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.

672. Which of the following are incorrect? 1. Mutuality means funds from various individuals are combined. 2. Diversification means spreading out funds to various destinations.

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1 is correct
2 is correct
Both A & B
None of the above is correct
✅ The correct answer is D.
Mutuality means flow of resources from many to one. Diversification is a risk management technique that mixes a wide variety of investments within a portfolio.

674. In a standard insurance policy document, the standard provisions section will have information on which of the following?

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Date of commencement, date of maturity and due date of last premium
Name of the nominee
The rights and privileges and other conditions which are applicable under the contract
The signature of the authorized signatory and policy stamp
✅ The correct answer is C.
In a standard insurance policy document, the standard provisions section will have information on the rights and privileges and other conditions which are applicable under the contract.

675. Universal Life Insurance is associated with

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Universal Life Insurance is associated with Germany
Universal Life plan was first introduced in the UK
France is the home of universal Life policies
USA is known for introducing such policies
✅ The correct answer is D.
Universal life insurance (often shortened to UL) is a type of cash value life insurance, sold primarily in the United States. Under the terms of the policy, the excess of premium payments above the current cost of insurance is credited to the cash value of the policy, which is credited each month with interest.

676. Survey and inspection of a property is essential

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Before acceptance of risk to assess the risk for rating purpose
To find out the true value of asset
To find out how the asset came into the owner’s possession
To know whether any other property in the neighbourhood can be insured
✅ The correct answer is A.
Survey and inspection of a property is essential before the acceptance of risk to assess the risk for rating purpose. A survey is an inspection of a property.

678. Which of the following statement is correct?

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Endowment assurance has no saving element
Whole Life Plan has no saving element at all
Term Insurance has little or no saving element
Money Back plan has no savings element
✅ The correct answer is C.
Term Insurance has little or no saving element. In term policies if you stop paying the premium the risk cover ceases and the policy ends. Nothing is payable to you as there is no savings element in the policy.

679. Identify the term of insurance that is depicted in the following scenario. Scenario: patient pays the health provider and is subsequently reimbursed by the health insurance company.

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Service Benefit
Direct Contracting
Indemnity
Casualty
✅ The correct answer is C.
Indemnity insurance protects against claims arising from possible negligence or failure to perform that result in a client’s financial loss or legal entanglement.

680. What is correct in the following sentences?

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Claim is a demand on the insurer to honour contractual commitment to pay the policy money to the claimant
It s request made to the insurer by the claimant to settle payment
While in some claims, the contract comes to an end with payment in other cases the contract continues
All of the above
✅ The correct answer is D.
All the above statements are correct.
Claim is a demand on the insurer to honour contractual commitment to pay the policy money to the claimant, It s request made to the insurer by the claimant to settle payment and While in some claims, the contract comes to an end with payment in other cases the contract continues.