All Exams >
B Com >
Principles of Insurance >
All Questions
All questions of Insurance Products for B Com Exam
What unexpected event occurred to Mr. Long Life, leading to financial difficulties for his family?- a)He lost his job.
- b)He suffered a heart attack.
- c)His business collapsed.
- d)He won the lottery.
Correct answer is option 'B'. Can you explain this answer?
a)
He lost his job.
b)
He suffered a heart attack.
c)
His business collapsed.
d)
He won the lottery.
|
Dev Patel answered |
Mr. Long Life suffered a stroke, which led to financial difficulties for his family as he was unable to run his business and incurred high medical expenses.
What is the maximum age until which a Whole Life Insurance plan provides coverage, as mentioned in the text?- a)65 years
- b)75 years
- c)100 years
- d)120 years
Correct answer is option 'C'. Can you explain this answer?
a)
65 years
b)
75 years
c)
100 years
d)
120 years
|
|
Dev Patel answered |
A Whole Life Insurance plan provides coverage up to the age of 100, as mentioned in the text.
What is the primary reason for the family's financial struggle in the story?- a)Mr. Long Life's lack of a retirement plan.
- b)The family's extravagant lifestyle.
- c)The unexpected medical expenses due to Mr. Long Life's illness.
- d)The decline in the value of their investments.
Correct answer is option 'C'. Can you explain this answer?
a)
Mr. Long Life's lack of a retirement plan.
b)
The family's extravagant lifestyle.
c)
The unexpected medical expenses due to Mr. Long Life's illness.
d)
The decline in the value of their investments.
|
|
Dev Patel answered |
The family's financial struggle in the story primarily resulted from the unexpected medical expenses due to Mr. Long Life's illness.
What is the primary advantage of taking an insurance plan from LIC?- a)Lower premiums
- b)High-risk coverage
- c)Good claims settlement ratio
- d)Tax-free maturity benefits
Correct answer is option 'C'. Can you explain this answer?
a)
Lower premiums
b)
High-risk coverage
c)
Good claims settlement ratio
d)
Tax-free maturity benefits
|
|
Dev Patel answered |
LIC is known for its good claims settlement ratio, which means it successfully settles a high percentage of claims.
Which LIC term plan is primarily designed for the rural population or low-income groups and offers a maturity benefit?- a)LIC Amulya Jeevan – II
- b)LIC Bhagya Lakshmi
- c)LIC New Jeevan Mangal
- d)LIC e-Term
Correct answer is option 'B'. Can you explain this answer?
a)
LIC Amulya Jeevan – II
b)
LIC Bhagya Lakshmi
c)
LIC New Jeevan Mangal
d)
LIC e-Term
|
|
Dev Patel answered |
LIC Bhagya Lakshmi is designed for the rural population and low-income groups, offering both death and maturity benefits.
Which LIC term plan offers a Single Pay premium option?- a)LIC Amulya Jeevan – II
- b)LIC Anmol Jeevan – II
- c)LIC Bhagya Lakshmi
- d)LIC New Jeevan Mangal
Correct answer is option 'A'. Can you explain this answer?
a)
LIC Amulya Jeevan – II
b)
LIC Anmol Jeevan – II
c)
LIC Bhagya Lakshmi
d)
LIC New Jeevan Mangal
|
|
Dev Patel answered |
LIC Amulya Jeevan – II offers a Single Pay premium option.
What is the primary purpose of Unit Linked Insurance Policies (ULIPs)?- a)Providing only life cover
- b)Generating tax-free income
- c)Combining life insurance with savings and investments
- d)Offering high returns on investments
Correct answer is option 'C'. Can you explain this answer?
a)
Providing only life cover
b)
Generating tax-free income
c)
Combining life insurance with savings and investments
d)
Offering high returns on investments
|
|
Dev Patel answered |
ULIPs combine life insurance with savings and investments, offering both protection and wealth creation.
What type of risk is created when individuals engage in risky activities due to having insurance coverage?- a)Pure risk
- b)Static risk
- c)Dynamic risk
- d)Moral hazard
Correct answer is option 'D'. Can you explain this answer?
a)
Pure risk
b)
Static risk
c)
Dynamic risk
d)
Moral hazard
|
|
Dev Patel answered |
Moral hazard arises when individuals or entities engage in riskier activities because they have insurance coverage, knowing that they will be protected in case of a loss. This behavior can increase the likelihood of losses for insurers.
