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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-5

Each section contains 100 MCQs on Insurance .
1
Which among the following is a wealth accumulation product?
Discuss
Answer & Solution
Answer: Option B
Solution:
Shares is a wealth accumulation product. To build a corpus for long-term goals like buying a house, building a retirement kitty or funding a child's education, investors must choose products that provide enhanced earning power. This can come in the form of diversified equity funds.
2
Savings can be considered as a composite of two decisions. Choose them from the list below.
Discuss
Answer & Solution
Answer: Option D
Solution:
Savings can be considered as a composite of Postponement of consumption and parting with liquidity.
Postponement of consumption: an allocation of resources between present and future consumption.
Parting with liquidity (or ready purchasing power) in exchange for less liquid assets. For instance, purchase of a life insurance policy implies exchanging money for a contract which is less liquid.
3
What is the relation between investment horizon and returns?
Discuss
Answer & Solution
Answer: Option B
Solution:
Greater the investment horizon the larger the returns is the relation between investment horizon and returns. The growth rate of the investments will depend on your risk profile, i.e., higher the risk you take in investments.
4
Which among the following can be categorised under transactional products?
Discuss
Answer & Solution
Answer: Option A
Solution:
Bank deposits can be categorised under transactional products. Transaction Banking division of a bank typically provides commercial banking products and services for both corporates and financial institutions, including domestic and cross-border payments, risk mitigation, international trade finance as well as trust, agency, depositary, custody and related services.
5
Which among the following can be categorised under contingency products?
Discuss
Answer & Solution
Answer: Option B
Solution:
Life insurance can be categorised under contingency products. If there is no contingency, no payment is made. In life insurance contract, payment is certain because the death or the expiry of term will certainly occur.
6
Which of the below can be categorised under wealth accumulation products?
Discuss
Answer & Solution
Answer: Option D
Solution:
Shares is a wealth accumulation product. To build a corpus for long-term goals like buying a house, building a retirement kitty or funding a child's education, investors must choose products that provide enhanced earning power. This can come in the form of diversified equity funds.
7
_________ is a rise in the general level of prices of goods and services in an economy over a period of time.
Discuss
Answer & Solution
Answer: Option B
Solution:
Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time.
8
Which of the below is not a strategy to maximise discretionary income?
Discuss
Answer & Solution
Answer: Option D
Solution:
Insurance purchase is not a strategy to maximise discretionary income.
9
_________ life insurance pays off a policyholder's mortgage in the event of the person's death.
Discuss
Answer & Solution
Answer: Option B
Solution:
Mortgage life insurance pays off a policyholder's mortgage in the event of the person's death. This protects a mortgage holder's heirs in the event of his/her untimely demise. If the beneficiary dies after he/she has finished paying for the house, no mortgage life insurance is paid out.
10
Which of the below option is correct with regards to a term insurance plan?
Discuss
Answer & Solution
Answer: Option C
Solution:
Term insurance can be bought as a stand-alone policy as well as a rider with another policy. Term insurance is a life insurance product offered by an insurance company which offers financial coverage to the policy holder for a specific time period. In case of death of the insured individual during the policy term, the death benefit is paid by the company to the beneficiary.