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.
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1) The impact of actuary recommendation in insurance premium would result in _______
a) Lower premium
b) Lower risk value
c) Construct morality tables
d) Higher Risk Value
e) None of these
2) Where is the headquarters of National Insurance Company Limited (NICL)?
a) Chennai
b) Delhi
c) Mumbai
d) Kolkata
e) Jodhpur
3) Insurance law in India had its origins in the United Kingdom with the establishment of a British firm ________ in 1818.
a) Bombay Life Assurance Company
b) The Madras Equitable Life Insurance Society
c) Aegon Life Insurance Company Limited
d) Peerless Group
e) The Oriental Life Insurance Company
4) The companies/organisations which issue ULIP are
a) Insurance companies
b) Banks
c) NABARD
d) RBI
e) None of the above
5) As part of the regulatory sandbox initiative, IRDAI will allow testing of products and services for how many months before the launch of any product in the market?
a) 11
b) 3
c) 4
d) 6
e) 10
6) A person with expertise in the fields of economics, statistics and mathematics, who helps in risk assessment and estimation of premiums etc for an insurance business, is called _____.
a) insurance agent
b) assignor
c) apostate
d) actuary
e) analyst
7) A party or entity who transfers the rights of the contract they hold to another party is known as ____.
a) appointee
b) assignor
c) actuary
d) policyholder
e) stakeholder
8) Recently, all the general insurance companies have been directed to raise the compulsory personal accident cover for owner-driver to Rs 15 lakh. What is the premium for that cover?
a) Rs. 750
b) Rs. 1000
c) Rs. 500
d) Rs. 800
e) Rs. 2000
9) In February 2019, Life Insurance Corporation (LIC) of India had launched a new micro insurance plan “Micro Bachat”. What is the maximum basic sum assured (BSA) under this plan?
a) Rs. 20 lakh
b) Rs. 5 lakh
c) Rs. 10 lakh
d) Rs. 2 lakh
e) Rs. 15 lakh
10) According to the annual report by Insurance Regulatory and Development Authority of India (IRDAI), insurance penetration in India continues to be one of the lowest at ____.
a) 4.65%
b) 5.35%
c) 3.69%
d) 2.51%
e) 5.81%
Answers:
1) Answer: a)
It is actually provide a lesser risk of investment in financial world which encourage behaviour of investing and caused mass people involvement in buying policies causing lesser premiums.
2) Answer: d)
National Insurance Company Limited (NICL) is a state owned general insurance company in India. The company headquartered at Kolkata was established in 1906.
3) Answer: e)
Insurance law in India had its origins in the United Kingdom with the establishment of a British firm, the Oriental Life Insurance Company in 1818 in Calcutta, followed by the Bombay Life Assurance Company in 1823, the Madras Equitable Life Insurance Society in 1829. However, till the establishment of the Bombay Mutual Life Assurance Society in 1871, Indians were charged an extra premium of up to 20% as compared to the British and it was the 1st Indian insurer.
4) Answer: a)
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) Answer: d)
IRDAI will allow testing of products and services for six months before they are launched in the market.The companies planning to test products will have to form a consortium and then apply for product testing.Subhash Chandra Khuntia is the Chairman of the Insurance Regulatory and Development Authority (IRDAI).IRDAI was established under the Insurance Regulatory and Development Authority Act, 1999.IRDAI Headquarters: Hyderabad
6) Answer: d)
An actuary is a person whose job is to measure the risk involved in the insurance product.
Actuaries play a crucial role in the operation and profitability of any insurance business.
They help the firm with their expertise in calculation of premiums of various insurance policies, rating methods and reserves, etc.
7) Answer: b)
Assignor transfers the complete rights of ownership and benefits pertaining to the contract to the assignee. For instance, party A gives an absolute assignment to party B of an insurance policy of Rs 5 lakh. Here A becomes the assignor.
8) Answer: a)
All general insurance companies have been directed to raise the compulsory personal accident cover for owner-driver to Rs 15 lakh.The premium for this cover is Rs 750 per annum.At present, the compulsory accident cover for motorised two-wheelers and private cars/commercial vehicles is Rs 1 lakh and Rs 2 lakh respectively.It is also mandatory for buyers of new cars and two-wheelers to purchase third-party insurance cover.
9) Answer: d)
Life Insurance Corporation (LIC) of India has launched a new micro insurance plan “Micro Bachat”.
Micro Bachat plan is a regular premium, non-linked and participating endowment micro insurance plan, which offers a combination of protection and savings.
This is for the first time, a micro insurance plan has been launched providing coverage up to Rs 2 lakh.
Minimum Basic Sum Assured: Rs. 50,000
Maximum Basic Sum Assured: Rs. 200,000
The Basic Sum Assured is available in multiples of Rs.5,000
Minimum Age at entry: 18 years (completed)
Maximum Age at entry: 55 years (nearer birthday)
Policy Term: 10 to 15 years.
10) Answer: c)
According to the annual report by Insurance Regulatory and Development Authority of India (IRDAI), insurance penetration in India continues to be one of the lowest at 3.69%.
According to the IRDAI report, the life insurance penetration was at 4.6% in 2009 but visibly showed a downward trend after that.
Insurance penetration is calculated as first year new business premium to GDP.
According to the report, the new business premium for life insurance has increased from Rs. 9,707.4 crore in FY 2000-01 to Rs. 19.41 trillion in FY 2017-18.
