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.

691. A policy taken with critical illness rider benefit is being assigned. Which type of assignment would suit the intended purpose because if the life insured is diagnosed with a critical illness, he only should receive the critical illness rider claim?

by
Absolute assignment
Conditional assignment
Loan assignment
Collateral assignment
✅ The correct answer is B.
A policy taken with critical illness rider benefit is being assigned. Conditional assignment would suit the intended purpose because if the life insured is diagnosed with a critical illness, he only should receive the critical illness rider claim.

692. State the incorrect statement

by
In the event of loss of policy document, no fresh proposal needed
The insurer will in such an event issue a duplicate policy without making any change in the contract
No fresh underwriting is involved for issue of a duplicate policy
The assured has to approach a competent court of law and obtain an order directing the insurer to issue a duplicate policy
✅ The correct answer is D.
The assured does not have to approach a competent court of law and obtain an order directing the insurer to issue a duplicate policy.

693. Under Variable life insurance, if the cash value became zero, the policy would _________

by
Continue
Converted into term ins
Surrender
Terminate
✅ The correct answer is D.
Under Variable life insurance, if the cash value became zero, the policy would Terminate. Variable life insurance is a permanent life insurance product with separate accounts comprised of various instruments and investment funds, such as stocks, bonds, equity funds, money market funds, and bond funds.

696. State the correct statement out of the following ones.

by
Primary care means acute care to a patient in a hospital
It means extensive care provided to a patient in a acute setting
First point of contact for health care to a needy person
Care provided by experts to solve a medical problem faced by a patient
✅ The correct answer is C.
First point of contact for health care to a needy person. Primary healthcare is the first contact a person has with the health system when they have a health problem.

697. What is correct

by
Insurer in certain circumstances may waive subsequent premiums
Policy document and FPR are one and the same
RPRs are revival premium receipt
After issue of FPR subsequent premiums are to be paid by the assured
✅ The correct answer is D.
After the issue of the FPR, the insurance company will issue subsequent premium receipts when it receives further premiums from the proposer. These receipts are known as renewal premium receipts (RPR). The RPRs act as proof of payment in the event of any disputes related to premium payment.

698. Which of the following could be termed Misrepresentation?

by
Innocent misrepresentation
Fraudulent misrepresentation
A & B are correct
None of the above
✅ The correct answer is C.
Both Innocent misrepresentation and fraudulent misrepresentation could be termed Misrepresentation. Innocent misrepresentation is a misrepresentation made by someone who had reasonable grounds for believing that his false statement was true. Fraudulent misrepresentation is a civil tort arising out of contract law. It is a false statement of fact that causes or induces someone to enter into a contract.

699. Which of the following statements are true about NABARD?

by
It is a development bank in the sector of Regional Rural Banks in India
It provides and regulates credits in the rural area
It gives assistance for the promotion and development of rural sectors, mainly agriculture
It finances rural crafts
✅ The correct answer is E.
All statements are true about NABARD.
It is a development bank in the sector of Regional Rural Banks in India, It provides and regulates credits in the rural area, It gives assistance for the promotion and development of rural sectors, mainly agriculture and It finances rural crafts.

700. Revival of a life insurance policy means

by
Forcing a policy to lapse
Reinstating a lapsed policy
Not paying the premiums
Non-settlement of claim monies
✅ The correct answer is B.
Revival of a life insurance policy means reinstating a lapsed policy. The documentation requirements for revival or reinstatement of a policy depend on the time elapsed between the date of lapsation and the date when the request for revival has been made by the policyholder.