Name: 
 

Test 3


Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 1. 
What are the benefits in investing in insurance plans ?
a.
In Family Protection
c.
Retirement planning
b.
Child education & marriage planning
d.
All of the above
 

 2. 
Insurance is meant to
a.
Prevent specified events
c.
compensate for losses from specified events
b.
prevent damage to assets from  specified events
d.
Rebuild the assets lost because of specified events
 

 3. 
Insurance is necessary because
a.
Assets deprciate over time and through usage
c.
Name of the above reasons
b.
Assets may be damagedby external causes
d.
None of the above reasons
 

 4. 
Insurance works on the principle of
a.
Mutual help
c.
Both of the above
b.
charity
d.
Neirther of the above
 

 5. 
Insurance works on the principle of
a.
Equal contributions
c.
Contributions dependent on affordability
b.
Proportional contributions
d.
None of the above
 

 6. 
An insurer, as a trustee, has to ensure that
a.
The life fund is safe
c.
Both of the above
b.
The life fund earns the maximum interest
d.
Neither of the above
 

 7. 
Life insurance is arranged because
a.
some one may die
c.
Of both the above reasons
b.
Some one may live
d.
Of neither of the above reasons
 

 8. 
Transfer of Insurance from Insurance Companies is done in favour of
a.
Bancassurance
c.
Reinsurance
b.
TPA
d.
Actuaries
 

 9. 
Insurance market divided into
a.
Endowment and money back insurance
c.
Govt. and Pvt. Insurance market
b.
Life and non-life insurance
d.
Health and saving Insurance market
 

 10. 
Prabhu, a businessman taken a term insurance for Rs. 30 lacs for 30 yrs. It is a example for
a.
Risk retention
c.
Riskavoidance
b.
Risktransfer
d.
Risktolerance
 

 11. 
Mr. X is illiterate and is buying insurance. Mr. Y fill up the proposal form on behalf of Mr. X and also endorses and signs an attestation in the proposal form. In addition to all document what else should be taken
a.
Mr. X photograph
c.
Mr. X thumb impression
b.
Mr. Y photograph
d.
Mr. Y thumb impression
 

 12. 
On Maturity of an insurance policy only 25% of the amount can is paid. This is due to
a.
It is assigned
c.
It is paid up
b.
It is a money back policy
d.
Any one of the above
 

 13. 
A Client can reject a policy after how many days of receiving the same.
a.
30
c.
50
b.
15
d.
20
 

 14. 
A & B in enters into a Contract & B accepts the Contract with a condition. Will this be considered as a Contract Between A & B?
a.
Contract is created only when the acceptance isunconditional.
c.
Both are Correct
b.
Contract is created only when the acceptance isconditional.
d.
Both are Incorrect
 

 15. 
Husband and wife jointly taking insurance policy what is the reason that they need not mention nominee under this insurance policy
a.
Whole life
c.
Joint Life Policy
b.
Return of premium
d.
Endowment policy
 

 16. 
In which kind of policy the insurable interest should exist at the time of claim only
a.
Motor insurance
c.
Liability insurance
b.
Marine insurance
d.
Travel insurance
 

 17. 
Policy having two nominees what should be the minirT allocation
a.
Each nominee to get minimum 10%
c.
First nominee to get more than second nominee
b.
Each nominee to get minimum 25%
d.
No such condition
 

 18. 
TWO FRIENDS HAVE TAKEN SAME POLICY BUT THEIR PREMIUMS ARE DIFFERENT WHY?
a.
AGE
c.
SA
b.
MEDICAL
d.
ALL THE ABOVE
 

 19. 
As per the norms of risk assessment by U/W both the parents of a policy holder died in their early 30s due to Heart disease, what is the risk assessed
a.
Moral Hazard
c.
Occupational Hazard
b.
Medical Hazard
d.
Physical Hazard
 

 20. 
Mr. A wants insurance cover . But he is drinks alcohol frequently . What kind of hazard you may categorize?
a.
Physical hazard
c.
financial risk
b.
Moral Hazard
d.
Pure risk
 

 21. 
Income replacement methods equates human life value (HLV) to
a.
Future value of present earning
c.
Present value of previous earning
b.
Present value of future earning
d.
Future value of previous earning
 

 22. 
In unde riting the economic value of the person is determined be wgat
a.
Occupation of the person
c.
The income that he earns
b.
Financial history of his family
d.
Human life value
 

 23. 
What tax rate, if any, will be applicable to a life insurance policy holder for the maturity proceeds of a Rs 50,000 life insurance policy 
a.
Nil
c.
0.2
b.
0.1
d.
0.3
 

 24. 
If 50000 is invested in Single Premium ULIP than what will be the minimum SA applicable?
a.
50000
c.
62500
b.
75000
d.
100000
 

 25. 
Term insurance if best suited for the following need
a.
home loan
c.
marriage of kids
b.
education needs
d.
Retirement  needs      
 

 26. 
Ram has invested Rs. 5000 in PPF and Rs. 1 lac in life insuranc premium in which he will get maximum tax benefit
a.
Life insurance premium
c.
50% on each
b.
PPF
d.
95% on life insurance and 5% on PPF
 

 27. 
Mr. Sumesh takes a policy and pays premium Rs. 20,000with• sum insured of Rs. 3 lac what will be the tax implication on hi: maturity amount
a.
Fully taxable
c.
0.2
b.
0.1
d.
tax fully exempted
 

