LIC AAO Insurance Awareness Questions 2019 (Day – 55)

Dear Aspirants, LIC AAO is one of 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. LIC AAO Insurance Awareness & Financial Market Awareness section comprises of 30 questions. LIC AAO Insurance Awareness Questions 2019 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 Insurance Awareness Questions 2019. Aspirants can make use of this LIC AAO Insurance Awareness Questions 2019, to improve score in the Insurance & Financial Market Awareness section.

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1) Suresh Mathur committee on Insurance marketing firms has recommended the migration of an individual agent to Insurance Service Provider. Currently, what is the salary of an ISP?

a) ₹ 2500

b) ₹ 5000

c) ₹ 1000

d) ₹ 7500

e) ₹ 10000

2) What is the shareholding of National Agricultural and Rural Development Bank (NABARD) in Agriculture Insurance Company of India Limited (AIC)?

a) 30%

b) 35%

c) 40%

d) 45%

e) 48%

3) It is a type of insurance which is designed to protect or compensate a business in the event of the death of its important executive. Identify the type of insurance.

a) New Business Premium

b) Treaty Reinsurance

c) Keyman Insurance

d) Medical Underwriting

e) Third Party 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) 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

6) ________ is the period between the date of subscription to an insurance-cum-pension policy and the time at which the first instalment of pension is received.

a) Appreciation

b) Depreciation

c) Deferment

d) Recognition

e) None of these

7) Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a scheme for people of what age group?

a) 65 years and above

b) 60 years and above

c) 50 years and above

d) 55 years and above

e) 45 years and above

8) The “Doctrine of Basic Structure” applies to?

a) Only to executive orders

b) Both ordinary laws and constitutional amendment

c) Only constitutional amendment

d) Every law that violates fundamental rights

e) Related to public interest litigation

9) The process of determining the cost of an insurance policy based on the actual loss experience determined as an adjustment to the initial premium payment is termed as _______

a) Universal Life Insurance

b) Unauthorized Reinsurance

c) Unearned Premium

d) Retrospective Rating

e) None of these

10) The term ‘insurable interest’ is related to which of the following types of insurance?

a) Life Insurance

b) Fire Insurance

c) Marine Insurance

d) General Insurance

e) All of the above

Answers :

1) Answer: b)

The salary of Insurance Service Providers is ₹ 5000.

Insurance marketing firms are registered by the IRDAI to sell insurance products and services through the ISPs who are employed with these firms.

Suresh Mathur committee on Insurance Marketing Firms recommended that the migration from an agent to ISP and the continuation of renewal commission/benefits of the individual agency and a reduction in the net-worth requirement to ₹ 5 lakh from ₹ 10 Lakh at time of registration.

2) Answer: a)

Indian General Insurance Corporation – 35 % ; National Agricultural and Rural Development Bank (NABARD) – 30 % ; National Insurance Company Limited – 8.75 %  ;The New India Assurance Company Limited – 8.75 % ;The Oriental Insurance Company Limited – 8.75 % ;United India Insurance Company Limited – 8.75 %

3) Answer: c)

Keyman Insurance is a type of insurance which is designed to protect or compensate a business in the event of the death of its important executive. It is also known as Key Person Insurance or Key Person Coverage or Key Employee Coverage. The executive is so important for the company that his death, disability or absence could prove to be disastrous for the company or organization. The company or organization is the beneficiary of such type of insurance.

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: 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.

6) Answer: c)

Period between the subscription date of an insurance-cum-pension policy and the time at which the first instalment of pension is received is called as deferment period.

7) Answer: b)

PMVVY stands for Pradhan Mantri Vaya Vandana Yojana and is a pension scheme exclusively for elderly persons aged 60 years and above. The citizens can invest a maximum investment of 15 Lakhs in the PMVVY scheme and the scheme is valid till March 31, 2020. The senior citizens will get assured returns of 8% per annum for 10 years depending on their investments. The exclusive privilege to operate the scheme has been given to the Life Insurance Corporation of India (LIC).

8) Answer: c)

The basic structure doctrine is an Indian judicial principle emerged after Kesavananda bharati case in 1973, that the Constitution of India has certain basic features that cannot be altered or destroyed through amendments by the parliament. It forms the basis for Supreme Court to review and strike down constitutional amendments enacted by the Parliament which conflict with or seek to alter this “basic structure” of the Constitution. The basic structure doctrine applies only to constitutional amendments. Recently 124th constitutional amendment act has been challenged in Supreme Court on the basis that it is against the basic structure of the constitution.

9) Answer: d)

An insurance policy with a premium that adjusts according to the losses experienced by the insured company, rather than according to an industry-wide loss experience is called Retrospective Rating.

10) Answer: e)

Insurable interest refers to the interest in the property or thing insured. Only the owner can have the insurable interest in the property. It is related to all types of insurance. In case of life insurance it is related to the life of insured person and in other cases it is related to the subject matter that is insured.


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