Deck 14: Insurance Principles, Functions, and Benefits

Question 1

The principle functions of an insurance contract are

A)To define the risk that is to be transferred
B)To state the conditions under which the contract applies
C)To explain the procedure for settling losses
D)All of the Above

Answer 1

All of the Above

Question 2

Insurance principle does not include

A)Principle of indemnity
B)Principle of utmost good faith
C)Principle of knowledge
D)Principle of insurable interest

Answer 2

Principle of knowledge

Question 3

___________is the oldest form of insurance

A)Motor insurance
B)Marine insurance
C)Fire
D)Life

Answer 3

Marine insurance

Question 4

Life insurance made its first appearance in England in the

A)14th century
B)15th century
C)16th century
D)17th century

Question 5

Risk may be:

A)objective
B)subjective
C)Both (a) and (b)
D)None of the above

Question 6

The General Insurance Business Nationalization Act was passed in

A)1952
B)1972
C)1962
D)1982

Question 7

Life Insurance Corporation of India headquarter is in

A)Delhi
B)Chennai
C)Guwahati
D)Mumbai

Question 8

Insurance works on the principle of

A)Sharing of losses
B)Probabilities
C)Large numbers
D)All of the Above

Question 9

The principle of _______ensures that an insured does not profit by insuring with multipleinsurers.

A)Subrogation
B)Contribution
C)Indemnity
D)All of the Above

Question 10

Insurance is meant to

A)Prevent specified events
B)Prevent damage to assets from specified events
C)Compensate for losses from specified events
D)Rebuild the assets lost because of specified events

Question 11

Insurance compensate losses

A)By replacing the original asset
B)To the full extent of lost income
C)Only to the extent of insured amount
D)All the above

Question 12

Insurance is necessary because

A)Assets depreciate over time and through usage
B)Assets may be damaged by external causes
C)Assets require regular maintenance
D)None of the above

Question 13

Insurance works on the principle of

A)Sharing
B)Probabilities
C)Large numbers
D)All the above

Question 14

Insurance works on the principle of

A)Trust
B)Sharing
C)Randomness
D)All the above

Question 15

The amount of insurance depends on

A)Peril
B)The risk
C)Neither the peril nor the risk
D)Both the peril and the risk

Question 16

Insurance benefits replace

A)All physical losses in full
B)All physical losses partially
C)The monetary losses in full
D)The monetary losses, but only to some extent.

Question 17

A human being

A)Is an economic asset
B)Is an income earning asset
C)Is a perishable asset
D)All the above

Question 18

_________ is a contract between two insures i.e.original insurer and another insurer.

A)Insurance
B)Reinsurance
C)Policy
D)Premium

Question 19

The spreading of losses incurred by the few over the entire group is called

A)pooling
B)pulling
C)contribution
D)joining

Question 20

Freight insurance is under

A)life insurance
B)marine insurance
C)fire insurance
D)other miscellaneous

Question 21

Insurance principle does not include

A)principle of indemnity
B)principle of utmost good faith
C)principle of knowledge
D)principle of subrogation

Question 22

The term „Risk? includes:

A)Damage to machinery and property
B)Impact on the health or life of a person
C)Leakage of toxic products into the atmosphere
D)all the above

Question 23

________ means the transfer of all the rights and remedies available to the insured in respect of the subject matter to the insurer after indemnity has been effected.

A)Subrogation
B)Indemnity
C)Contribution
D)none

Question 24

The IRDA stands for

A)Insurance Regulatory and Development Activity.
B)Insurance Reconstruction and Development Activity.
C)Insurance Regulatory and Development Authority.
D)Insurance Regulatory and Department Activity.

Question 25

Virtual banking is also called

A)Internet Banking
B)Home banking
C)Mobile banking
D)None of these