 28. 
Kamal is willing to pay Rs. 60,000 pa. for his ulip policy. What should betheSAin case he wants to avail the tax benefits?
a.
1 lac
c.
2 Iac
b.
3 lac
d.
1.5 lac
 

 29. 
What is the advantage of converting physical gold assets to gold ETFS Liquidity
a.
Liquidity
c.
Purity
b.
More gold in value
d.
More conversion value
 

 30. 
A person takes a pension plan for 15 year term with Rs. 20,000 premium and S.A. of Rs. 3 lac. What would be the tax implication on maturity value at the time of maturity?
a.
NIL
c.
0.2
b.
0.1
d.
0.3
 

 31. 
Critical illness rider was taken and the rider benefit has been claimed , the rider benefit now gets
a.
Reduced the  base SA
c.
continues as it is
b.
terminated
d.
will discontinue for 1 months
 

 32. 
Customer has opted for a 5 yrs guaranteed annuity option. What will happen to annuity if the customer survives for 5 years after the end of guarantee pd.
a.
Paid upto 75yrs
c.
Till he die
b.
Annuity will be continued for next 5 yrs
d.
Not remembered
 

 33. 
Under a health insurance policy if a policy holder needs to his no claim bonus how can that be done
a.
Cash encashment
c.
Increase in the cover level
b.
Discount in the next premium
d.
Certain policy exclusion
 

 34. 
Mr. Yash has taken an annuity on 25th August 2010. The 'benefit, of the plan will start from 25th August 2011. What type of annuity. plan isthis?
a.
Guaranteed period annuity
c.
Deferred annuity
b.
Life annuity
d.
Immediate annuity
 

 35. 
Why need do self employed people have to buy medical insurance than that of a person employed with a public sector company
a.
Public sector employees do not get sick very often
c.
Self employed person fall sick quite often
b.
public sector employees enjoy medical cover related to the Job
d.
Self employed person give more priorities to health
 

 36. 
Samir is married and he has only one partner with dependent parents and no child. What should be his priority?
a.
Income protection
c.
Investment efficiency
b.
Inheritance planning
d.
Longterm saving
 

 37. 
Acouple has 7 year old son. What solution would they be looking for
a.
Retirement
c.
Child education
b.
Health care
d.
Life cover
 

 38. 
In which of the recognised life stages an indivlducl does not required any protection cover
a.
Childhood
c.
Pre retirement
b.
Young married
d.
Retirement
 

 39. 
Mr. Raj is married and having 2 children which plan can he that can cover his whole family
a.
Health insurance
c.
Life insurance
b.
Family floater
d.
Retirement
 

 40. 
As an advisor why is it essential for you to carry out the financial planning exercise with the prospective client
a.
Individuals understand their real needs and can prioritize' them
c.
Individual do not understand their real needs and cannot prioritize them
b.
Individuals have same financial needs at different stages Of the life cycle
d.
Individual's real and perceived needs are same
 

 41. 
Churning is bad , based on  which aspect
a.
Agents earn Lower  Commission on churning
c.
Policyholders suffer due to surrender charges and benefits
b.
Policyholder gets more benefits
d.
Insurance companies get good branding
 

 42. 
If a person is missing then after how many years will he be considered as dead & SA paid to the nominee.
a.
5
c.
10
b.
7
d.
12
 

 43. 
To whom prevention of money laundering Act 2002 (PMLA) is applicable
a.
RBI/SEBI/IRDNFI
c.
All service providers
b.
Corporate House
d.
All above
 

 44. 
In a MWP policy the beneficiaries under the plan, other than wife can be
a.
Ex wife
c.
Parents
b.
Sibling
d.
Children
 

 45. 
What is the limit of Ombudsman claim settlement?
a.
insurance contracts of value not exceeding Rs. 20 lakhs
c.
insurance contracts of value not exceeding Rs. 30 lakhs
b.
insurance contracts of value not exceeding Rs. 25 lakhs
d.
insurance contracts of value not exceeding Rs. 50 lakhs
 

 46. 
If I RDA is unable to discharge its functions or duties, central govt.
a.
Has power to supersede the IRDAby issuing notification
c.
Has power to supersede the IRDA by issuing draft
b.
Has power to supersede the IRDA by issuing a bill in parliament
d.
Can make changes inlRDAlaw
 

 47. 
According to Insurance broker association of India, what is the most appropriate relationship between insurer and broker
a.
Insurance broker represents the client and insurer, remunerate the broker
c.
Insurer represent both client and broker remuneration
b.
The client represents broker and insurer remunerate broker
d.
Broker only .service the client
 

 48. 
The code of conduct has been prescribed in India by
a.
IRDA
c.
Insurance lnstt. of India
b.
insurance council
d.
Govt. of India
 

 49. 
Rahul is licensed insurance agent.  As agent he must carry out his role in accordance with
a.
Insurance company code of conduct
c.
I RDA regulation code olconduct
b.
IRDAAct code of conduct
d.
Insurance Act code ofconduct
 

 50. 
Shanker an advisor sold a term insurance and ULIP to Amar, ths client who is unmarried with no dependent, Shan ker action woul: be     
a.
Underselling of insurance policy
c.
Overselling of insurance policy
b.
Churning
d.
Ethical practice
 



 
Check Your Work     Start Over