LIC AAO 2019 – Insurance Awareness Questions (Day – 36)

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. LIC AAO 2019 Insurance Awareness Questions questions play an important role in boosting up the score in mains examination and also helps in the interview. Here we are providing a new series of LIC AAO 2019 Insurance Awareness Questions. Aspirants can make use of this LIC AAO 2019 Insurance Awareness Questions, to improve score in the Insurance & Financial Market Awareness section.

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1) Which insurance company begun its journey on September 1, 1956, with an initial capital of Rs 5 crore.

a) United India Insurance Company

b) National Insurance Company

c) Life Insurance corporation of India

d) The Oriental Insurance Company

e) Export Credit Guarantee Corporation of India

2) What is the premium amount of PradhanMantriSurakshaBimaYojana, an accident insurance scheme?

a) ₹ 12 per month

b) ₹ 500 per annum

c) ₹ 330 per month

d) ₹ 12 per annum

e) ₹ 250 per annum

3) What is the lock-in period Unit Linked Insurance Plan?

a) 3 years

b) 5 years

c) 2 years

d) 7 years

e) 8 years

4) A policy underwrites to cover a specific risk that cedes to a reinsurer is called ________.

a) Umbrella Policy

b) Captive Policy

c) Coinsurance Policy

d) Reinsurance Policy

e) Fronting policy

5) Which general Insurance Company launched India’s first Artificial intelligence (AI) based technology to facilitate instant health insurance claims approval.

a) Bajaj Allianz General Insurance Company Limited

b) Bharti AXA General Insurance Company Limited

c) HDFC ERGO General Insurance Company Limited

d) Future Generali India Insurance Company Limited

e) ICICI Lombard General Insurance Company Limited

6) What term is used to refer the making compensation payments to one party by the other for the loss occurred?

a) Mitigation

b) Insurability

c) Indemnity

d) Annuity

e) Liability

7) ECGC provides insurance cover to exporters. What is the meaning of the second C in ECGC?

a) Company

b) Corporation

c) Credit

d) Cover

e) None of the Above

8) UPR is the total annual premium less than the amount earned. What is the full form of UPR?

a) Uniform Premium Research

b) Uninsured Premium Reserve

c) Unearned Premium Reserve

d) Unearned Premium Requirement

e) Uninsured Premium Requirement

9) What is the term used for the ability of an insurer to cover their liabilities and meet the financial requirements of doing insurance business?

a) Claimed Capital

b) Credit Ratio

c) Solvency

d) Reserve Fund

e) Schedule

10) What does the term ‘ACV’, used in insurance context, stand for?

a) Assisting Cash Value

b) Asset Classification Value

c) Actual Claimed Value

d) Asset claimed Value

e) Actual Cash Value

Answers:

1) Answer: c)

Life Insurance Corporation of India (LIC) begun its journey on September 1, 1956, with an initial capital of Rs 5 crore and an asset base of Rs 352.20 crore, Now it has assets of around over Rs 28.45 trillion with life fund to the tune of Rs 25.84 trillion. LIC is present in 14 countries through branch offices, wholly-owned subsidiaries and joint ventures in Fiji, Mauritius, England, Bahrain, Nepal, Sri Lanka, Singapore and Bangladesh, among others.

2) Answer: d)

An accident insurance scheme, PradhanMantriSurakshaBimaYojana (PMSBY) offers a one-year accidental death and disability cover, which can be renewed annually. All individual (single or joint) bank account holders in the 18-70-year age group are eligible to join PMSBY. The premium payable is Rs 12 per annum.

3) Answer: b)

Unit Linked Insurance Plan (ULIP) is a single integrated plan, the investment part, and the protection part can be managed according to choices and needs. It provides risk cover for the policyholder along with investment options. The Lock-in period of ULIP policy is 5 years. The premium paid towards a ULIP is eligible for a deduction under Section 80C of Income tax act 1961.

4) Answer: e)

A policy underwrites to cover a specific risk that cedes to a reinsurer is known as Fronting Policy. Fronting is a procedure in which a primary insurer acts as the insurer of record by issuing a policy, but then passes the entire risk to a reinsurer in exchange for a commission.

5) Answer: e)

ICICI Lombard General Insurance Company Limited has launched India’s first Artificial intelligence (AI) based technology to facilitate instant health insurance claims approval. The traditional cashless claim request which takes an average of 60 minutes of processing has been drastically brought down to a minute using AI. The varied medical procedures where AI is being deployed include Cataract, Maternity, Appendicitis, Haemodialysis, and Hysterectomy.

6) Answer: c)

Indemnity means making compensation payments to one party by the other for the loss occurred. It means security, protection and compensation given against damage, loss or injury. According to the principle of indemnity, an insurance contract is signed only for getting protection against unpredicted financial losses arising due to future uncertainties.

7) Answer: b)

Export Credit Guarantee Corporation of India (ECGC) is an Indian enterprise which is administered by the Government of India through the Ministry of Commerce and Industry. ECGC is wholly owned by the Indian Government and was set up in the year 1957 with the intention to promote exports by offering credit risk insurance and services to exporters. GeethaMuralidhar is the CMD of ECGC. Headquarters- Mumbai.

8) Answer: c)

Unearned Premium Reserve (UPR or UEPR) is the number of unexpired premiums on policies or contracts as of a certain date (the total annual premium less the amount earned).

9) Answer: c)

Solvency is the ability of an insurer to cover their liabilities and meet the financial requirements of doing insurance business. If an insurance company is not solvent it may no longer function as insurer for new policies and prospective clients would be unlikely to wish to take policies out with an insurer that couldn’t meet its obligations in the event that they had to make a claim anyway.

10) Answer: e)

In the property and casualty insurance industry, Actual Cash Value (ACV) is a method of valuing insured property, or the value computed by that method. It is not equal to replacement cost value (RCV). ACV is computed by subtracting depreciation from replacement cost. The depreciation is usually calculated by establishing a useful life of the item determining what percentage of that life remains. This percentage multiplied by the replacement cost equals the ACV.

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