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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-3 section-8

Each section contains 100 MCQs on Insurance .
21
If any condition is put by the Insurer then it is
Discuss
Answer & Solution
Answer: Option C
Solution:
If any condition is put by the Insurer then it is Counter offer. A counter offer is an offer made in response to a previous offer by the other party during negotiations for a final contract. It is a new offer made in response to an offer received.
22
Which is the ‘consideration’ from the insurer in an insurance contract?
Discuss
Answer & Solution
Answer: Option B
Solution:
Promise to indemnify is the ‘consideration’ from the insurer in an insurance contract. In every contract of guarantee there is an implied promise by the principal debtor to indemnify the surety, and the surety is entitled to recover from the principal debtor whatever sum he has rightfully paid under the guarantee, but no sums which he has paid wrongfully.
23
Consent is not said to be free when it is caused by
Discuss
Answer & Solution
Answer: Option D
Solution:
Consent is not said to be free when it is caused by Coercion, Fraud and Misrepresentation.
24
Which is not a capacity to enter into contract?
Discuss
Answer & Solution
Answer: Option A
Solution:
Minors (those under the age of 18, in most states) lack the capacity to make a contract. So a minor who signs a contract can either honor the deal or void the contract.
25
In commercial contracts, the principle to be observed is
Discuss
Answer & Solution
Answer: Option A
Solution:
In commercial contracts, the principle to be observed is Caveat Emptor. Caveat emptor is a Latin term that means "let the buyer beware." Similar to the phrase "sold as is," this term means that the buyer assumes the risk that a product may fail to meet expectations or have defects.
26
Material facts are those that would help the insurer to decide :
Discuss
Answer & Solution
Answer: Option C
Solution:
Material facts are those that would help the insurer to decide the acceptability of risk and the rate of premium to be charged.
27
Which of the following is not a material fact?
Discuss
Answer & Solution
Answer: Option D
Solution:
Hazardous occupation, previous policies of the proposer and health are not a material fact. Material fact is a fact that is important, significant or essential to a reasonable person in deciding whether to engage or not to engage in a particular transaction, issue or matter at hand.
28
Which of the following material facts need not be disclosed?
Discuss
Answer & Solution
Answer: Option D
Solution:
Matters of law, Fact which proposer was not aware and Fact which could have been discovered by reasonable diligence material facts need not be disclosed.
29
Duty to disclose arises in which of the following instances?
Discuss
Answer & Solution
Answer: Option C
Solution:
Duty to disclose arises at the time of taking the policy and at the time of revival of lapsed insurance.
30
Which of the following constitute Breach of Utmost Good faith?
Discuss
Answer & Solution
Answer: Option C
Solution:
Misrepresentation and non-disclosure constitute breach of utmost good faith. In an insurance policy, misrepresentation on the behalf of the insured gives the insurance company a right to terminate the policy. Non-disclosure means failure to divulge a relevant fact when applying for an insurance policy. This is a violation of the principle of good faith which should be observed in insurance negotiations.