What is the primary purpose of an annuity?- a)To provide immediate cash benefits
- b)To secure a steady cash flow during retirement
- c)To offer protection against data breaches
- d)To insure against property damage
Correct answer is option 'B'. Can you explain this answer?
a)
To provide immediate cash benefits
b)
To secure a steady cash flow during retirement
c)
To offer protection against data breaches
d)
To insure against property damage
|
|
Dev Patel answered |
An annuity's primary purpose is to provide a reliable means of securing a steady cash flow for individuals during their retirement years and to mitigate the risk of outliving one's assets. It is designed to accept and grow funds during the accumulation phase and then pay out a stream of payments during the annuitization phase, ensuring financial security in retirement.
What are the key features of LIC Term Insurance Plans?- a)They do not offer any maturity benefits.
- b)Premiums are paid only annually.
- c)Riders cannot be added to these plans.
- d)They provide both death and maturity benefits.
Correct answer is option 'D'. Can you explain this answer?
a)
They do not offer any maturity benefits.
b)
Premiums are paid only annually.
c)
Riders cannot be added to these plans.
d)
They provide both death and maturity benefits.
|
|
Dev Patel answered |
LIC Term Insurance Plans offer both death and maturity benefits, making them a combination of life insurance and savings plans.
What risk management department within an organization is responsible for minimizing enterprise risks?- a)Human resources
- b)Marketing
- c)Information technology
- d)Enterprise risk management
Correct answer is option 'D'. Can you explain this answer?
a)
Human resources
b)
Marketing
c)
Information technology
d)
Enterprise risk management
|
|
Dev Patel answered |
Enterprise risk management is the department within an organization responsible for minimizing enterprise risks. It focuses on identifying, assessing, and mitigating risks that can affect the entire organization.
What is the primary characteristic that distinguishes moral hazard from other types of hazards?- a)It results from dishonesty or unethical behavior
- b)It involves physical conditions increasing the likelihood of loss
- c)It is caused by a specific event or peril
- d)It arises from legal regulations
Correct answer is option 'A'. Can you explain this answer?
a)
It results from dishonesty or unethical behavior
b)
It involves physical conditions increasing the likelihood of loss
c)
It is caused by a specific event or peril
d)
It arises from legal regulations
|
|
Dev Patel answered |
Moral hazard is characterized by losses resulting from dishonesty or unethical behavior. It often occurs when individuals or entities take advantage of insurance without taking proper precautions to prevent losses.
What distinguishes fixed annuities from variable annuities?- a)Fixed annuities provide regular periodic payments.
- b)Variable annuities offer guaranteed cash flows.
- c)Fixed annuities allow the annuitant to invest in the stock market.
- d)Variable annuities have a fixed surrender period.
Correct answer is option 'A'. Can you explain this answer?
a)
Fixed annuities provide regular periodic payments.
b)
Variable annuities offer guaranteed cash flows.
c)
Fixed annuities allow the annuitant to invest in the stock market.
d)
Variable annuities have a fixed surrender period.
|
|
Dev Patel answered |
Fixed annuities offer stable and regular periodic payments to the annuitant, while variable annuities allow the annuitant to invest in the stock market, resulting in potentially varying cash flows based on the performance of the underlying investments.
What is the minimum entry age for LIC e-Term, LIC's only online term plan?- a)25 years
- b)30 years
- c)18 years
- d)21 years
Correct answer is option 'C'. Can you explain this answer?
a)
25 years
b)
30 years
c)
18 years
d)
21 years
|
|
Dev Patel answered |
The minimum entry age for LIC e-Term is 18 years.
Which type of risk is generally insurable due to the application of the law of large numbers?- a)Pure risk
- b)Static risk
- c)Dynamic risk
- d)Speculative risk
Correct answer is option 'A'. Can you explain this answer?
a)
Pure risk
b)
Static risk
c)
Dynamic risk
d)
Speculative risk
|
|
Dev Patel answered |
Pure risk is generally insurable because the law of large numbers can be applied to estimate future losses, allowing insurance companies to calculate premiums based on expected losses and share the risk among policyholders.
