Published February 2012
IC 33 Exam Questions
1. How are perils and hazards normally distinguished under term insurance policies?
A. Perils are medical factors which influence the risk of dying and hazards are lifestyle activities which influence the risk of dying.
B. Perils are risks that policyholders will die before a specified date and hazards are factors which could influence that risk.
C. Perils are factors which affect the risk being insured and hazards are the size of the risk being insured.
D. Perils are factors which could influence an insured event occurring and hazards are the actual events which will trigger a payout
2. In the context of financial planning, how is the difference between real needs and perceived needs best described?
A. Real needs are financial needs and perceived needs are non-financial needs.
B. Real needs are actual needs and perceived needs are based on a client’s thoughts and desires.
C. Real needs are identified by the insurance agent and perceived needs are identified by the client.
D. Real needs are needs which satisfy an objective and perceived needs are needs which do not satisfy an objective.
3. If a person is concentrating more on health plan and retirement plan then at which stage of life is he in.
A. Young unmarried
B. Young married
C. Young married with Kids
D. Pre retirement
4. The Institute of insurance and risk management along with insurance education does what more
A. Regulation
B. Redressal
C. Research
D. Repository
5. If the client does not wish to proceed with the recommendations right at the moment the agent should
A. Insist on taking the product right away
B. Should ask for the reason for not going with the recommendation
C. Should ask for a future date from the client
D. Should review once again
6. Suresh has adequate reserve capital with him and he wishes to protect his income, moreover he feels that if he does not die then he would need the amount. What type of plan should he opt for?
A. Term Insurance Plan
B. Endowment plan
C. Return of premium plan
D. Pension plan
7. A claim was paid in a policy and it was advertised in the newspaper also. This indicates that the policy was.
A. It was assigned.
B. It was paid up.
C. It was lost.
D. It was surrendered.
8. An indemnity bond was signed in a policy when the claim was paid. This indicates that the policy was.
A. It was lost.
B. It was paid up.
C. It was lapsed.
D. It was surrendered.
9. Manish and Manisha is a married couple with one child. They want to plan for savings, child education/marriage and their retirement and protection of income. Which should be their lowest priority?
A. Marriage.
B. Savings.
C. Education.
D. Protection.
10. While calculating HLV along with future income, no of years of work, increments in salary what is also to be taken in to account?
A. Inflation.
B. Interest.
C. Discount rate
D. Compounding.
11. If RBI increases the interest rates then what will be the effect on share prices.
A. Shares will be more attractive.
B. Shares will be less attractive.
C. Fixed deposits will be more attractive.
D. Fixed deposits will be less attractive.
12. Vishal and sandeep applied for a health plan in XYZ Life Insurance Company. Vishal is asked to undergo a medical checkup but Sandeep is not asked to do so. What will be most possible reason?
A. Sandeep has taken another policy from XYZ Life Insurance Company
B. Vishal is older than Sandeep
C. Sandeep is earning more then Vishal
D. Vishal is working in a MNC
13. During fact finding, What will be the next step after Identifying clients need
A. Quantify clients need
B. Priorities Clients Need
C. Recommending Product
D. Fill up the proposal form
14. What is purpose of investing money in debt mutual fund?
A. Easy access
B. Fixed income
C. Tax Benefits
D. Liquidity
15. Mr. shailsh has an endowment policy with 30 years policy term, he has paid for eight years. The sum assured Rs.8,00,000/- and accumulated bonus Rs.60,000/-. What is the paid up value?
