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.[WpProQuiz 6478]
1) If a policyholder decides to terminate the policy before maturity, the amount which the insurance company will pay to the policyholder is known as _____.
a) Termination Value
b) Maturity Value
c) Pre-mature Value
d) Surrender Value
e) Holder Value
2) In which of the following years, the Life Insurance Companies Act, and the Provident Fund Act were passed?
3) ICR metric indicates a general insurer’s ability to pay claims. ‘I’ in ICR stands for_________.
4) LIC’s _________ is exclusively designed for male lives having Aadhaar Card issued by UIDAI.
a) Aadhaar Stambh Plan
b) Aadhaar Shila Plan
c) Aadhaar Shashakt Plan
d) Aadhaar Vardaan Plan
e) None of the above
5) ‘LIC should pay interest on delays in payment beyond 30 days’ was one of the recommendations of committee formed in the year 1993. It was headed by __________.
a) Y.V Reddy
b) Jagdish Bhagwati
c) Kaushik Basu
d) R.N. Malhotra
e) Bimal Jalan
6) What is the maturity age of Whole life Insurance policy?
a) 50 years
b) 60 years
c) 75 years
d) 100 years
e) 120 years
7) Minimizing the risk associated with a loss due to unwanted events is called ____.
a) Insurable Risk
b) Investment Risk
e) Reinsurance Risk
8) 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
9) Which body/official determines the risk coverage for calculation of premium for life insurance policies?
a) Actuary of the life insurance company
c) The chief executive of the life insurance company
d) The board of directors of the life insurance company
e) None of the given options is true
10) Which of the following is the amount which the insurance company has to pay before any bonuses are added?
a) Sum assured
c) Maturity value
e) None of the above
1) Answer: d)
If a policyholder decides to terminate the policy before maturity, the amount which the insurance company will pay to the policyholder is known as surrender value.
2) Answer: b)
In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by professional that analyses financial risk using mathematics, statistics and financial theories i.e. an actuary.
3) Answer: b)
The Incurred claims ratio (ICR) metric indicates a general insurer’s ability to pay claims. It is calculated as the total value of all claims paid by the company divided by the total amount of premium collected in a financial year. For instance, an ICR of 70% implies that the company has spent 70 on claims for every Rs 100 collected as premium.
4) Answer: a)
Aadhaar Stambh Plan is exclusively designed for male lives having Aadhaar Card issued by UIDAI financial support for the family in case of unfortunate death of the policyholder any time before maturity and a lump sum amount at the time of maturity for the surviving policyholder.
5) Answer: d)
In 1993, Malhotra Committee, led by former secretary and RBI Governor, R.N. Malhotra, was formed to evaluate the Indian Insurance Industry and for recommending its future directions. It recommended that LIC should pay interest on delays in payment beyond 30 days.
Its other important recommendation were-
- Government stake in the Insurance companies to be brought down to 50%
- Private companies with minimum paid up capital of Rs. 1 billion should be allowed to enter in industry.
- Mandatory investment of LIC life fund in Government Securities to be reduced from 75 percent to 50 percent.
6) Answer: d)
Whole life insurance policy has a maturity age of 100 years. It provides life coverage until the death of the life assured. The policy stays in force throughout the life if the life assured pays the premium. If the life assured dies before the age of 100 years, the nominee receives the sum assured. Tax benefit and loans can be availed against whole life insurance policies.
7) 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.
8) 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.
9) Answer: a)
Actuary of the life insurance company determines the risk coverage for calculation of premium for life insurance policies.
10) Answer: a)
The sum assured is the amount of money an insurance policy guarantees to pay up before any bonuses are added. In other words, sum assured is the guaranteed amount the policy holder will receive. This is also known as the cover or the coverage amount and is the total amount for which an individual is insured.
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