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.

651. Mortgage redemption insurance (MRI) can be categorised under _________.

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Increasing term life assurance
Decreasing term life assurance
Variable life assurance
Universal life assurance
✅ The correct answer is B.
Mortgage redemption insurance (MRI) can be categorised under decreasing term life assurance. It is basically a decreasing term life insurance policy taken by a mortgagor to repay the balance on a mortgage loan if he/she dies before its full repayment.

652. Which of the following statements is true?

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Insurance is a method of sharing the losses of a ‘few’ by ‘many’
Insurance is a method of transferring the risk of an individual to another individual
Insurance is a method of sharing the losses of a ‘many’ by a few
Insurance is a method of transferring the gains of a few to the many
✅ The correct answer is A.
Insurance pays when there is loss of asset. Insurance is a method of sharing the losses of a ‘few’ by ‘many’. property to assess the risk for rating purposes.

653. State which of the following statements is correct

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In ULIPs the insurance cover must be a minimum multiple of the premium
ULIPs can be surrendered after two years
Both the above statements are correct
Both the above statements are wrong
✅ The correct answer is A.
In ULIPs the insurance cover must be a minimum multiple of the premium. ULIPs determine the cover as a multiple of the annual premium. If you are looking for an investment avenue, choose a plan with the lowest Sum Assured because a higher cover means a higher mortality charge.

657. In so far policy loans are concerned, which one of the following is correct?

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The policy has to be assigned in favour of the insurer
Such an assignment will not cancel the nomination already made
Both A & B
None of the above
✅ The correct answer is C.
Both the statements are correct.
The policy has to be assigned in favour of the insurer and such an assignment will not cancel the nomination already made.

659. Which of the following is incorrect with regards to portfolio method?

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The total investment return is shared between policyholders
No attempt is made to distinguish between investments of previous years over current investments
This method gives homogenized rates of return
None of the above
✅ The correct answer is D.
All of the above are correct with regards to the portfolio method. The portfolio method is an accounting method that credits all funds on the specified current rate of interest, regardless of when the money was placed in the account.