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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-2 section-3

Each section contains 100 MCQs on Insurance .
11
Which among the following is not a variant of term assurance?
Discuss
Answer & Solution
Answer: Option D
Solution:
An endowment policy is a life insurance contract designed to pay a lump sum after a specific term (on its 'maturity') or on death.
12
Which of the following is not a risk fit for insurance?
Discuss
Answer & Solution
Answer: Option D
Solution:
Natural wear and tear to an asset is not to be included in insurance. A wear and tear exclusion states that the normal, expected deterioration of the insured object will not be covered by an insurance policy.
13
In context of insurance, ‘risk retention’ indicates a situation where
Discuss
Answer & Solution
Answer: Option D
Solution:
Risk retention is a situation where one decides to bear the risk and its effects. Risk retention is a company's decision to take responsibility for a particular risk it faces, as opposed to transferring the risk over to an insurance company. Companies often retain risks when they believe that the cost of doing so is less then the cost of fully or partially insuring against it.
14
Occurrence of _________ has to be _________ and not a _________ of the insured person.
Discuss
Answer & Solution
Answer: Option A
Solution:
Occurrence of peril has to be uncertain and not a creation of the insured person. A specific risk or cause of loss covered by an insurance policy, such as a fire, windstorm, flood, or theft. A named-peril policy covers the policyholder only for the risks named in the policy in contrast to an all-risk policy, which covers all causes of loss except those specifically excluded.
15
In this method of underwriting, the underwriter gives rating points for all the negative or adverse factors, totals them and decides extra mortality rating. Which method are we talking about?
Discuss
Answer & Solution
Answer: Option D
Solution:
Numerical rating system is underwriting method used in classifying applicants for life insurance according to certain demographic factors and assigning weights to these factors. Factors include physical condition, build, family history, personal history, habits, and morals.
16
How much free look period is allowed from the date of receipt of health insurance policy document?
Discuss
Answer & Solution
Answer: Option B
Solution:
A free look period is where a new insurance policy owner is able to terminate the contract without penalties such as surrender charges, etc. The free look period allowed is 15 days.
17
When is an insurance company put to real test?
Discuss
Answer & Solution
Answer: Option D
Solution:
An insurance company put is to real test at the time of announcement of bonuses. Bonus refers to an extra amount of money one receives in addition to the base amount. The same concept also holds true with bonuses payable in a life insurance policy.
18
Unit Linked policy scores over Traditional plan with respect to
Discuss
Answer & Solution
Answer: Option D
Solution:
Unit Linked policy scores over traditional plan with respect to Transparent charges structure, value of the units related to an index of performance and both premium and sum insured (as a multiple of annual premium) decided by the insured.
19
If the claim could not be settled for want of proper identification of a payee, the insurer shall pay interest at the rate of
Discuss
Answer & Solution
Answer: Option A
Solution:
If the claim could not be settled for want of proper identification of a payee, the insurer shall pay interest at the rate of savings bank account.
20
Which act speaks about presumption of death?
Discuss
Answer & Solution
Answer: Option D
Solution:
Indian Evidence Act act speaks about presumption of death. Presumption of death is governed by sections 107 and 108 of the Evidence Act, which allows for presumption of death for a person missing for 7 years to be raised in appropriate proceedings before the court.