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.

641. Declined life means

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Life to which insurance could be granted
Life to which insurance cover could not be granted at affordable cost
Both A & B
None of the above
✅ The correct answer is B.
Declined life means Life to which insurance cover could not be granted at affordable cost. Its purpose it to protect insurance companies from applicants who may be lying about their current health conditions. Just because you have been previously denied life insurance does not mean you will be denied again.

643. Which is correct?

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It is easy to know cash value and savings value components in a traditional plan
In a traditional life insurance it is not easy to ascertain the rate of return
Surrender value can easily be arrived at in such policies
Rate of return is always high in such policies
✅ The correct answer is B.
It is easy to know cash value and savings value components in a traditional plan. Cash value life insurance is a form of permanent life insurance that features a cash value savings component.

644. Pick out the incorrect statement out of the following ones.

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In decreasing term policy the premium will fall each year
In decreasing term cover the premium is the same throughout the policy duration
Policy benefits will also decrease over the policy period
Mortgage redemption policy is nothing but a term insurance cover
✅ The correct answer is A.
In decreasing term insurance the premium is constant through the term.

645. Which act speaks about presumption of death?

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Insurance Act, 1938
IRDA Act, 1999
IRDA Regulations, 2000
Indian Evidence Act
✅ The correct answer is D.
Indian Evidence Act act speaks about presumption of death. Presumption of death is governed by sections 107 and 108 of the Evidence Act, which allows for presumption of death for a person missing for 7 years to be raised in appropriate proceedings before the court.

647. It would be advantageous to Revive a lapsed policy rather than taking a new policy. Most apt reason is –

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Fresh conditions may be imposed under a new policy
Policyholder may not get the same policy benefits
That policy may longer be available for sale
Premium under a new policy would be more based on his latest age
✅ The correct answer is D.
It would be advantageous to Revive a lapsed policy rather than taking a new policy. Most apt reason is -Premium under a new policy would be more based on his latest age.

648. What is responsible for a rise in general price levels of goods and services in a nation’s economy?

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Inflation
Deflation
Reflation
Stagflation
✅ The correct answer is A.
Inflation is responsible for a rise in general price levels of goods and services in a nation’s economy. Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time. It is the constant rise in the general level of prices where a unit of currency buys less than it did in prior periods.

649. During the revival of a lapsed policy, which of the below aspect is considered most significant by the insurance company? Choose the most appropriate option.

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Evidence of insurability at revival
Revival of the policy leading to increase in risk for the insurance company
Payment of unpaid premiums with interest
Insured submitting the revival application within a specified time frame
✅ The correct answer is A.
During the revival of a lapsed policy, Evidence of insurability at revival is considered most significant by the insurance company. A lapsed policy means that the benefit of insurance will not be available to protect the financial interest of the dependants in the event of the death of the insured.