Deck 7: Insurance and Risk Management

Question 1

Identify a Non-Physical Asset, from the List of Following Options.

A)Car
B)House
C)Goodwill
D)Air-Conditioner

Answer 1

Goodwill

Question 2

Mr. Manish asks His Insurance-Advisor, the Primary Purpose of Insurance. Help Mr. Manish, Identify the Primary Purpose of Insurance, from the Following Options.

A)Share the Losses of Many, among Many.
B)Share the Losses of Many, among a Few.
C)Share the Losses of a Few, among Many.
D)Speculation.

Answer 2

Share the Losses of a Few, among Many.

Question 3

What led to the Formulation of Insurance?

A)Hazard
B)Indemnity
C)Loss
D)Risk

Answer 3

Risk

Question 4

Which One of the Following Methods of Risk- Management, is also known as Self-Insurance?

A)Risk-Avoidance
B)Risk-Retention
C)Risk-Reduction and Risk- Control
D)Risk-Transfer

Question 5

When would You choose, to go for Insurance?

A)After the Contingent Event has occurred.
B)When the Probability of Event-Occurrence is Low, But, Severity is High.
C)When the Probability of Event-Occurrence is Low, along with the Severity.
D)When you can finance the Losses of the Contingent-Event, on Your Own.

Question 6

Which One of the Following, is, the First Indian Insurance Company?

A)The Oriental Life Assurance Company Limited
B)Triton Insurance Company Limited
C)Bombay Mutual Assurance Society Limited
D)National Insurance Company Limited

Question 7

Name the Public Sector Life Assurance Company, formed as a Result of Nationalisation of Life Assurance in India.

A)General Insurance Corporation (G.I.C.) of India
B)Life Insurance Corporation (L.I.C.) of India
C)Oriental Insurance Company of India
D)National Insurance Company Limited

Question 8

Discuss the Risk-Management Technique, employed by an Individual, when He or She purchases the Insurance.

A)Risk-Avoidance
B)Risk-Retention
C)Risk-Transfer
D)Risk-Mitigation

Question 9

Discuss the Difference between Insurance and Assurance.

A)Insurance: Protection Against an Event, that Will Happen. Assurance: Protection Against an Event, that Might Happen.
B)Insurance: Protection Against an Event, that Might Happen. Assurance: Protection Against an Event, that Will Happen.
C)Both: Insurance and Assurance, Refer to the Same Thing.
D)Insurance: Guaranteed Protection, Against an Event, that Might Happen. Assurance: Protection Against an Event, that Might Happen, is Not Guaranteed.

Question 10

Mr. Poddar has used Insulated Wiring in His House, so as to Reduce the Chances of Damage, Due to Fire. Identify the Risk-Management Technique, practiced here.

A)Risk-Avoidance
B)Risk-Retention
C)Risk-Transfer
D)Risk-Reduction and Risk- Control

Question 11

Ms. Shaheen refuses to go on a Business-Trip to Iraq, because of Violence in the Destination Country. Identify the Risk-Management Technique, practiced here.

A)Risk-Avoidance
B)Risk-Retention
C)Risk-Transfer
D)Risk-Reduction and Risk- Control

Question 12

Mr. Suresh has purchased a Life Assurance Policy, so that, His Family-Members do not have to depend on Any-One, in Case of His Un-Timely Death. Identify the Risk-Management Technique, practiced here.

A)Risk-Avoidance
B)Risk-Retention
C)Risk-Transfer
D)Risk-Reduction and Risk- Control

Question 13

Ms. Smita has set-up a Reserve Fund, to be used for the Repairs, in Case, the House is damaged for Some Reason. Identify the Risk-Management Technique, practiced here.

A)Risk-Financing
B)Risk-Retention
C)Risk-Transfer
D)Risk-Reduction and Risk- Control

Question 14

Which One of the Following Statements, is Correct?

A)Insurance protects the Asset from Damage.
B)Insurance prevents the Losses.
C)Insurance reduces the Possibility of Loss.
D)Insurance indemnifies the Insured, in the Event of a Loss.

Question 15

You are an Insurance-Surveyor. On Behalf of the Insurer, Why Will You survey and inspect a Property, Prior to Insurance?

A)To Assess the Risk, for Rating Purposes.
B)To Arrive At the Valuation of the Property, by Looking at the Surroundings.
C)To Find-Out: How Far the Property is, From the City.
D)To Get a Look at the Neighbouring Properties, Also.

Question 16

Who, originally proposed the Concept of Human Life Value (H.L.V.)?

A)William Faulkner
B)Mr. N. Malhotra
C)Economist, Adam Smith
D)Professor Hubener

Question 17

Describe an Asset, in General. Choose the Most Appropriate Option.

A)An Asset is Some-Thing, that is Freely Available.
B)An Asset is Some-Thing, that yields a Value or a Return.
C)An Asset is Some-Thing, that yields No Return, and Only provides an Utility.
D)An Asset is Some-Thing, that cannot be owned.

Question 18

The Principle of Indemnity is Applicable to --.

A)Life Assurance
B)General Insurance
C)Life Assurance and General Insurance
D)Neither Life Assurance, Nor General Insurance.

Question 19

Which One of the Following, cannot be categorised under the Risks, faced by Ordinary People?

A)Living, Too Long.
B)Dying, Too Early.
C)Natural Wear and Tear.
D)Living with Disability.

Question 20

Identify the Two Factors, that need to be considered, while calculating Human Life Value (H.L.V.).

A)Net-Earnings of the Bread-Winner and Number of Family- Members.
B)Net-Earnings of the Bread-Winner and Annual Rate-of-Interest.
C)Net Earnings of the Bread-Winner and His or Her Job-Type.
D)Net Earnings of the Bread-Winner and Insurance-Purchased

Question 21

Which One of the Following Methods, is, a Traditional Method, that can Help Determine the Insurance, needed by an Individual?

A)Human Property-Value
B)Life-Term Proposition
C)Human Life-Value
D)Future Life-Value

Question 22

Identify the Component, that is Not a Part of the Life Assurance Business.

A)Asset
B)Risk
C)Principle of Mutuality
D)Speculation

Question 23

Which One of the Following, cannot be an Asset?

A)Air
B)Car
C)House
D)Goodwill

Question 24

What was the Primary Argument, behind "Buy Term Assurance and Invest the Difference, Else-Where"? Choose the Most Appropriate Option.

A)Term Assurance is the Best Form of Life Assurance.
B)Investing the Balance Premiums, in Other Investment-Instruments, could yield a Higher Return.
C)The Policy-Holder can take the Higher Risks, by investing the Balance Premium in the Equities.
D)Non-Term Assurance has the Lowest Yields.

Question 25

All of the Following, are the Advantages of Cash-Value Insurance-Contracts, Except --.

A)Inculcates the Saving- Discipline
B)Safe and Secure Investment
C)Income-Tax Benefits
D)Lower Yields