Dear Aspirants, LIC AAO is one the most important exam in the competitive examination. LIC AAO mains exam consists of four sections i.e. Reasoning ability, Data Analysis & Interpretation, General knowledge & Current affairs and Insurance & Financial Market Awareness. Insurance & Financial Market Awareness section comprises of 30 questions. Â Insurance & Financial Market Awareness questions plays an important role in boosting up the score in mains examination and also helps in interview. Here we are providing new series of Practice Questions on Insurance awareness. Aspirants can make use of it, to improve score in Insurance & Financial Market Awareness section.
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1) What’s the name of the written document that allows for policy transfer from one person to another?
a) Transfer Decree
b) Automatic Treaty
c) Arbitration
d) Stamp paper
e) Assignment
2) Which of the following is a legal contract in which outcome is factored upon uncertain event?
a) Deferred Contract
b) Aleatory contract
c) Aggregate Limits
d) All-Risk Agreement
e) No -Risk Agreement
3) The amount, where an Insured discontinues premium payment but doesn’t withdraw money from policy, would be known as_________________
a) Surrender Value
b) Paid-up value
c) Assured value
d) Comprehensive Value
e) None of the above
4) The insurance companies collect a fixed amount from its customers at a fixed interval of time. What is it called?
a) Instalment
b) Contribution
c) Premium
d) EMI
e) None of these
5) What is called the insurance cover that is linked to credit activities and is the goal of protecting credit?
a) Credit file
b) Worth file
c) Assets
d) Arbitration
e) None of the above
6) What is a term for entities which pool money to purchase securities, real property, and other investment assets or originate loans?
a) External investor
b) Institutional investor
c) Co-operative investor
d) Internal investor
e) None of these
7) Under which of the following Act, the General Insurance Council was established?
a) Indian Insurance Act, 1956
b) Life Insurance Corporation Act, 1992
c) Life Insurance Corporation Act, 1984
d) Indian Insurance Act, 1938
e) Indian Insurance Act, 1932
8) What is the name of a company owned by a policyholder who gives a share of its profits to the policyholders as a dividend?
a) Mutual Insurance Company
b) Pure Life Annuity
c) Term Insurance Company
d) Service Provider
e) Insurance Help Provider Company
9) Under the ESOP, who among the following are offered shares in the company?
a) Employees
b) Existing Shareholders
c) Promoters
d) NRIs
e) None of these
10) Pre-authorisation is needed for which type of following insurances?
a) Motor insurance
b) Health insurance
c) Life insurance
d) Travel Insurance
e) General Insurance
Answers :
1) Answer: e)
It is the Assignment which is the written document by means of which a life insurance policy holder can transfer rights of the policy to the assignee, in accordance with some terms and conditions.
2) Answer: b)
It’s the Aleatory Contract which is commonly used in insurance policies and involve performance of certain action which is dependent on certain events. These events are beyond the control of either party, such as natural disaster and death.
3) Answer: b)
It’s the paid up value which is lesser than sum assured, that is paid by the insurer to the insured for not fulfilling contract agreement by not paying premium after three years.
4) Answer: c)
The insurance companies collect a fixed amount from its customers at a fixed interval of time, It is called “Premium”
5) Answer: a)
Credit file is the insurance cover that is linked to credit activities and is the goal of protecting credit.
6) Answer: b)
An Institutional investor is a term for entities which pool money to purchase securities, real property, and other investment assets or originate loans. * There are usually six types of institutional investors: endowment funds, commercial banks, mutual funds, hedge funds, pension funds and insurance companies. Â It trades in large amounts or in dollar amount of securities, which qualifies for preferential treatment and low commission.
7) Answer: d)
Under section 64C of the Indian Insurance Act 1938, the General Insurance Council was established. The Insurance Act, 1938 is a law originally passed in 1938 in British India to regulate the insurance sector. The General Insurance Council is an important link between the Insurance Regulatory and Development Authority of India and the non-Life insurance industry.
8) Answer: a)
The sole purpose of a ‘Mutual Insurance Company’ is to provide insurance coverage for its members and policyholders, and its members have been given the right to choose management. A mutual insurance company is owned by policyholders who gives a share of its profits to the policyholders as a dividend. The concept of mutual insurance originated in England in the late 17th century to cover losses due to fire.
9) Answer: a)
An employee stock ownership plan (ESOP) is an employee-owner program that provides a company’s workforce with an ownership interest in the company. In an ESOP, companies provide their employees with stock ownership, often at no upfront cost to the employees. ESOP shares, however, are part of employees’ remuneration for work performed.
10) Answer: b)
Pre-authorisation is needed for health insurance policies. Prior authorization is a process required for the providers to determine coverage and obtain approval or authorization from an insurance carrier to pay for a proposed treatment or service. This approval is based on medical necessity, medical appropriateness and benefit limits.
