Insurance Awareness Quiz – Set 49

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. A type of car insurance contract under which insureds and its passengers’ are indemnified by their own insurance company in case of car accident, regardless of who caused the accident, is known as_____
   A) Freebie Insurance
   B) No Fault Insurance
   C) Affectionate Insurance
   D) Remedial Insurance
   
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   Option B
   Explanation: No-fault insurance is any type of insurance contract under which insureds are indemnified for losses by their own insurance company, regardless of fault in the incident generating losses.
2. A type of risk where large group of policy holders are adversely affected by a single phenomenon such as a natural disaster is known as________
   A) Particular Risk
   B) Speculative Risk
   C) Specific Risk
   D) Covariant Risk
   
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   Option D
   Explanation: Covariant Risk arises when many farms/households in one area are adversely affected by a single phenomenon such as a natural disaster, epidemic, unexpected change in world prices, macroeconomic crisis or civil conflict.
3. The IRDAI has raised the compulsory personal accident coverage for owner-driver to Rs _____ lakh
   A) Rs 15 lakhs
   B) Rs 10 lakhs
   C) Rs 20 lakhs
   D) Rs 5 lakhs
   
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   Option A
   Explanation: Irdai had increased the compulsory personal accident coverage amount from Rs 1 lakh to Rs 15 lakh and thus, pushing the cost up. 
   
4. ICR is the measure of total value of all claims paid by the company divided by the total amount of premium collected in a financial year. Expand ICR.
   A) Immediate Claims Rectified
   B) Insured Claims Rendered
   C) Incurred Claims Ratio
   D) Insurance Claims Rate
   
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   Option C
   Explanation: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.
   
5. When an Agent collects the premium from the policyholder and remits it to the insurer’s office, he is acting as an agent of __________
   A) IRDAI
   B) Insurance Company
   C) Policy Holder
   D) Insured
   
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   Option B
   
6. The premium for a Whole Life plan is always ________ than compared to the premium for an Endowment plan for the same age
   A) Less
   B) Half
   C) Double
   D) More
   
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   Option D
   
7. IRDAI has mandated all insurance companies to maintain a minimum Solvency ratio of _______ percent to minimise the risk of bankruptcy
   A) 75%
   B) 100%
   C) 150%
   D) 90%
   
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   Option C
   Explanation: According to Irdai guidelines, all companies are required to maintain a solvency ratio of 150% to minimise bankruptcy risk
8. Which of the following rates are used by an actuary to determine the premiums to be charged to customers for likelihood of getting a disease?
   A) Mortality rates
   B) Morbidity rates
   C) Valuation rates
   D) Policy rates
   
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   Option B
   
9. A nomination can be made in favour of ______
   A) Any individual
   B) spouse
   C) children
   D) parents
   
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   Option A
   
10. ________ is a type of an extra liability insurance to provide an additional layer of security to the insured against significant claims and lawsuits and protect insured’s assets and the business future.
    A) Special Protection Insurance
    B) Parasol Insurance
    C) Patronage Insurance
    D) Umbrella Insurance
    
    View answer

    Option D
    Explanation: An umbrella insurance policy is extra liability insurance coverage that goes beyond the limits of the insured’s home, auto or watercraft insurance. It provides an additional layer of security to those who are at risk for being sued for damages to other people’s property or injuries caused to others in an accident.

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