- 213333
- 229333
- 273333
- 293333
16. What is the similarity between Recurring Deposits & cumulative deposits in a bank
- Guarantees
- Taxation
- Tenure
- Lock in periods
17. Mrs. Sheela received some amount out of her husband’s death. In such a situation what will be her prime focus?
- Savings
- Insurance
- Investment management
- Planning for pension
18. Mr. Kunal used to participate in Car race. While taking up the Insurance policy he disclosed this information. What kind of hazard does it refers to
A. Physical hazard
B. Fraudulent representation
C. Moral hazard
D. Peril
19. Which of the following falls under voidable contract?
A. Misrepresentation
B. Lack of insurable interest
C. Fraud
D. None of the above
20. Law of large numbers is worked out by which of the following?
- Pooling of risk
- Maintaining insurable interest
- With utmost good faith
- Randomness
21. If a client wants to compare between all financial products then the best person he can approach is
- Individual agent
- Corporate agent
- Bank
- Broker
22. If a person want to maintain emergency funds the best place is a bank or
- Equity market
- ULIP
- Debt mutual fund
- FD
23. During a fact finding process the need analyzed were income replacement and children’s education. But the customer insists on only a child plan for the time being and asks the agent to give him a child plan. The agent should.
- Do the fact finding exercise again
- Insist with the client to take a term plan
- Give a child plan and revisit the client on a later date
- Give the lead to another agent
24. If a case is already before the consumer forum, then the ombudsman should
- Give a recommendation
- Give a joint decision with the consumer forum
- Dismiss the case
- Give an award.
25. If the sum assured remains the same, what will be impact of net premium if the age of the policyholder increases
A. It rises
B. It falls
C. It remains constant
D. Gross premiums increases
26. What is the advantage of converting physical gold assets to gold ETFs.
A. Liquidity
B. More gold in value
C. Purity
D. More conversion value
27. For which of the following reasons, the underwriter should ask beyond agent’s confidential report.
A. Physical Hazard
B. Moral Hazard
C. SA is too high
D. Pure Risk
28. After doing the need analysis of the client, the agent advised the client to opt for TROP product. But the client refused. According to ethical business practices what will the agent do ?
A. Enquire about the refusal from the client
B. Suggest an alternative plan
C. Pass on to the superior
D. Pass on to the other agent
29. Generally insurance companies do not hold the premium in case of a fraud or misrepresentation. However, due to which of the following circumstances the insurer can retain the premium of the policyholder
A. Fraudulent claim
B. Indisputability clause
C. Redressal procedure
D. Pending decision from Ombudsman
30. According to IRDA agent’s code of conduct, what is the best method of showing the amount of commission earned by the advisor
A. Signed copy of sales illustration
B. Brochure
C. Sales Communication
D. Press releases
31. With pooling of risks an insurance company pools the premium collected from several individuals to insure them against similar risks. At what circumstances will the insurance companies pool the risk of a life insurance and health insurance together?
A. Under no circumstances
B. Under conditions of the reinsurer
C. As directed by actuary
D. As per company policy
32. In case the customer has stopped making payment for the premium of the policy. What are the two most important things required in order to reinstate the policy?
A. Reinstatement Fee and Proof of continuing good health
B. Premium cheque and health declaration
C. Only health certificate
D. Premium cheque with arrears
33. If the customer has invested money in a pension plan from company A and buys an annuity from company B, what is the nature of transaction?
A. Life Long Annuity
B. Open Market
C. Reinsuring Annuity
34. If a policy holder buys a policy from the advisor and lodges a complaint, it should be treated as :
A. Same for all policies sold by advisor
B. Same for all policies sold by the advisor except corporate clients
35. An investor holds a wide range of shares. If the Reserve Bank of India announces a series of significant interest rate increases, the prices of these shares are most likely to
- Become volatile
- Decrease
- Increase
36. In life insurance business if a person is working in calculating premium rates of insurance products, then he is mostly likely a member of
- institutes of actuaries of India
- insurance institute of India
- Charted institute of insurance
- Insurance institute of risk management
37. In a life insurance policy it is later found that the person doesn’t have insurable interest then the contract is
- expired
- reviewed
- Void
- Valid
38. If both parents of proposer died in their thirties due to heart attack what is the kind of peril or hazard the proposer has?
A. Insurable hazard
B. moral hazard
C. non insurable hazard
D. Physical hazard
39. Raunak earns 80,000 per month as salary. He has taken a House loan of Rs. 500000. What will be the maximum amount of EMI that can be charged by the Bank to recover the loan amount?
