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.

681. Shankar bought a 10 year Unit Linked Insurance Plan. If he dies before the maturity of the policy which of the below will be paid?

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Lower of sum assured or fund value
Lower of sum assured or fund value
Premiums paid will be returned with 2% higher interest rate as compared to a bank’s savings deposit
Surrender value
✅ The correct answer is B.
Shankar bought a 10 year Unit Linked Insurance Plan. If he dies before the maturity of the policy lower of sum assured or fund value will be paid.

682. Which is incorrect?

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Special reports like ECG, EEG, Chest x-ray reports etc are called for in large sums proposed and where the ages of the proposers are higher than otherwise
First insurance at age of 50 for a large sum proposed is a sign of moral hazard
Family history has no role in risk assessment
If there is no relationship between the proposer’s income and the sum proposed moral hazard is suspected
✅ The correct answer is C.
Family history plays a critical role in assessing the risk of inherited medical conditions and single gene disorders. Several methods have been established to obtain family medical histories, including the family history questionnaire or checklist and the pedigree.

684. Under Deferred annuity, the time period between its purchase and start of annuity payments is called–

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Waiting period
Postponement period
Waiver period
Deferment period
✅ The correct answer is D.
A deferred payment annuity allows the investment, known as the premium, to grow both by contributions and interest before payments are initiated. A deferred payment annuity is also known as a “deferred annuity” or a “delayed annuity.”

688. Which of the following constitute Breach of Utmost Good faith?

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Non-Disclosure
Misrepresentation
Both A & B
None of the above
✅ The correct answer is C.
Misrepresentation and non-disclosure constitute breach of utmost good faith. In an insurance policy, misrepresentation on the behalf of the insured gives the insurance company a right to terminate the policy. Non-disclosure means failure to divulge a relevant fact when applying for an insurance policy. This is a violation of the principle of good faith which should be observed in insurance negotiations.