LIC AAO 2019 – Insurance Awareness Questions (Day – 20)

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.  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.

LIC AAO Insurance Awareness Questions Day -20

maximum of 10 points
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1) The maximum amount for which per depositor can be insured across the banks by DICGC is?

a) Rs. 50000

b) Rs. 100000

c) Rs. 200000

d) Rs. 500000

e) Rs. 1000000

2) Minimizing the risk associated with a loss due to unwanted events is called ____.

a) Insurable Risk

b) Investment Risk

c) Mitigation

d) Reinstatement

e) Reinsurance Risk

3) Which insurance company has launched a specially designed mentorship program ‘Wings’, to empower the female workforce?

a) Life Insurance Corporation of India

b) Bajaj Allianz Life Insurance

c) Aviva Life Insurance

d) Bharti AXA Life Insurance

e) Aegon Life Insurance

4) What is an actuary?

a) The actual person who takes an insurance policy.

b) The bond signed between policyholder and insurance company

c) A professional who accesses the risk involved in insurance.

d) The company who provides insurance service in small areas.

e) A hypothetical guardian of the policy.

5) What is Bancassurance?

a) A relationship between a bank and an insurance company to offer insurance products.

b) It is a new type of business loan given by the bank.

c) It is the assurance given by the bank in case of a new project.

d) It is the bank’s assurance to fund a project in case the investors fail.

e) All of the above are correct.

6) LRS is a facility provided by the Reserve Bank of India for all the resident individuals to freely remit a certain amount in terms of US dollar every financial year for a permissible set of current or capital account transactions. Here ‘LRS’ stands for ____

a) Liquidity Remittance Scheme

b) Liberalised Remittance Scheme

c) Liberalised Remittance Source

d) Liberalised Revenue Scheme

e) Liberalised Revenue Source

7) ‘CDS’ offer protection against the non-payment of unsecured corporate or sovereign debt. Here ‘CDS’ stands for ____

a) Collateral default swap

b) Credit demand swap

c) Credit default swap

d) Contract demand swap

e) Contract default swap

8) The mechanism through which the banks are allowed to borrow money through repurchase agreements are called a__________

a) Marginal standing facility

b) Liquidity Adjustment facility

c) Treasury bills

d) Open Market operations

e) Market Stabilisation scheme

9) Which of the following type of agreement grants an agent to write insurance on behalf of the insurance company?

a) No- risk agreement

b) Hiring agreement

c) Agreement of Sundry

d) Affirmative warranty

e) None of the above

10) The individual or entity to which the rights of the insured is legally transferred is known as?

a) Appointee

b) Agent

c) Stakeholder

d) Policyholder

e) Assignee

Answers :

1) Answer: b)

Each depositor in a bank is insured upto a maximum of Rs.1,00,000 (Rupees One Lakh) for both principal and interest amount held by him in the same capacity and same right as on the date of liquidation/cancellation of bank’s licence or the date on which the scheme of amalgamation/merger/reconstruction comes into force.

2) Answer: c)

Minimizing the risk associated with a loss due to unwanted events is called mitigation. It is an important factor which an insurance business should take into consideration so as to reduce the losses due to unwanted events.

3) Answer: c)

Aviva Life Insurance has announced the launch of ‘Wings’, a specially designed mentorship program to empower the female workforce.The program is an initiative of the SHE division of the company, for mentoring all the women employees.

4) Answer: c)

An actuary is a person whose job is to measure the risk involved in the insurance product. * He accesses the risk involved and works on its management. * In case of insurance, they are helpful for both the insurer and the company.

5) Answer: A)

Bancassurance is a relationship between a bank and insurance company to provide insurance facilities. * In this, the insurance facility is given by the banks to its customers. * It is beneficial for both the bank and insurance company as the bank makes money and the insurance company gets access to the bank’s customers.

6) Answer: b)

LRS stands for – Liberalised Remittance Scheme. LRS is a facility provided by the Reserve Bank of India for all resident individuals to freely remit certain amount in terms of US dollar every financial year for a permissible set of current or capital account transactions. Note: * In April 2018, the Reserve Bank of India (RBI) has tightened reporting norms for the Liberalised Remittance Scheme (LRS) under which individual can transfer up to US $2,50,000 abroad in a year. * The purpose of tightening of norms is to improve monitoring and to ensure compliance with LRS limits. * The scheme was introduced in February 2004 and its regulations are provided under Foreign Exchange Management Act (FEMA), 1999.

7) Answer: c)

Credit default swaps offer protection against the non-payment of unsecured corporate or sovereign debt. A typical CDS contract features one counterparty agreeing to “sell” protection to another. The “protected” party pays a fee each year in exchange for a guarantee that if a bond goes into default, the seller of protection will provide compensation.

8) Answer: b)

Liquidity Adjustment Facility (LAF): is a monetary policy which allows banks to borrow money through repurchase agreements. – LAF consists of repo and reverse repo operations.

9) Answer: d)

Affirmative warranty is an agreement between an insurance company and an agent, granting the agent authority to write insurance from that company. It specifies the duties, rights, and obligations of both parties.

10) Answer: e)

It’s the assignee to whom property is transferred by sale or gift, particularly real property. Such transfer takes within the capacity of law and gives the entitled person legally right over the transferred subject.

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