This Post Licentiate Exam Sample Papers : IC 01 Principle Of Insurance Sample Paper was originally Published at FlossHype.
1. Which of the following statements is true?
1. Insurance is a method of sharing the losses of a ‘few’ by the ‘many’
2. Insurance is a method of transferring the risk of an individual to a group of individuals
a) Only Statement 1
b) Only Statement 2
c) Both Statement
d) Neither of the Statements
2. In the insurance context ’risk’ means
a) Possibility of loss or damage
b) Loss producing event
c) Property covertly covered by
insurance
d) All the above
3. To which of the following does the Employees state insurance Act,
1948 apply.
a) Employees of Central
Government
b) Employees of State
Government
c) Employees of Public Sector
manufacturing companies
d) Industrial employees as
notified by the Government
4. Which of the following statements is true?
a) Insurance protects the asset
b) Insurance prevents its loss
c) Insurance reduces
possibilities of loss
d) Insurance pays when there is
loss of asset
5. Which of the following statements is true?
a) Insurance facilitates free
investment of capital in business
b) Insurance encourages
commercial and industrial
development
c) Insurance contributes
commercial and industrial
development
d) Insurance contributes to
national productivity
e) All the three above
6. The duty of disclosure of material information
a) Applies to insured
b) Applies to the agent
c) Applies to the insurer
d) All three
7. Out of 400 houses, each valued at Rs.20,000. 4 houses get burnt
every year on an average resulting in a loss of Rs.80,000. What should
be the annual contribution of each house owner to make good this loss?
a) Rs.100
b) Rs.200
c) Rs.80
d) Rs.400
8. Which of the following statements is true?
1. Insurance provides direct benefits to individuals
2. Insurance provides indirect benefits to the community
a) Only Statement 1
b) Only Statement 2
c) Both Statements
d) Neither of the Statements.
9. Which of the following statements is true?
1. Insurance prevents the losses from happening
2. Insurance spreads the losses amongst the insured
a) Only Statement 1
b) Only Statement 2
c) Both Statements
d) Neither of the Statements.
10. Which of the following are requisites of a valid insurance contract?
1) Consideration 2) Parties of the same mind
3) Parities are competent of contract
a) 1
b) 2
c) 1 and 2
d) All three
11. Which of the following statements is correct according to law?
1. The parities to a commercial contract have to observe good faith
2. The parties to an insurance contract have to observe utmost good faith
a) 1 is correct
b) 2 is correct
c) Both are correct
d) Both are incorrect
12. Which of the following statements is correct?
1. A void contract has no legal validity
2. A violable contract remains a contract until the insurer exercises his
option to avoid the contract
a) 1 is correct
b) 2 is correct
c) Both are correct
d) both are incorrect
13. If there is no insurance interest the insurance contract becomes
a) Unenforceable in a Court of
Law
b) illegal
c) Void
d) avoidable
14. Which of the following makes the contract unenforceable in a Court
of Law?
a) The proposer has committed
non- disclosure
b) The proposer has committed
mis- representation
c) The proposer has given
wrong address of property due
to a clerical error
d) The policy is not stamped as
per Indian Stamp Act.
15. The object of the principle of indemnity is to
a) Pay the full cost of repairs
b) Pay the full cost of
replacement
c) Pay the cost of reinstatement
d) Prevent the insured form
making any profit out of his loss
16. Sum insured under an insurance policy means
a) It is the agreed value of
subject matter insured
b) The amount payable when
there is a loss
c) The amount on which the
premium is calculated
d) The maximum limit of liability
under the policy
17. Agreed Value policies are issued for
a) Marine cargo
b) Marine hull
c) Marine cargo and hull
d) Fire insurance on high valued
machinery
18. Which of the following ensure that the amount of claim payable is
less than the actual amount of loss.
a) Pro-rata average
b) Excess limit
c) Salvage
d) All the three above
19. Consent of insurers is not required for the assignment of
a) Marine hull policies
b) Marine cargo policies
c) Fire policies
d) Burglary policies
20. Subrogation condition does not appear in
a) Fire policy
b) Marine cargo policy
c) Burglary policy
d) Baggage policy