1. Which term is used for options given to policyholders of ULIPs to move their investments from one fund to another within one plan?

A. Transfer Pricings B. Trade Options C. Switches D. Unit Payments E. Dual Payments

2. Consider the following statements regarding the Group Insurance Policy. I. It can be group term insurance policy and group health insurance policy. II. The premium is lesser than the premium in case of individual policies taken. III. This is taken by companies for their employees as part of the employee benefits. Which among the above statements is/are true?

A. Both I and II B. Both II and III C. Both I and III D. Only II E. All I, II and III

3. The profits allocated to each life insurance participating policy are paid in the form of __________.

A. Interim Bonus B. Cash Bonus C. Reversionary Bonus D. Terminal Bonus E. Pay-out Bonus

4. The one who will get the insured amount if you die, is referred to as __________

A. Insured or Policyholder B. Nominee or Beneficiary C. Insurer D. Agent E. Relatives

5. ______ is the amount the policy holder will get from the insurance company if he exits the policy before maturity.

A. Paid up value B. Surrendered value C. Annuity Value D. Lapse Value E. None of these

Answers and Explanations
1. Answer - Option C
Explanation -
Switches are options given to policyholders of ULIPs to move their investments from one fund to another, within one plan. You can transfer units fully or partially between fund options — equity, debt and equity to debt.
2. Answer - Option E
Explanation -
Group Insurance Policies can be group term insurance and group health insurance policy. The premium costs less than the premium in case the individual policyholders had taken separate policies. This is because the risk is spread over a large group of persons, rather than one person.
3. Answer - Option C
Explanation -
The profits allocated to each participating policy are paid in the form of a Reversionary Bonus. A reversionary bonus adds value to the total amount payable to the policyholder or nominee. A reversionary bonus is usually declared at the end of every financial year and it is payable at the time of a claim.
4. Answer - Option B
Explanation -
A person who receives the benefit in case of death of the insured person is a nominee.
5. Answer - Option B
Explanation -
Surrender value is the amount the policy holder will get from the insurance company if he exits the policy before maturity, but after payment of premium for full 3 years. So if a person has payed premium for 3 years, he can opt out of the policy and get the money proportionally (it will obviously be less than that he would have got at maturity)

1. Under which section of Insurance act 1938, the Amalgamation and Transfer of Insurance Business came?

A. section 56 B. section 32 C. section 40 D. section 35 E. section 23

2. In which year General Insurance Corporation of India is notified as Reinsurer?

A. 2000 B. 1999 C. 2002 D. 2005 E. 2008

3. _____________ a/an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium.

A. Insurance B. Banking C. Market Risk D. Premium E. Prompt Corrective Action (PCA)

4. In 1972, the general insurance business was nationalized and ________ insurance companies were amalgamated into four companies.

A. 108 B. 107 C. 110 D. 112 E. 110

5. _______ is a policy contract that for some reason specified in the policy becomes free of all legal effect.

A. Salvage B. Schedule C. Retrospective Rating D. Void E. None of these

Answers and Explanations
1. Answer - Option D
Explanation -
Under section 35 of Insurance act 1938, the Amalgamation and Transfer of Insurance Business came.
2. Answer - Option A
Explanation -
General Insurance Corporation of India is notified as Reinsurer in 2000 and through administrative instruction, its supervisory role over the four subsidiaries was ended.With the General Insurance Business (Nationalisation) Amendment Act 2002, GIC ceased to be a holding company of its subsidiaries. GIC was formed for the purpose of superintending, controlling and carrying on the business of general insurance.
3. Answer - Option A
Explanation -
Insurance is an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium.
4. Answer - Option B
Explanation -
In 1972, the general insurance business was nationalized and 107 general insurance companies were merged into four companies – New India Assurance, Oriental Insurance, United India Insurance and National Insurance Company.
5. Answer - Option D
Explanation -
A policy or other contract that has no legal validity is described as void. When an insurance company voids a life insurance policy, it is usually due to the discovery of misrepresentation of material facts by the person insured. It is as though the voided policy was never in effect since all premiums paid are usually returned to the policy owner.

1. Uberrima fides, is the Latin name for which Principle of Insurance?

A. Principle of Utmost good faith B. Principle of Contribution C. Principle of Proximate cause D. Principle of Indemnity E. All of these

2. With respect to insurance industry, the amount of policies and contracts sold by each sales employee is called ________

A. Productivity B. Durability C. Output D. Work Rate E. Feasibility

3. In case the life insurance policy proceeds are taxable but does not increase Rs __________, then no TDS is deducted by the insurer

A. Rs 1 lakh B. Rs 1.5 lakh C. Rs 2 lakh D. Rs 2.5 lakh E. Rs 2.25 lakh

4. ________ is known as approaching a client by an insurer or an intermediary with a view to convince the client to purchase an insurance polic

A. Solicitation B. Reinstatement C. Proposal D. Claim E. Settlement

5. As per IRDA, the maximum limit to pay insurance premium via cash mode is___________

A. Rs 2,00,000 B. Rs 75,000 C. Rs 50,000 D. Rs 1,00,000 E. Rs 25,000

Answers and Explanations
1. Answer - Option A
Explanation -
Uberrima fides, is the Latin name for Principle of Utmost good faith.
2. Answer - Option A
Explanation -
With respect to insurance industry, the amount of policies and contracts sold by each sales employee is called Productivity.
3. Answer - Option A
Explanation -
Even if these proceeds are taxable as per section 10(10D) but do not exceed Rs 100,000, then also no TDS is to be deducted by the insurer when making the payment to the insured.
4. Answer - Option A
Explanation -
Solicitation is known as approaching a client by an insurer or an intermediary with a view to convince the client to purchase an insurance policy
5. Answer - Option C
Explanation -
Premium is required to be paid in advance and can be paid via cash up to Rs 50,000, (the limit set by IRDA for cash payments) cheque or DD. Further, most insurance companies have provided for payment of premium online.