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Insurance MCQ Questions and Solutions with Explanations | Commerce

Insurance MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Insurance MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-10 section-7

Each section contains 100 MCQs on Insurance .
91
In insurance , need-gap analysis involves_________
Discuss
Answer & Solution
Answer: Option A
Solution:
In insurance, need-gap analysis involves identifying the areas where the prospect needs insurance protection. In need gap analysis we engage in a process of gathering detailed information about the prospect’s insurance requirements, to identify and determine the assets and perils for which there is inadequate coverage. The objective here is to collect as much additional information about the prospect as possible.
92
The emergence of which of the following necessitates insurance as a form of security?
Discuss
Answer & Solution
Answer: Option B
Solution:
Nuclear family system necessitates insurance as a form of security. Nuclear family system is a family structure that consists of two parents living with their children, also known as an immediate family.
93
Government of India transacts life insurance business in India through which of the following:
Discuss
Answer & Solution
Answer: Option C
Solution:
Government of India transacts life insurance business in India through Postal Life Insurance.
94
Which of the following is correct?
Statement A – Insurance reduces burdens
Statement B – Insurance is a system of mutual support.
Statement C – Insurance the only method to manage risks.
Discuss
Answer & Solution
Answer: Option D
Solution:
Insurance reduces burdens and Insurance is a system of mutual support. Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.
95
Which of the following can easily be compensated thro’ insurance?
Discuss
Answer & Solution
Answer: Option A
Solution:
Primary burden of risk can easily be compensated thro’ insurance. The primary burden of risk consists of losses that are actually suffered by households (and business units), as a result of pure risk events. These losses are often direct and measurable and can be easily compensated for by insurance.
96
Which are the methods to manage risks?
Discuss
Answer & Solution
Answer: Option D
Solution:
Risk Avoidance, Risk Retention and Risk Reduction are the methods to manage risks. There are four main ways to manage risk: risk avoidance, risk transfer, risk reduction and risk retention. Each is applicable under different.
97
Risk reduction and control involves steps like -
Discuss
Answer & Solution
Answer: Option D
Solution:
Risk reduction and control involves steps like Education and training, Making environmental changes, Spreading out items to various locations, etc.
98
Risk Financing includes -
Discuss
Answer & Solution
Answer: Option C
Solution:
In business economics, risk financing is concerned with providing funds to cover the financial effect of unexpected losses experienced by a firm. Traditional forms of finance include risk transfer, funded retention by way of reserves (often called self-insurance) and risk pooling.
99
Risk Retention means
Discuss
Answer & Solution
Answer: Option D
Solution:
Risk Retention means Self-insurance. In other words the retention of risk means one is liable to bear the losses himself up to the amount retained.
100
Insurance refers to protection against an event that _________ happen whereas Assurance refers to protection against an event that _________ happen.
Discuss
Answer & Solution
Answer: Option B
Solution:
Insurance refers to protection against an event that might happen whereas Assurance refers to protection against an event that will happen.