c 98250d 99500


1 d 16 d 31 d2 a 17 c 32 a3 d 18 b 33 c4 c 19 c 34 a5 d 20 a 35 c6 a 21 b 36 a

Survival benefits of 15% each had been paid at the end of 5th, 10th, 15th,

7 d 22 d 37 d8 d 23 d 38 c9 c 24 b 39 b

10 a 25 d 40 c11 c 26 a 41 b12 c 27 d 42 d13 b 28 c 43 b14 c 29 b 44 c15 a 30 a 45 b


1 0 16 0 31 02 0 17 0 32 03 0 18 0 33 04 0 19 0 34 05 0 20 0 35 06 0 21 0 36 07 0 22 0 37 08 0 23 0 38 09 0 24 0 39 0

10 0 25 0 40 011 0 26 0 41 012 0 27 0 42 013 0 28 0 43 014 0 29 0 44 015 0 30 0 45 0

Total Marks 0

RESULT FAIL

If a claim is made in January 2007 under a policy, which commenced in May 2002, stating that the life insured had died in April 2004,

1 lakh and above. Tabular premium Rs. 48.20 maximum total SA on which DAB is allowed is Rs. 10/- lakhs.


Practice Paper 7NameBranch Marks 0

1 Insurance reduces the burden on

a The societyb Individual familiesc Business housesd All the three

2 Micro insurance can be transacted by

a Life insurers onlyb Non-life insurers onlyc Both life and non-life insurersd Only by specially created insurers

3 The asset, which is a human being, perishes when

a He diesb He becomes disabled to workc He retires from workd In all the above situations

4 In the case of life insurance, the principle of insurable interest operates

a In the same way as in marine insuranceb In the same way as in fire insurance c In the same way as in motor insuranced Differently than in other forms of insurances

5 If the life to be insured falls sick, that fact has to be informed to the insurer

a If it happens within two years of commencement of riskb If it happens before the first premium receipt is issued c If it happens before the policy document is issuedd Only if there is a specific query from the insurer


a Many people think that they do not need life insuranceb Many people think that there is no hurry to buy life insurancec Both the above statements are correct d Both the above statements are wrong


a The premium collected in the early years is less than what is requiredb The premium collected in the early years is more than what is required c The premium collected in any year is exactly what is requiredd All the above statements are correct

8 The policyholder is concerned with the

a Office premium b Pure premiumc Net premiumd Risk premium

9 The practice of charging level premiums has the benefit of

a Making it easy for the policyholder to maintain the insurance cover b Increasing the returns to the policyholderc Helping the agent in his sales effortd All the above




a Any policy which promises a payment on a fixed date is an Endowment policyb If the SA increases every year, it is a participating policyc Both the statements above are correctd Both the statements above are wrong


a In group insurance, a single policy is issued covering many persons b A master policy covers servants of a masterc Both the statements above are correctd Both the statements above are wrong


a Amount of annual incomeb Level in the hierarchyc Age of the persond All the three above

14 In what respect does group insurance differ from salary savings schemes?

a The person who pays the premiumb Responsibility to pay the premiumc Decision to take the policyd In all the above three respects


a A trade union can take out a group insurance policy for its membersb The cover for an employee can be equal to his age multiplied by a fixed number c Both the statements above are correct d Both the statements above are wrong


a An underwriter acts in the interests of the policyholders as a wholeb An underwriter acts in the interests of the insurance companyc Both the statements above are correct d Both the statements above are wrong


a Underwriting is done only when there is a medical examinationb Medical examination is necessary before a policy can be issuedc Both the statements above are correctd Both the statements above are wrong


a For a first class life, the premium charged is less than in the tabular ratesb For a first class life, the vested bonus will be more than in other casesc Both the statements above are correctd Both the statements above are wrong


a The FPR acknowledges premium for the first year of the policyb The second quarterly premium after commencement is called renewal premium c Both the statements above are correctd Both the statements above are wrong


a The personal statement must be witnessed by the agentb Personal statements are required only in medical casesc Both the statements above are correctd Both the statements above are wrong

