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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-1 section-3

Each section contains 100 MCQs on Insurance .
1
In which of the following cases is insurable interest not present?
Discuss
Answer & Solution
Answer: Option C
Solution:
For purposes of life insurance, everyone is considered to have an insurable interest in their own lives as well as the lives of their spouses and dependents. Employer also has an insurable interest on the life of his employees. Insurable interest is not present in the life of a colleague.
2
Which of the following statements is correct?
Discuss
Answer & Solution
Answer: Option A
Solution:
The higher the premium deposited, the more the benefits at the time of claim.
3
All of the following are elements of a valid contract, except
Discuss
Answer & Solution
Answer: Option B
Solution:
All of the following are elements of a valid contract, except Capacity to pay premiums. It is calculated as the total value of all claims paid by the company divided by the total amount of premium collected in a financial year.
4
Which of the following is NOT true regarding ULIP?
Discuss
Answer & Solution
Answer: Option B
Solution:
ULIP is a life insurance product which provides risk cover for the policy holder along with investment options to invest in any number of qualified investments such as stocks, bonds or mutual funds.
5
A policy with cover for an indefinite term is called
Discuss
Answer & Solution
Answer: Option A
Solution:
Whole life insurance is a life insurance policy which is guaranteed to remain in force for the insured's entire lifetime, provided required premiums are paid throughout.
6
A standalone health insurance company is
Discuss
Answer & Solution
Answer: Option C
Solution:
A standalone health insurance company is a general insurance company which sells only health products. Stand-alone insurance refers to an insurance product that a business or individual purchases to cover a specific risk or cost.
7
Which of the following actions showcases the principle of “uberrima fides”?
Discuss
Answer & Solution
Answer: Option C
Solution:
Uberrima fides is a Latin phrase, meaning "utmost good faith". This means that all the parties to an insurance contract must deal in good faith, making a full declaration of all the material facts in the insurance proposal.
8
On which of the following does amount of annuity payable depend?
1. Principal sum of money
2. Investment period
3. Rate of return
4. Duration of annuity payments
Discuss
Answer & Solution
Answer: Option D
Solution:
Amount of annuity payable depends on all of the above.
9
The insurer’s right to reject a claim under a policy is subject to which of the following sections of the Insurance Act, 1938?
Discuss
Answer & Solution
Answer: Option D
Solution:
The insurer’s right to reject a claim under a policy is subject to Section 45 of the Insurance Act, 1938. Section 45 deals with the insurer's right to reject a claim under a policy.
10
Which of the following funds provides for predominant investment in equities?
Discuss
Answer & Solution
Answer: Option A
Solution:
Equity fund provides for predominant investment in equities. An equity fund is a fund that invests in stocks, also called equity securities. Equity funds are practical investments for most people. The attributes that make equity funds most suitable for small individual investors are the reduction of risk.