Insurance Awareness Quiz – Set 56

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. When there are several policies on the same subject matter, each insurer pays only a proportionate of the loss. This concept is known as?
   A) Proportion
   B) Yield
   C) Insurance
   D) Contribution
   
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     Option D
   Explanation: Contribution
2. Amit has given a loan of Rs 10,000 to Sumit. At the end of 5 years, the outstanding balance of loan due is Rs 1,000. As per the principle of insurable interest, how much is the insurable interest of Amit on the life of Sumit?
   A) Rs 10,000
   B) Rs 9,000
   C) Rs 1,000
   D) Amit cannot take insurance on Sumit’s life as the two doesnot have any legal relationship
   
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     Option C
   Explanation: on the amount of outstanding loan
3. The principle of _________ ensures that insurance cannot be used to make profit.
   A) insurable interest
   B) indemnity
   C) Subrogation
   D) Contribution
   
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   Option B
   Explanation: principle of indemnity
4. A house was burnt and weakened due to fire. After some days a storm, brought down the house completely. In this case what will be considered the proximate cause?
   A) Strom
   B) Fire
   C) Both of these
   D) None of these
   
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   Option A
   Explanation: The event that occurred last
5. What is the process for applying for insurance called?
   A) Nomination
   B) Proposal
   C) Endorsement
   D) Application
   
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   Option B
   Explanation: Proposal
6. The process when a policyholder transfers theirs right under a policy to another person is known as?
   A) Assessment
   B) Swap
   C) Switch
   D) Assignment
   
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   Option D
   Explanation: Assignment
7. In insurance, ___________ is an increase in the premium if there is a claim in the previous year.
   A) Malus
   B) Bonus
   C) Shift
   D) Upgrade
   
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   Option A
   Explanation: Malus is an increase in the premium if there is a claim in the previous year. Bonus-malus systems are very common in vehicle insurance.
8. ________ is the first amount payable by you in the event of a loss, and is the uninsured portion of your loss.
   A) Over
   B) Increase
   C) Value
   D) Excess
   
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   Option D
   Explanation: An excess is the first amount payable by you in the event of a loss, and is the uninsured portion of your loss, so when you submit a claim you’ll have to pay an excess.
9. The person who assesses the risk of a proposal is known as _______.
   A) Agent
   B) Underwriter
   C) Actuary
   D) Assessor
   
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   Option B
   Explanation: Underwriter
10. Amendments in a standard policy condition is known as __________.
    A) Endorsement
    B) Valuation
    C) Excess
    D) Exclusions
    
    View answer

    Option A
    Explanation: Endorsement

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