21 If a policyholder applies for cancellation of policy soon after he receives the FPR,

a The full premium will be refundedb The full premium after some small deductions, will be refunded c The policy will be treated as lapsed from the next premium due dated He will be debarred from taking any further insurance policies


a A policy is made paid up only if the paid up value is of a minimum amountb If the paid up value is not up to a level, the cash value is paidc Both the statements above are correct d Both the statements above are wrong


a Paid up value is subject to deduction of unpaid premiumsb When a policy is paid up, the surrender value option is lostc Both the statements above are correctd Both the statements above are wrong


a When a policy lapses, the policyholder loses everythingb When a policy lapses, some benefits are protected c Both the statements above are correctd Both the statements above are wrong


a A paid up policy is entitled to further bonusesb A paid up policy is entitled to further bonuses if it is a with profits policyc Both the statements above are correctd Both the statements above are wrong


a When a nomination is made, the rights to the policy are transferredb The assignee immediately becomes the policyholder c Both the statements above are correct d Both the statements above are wrong




a All maturity claims are paid in one lump sum

b All death claims are paid in one lump sumc Both the statements above are correct d Both the statements above are wrong


a An insurer makes enquiries to establish the fact of deathb The insurer makes enquiries to check facts stated in the proposal c Both the statements above are correct d Both the statements above are wrong


a Death certificate is required to be produced in all death claim cases b Police inquest report is required in all death claim casesc Both the statements above are correct d Both the statements above are wrong


a The claim may be repudiated, if the age is found to be differentb Insurer need not wait for formal death intimation c Both the statements above are correct d Both the statements above are wrong


a Coroner’s report is necessary in all death claim casesb Special reports are avoided in early death cases if death occurred in a hospitalc Both the statements above are correct d Both the statements above are wrong


a An indemnity bond is necessary when the heirs challenge the nominationb Heirs claiming the policy monies must be asked to obtain court decrees c Both the statements above are correct d Both the statements above are wrong


a In ULIPs, the death benefit may be ‘integrated’b In ULIPs, the death benefit will be the basic SA onlyc Both the above statements are correct d Both the above statements are wrong


a In ULIPs, loans are availableb In ULIPs, partial withdrawals are permitted periodically



a In ULIPs, the SA must not be less than 1.25 times single premiumb In ULIPs, the SA must not be less than 5 times instalment premiumc Both the above statements are correct d Both the above statements are wrong



38 Which of the following statements is true?

a An agent must look after the interests of the insurerb An agent must look after the interests of the proposerc Neither of the two statements is trued Both the above statements are correct


a Unethical behaviour can affect the settlement of the claim, if it is early b Ethical behaviour is beneficial to the policyholder, but not to the agent c Both the statements above are correct d Both the statements above are wrong


a Matters referred to the Ombudsman may not be decided for yearsb The Ombudsman cannot modify the terms of acceptance of the proposal c Both the statements above are correct d Both the statements above are wrong


a The surrender value is not treated as incomeb The claim amount is not treated as incomec Both the statements above are correct d Both the statements above are wrong

42 Which of the following can a policyholder having a dispute with an insurer, approach?

a IRDAb Ombudsmanc Consumers redressal forum

d Any of the above

43 Calculate monthly premium (rounded off to next higher fifty paisa) SA Rs 30,000/- with DAB for Rs. 1/- per thousand and occupational extra of Rs. 1.75 per thousand. Data of Birth 21.10.1980. 5% extra for monthly mode of payment. Tabular premium Rs. 32.81

a 93.00b 93.50c 94.00d 94.50

44 Find out the surrender value on the basis of the following data, (the answer to be rounded off to the next higher rupee)

SA. Rs.60,000 DOC- 20.02.1993,Endowment with profit - 20 years, Due date of last premium paid 20-05-2007, mode quarterly, Accrued bonus Rs.1095/- per thousand SA. SV factor 60%


45 On the basis of the data given below, calculate the claim amount payable. Date of commencement 16.06.2002, SA Rs.50, 000/- with DAB. Endowment 20 years. Annual premium Rs.3000 Last premium paid, due 16.06.2006. Date of death 08.07.2007 due to road accident.

a 10000b 20000c 97000d 100000


1 d 16 c 31 b2 c 17 d 32 d3 d 18 d 33 b4 d 19 b 34 c5 b 20 d 35 b6 c 21 b 36 c

7 b 22 c 37 d8 a 23 d 38 d9 a 24 b 39 a

10 a 25 d 40 b11 d 26 b 41 c12 a 27 d 42 d13 d 28 d 43 a14 d 29 b 44 c15 c 30 a 45 c


1 0 16 0 31 02 0 17 0 32 03 0 18 0 33 04 0 19 0 34 05 0 20 0 35 06 0 21 0 36 07 0 22 0 37 08 0 23 0 38 09 0 24 0 39 0

10 0 25 0 40 011 0 26 0 41 012 0 27 0 42 013 0 28 0 43 014 0 29 0 44 015 0 30 0 45 0

Total Marks 0

RESULT FAIL

of Rs. 1.75 per thousand. Data of Birth 21.10.1980. 5% extra for monthly mode of payment.


