Insurance Awareness Quiz – Set 54 (With Numercials)

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. This set contains numericals for insurance exams like LIC AAO, LIC ADO.

1. Political upheaval or government suddenly losing voting of confidence will be classified as which type of risk?
   A) Particular Risk
   B) Dynamic Risk
   C) Financial Risk
   D) Static Risk
   
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     Option B
   Explanation: Dynamic risk is one resulting from change in economy. Political upheavals may cause financial loss to the members of the economy.
2. The total loss that can happen is defined as?
   A) Maximum Prudent Loss
   B) Maximum Potential Loss
   C) Probable Maximum Loss
   D) Maximum Possible Loss
   
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     Option D
   Explanation: Maximum Possible Loss
3. Probable Maximum Loss is defined as ____________.
   A) Probability of Peril Striking / Maximum Possible Loss
   B) Maximum Possible Loss / Probability of Peril Striking
   C) Maximum Possible Loss * Probability of Peril Striking
   D) Maximum Possible Loss + Probability of Peril Striking
   
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   Option C
   Explanation: Maximum Possible Loss * Probability of Peril Striking
4. Spreading risk across areas which may not be affected equally or at the same time is known as __________.
   A) Duplication
   B) Transfer
   C) Separation
   D) Diversification
   
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   Option D
   Explanation: Diversification is the spreading of the risk across areas which may not be affected equally or at the same time.
5. There are 500 cars in a city. It is expected that on an average 1% of the cars may meet an accident in a year. The economic value of the loss suffered by the owner of each car is taken to be Rs 10,000. What is the premium for each insured?
   A) Rs 200
   B) Rs 500
   C) Rs 100
   D) Rs 50
   
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   Option C
   Explanation: Total Number of cars=500; cars that may meet accident=1/100*500=5; total expected loss=5*10000=50,000; total no. of people amongst whom the loss of Rs 50,000 is to be distributed=50000/500=100
6. There are 700 car owners in a city. On an average it is expected that 2% of the cars or 14 cars are likely to meet with an accident. It is expected the loss suffered by each of the 14 car owners will be Rs 15000. What would be the premium that the car owners would have to contribute?
   A) Rs 100
   B) Ss 200
   C) Rs 300
   D) Rs 400
   
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   Option C
   Explanation: 14*15000/700=300
7. In India, in which year was the insurance sector opened for private players?
   A) 1980
   B) 2000
   C) 2010
   D) 2005
   
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   Option B
   Explanation: 2000
8. There are 100 people in a village. On an average every year 4 people die. The economic value of each person is Rs 25,000. How much will be the premium required to be contributed by each person to settle the losses of the families of persons who die?
   A) Rs 100
   B) Rs 1000
   C) Rs 2000
   D) Rs 200
   
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   Option B
   Explanation: 4*25000/100=Rs 1000
9. ECGC is owned by which of the following?
   A) LIC
   B) GIC
   C) Government of India
   D) RBI
   
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   Option C
   Explanation: The ECGC Limited (Formerly Export Credit Guarantee Corporation of India Ltd) is a company wholly owned by the Government of India based in Mumbai, Maharashtra.
10. For a life micro-insurance products, what is the maximum amount for term insurance?
    A) Rs 5 lakh
    B) Rs 1 lakh
    C) Rs 50,000
    D) Rs 10,000
    
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    Option C
    Explanation: In case of life micro-insurance products, the cover amount for term insurance is between Rs 5,000-50,000 for a minimum term of five year and maximum 15 years.

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