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.

71. Which of the following statements is correct?

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A) The policy document has to be signed by a competent authority, but need not be compulsorily stamped according to the Indian Stamp Act
B) The policy document has to be signed by a competent authority and should be stamped according to the Indian Stamp Act
C) The policy document need not be signed by a competent authority, but should be stamped according to the Indian Stamp Act
D) The policy document neither needs to be signed by a competent authority nor it needs to be compulsorily stamped according to the Indian Stamp Act
✅ ANSWER: B
According to the Indian Stamp Act, the policy document has to be signed by a competent authority as well as stamped. Hence, option (2) is correct.

72. IGMS stands for

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Individual Grievance Management Service
Integrated Grievance Management System
Indian Grievance Management System
Insurance Grievance Management System
✅ The correct answer is B.
The Integrated Grievance Management System(IGMS) facilitates online registration of policyholders’ complaints and helps track their status.

73. In case the policyholder is not satisfied with the policy, he / she can return the policy within the free-look period i.e. within _________of receiving the policy document.

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60 days
45 days
30 days
15 days
✅ The correct answer is D.
In case the policyholder is not satisfied with the policy, he / she can return the policy within the free-look period i.e. within 15 days of receiving the policy document.

75. Which is correct about a decreasing Term Insurance?

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Premium will increase over time
Premium will decrease over time
In decreasing term insurance the premium is constant through the term
Premium is returned periodically
✅ The correct answer is C.
In decreasing term insurance the premium is constant through the term. A term life insurance policy in which the policyholder pays a constant premium but the benefit decreases over time, either on a monthly, quarterly, or yearly basis.

78. Which of the following are the disadvantage(s) of Traditional With Profit policies over ULIPs?

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Bonuses are declared only once a year and do not reflect daily fluctuations in the value of the assets
Policyholder’s benefits depend on assumptions/discretions of the insurance company
Bonus structure does not reflect the true value of assets of the insurer
All of the above
✅ The correct answer is D.
Bonuses are declared only once a year and do not reflect daily fluctuations in the value of the assets, Policyholder’s benefits depend on assumptions/discretions of the insurance company and Bonus structure does not reflect the true value of assets of the insurer are the disadvantages of Traditional With Profit policies over ULIPs.

80. Risk Financing includes –

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Risk Retention
Risk Transfer
A & B correct
None of the above
✅ The correct answer is C.
In business economics, risk financing is concerned with providing funds to cover the financial effect of unexpected losses experienced by a firm. Traditional forms of finance include risk transfer, funded retention by way of reserves (often called self-insurance) and risk pooling.