Practice Paper 8NameBranch Marks 0

1 The probability of 50% for an event happening means that the event

a Will happen regularly every alternate occasionb Will happen 50% of the time over a very large number of trials c Will never exceed 50%, however large be the attempts maded Will become closer to 50% as the attempts increase

2 Insurance is meant to

a Prevent specified eventsb Prevent damage to assets from specified eventsc Compensate for losses from specified events d Rebuild the assets lost because of specified events


a Risk is uniform for all assets b Life insurance improves standards of living c Both the above statements are correctd Both the above statements are wrong


a The needs of people are differentb The needs of people vary according to life stylesc The needs of people depend on their upbringingd All the three statements are correct

5 Insurable interest is

a Defined in the Insurance Actb Defined in the Contracts Actc Defined by the IRDAd Not defined in any written law

6 In the case of life insurance, the risks

a Can be avoidedb Cannot be avoided c Are avoidable through medical scienced Are avoidable through proper food habits


a The rate of premium charged can be less than the tabular ratesb The rate of premium can be more than the tabular rates c Both the above statements are correctd Both the above statements are wrong


a The life fund belongs to the policyholders b The life fund belongs to the shareholdersc Both the statements above are correctd Both the statements above are wrong

9 The surplus disclosed in a valuation means

a That the interests of the policyholders are safeb That the funds of the insurer are adequate to meet its liabilitiesc That the business is being managed welld All of the above

10 Which one of the following statements is incorrect?

a The SA payable on death can be more than the SA payable on maturityb The SA payable on maturity can be more than the SA payable on deathc Both the statements above are correct d Both the statement above are wrong


a The premium on a rider varies according to the basic planb The premium on riders cannot exceed specified limits of the basic premium c Both the statements above are correctd Both the statements above are wrong


a The SA is always payable immediately on death or survivalb The SA payable on death may be paid long after the death of the insured c Both the statements above are correctd Both the statements above are wrong


a A rider modifies an existing condition in the policyb A rider supplements or adds to an existing condition in the policy c Both the statements above are correctd Both the statements above are wrong


a In a deferred annuity policy, the premium has to be paid in a lump sumb Annuities purchased during different years may all commence on the same date c Both the statements above are correctd Both the statements above are wrong

15 A plan of insurance is said to be different from another if

a The date of maturity is differentb The date of commencement of risk is differentc The underwriter decides to charge extra premium in one cased The conditions when the sum assured becomes payable are different




a A medical referee examines the life to be insuredb The medical referee only sees the reports received by the insurer c Both the statements above are correctd Both the statements above are wrong




a The policy is the basis of the insurance contractb The proposal is the basis of the insurance contract c Both the statements above are correctd Both the statements above are wrong


a The FPR acknowledges premium for the first year of the policyb The second quarterly premium after commencement is called renewal premium c Both the statements above are correctd Both the statements above are wrong


a The proposal must be signed by a witness b The answers in the proposal form should be written in English c Both the statements above are correctd Both the statements above are wrong

22 If the premium was due on 15th July and 16th August is a Sunday

a The grace period will end on 14th August (Friday)b The grace period will end on 15th August (Saturday)c The grace period will end on 17th August (Monday) d The grace period will end as per the discretion of the insurer

23 If a policy is under the MWP Act, the policyholder is

a The life insured b The beneficiariesc The trustee d The administrator


a An assignment can be cancelled at any time by the assignorb A nomination can be cancelled at any time by the life insured c Both the statements above are correct d Both the statements above are wrong

25 In which of the following aspects do the three non-forfeiture options differ?

a The extent of insurance coverb The amount of debt on the policyc The amount payable on maturityd On all the above three


a Age is important for the underwriter to consider the need for medical testsb Age is material to decide on the plan that can be offeredc Both the statements above are wrongd Both the statements above are correct


a The beneficiaries permitted under the MWP Act depend also on religionb A MWP Act policy cannot be surrenderedc Both the statements above are correct d Both the statements above are wrong


a When a claimant produces the original will, no further proof is necessary

b An affidavit filed before a court by the heirs is adequate evidence of titlec Both the statements above are correct d Both the statements above are wrong


a The insurer should ignore a court attaching the moneys under a MWP Act policy, b The insurer should not become a party to a dispute between rival claimants c Both the statements above are correct d Both the statements above are wrong


a Claims may be paid on the basis of indemnity, if title is not establishedb Claims may be paid on the basis of indemnity, if original policy is lostc Both the statements above are correct d Both the statements above are wrong