A. Rs. 32000 per month
B. Rs. 24000 per month
C. Rs. 40000 per month
D. Rs. 48000 per month
[Chapter 6/13 - Care should be taken to ensure that EMIs do not exceed 40% of the monthly take home salary.]
40. Frequent switching is not advisable in ULIP plan because it increase
A. Investment Risk
B. Risk of death
C. Uncertainty of return
D. Chances of lapse
41. According to insurance terminology which of the following is correct?
A. Lung cancer is a hazard whereas smoking is a peril
B. Smoking is a hazard and lung cancer is a peril
C. Lung cancer is a peril and smoking is a moral hazard
D. Smoking is a moral hazard whereas lung cancer is a peril.
[Chapter 2/5 - If lung cancer is a peril then smoking can be a hazard that may increase the chance that the peril (lung cancer) will occur.]
42. An insurance agent sold two policies to two different persons having the same policy term. He declares the commission to each of them. The commission of one of the policy is more than the other. What should be the reasons for this difference?
A. Risk profile of both the policyholder are different
B. Age of both the candidate are different
C. One has chosen Single premium policy and other has chosen regular premium policy
D. Both have chosen different kind of policies.
43. Open market option under Annuity policy would extend which of the following benefit?
A. Ensure Better annuity rate
B. Increase in the range
C. Increase in return
D. Switch of Funds
44. Akash is an Unmarried person and employed with company ABC and drawing a handsome salary. He has no liabilities. What kind of plan can be suggested to him?
A. Money Back
B. Term Plan
C. Endowment Plan
D. ULIP
45. What should an agent do in order to understand the mental state of client in respect to his investments in saving products
A. Fact finding
B. Consulting the client’s parents
C. Consulting the family of the client
D. Reviewing his existing investments
46.
47. Net premium is equal to
A. Premium plus interest earning
B. Risk premium plus interest earning
C. Premium minus interest earning
D. Risk premium minus interest earning
48. Pooling of risk in insurance means
A. The premium collected & deposited in a pool
B. All similar risks are pooled together
C. Premium is pool to make claims
D. Contribution of insurance company
49. Principle of utmost good faith will operate in existing policy
A. Every time premium is paid
B. If the policy has lapsed and it has to be revived.
C. If the insured person falls sick and is admitted to hospital.
D. If the insured person changes his job.
50. Both the parties to a contract must agree and understand the same thing and in the same sense which is called
A. Consideration.
B. Legality of an object.
C. Consensus ad idem.
D. Acceptance.
51. In case of life insurance, Insurable interest must exist
A. At inception of policy
B. Not needed
C. At the time of claim
D. Any time during the contract
52. With this type of deposit the bank pays the principal and the total interest at the end of the term.
A. Traditional deposits
B. Recurring deposits
C. Cumulative deposits
D. Term Deposits
53. The Premium on all riders put together should not exceed
A. 10% of the premium on the base policy
B. 20% of the premium on the base policy
C. 30% of the premium on the base policy
D. 40% of the premium on the base policy
54. How riders will help the customer in life insurance?
A. allows policyholders to customize their insurance cover with additional benefits
B. rider is like a clause
C. Operative clause.
D. Rider is like Preamble.
55. In Daily hospitalization cash benefit scheme,
A. The daily amount paid is fixed and will never be more or less than the cost of actual treatment.
B. The insurance company may pay an additional amount on a daily basis if the insured is admitted to the Intensive Care Unit (ICU).
C. The insurance company will pay for doctor consultation fees incurred prior to hospitalization
D. Only surgery expenses are included in daily hospitalization benefit
56. A lump sum withdrawal allowed as commutation in pension plans is
A. 1/3rd of the accumulation fund
B. 1/4th of the accumulation fund
C. 1/2nd of the accumulation fund
D. Full withdrawal is allowed
57. 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 period?
