Insurance Awareness Quiz for LIC AAO- Set 21

Insurance Awareness Quiz: We have created quiz questions on Insurance Awareness which are most important for insurance exams. These questions and answers will guide you in all insurance exams like LIC (AAO/ADO), NIACL assistant and AO, UIIC, IRDA and other Bank PO exams and all competitive exams. So attempt these multiple choice questions now based on the exam pattern syllabus.

1. Which among the following is the oldest insurance company in India?
   A) Life Insurance Corporation of India
   B) National Insurance Company
   C) United India Insurance
   D) Agriculture Insurance Company of India
   
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   Option B
   Explanation: The National Insurance Company is the oldest existing insurance company in India and was founded in 1906
2. What is Insurable interest?
   A) Insurance plans which are made for two annuitants wherein regular payments are provided till the death of both the beneficiaries
   B) A professional who provides specialized guidance and advice for investment in various insurance schemes
   C) Probability or likelihood of occurrence of losses relative to the expected return on any particular investment
   D) Reasonable concern of a person to obtain insurance for any individual or property against unforeseen events such as death, losses, etc
   
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   Option D
   
3. Which principle of Insurance states that ‘when the insured is compensated for the losses due to damage to his insured property, then the ownership right of such property shifts to the insurer’
   A) Principal of Subrogation
   B) Principle of Contribution
   C) Principle of Indemnity
   D) Principle of CAUSA PROXIMA
   
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   Option A
   Explanation: Mr. John insures his house for $ 1 million. The house is totally destroyed by the negligence of his neighbour Mr.Tom. The insurance company shall settle the claim of Mr. John for $ 1 million. At the same time, it can file a law suit against Mr.Tom for $ 1.2 million, the market value of the house. If insurance company wins the case and collects $ 1.2 million from Mr. Tom, then the insurance company will retain $ 1 million (which it has already paid to Mr. John) plus other expenses such as court fees. The balance amount, if any will be given to Mr. John, the insured.
4. Which of these is an Insurance Repository (IR) operational in India?
   A) NSDL Database Management Limited
   B) CAMS Repository Services Limited
   C) Karvy Insurance Repository Limited
   D) All the above
   
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   Option D
   Explanation: Central Insurance Repository Limited is the fourth IR.
5. IGMS facilitates online registration of policyholders’ complaints and helps track their status. What does IGMS stands for?
   A) Institutional Grievance Management System
   B) Instant Grievance Management System
   C) Internal Grievance Management System
   D) Integrated Grievance Management System
   
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   Option D
   
6. ___________ is defined as a fixed amount paid by an insured to insurer each time before receiving a particular health care service.
   A) Re-insurance
   B) Deductible
   C) Copayment
   D) Repayment
   
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   Option C
   Explanation: A copayment or copay is a fixed amount for a covered service, paid by a patient to the provider of service before receiving the service. It may be defined in an insurance policy and paid by an insured person each time a medical service is accessed.
7. The maximum amount of risk retained by an insurer per life is called as ___________
   A) Retention
   B) Reinsurance
   C) Retention Limit
   D) Revival
   
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   Option A
   Explanation: The maximum amount of risk retained by an insurer per life is called retention. Beyond that, the insurer cedes the excess risk to a reinsurer. The point beyond which the insurer cedes the risk to the reinsurer is called retention limit. 
8. The Mortality Charge is levied __________ in life insurance policy
   A) Quarterly
   B) Half Yearly
   C) Monthly
   D) Annually
   
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   Option D
   
9. A company that provides both life insurance and non-life insurance is known as ________
   A) Mutual Insurer
   B) Composite Insurer
   C) Captive Insurer
   D) Dual Insurer
   
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   Option B
   
10. What is the maximum limit for the amount under dispute that can be entertained by the Insurance Ombudsman?
    A) Rs 25 lakhs
    B) Rs 50 lakhs
    C) Rs 20 lakhs
    D) Rs 15 lakhs
    
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    Option C
    Explanation: The maximum limit for the amount under dispute for which the Ombudsman can entertain a complaint is up to Rs.20 lakhs.

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