LIC AAO 2019 – Insurance Awareness Questions (Day – 40)

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 of the following is India’s oldest existing insurance company?

a) Life Insurance Corporation of India

b) New India Assurance Company Ltd.

c) United India Insurance Company Ltd.

d) National Insurance Company Ltd.

e) General Insurance Company Ltd.

2)Which among the following correctly defines the Principle of Insurable Interest in an insurance contract?

a) It defines that the insurance company should know the extent loss that may occur in case of any event.

b) It defines that the insured should understand the contract of insurance properly before signing the papers.

c) A person is said to have insurable interest in something when loss or damage to that thing would cause loss to the person.

d) It defines that the insurance company and the insured should have a good working relationship during the tenure of the policy.

e) It defines that any insurance company has interest in providing insurance cover but the insured should take an informed decision only in this regard.

3) When a contract ceases to be enforceable at law, then it is called as

a) Legal Contract

b) Void contract

c) Life contract

d) Voidable contract

e) None of these

4) The payment of sum assured to the insured person which has become due by instalments under a money back policy is known as ______

a) Surrender Value

b) Paid-up value

c) Sum Assured

d) Survival Benefit

e) Maturity Value

5) ______ is the amount the policy holder will get from the insurance company if he exits the policy before maturity.

a) Paid up value

b) Surrendered value

c) Annuity Value

d) Lapse Value

e) None of these

6) As per the regulations of IRDAI, which insurance policy cannot be declined to underwrite the policy?

a) Term Insurance Policy

b) Unit Linked Insurance Policy

c) Third Party Insurance Policy

d) Valued Insurance Policy

e) Whole Life Insurance Policy

7) Under which section of Insurance act 1938, the Amalgamation and Transfer of Insurance Business came?

a) Section 56

b) Section 32

c) Section 40

d) Section 35

e) Section 23

8)  Under a money back policy, the payment of sum assured to the insured which has become due by instalments is known as _________.

a) Claim Amount

b) Guaranteed Insurance Sum

c) Survival Benefit

d) Surrendered value

e) Insurable Interest

9)  LIC was formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. _______________ from the Government of India.

a) Rs. 10 crore

b) Rs. 50 crore

c) Rs. 100 crore

d) Rs. 1 crore

e) Rs. 5 crore

10) A wrongful act or an infringement of a right leading to legal liability is called ________.

a) Term

b) Tort

c) Peril

d) Slip

e) Cede

Answers:

1) Answer: d)         

National Insurance Company Limited (NICL) was founded in 1906 and headquartered at Kolkata. It is oldest existing insurance company in India.

2) Answer: c)           

The Principle of Insurable Interest is applicable to all the contracts of insurance. It defines that the insured will have insurable interest in something if he suffers loss due to any damage to that thing.

3) Answer: b)

The law relating to contracts in India is governed by The Indian Contract Act , 187B.  A void contract is a contract which ceases to be enforceable by law.

4) Answer: d)

Survival benefits are benefit given to the policy holder during or upon completion of the policy tenure.

5) Answer: b)

Surrender value is the amount the policy holder will get from the insurance company if he exits the policy before maturity, but after payment of premium for full 3 years. So if a person has payed premium for 3 years, he can opt out of the policy and get the money proportionally (it will obviously be less than that he would have got at maturity)

6) Answer: c)

As per the IRDAI, no insurer can decline to underwrite third party insurance. Third Party Insurance Policy covers the third person who has been injured in an accident involving the owner and his/her car. It doesn’t provide direct benefit to the insured. This is a mandatory cover, along with the own damage cover, that a vehicle owner must purchase. This insurance cover is for any collateral damage to a third party.

7) Answer: d)

Under section 35 of Insurance act 1938, the Amalgamation and Transfer of Insurance Business came.

8) Answer: c)

Survival Benefit is the payment of sum assured to the incurred person which has become due by instalments under a money back policy. Surrender Value is the value payable to the policyholder in the event of terminating the policy before the maturity of the policy. The reasonable concern of a person to obtain insurance for any individual or property against unforeseen events is called Insurable Interest.

9) Answer: e)

LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

10) Answer: b)

  1. The period of time for which a policy is issued is called a Term.
  2. A wrongful act or an infringement of a right leading to legal liability is called Tort.
  3. iii. The cause of immediate loss or danger is called Peril. Hazard is not included in this danger.
  4. A term used to describe a summary of contract terms and conditions are shown to an underwriter by a broker when a risk is offered is called Slip.
  5. To transfer risk from an insurer to a reinsurer is called Cede.
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