What is the primary risk associated with annuities?- a)Credit risk
- b)Market risk
- c)Inflation risk
- d)Liquidity risk
Correct answer is option 'D'. Can you explain this answer?
a)
Credit risk
b)
Market risk
c)
Inflation risk
d)
Liquidity risk
|
|
Dev Patel answered |
Annuities are often criticized for their illiquidity. Deposits into annuity contracts are typically locked up for a period of time, known as the surrender period, during which the annuitant would incur a penalty if they try to access the funds. Surrender periods can last several years, making annuities less liquid compared to other investments.
What is the primary purpose of diversifying investments in the context of risk management?- a)To eliminate all risk
- b)To increase systemic risk
- c)To minimize diversifiable risk
- d)To maximize speculative risk
Correct answer is option 'C'. Can you explain this answer?
a)
To eliminate all risk
b)
To increase systemic risk
c)
To minimize diversifiable risk
d)
To maximize speculative risk
|
|
Dev Patel answered |
Diversifying investments is primarily done to minimize diversifiable risk, also known as unsystematic risk. By spreading investments across different assets or asset classes, investors can reduce the impact of individual asset performance on their overall portfolio, thereby minimizing risk.
What is the purpose of group life insurance typically offered by employers?- a)To provide coverage for property damage
- b)To offer protection against data breaches
- c)To provide life insurance coverage to employees
- d)To insure against professional service mistakes
Correct answer is option 'C'. Can you explain this answer?
a)
To provide coverage for property damage
b)
To offer protection against data breaches
c)
To provide life insurance coverage to employees
d)
To insure against professional service mistakes
|
|
Dev Patel answered |
Group life insurance offered by employers is primarily designed to provide life insurance coverage to employees as part of their benefits package. It allows employees to have life insurance at lower costs compared to purchasing individual policies.
What is the main feature that distinguishes ULIPs from traditional life insurance policies?- a)Lower premiums
- b)Transparency in investments
- c)Higher risk coverage
- d)Guaranteed maturity benefits
Correct answer is option 'B'. Can you explain this answer?
a)
Lower premiums
b)
Transparency in investments
c)
Higher risk coverage
d)
Guaranteed maturity benefits
|
|
Dev Patel answered |
ULIPs are known for their transparency in investments, providing policyholders with regular updates on their investments.
What type of insurance plan offers coverage up to the age of 100, as mentioned in the text?- a)Term Insurance Plans
- b)Money Back Plans
- c)Whole Life Plan
- d)Endowment Plans
Correct answer is option 'C'. Can you explain this answer?
a)
Term Insurance Plans
b)
Money Back Plans
c)
Whole Life Plan
d)
Endowment Plans
|
|
Dev Patel answered |
The text discusses a type of insurance plan that provides coverage until the insured reaches the age of 100, which is referred to as a "Whole Life Plan."
Which type of insurance plan did Mr. Long Life ultimately decide against purchasing in the story?- a)Term Insurance
- b)Money Back Plan
- c)Whole Life Plan
- d)Endowment Plan
Correct answer is option 'C'. Can you explain this answer?
a)
Term Insurance
b)
Money Back Plan
c)
Whole Life Plan
d)
Endowment Plan
|
|
Dev Patel answered |
Mr. Long Life decided against purchasing a Whole Life Insurance plan in the story.
What is the minimum premium that can be paid towards the LIC New Endowment Plus ULIP in a year?- a)Rs. 10,000
- b)Rs. 20,000
- c)Rs. 30,000
- d)Rs. 50,000
Correct answer is option 'B'. Can you explain this answer?
a)
Rs. 10,000
b)
Rs. 20,000
c)
Rs. 30,000
d)
Rs. 50,000
|
|
Dev Patel answered |
The minimum premium for LIC New Endowment Plus ULIP is Rs. 20,000 per year.
What is a peril in the context of risk and insurance?- a)The chance of loss
- b)A condition that increases the likelihood of loss
- c)The direct cause of a loss
- d)The increase in risk due to dishonesty
Correct answer is option 'C'. Can you explain this answer?
a)
The chance of loss
b)
A condition that increases the likelihood of loss
c)
The direct cause of a loss
d)
The increase in risk due to dishonesty
|
|
Dev Patel answered |
A peril is the direct cause of a loss. For example, in the context of insurance, fire can be considered a peril because it directly causes property damage or loss.
In the story, why did Mr. Long Life initially decline the offer of a Whole Life Insurance plan?- a)He believed his business was sufficient to provide for his family's future needs.
- b)He thought he was too young and healthy to need insurance.
- c)He had multiple vices that made him ineligible for the plan.
- d)He had a significant amount of debt.
