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.

41. Which of the following is correct? Statement A – Insurance reduces burdens Statement B – Insurance is a system of mutual support. Statement C – Insurance the only method to manage risks.

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A) A is correct
B) B is correct
C) A, B & C correct
D) A & B correct
✅ ANSWER: D
Insurance reduces burdens and Insurance is a system of mutual support. Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.

42. Which of the following statements is incorrect in case of a non-medical case?

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A) In a non-medical case, risk cannot be assessed in the absence of medical report
B) Risk assessment is possible in a non-medical proposal
C) More than 90% of people who submit proposals on their lives are accepted at ordinary rates
D) In preferred lives, the level of anticipated mortality is likely to be lower than even standard lives
✅ ANSWER: A
In a non-medical case, risk can be assessed in the absence of a medical report. No medical report is required in a non-medical case.

43. What is the meaning of the term non-medical underwriting?

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A) Taking health insurance
B) Buying a medical insurance without medical exam
C) Buying a life insurance without medical exam
D) None of the three
✅ ANSWER: C
Buying a life insurance without medical exam is the meaning of the term non-medical underwriting. No medical exam life insurance policies are term life insurance policies, often with a relatively low face value. You can obtain term life insurance quotes for no exam coverage with no medical exam and perhaps only a few medical questions. Your premiums may be higher based on your answers.

45. In Unit Linked policies, the risk cover is a multiple of _________

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A) Fund Value
B) Accumulations
C) Net Asset Value
D) Premiums
✅ ANSWER: D
In Unit Linked policies, the risk cover is a multiple of Premiums. A unit linked insurance plan (ULIP) is an investment product that provides for insurance payout benefits. ULIP offerings are primarily concentrated in India. The investment vehicle requires a premium payment which is invested in investment products for capital appreciation.

46. Which of the following options is correct?

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A) Premium paid by a client for health cover enjoys income tax deduction under section 80C of the Income Tax Act
B) Premium paid towards health cover earns income tax rebate under section 80D of the Income Tax Act
C) Premium paid for a health cover does not qualify for tax benefit under any provision of the Income Tax Act
D) There is no upper limit to sum assured in a health insurance policy
✅ ANSWER: B
Section 80D of the Income Tax Act deals with rebates. Tax Benefits of Health Insurance Under Section 80D. Health insurance premium paid for self, spouse, dependent children or parents qualifies for tax deduction up to Rs.25,000. This limit has been increased from Rs.15,000 from the previous year to Rs.25,000.

50. Identify the correct statement.

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A) Closing a sale is the art of persuading the prospect to buy now based on the recommendation of the agent
B) Offering alternatives as to mode of payments will quicken the closing
C) Undue pressure tactics on the prospect are to be always avoided in a close of sales interview
D) All of the above
✅ ANSWER: D
All the statements are correct.
Closing a sale is the art of persuading the prospect to buy now based on the recommendation of the agent, Offering alternatives as to mode of payments will quicken the closing and Undue pressure tactics on the prospect are to be always avoided in a close of sales interview.