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B Com Exam  >  B Com Tests  >  Principles of Insurance  >  Test: Insurance Contract - 1 - B Com MCQ

Test: Insurance Contract - 1 - B Com MCQ


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10 Questions MCQ Test Principles of Insurance - Test: Insurance Contract - 1

Test: Insurance Contract - 1 for B Com 2024 is part of Principles of Insurance preparation. The Test: Insurance Contract - 1 questions and answers have been prepared according to the B Com exam syllabus.The Test: Insurance Contract - 1 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Insurance Contract - 1 below.
Solutions of Test: Insurance Contract - 1 questions in English are available as part of our Principles of Insurance for B Com & Test: Insurance Contract - 1 solutions in Hindi for Principles of Insurance course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Insurance Contract - 1 | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Principles of Insurance for B Com Exam | Download free PDF with solutions
Test: Insurance Contract - 1 - Question 1
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What is the primary purpose of the insuring agreement in an insurance contract?

Detailed Solution for Test: Insurance Contract - 1 - Question 1
The primary purpose of the insuring agreement in an insurance contract is to specify the risks that are covered by the policy. It outlines what events or circumstances will trigger coverage under the insurance contract.
Test: Insurance Contract - 1 - Question 2
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What is the primary function of the Principle of Insurable Interest in insurance?

Detailed Solution for Test: Insurance Contract - 1 - Question 2
The primary function of the Principle of Insurable Interest in insurance is to prevent gaming and wagering in insurance contracts. It ensures that only individuals with a legitimate financial interest in the subject matter of insurance can purchase insurance policies.
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Test: Insurance Contract - 1 - Question 3
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Which of the following is NOT one of the requirements for any valid contract, including insurance contracts?

Detailed Solution for Test: Insurance Contract - 1 - Question 3
One of the requirements for any valid contract, including insurance contracts, is not the legal form. Instead, insurance contracts have an additional requirement that they be in legal form, which means they must comply with state laws and regulations governing insurance contracts.
Test: Insurance Contract - 1 - Question 4
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Which of the following Acts necessitated the presence of insurable interest in insurance contracts?
Detailed Solution for Test: Insurance Contract - 1 - Question 4
The presence of insurable interest in insurance contracts was necessitated by The Life Assurance Act, 1774. This Act required that no insurance shall be allowed to be made by a person for his own benefit on the life of another unless the person effecting the policy of insurance shall have insurable interest on the life of that other person.
Test: Insurance Contract - 1 - Question 5
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What does insurable interest mean in the context of insurance?
Detailed Solution for Test: Insurance Contract - 1 - Question 5
Insurable interest, in the context of insurance, refers to the legal financial interest of a person in the subject matter of insurance. It means that the person stands to benefit from the safety of the subject matter and may incur a loss or liability in the event of its loss, damage, or destruction.
Test: Insurance Contract - 1 - Question 6
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In which type of insurance must insurable interest exist both at the time of effecting the policy and at the time of claim?
Detailed Solution for Test: Insurance Contract - 1 - Question 6
Insurable interest must exist both at the time of effecting the policy and at the time of claim for fire insurance. In other words, the insured must have a valid insurable interest when purchasing the policy and when making a claim.
Test: Insurance Contract - 1 - Question 7
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Who typically has insurable interest in the life of an individual, as mentioned in the text?
Detailed Solution for Test: Insurance Contract - 1 - Question 7
According to the text, relatives such as spouses, parents, and grandparents typically have insurable interest in the life of an individual. They can take out life insurance policies on the lives of their family members.
Test: Insurance Contract - 1 - Question 8
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What is the primary reason behind the requirement for insurable interest in insurance contracts?
Detailed Solution for Test: Insurance Contract - 1 - Question 8
The primary reason for the requirement of insurable interest in insurance contracts is to prevent gaming and wagering. It ensures that insurance contracts are not used as instruments for making financial gains without incurring any losses or liabilities.
Test: Insurance Contract - 1 - Question 9
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What must exist at the time of claim in the case of marine insurance, according to the text?
Detailed Solution for Test: Insurance Contract - 1 - Question 9
In the case of marine insurance, insurable interest must exist at the time of claim. This means that the insured must have a valid financial interest in the subject matter of insurance when making a claim.
Test: Insurance Contract - 1 - Question 10
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What is the primary distinction between the "subject matter of insurance" and the "subject-matter of insurance contract," as mentioned in the text?
Detailed Solution for Test: Insurance Contract - 1 - Question 10
The primary distinction between the "subject matter of insurance" and the "subject-matter of insurance contract" is that the subject matter of insurance is the property being insured, while the subject-matter of the insurance contract is the premium amount. In other words, the former refers to what is being insured (e.g., a house, life, cargo), while the latter refers to the financial interest or consideration involved in the insurance contract, which includes the premium paid by the insured.
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