Insurance Awareness Quiz – Set 32

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. The topic of this quiz is Insurance Ombudsman.

  1. The one who purchases the insurance policy and pays the premium is known as __________.
    A) Insured
    B) Proposer
    C) Beneficiary
    D) Nominee
    View answer
    Option B
    Proposer (also known as Policy Owner) purchases the policy and pays the premium while Insured is the one whose life is being insured. Insured and proposer may or may not be same.
  2. Which among the following is not a valid Principle of Insurance?
    A) Principle of Payment
    B) Principle of Utmost good faith
    C) Principle of Contribution
    D) Principle of Proximate cause
    View answer
    Option A
    Explanation: Insurance is based on these 7 Principles

    • Law of large numbers
    • Principle of Insurable interest
    • Principle of Utmost good faith
    • Principle of Indemnity
    • Principle of Subrogation
    • Principle of Contribution
    • Principle of Proximate cause
  3. Which Principle of Insurance defines the reasonable concern of a person to obtain insurance for any individual or property against unforeseen events such as death, losses, etc?
    A) Principle of Proximate cause
    B) Principle of Contribution
    C) Principle of Subrogation
    D) Principle of Insurable interest
    View answer
    Option D
  4. Name the Insurance Principle which requires contracting parties to act honestly and not mislead or withhold any information that is essential to the contract
    A) Principle of Insurable interest
    B) Principle of Subrogation
    C) Principle of Utmost good faith
    D) Principle of Indemnity
    View answer
    Option C
  5. What is meant by Lapse ratio?
    A) The ratio of the number of policies that lapse during a period to the total number of policies in force at the beginning of that period
    B) The ratio between incurred losses to earned premiums expressed as a percentage
    C) The ratio of losses suffered to the amount of insurance in effect
    D) The portions of the obligations in an insurance company’s policy portfolio that are transferred to a reinsurer
    View answer
    Option A
  6. The Principle of Indemnity does not apply to __________
    A) Marine Insurance
    B) Life Insurance
    C) Motor Insurance
    D) Property Insurance
    View answer
    Option B
    It does not apply to Life and Personal accident insurance
  7. The “rights of the insurer to assume the rights of the insured” fits best to which principle of insurance?
    A) Principle of Indemnity
    B) Principle of Insurable interest
    C) Principle of Subrogation
    D) Principle Contribution
    View answer
    Option C
  8. The Principle of Proximate cause means:
    A) You get compensated for what you lose – no more, no less
    B) Disclosure of all material information from both the parties
    C) The more the number of members who are insured, the more likely it is that the actual result would be closer to the expected
    D) How the loss or damage actually occurred and whether it is indeed as a result of an insured peril
    View answer
    Option D
  9. Uberrima fides, is the Latin name for which Principle of Insurance?
    A) Principle of Utmost good faith
    B) Principle of Contribution
    C) Principle of Proximate cause
    D) Principle of Indemnity
    View answer
    Option A
  10. What does paid-up value signifies in insurance sector?
    A) The amount that the insurer agrees to pay on an occurrence of an insured event like death
    B) The value paid to the policyholder who stops paying the premium but does not withdraws the money from his policy
    C) The fee paid by the insurer to agents and brokers for the sale of insurance policies
    D) The value payable to the policyholder in the event of his deciding to terminate the policy before the maturity of the policy
    View answer
    Option B

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