Insurance mcqs

✅ The correct answer is C.
An individual who needs insurance but has a low budget is advised to purchase a term plan. Term plans are beneficial for those who want higher coverage at low premium rates, providing financial protection for their family in case they are not around.

✅ The correct answer is A.
Increased risky behaviour following the purchase of insurance can be attributed to moral hazard. Moral hazard is a situation in which one party gets involved in a risky event knowing that it is protected against the risk and the other party will incur the cost. It arises when both the parties have incomplete information about each other.

✅ The correct answer is D.
The person who makes the offer is called the Proposer and the person who accepts the offer in an insurance contract is called the Insurer.

✅ The correct answer is A.
Cost of the risk would increase with the probability and amount of loss. Hazard is a condition that increases the chances of a loss arising from a peril. For example, an accident may be the cause of a permanent and total disability.

✅ The correct answer is D.
In Universal life products, larger the size of the premium, Larger the coverage provided and larger the policy cash value.

✅ The correct answer is B.
The losses of a few are shared amongst many through the mechanism of Insurance.

✅ The correct answer is D.
All of the above will help an agent to get successful results. An agent can work on which of the following bases for successful results: Natural market is a source of market for a life insurance agent. A satisfied client can be an effective referral to an agent for further references. Family and friends can offer an easy opportunity for being contacted for life insurance selling.

✅ The correct answer is A.
Hospital is an institution in which sick or injured persons are given medical or surgical treatment by professional doctors. Therefore, according to the definition of hospital, the first option is not correct and the rest are correct.

✅ The correct answer is D.
Both the statements are incorrect.
Under Defined Benefit scheme, pension paid was not linked to investment performance of fund and Under Defined Contribution scheme, pension paid was linked to investment performance of the fund.

✅ The correct answer is B.
As per Section 45 of Insurance Act, 1938, an insurance company can reject a claim within 2 years from issuance of policy if the material facts in the proposal are proved false.