A. paid up to 75 Yrs
B. annuity will be continued for next 5 Years
C. till he die
D. not remembered
58. In term insurance if Critical illness rider claim happens then what will happen to existing policy
A. CI benefit will cease
B. CI benefit reduced from existing sum assured
C. CI benefit continues
D. No change in policy.
59. What is the main objective of taking the life insurance policy?
A. Tax benefit
B. Savings
C. Investment
D. Protection
60. If person consumes alcohol- what is the type of hazard?
A. Moral
B. Physical
C. Occupational
D. Professional
61. Group Insurance can be taken in following relationship
A. employee- employer
B. husband-wife
C. family members
D. society members
62. Where one can approach in case of dispute?
A. IRDA
B. Consumer Forum
63. Life insurance is the most important for which age group
A. Young
B. Pre- retirement
C. Retirement
D. children
64. Where annually increasing flexible premiums operate under a life insurance policy, what rate of increase will generally apply?
A. 2.5%
B. 3.0%
C. 5.0%
D. 7.5%
65. Kamal is willing to pay 60000/- per annum for his ULIP policy. What should be the SA in case he wants to avail the tax benefits?
A. 1 lacs
B. 3 lacs
C. 2 lacs
D. 1.50 lacs
66. The regulations issued by the IRDA, require that the decision on the proposal must be conveyed to the proposer within
A. 15 days of receiving the proposal
B. 20 days of receiving the proposal
C. 25 days of receiving the proposal
D. 30 days of receiving the proposal
67. Family floater health Insurance plan covers
A. All members of a Family
B. Husband and Wife only
C. Parents only
D. Children Only
68. According to IRDA guidelines, how long does an insurance company have to complete its investigation of a claim?
A. 30 days
B. 90 days
C. 120 days
D. 180 days
69. How the Daily hospitalization cash benefit will provide benefits to policyholder who is hospitalized?
A. Entire charges are refunded.
B. Entire charges less bed charges will be paid
C. A fixed amount on a daily basis is paid irrespective of the actual cost of treatment
D. Only Hospital bill will be paid
70. Who is a regulator, supervisor and monetary authority of the financial system in India?
A. IRDA
B. SEBI
C. RBI
D. SBI
71. Indisputability clause can be enforced by the insurance company during the
A. First five years of policy
B. First Two years of policy
C. Claim
D. Inception of the policy
72. To ensure that the premiums are paid out of a legitimate source of funds cash is accepted
A. Up to 50000
B. Up to 99990
C. Up to 100000
D. Without any limit
73. If there is no claim in a year than what will be the benefit to the customer as NO CLAIM BONUS
A. Discount in next year premium
B. Increase in Sum Assured next year
C. Loans facility
D. No benefit
74. An individual is said to be competent to enter into a contract if they are
A. 18 year old
B. 21 year old
C. 23 year old
D. 25 year old
75. Maximum time for investigation in disputed claim?
A. 1 month
B. 2 months
C. 3 months
D. 6 months
76. The Ombudsman’s powers are restricted to insurance contracts of value not exceeding?
A. 50 lakhs
B. 30 lakhs
C. 25 lakhs
D. 20 lakhs
77. In which section of Policy document, Information about the location of the insurance Ombudsman had written?
A. Operative clause
B. Attestation
C. Information statement
D. Endorsements
78. In Cumulative bank deposit the interest that in normally compounded on what basis.
A. Monthly
B. Quarterly
C. Half Yearly
D. Annually
79. The premium for accidental death benefit rider must not exceed
A. 15% of base policy premium
B. 25% of base policy premium
C. 30% of base policy premium
D. 40% of base policy premium
80. If the annual premium for a plan is 32000 and a frequency loading of 4% is added in a quarterly premium what is the amount that needs to be paid.
A. 8000
B. 8320
C. 9456
D. 9240
81. What amount of insurable interest does an individual have in his own life?
A. 20,000
B. 50,000
C. Up to the sum assured taken in the plan
D. Unlimited
82. Ombudsman passes an award within which time
A. 1 month
B. 2 months
C. 3 months
D. 6 months
83. If the license of an agent has been disqualified by a designated authority in 2010 then the person can apply for a license in which year.
