Question 1

Find out which of the given statements is incorrect

Accepted Answer

The actuarial department is primarily responsible for assessing risk, setting premium rates, and ensuring the financial stability of insurance products. The responsibility for settling death claims typically falls to the claims department, not the actuarial department.

Question 2

Which of the following terms is dissimilar to the other four in the context of death claims in life insurance?

Accepted Answer

Foreclosure is dissimilar because it refers to the legal process by which a lender takes control of a property, evicts the homeowner, and sells the home after the homeowner fails to make full principal and interest payments on a mortgage. This term is not directly related to death claims in life insurance, unlike the other options which are directly associated with the process of filing and processing a death claim.

Question 3

As per structured formula under the Motor Vehicle Act, victims of fatal injuries are paid compensation on the basis of:

Accepted Answer

Under the Motor Vehicle Act, compensation for victims of fatal injuries is calculated based on the age and income of the deceased. This structured formula takes into account the potential earning capacity lost due to the fatal injury.

Question 4

Time Policies relate to:

Accepted Answer

Time Policies are specifically related to marine or hull insurance, where the policy is taken for a specific period of time, typically to cover the duration of a voyage or a specified time period when the ship is in use or at risk.

Question 5

Which clause specifies the perils insured in a scheduled form of policy?

Accepted Answer

The Operative Clause specifies the perils insured in a scheduled form of policy, detailing the coverage provided by the insurer.

Question 6

Which of the following types of insurances is mandatory?

Accepted Answer

Motor Third Party Legal Liability insurance is mandatory in many countries to cover the insured person's legal liability for death, injury, or damage to property of third parties arising from the use of the vehicle.

Question 7

The minimum paid up capital required for a General Insurance Company is Rs. ____

Accepted Answer

The answer of The minimum paid up capital required for...

Question 8

In 'Hit and Run' cases, claims are settled from _______

Accepted Answer

The Solatium Fund is used to settle claims in 'Hit and Run' cases, providing compensation to victims or their families when the vehicle responsible cannot be traced.

Question 9

Select the expanded form of FPA as used in insurance

Accepted Answer

Free of Particular Average (FPA) is a term used in insurance, particularly in marine insurance, to indicate a limited form of coverage. This type of insurance covers loss or damage to the insured goods only if the damage exceeds a certain percentage of the insured value, or is caused by specific, named perils. It does not cover partial losses except those caused by the ship sinking, being stranded, burning, or colliding.

Question 10

Select the expanded form of ALOP used in insurance

Accepted Answer

Advance Loss of Profits (ALOP) insurance is designed to cover the financial losses due to delays in the start-up of a project, typically because of an insured peril under a construction or erection policy.

Question 11

Insurance cannot prevent the occurrence of risk but it provides for the………

Accepted Answer

Insurance is designed to provide financial compensation for losses incurred from specific risks, not to prevent the risks themselves from occurring.

Question 12

The document which embodies the contract in insurance is called…………

Accepted Answer

The document which embodies the contract in insurance is called a policy.

Question 13

……… principle in insurance means maximum truth.

Accepted Answer

Uberrima fides is a Latin phrase meaning "utmost good faith," and it is the principle in insurance that emphasizes the need for complete honesty and disclosure of all relevant facts by both parties (the insurer and the insured). This principle is fundamental in insurance contracts, requiring that all material facts be disclosed to prevent fraud and ensure fair dealing.

Question 14

Which of the following terms matches closest with 'Composite Policy'?

Accepted Answer

Shopkeepers' insurance is a type of composite policy that covers a range of risks such as fire, theft, and liability within a single policy, catering to the diverse needs of shop owners.

Question 15

Members of the Insurance Advisory Committee are drawn to represent the interests of different groups like:

Accepted Answer

The answer of Members of the Insurance Advisory Committee are...

Question 16

Which of the following covers is dissimilar to the other four options?

Accepted Answer

Loss of Profits is dissimilar because it pertains to a financial loss due to business interruption, whereas the other options (Loss of Passport, Loss of checked in baggage, Delay in receiving checked in baggage) are related to travel inconveniences.

Question 17

Which of the following types of insurances is dissimilar to the other four options?

Accepted Answer

Builders' Risks insurance is related to construction projects, while the other options are related to agricultural or rural property and assets.

Question 18

Which of the following terms matches closest with 'Asbestosis'?

Accepted Answer

Asbestosis is a lung disease resulting from the inhalation of asbestos particles, often in the workplace, making it closely related to Workmen's Compensation issues.

Question 19

Regarding 'Exclusions' find out the incorrect statement.

Accepted Answer

Exclusions specifically deal with risk coverage by defining what is not covered under the policy, thereby outlining the scope of risk that the insurer is willing to accept.

Question 20

Which of the following statements is incorrect in respect of brokers?

Accepted Answer

Brokers can be individuals or entities, not necessarily registered companies or firms.

Quiz 3: Insurance Terms and Concepts