Insurance
Insurance MCQs with Answers and Explanations | Life, Health & General Insurance Objective Questions
Enhance your understanding of Insurance and Risk Management with our comprehensive collection of MCQs with answers and detailed explanations. Topics include principles of insurance, life insurance, health insurance, fire insurance, marine insurance, reinsurance, risk management, premium calculation, claims settlement, insurance laws, and regulatory framework. These objective questions are ideal for students, teachers, and candidates preparing for competitive and professional exams (CA, ACCA, ICMA, MBA, BBA, CSS, PMS, NTS, FPSC, PPSC, UPSC, insurance licensing exams, etc.). Each MCQ is followed by a clear explanation to strengthen concepts, improve problem-solving skills, and boost exam performance. Perfect for practice, revision, and self-assessment in the field of Insurance.
A) Unbundled plans
B) Bundled plans
C) Annuity
D) ULIP
✅ ANSWER: B
Traditional cash value plans are also known as Bundled plans. Bundled plans consist of multiple types of health coverage that a consumer can purchase together, typically with one integrated premium. The plans are generally designed to complement each other, or to provide varying benefits.
A) Cancel the license
B) Issue a duplicate license
C) Renew the existing license
D) Take some fees from the agent
✅ ANSWER: A
If an agent is found guilty of criminal misappropriation the designated person will Cancel the license.
A) In regular instalments
B) In lumpsum
C) Both A & B
D) None of the above
✅ ANSWER: B
Under Immediate annuity, the premium has to be paid in lumpsum. An immediate annuity is an insurance product that gives the buyer a guaranteed stream of income in exchange for a lump sum of cash. Immediate annuities have several advantages, such as long-term stability, tax-deferred income, and monthly income payments for the rest of your life.
A) In a medical examiner’s report physical features like height, weight, blood pressure, etc need to be stated for proper risk assessment
B) If a proposal cannot be considered as a non-medical case for underwriting, a medical report is essential
C) There is no such thing as non-medical underwriting
D) Ration card is a non-standard proof of age
✅ ANSWER: C
Non Medical Life Insurance is for those who want the quickest possible coverage without going through a longer underwriting process. This product is a fully underwritten product which allows for rapid decision on available medical criteria.
A) Byepass surgery
B) Cataract
C) Lithotripsy
D) Piles
✅ ANSWER: A
Byepass surgery is not a Day Care procedure. A day care procedure is a surgery or medical procedure that formerly required a prolonged stay in hospital but can now be completed in less than 24 hours.
A) Term insurance plans come with life-long renewability option
B) All term insurance plans come with a built-in disability rider
C) Term insurance can be bought as a stand-alone policy as well as a rider with another policy
D) There is no provision in a term insurance plans to convert it into a whole life insurance plan
✅ ANSWER: C
Term insurance can be bought as a stand-alone policy as well as a rider with another policy. Term insurance is a life insurance product offered by an insurance company which offers financial coverage to the policy holder for a specific time period. In case of death of the insured individual during the policy term, the death benefit is paid by the company to the beneficiary.
A) Tax rebates
B) Safe investment avenue
C) Protection against the loss of economic value of an individual’s productive abilities
D) Wealth accumulation
✅ ANSWER: C
Protection against the loss of economic value of an individual’s productive abilities is the primary purpose of a life insurance product. The primary purpose for purchasing life insurance is to provide financial stability to beneficiaries in the event of the insured’s death.
A) Martin Luther
B) Prof.H.S.Huebner
C) J.M.Keynes
D) Warren Buffet
✅ ANSWER: B
With Prof.H.S.Huebner we associate the concept of Human Life Value. Human life value (HLV) concept is an economic theory developed in 1920’s that attempt to assign a monetary value to one’s life.
A) Insurer
B) Insured
C) Underwriter
D) Proposer
✅ ANSWER: A
Insurer obligation is to pay claim. When a policyholder files a claim under his or her own insurance policy, the insurer has certain obligations to the insured and has a duty to act with good faith in handling that claim.
A) Bonus is not allowed on surrender of a policy
B) In compound reversionary bonus it is a percentage of basic benefit and already attached bonus
C) Terminal bonus and compound bonus are one and the same
D) Persistence bonus is allowed by the insurer at its discretion in certain cases
✅ ANSWER: B
In compound reversionary bonus it is a percentage of basic benefit and already attached bonus. Compound reversionary bonuses are a percentage rate, which apply to the sum assured in respect of the basic policy benefit, and to the reversionary bonuses already attached to the policy. The difference is in the way the bonuses are accrued.