A. 2013
B. 2015
C. 2017
D. 2020
84. Under the hospital care rider what is the payout made
A. 10% of the sum assured
B. Specified amount multiplied by the number of days the policyholder is hospitalized
85. If the agent recommends the client to terminate an endowment plan and take a whole life in order to earn higher commission its termed as
A. Switching
B. Doing a financial planning
C. Churning
86. Mr. Denny is married and has 2 children and his parents are alive. He has taken a family floater plan. Under the plan who all will be covered.
A. Denny
B. Denny and his wife
C. Denny, his wife and children
D. Denny, his wife, his children and his parents
87. Amit has taken a G-Sec and has parted with it mid way as he required the money with the intention of not getting the interest. What will he get?
A. Discounted Value
B. Principle amount
C. Discounted Value with persistency bonus
D. Principle with persistency bonus
88. If bonus is given under a plan the additional premium added is known as
A. Loading
B. Investment
C. Frequency
89. Nomination can be in favor of how many people?
A. One person
B. Two persons
C. Three persons
D. It can be any number
90. Suresh is suffering from Asthma and the policy in been done on joint life basis and the need for nomination under the plan is less as
A. Joint life policy
B. Has physical ailment
91. What key impact will the agent have in low persistency
A. Increase more business
B. Increase in the agents earning
C. Will improve reputation
D. Will have impact in his commission.
92. Within how many days will the underwriter needs to inform the policyholder regarding the status of the policy.
A. 10 days
B. 15 days
C. 30 days
D. 45 days
93. Certificate from the village panchayat
A. Will be considered as standard age proof
B. Will be considered as non standard age proof
C. Will not be accepted
94. What is the maximum sum assured under a micro insurance
A. 10000
B. 25000
C. 50000
D. 100000
95. Varun wishes to pursue a career in insurance and wishes to be in a department which calculates the level of premium. In which department should he join?
A. Actuary
B. Underwriter
C. Claim Department
D. Accounts
96. If Naresh wishes to take the tax benefit of the full premium paid which is 60000, what amount of sum assured should he avail in a ULIP plan.
A. 2 lacs
B. 3 lacs
C. 5 lacs
D. 6 lacs
97. Ashish is looking at different plans of insurance for protection at the lowest premium. Which is the best plan for him?
A. Term plan
B. Endowment plan
C. Whole life plan
D. Money back plan.
98. The insurance act of 1938 created which of these.
A. IRDA
B. Tariff Advisory Committee
C. National Insurance Academy
D. LIC
99. Ashu is an illiterate person and his proposal form was filled by Nishu, then what is the additional requirement to be taken along with the documents.
A. The policy needs to be advertised in the newspaper.
B. Nishu has to sign an indemnity bond.
C. Thumb impression of Ashu has to be taken.
D. Ashu needs to be medically examined.
100.Harsh’s policy matured, however he was paid only 25% of the sum insured in spite of all his premiums been paid on time. This indicates that his policy is a
A. Term plan.
B. Endowment plan.
C. Money back plan.
D. Wholelife plan.
101.The Authority of COPA is limited to what amount at the district level.
A. 10,00,000.
B. 20,00,000.
C. 50,00,000
D. 1,00,00,000.
102.In case of a term plan the maximum premium of the accidental rider can be.
A. 100% of basic premium.
B. 50% of basic premium.
C. 30% of basic premium.
D. 35% of basic premium.
103.With reference to the principle of indemnity a life insurance policy is a.
A. Insurance contract.
B. Indemnity contract.
C. Value contract.
D. Major life contract.
104.In the personal statement, Ramesh declares that he consumes alcohol twice every week. This is a
A. Moral hazard.
B. Moral peril.
C. Physical hazard.
D. Physical peril.
105.Micro insurance is made specifically for people from.
A. High income.
B. Middle class.
C. Low income.
D. Affluent class.