31 Why are enquiries made in the case of early claim?

a To ensure that there is no misstatement of factsb To protect the interests of the community of policyholdersc To protect the interests of the insurersd For all the above reasons

32 A missing person will be presumed to be dead only after

a Three yearsb Five yearsc Seven years d Nine years


a A survival benefit is settled like a maturity claim b A survival benefit is paid to the nominee if the policyholder diesc Both the statements above are correct d Both the statements above are wrong


a In ULIPs the premium is invested in a fund decided by the insurerb In ULIPs the premium is invested in a fund decided by the policyholder c Both the above statements are correctd Both the above statements are wrong


a In ULIPs, a policyholder can switch between funds at any timeb In ULIPs, the premium to be invested in the fund can be increased in any year



a In ULIPs, the NAVs are known only to the insurersb In ULIPs, the NAVs are published regularly. c Both the above statements are correctd Both the above statements are wrong




a Ethical behaviour is prescribed in the IRDA’s code of conductb Ethical behaviour is automatic when the policyholder’s interest are kept in mindc Both the statements above are correct d Both the statements above are wrong

39 It is wrong to terminate an existing policy and take out a fresh one if

a The benefits under the new one are drastically different from the existing oneb The earlier policy was taken without fully understanding the implications of the MWP Act c The agent who had recommended the earlier policy is not active any mored It is done with a view to collect the higher first years commission


a The Ombudsman’s recommendations are not binding on the complainantb Insurers have to comply, if the complainant accepts what the Ombudsman saysc Both the statements above are correct d Both the statements above are wrong


a Every insurer has to do a minimum SA of business from the rural areasb Every insurer has to do a minimum number of policies from the rural areas c Both the statements above are correctd Both the statements above are wrong


a The social sector is only in the rural areasb The social sector is only in the urban areasc Both the statements above are correct


43 Given the following information, indicate which of the four options given below would be the correct annual premium (rounded off to the nearest rupee) for an endowment policy on the life of a person born on 28.6.1974. Sum assured Rs. 50,000.Policy taken on 3rd March 2003, to be back dated by three monthsTabular premium for age nearest birthday 27 - Rs.27.46 per thousand Tabular premium for age nearest birthday 28 - Rs.27.83 per thousand Tabular premium for age nearest birthday 29 - Rs.28.37 per thousand Premium adjustment - 5% extra for monthly mode, Re. 1 less for half yearly mode and Rs. 1.50 less for yearly mode SA Rebate Rs 1.50 less for Rs. 50,000 and above

a 1241.00b 1241.50c 1242.00d None of the above

44 Find out loan available at 90% of surrender value as on 1.9.2007 on the basis of following data (the answer to be rounded off to the next lower rupee)

SA Rs. 50,000 DOC- 13.7.2001,Endowment without profit = 25 years Due date of last premium paid 13.07.2096 : yearly mode SV factor 5 yrs 23.91%, 6 yrs 24.63%, 7 yrs 26.48%


45 Find out the loan payable at 90% of surrender value on the basis of following data, (the answer to be rounded off to the next higher rupee)

SA. Rs 50,000 DOC 13.07.1990Endowment with profit - 25 years Due date of last unpaid premium 13-04-2007 mode quarterlyPremium amount Rs 450/- SV factor 56% Bonus is Rs 960 per thousand Interim bonus rate was Rs 75/-



1 d 16 c 31 d2 c 17 b 32 c3 b 18 c 33 a4 d 19 b 34 b5 d 20 b 35 c6 b 21 a 36 b

7 b 22 c 37 b8 a 23 c 38 c9 d 24 b 39 d

10 c 25 d 40 c11 b 26 d 41 b12 b 27 c 42 d13 b 28 d 43 c14 b 29 b 44 b15 d 30 c 45 c


1 0 16 0 31 02 0 17 0 32 03 0 18 0 33 04 0 19 0 34 05 0 20 0 35 06 0 21 0 36 07 0 22 0 37 08 0 23 0 38 09 0 24 0 39 0

10 0 25 0 40 011 0 26 0 41 012 0 27 0 42 013 0 28 0 43 014 0 29 0 44 015 0 30 0 45 0

Total Marks 0

RESULT FAIL

ic33 practice test iii

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