Correct answer is option 'A'. Can you explain this answer?
a)
He believed his business was sufficient to provide for his family's future needs.
b)
He thought he was too young and healthy to need insurance.
c)
He had multiple vices that made him ineligible for the plan.
d)
He had a significant amount of debt.
|
|
Dev Patel answered |
Mr. Long Life declined the Whole Life Insurance plan initially because he believed his successful business would provide for his family's future needs.
What was the main reason for Mr. Long Life's friend, Mr. Whole Life Insurance, recommending a Whole Life Insurance plan to him?- a)Mr. Long Life's young age and good health.
- b)Mr. Long Life's lack of financial success.
- c)Mr. Long Life's unhealthy lifestyle.
- d)Mr. Long Life's desire to retire early.
Correct answer is option 'A'. Can you explain this answer?
a)
Mr. Long Life's young age and good health.
b)
Mr. Long Life's lack of financial success.
c)
Mr. Long Life's unhealthy lifestyle.
d)
Mr. Long Life's desire to retire early.
|
|
Dev Patel answered |
Mr. Whole Life Insurance recommended a Whole Life Insurance plan to Mr. Long Life because of Mr. Long Life's young age and good health, emphasizing the importance of preparing for the future.
In the story, what role did Mr. Long Life's eldest child play in the family's financial situation?- a)He managed the family's business.
- b)He provided financial support from abroad.
- c)He sold the family's assets.
- d)He borrowed money from the bank.
Correct answer is option 'B'. Can you explain this answer?
a)
He managed the family's business.
b)
He provided financial support from abroad.
c)
He sold the family's assets.
d)
He borrowed money from the bank.
|
|
Dev Patel answered |
Mr. Long Life's eldest child played a crucial role by providing financial support from abroad to the family during their financial difficulties.
Which LIC term plan offers the option to pay premiums in monthly installments?- a)LIC e-Term
- b)LIC Anmol Jeevan – II
- c)LIC Bhagya Lakshmi
- d)None of the above
Correct answer is option 'D'. Can you explain this answer?
a)
LIC e-Term
b)
LIC Anmol Jeevan – II
c)
LIC Bhagya Lakshmi
d)
None of the above
|
|
Dev Patel answered |
None of the mentioned LIC term plans offer monthly premium payment options; they typically offer annual, semi-annual, or other modes of payment.
Which type of funds can be chosen in a Unit Linked Insurance Policy (ULIP) based on risk appetite?- a)Equity Funds
- b)Fixed Interest Funds
- c)Cash or Secured Funds
- d)All of the above
Correct answer is option 'D'. Can you explain this answer?
a)
Equity Funds
b)
Fixed Interest Funds
c)
Cash or Secured Funds
d)
All of the above
|
|
Dev Patel answered |
In a ULIP, you can choose funds based on your risk appetite, including Equity Funds, Fixed Interest Funds, and Cash or Secured Funds.
What type of insurance company is Life Insurance Corporation (LIC) of India?- a)Private sector insurance company
- b)International insurance company
- c)Public sector insurance company
- d)Micro-insurance company
Correct answer is option 'C'. Can you explain this answer?
a)
Private sector insurance company
b)
International insurance company
c)
Public sector insurance company
d)
Micro-insurance company
|
|
Dev Patel answered |
Life Insurance Corporation (LIC) of India is a public sector insurance company, as mentioned in the text.
How did Mr. Long Life's family cope with the financial challenges caused by his illness?- a)They sold the family home.
- b)They relied on the income of their eldest child.
- c)They received financial support from the government.
- d)They borrowed money from friends and relatives.
Correct answer is option 'B'. Can you explain this answer?
a)
They sold the family home.
b)
They relied on the income of their eldest child.
c)
They received financial support from the government.
d)
They borrowed money from friends and relatives.
|
|
Dev Patel answered |
Mr. Long Life's family coped with the financial challenges by relying on the income of their eldest child, who was working abroad and providing financial support.
Chapter doubts & questions for Insurance Products - Principles of Insurance 2025 is part of B Com exam preparation. The chapters have been prepared according to the B Com exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for B Com 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
Chapter doubts & questions of Insurance Products - Principles of Insurance in English & Hindi are available as part of B Com exam.
Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free.
Principles of Insurance
46 videos|62 docs|14 tests
|
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up
within 7 days!
within 7 days!
Takes less than 10 seconds to signup