Q 1. What is the minimum requirement for business to be done by an agent in each agency year?

A) No minimum requirement

B) Varies based on insurer

C) 10 policies

D) 100 policies

E) 1,000 policies

Report

Q 2. Under the Insurance Act, who needs to be licensed by the IRDA to work as an insurance agent?

A) Lawyers

B) Ambassadors

C) Telemarketers

D) Insurance brokers

E) Individuals or corporate bodies acting as salesmen or intermediaries

Report

Q 3. What does the structure of an organization refer to?

A) Arrangement of departments and sections

B) Assignment of responsibilities and authority

C) Formation of offices, departments, and sections

D) Grouping of activities

E) Avoiding conflicts and stabilizing processes

Report

Q 4. What is the term used for the process of analyzing and assessing the risk associated with an insurance proposal?

A) Underwriting

B) Issuance

C) Application

D) Nominations

E) Claims

Report

Q 5. When was the Rural PLI scheme made available to the general public in rural areas?

A) 24th March 1995

B) 1st February 1884

C) 1st September 1956

D) 1988

E) 1938

Report

Q 6. What is the penalty for agents involved in rebating?

A) Business suspension

B) Commission reduction

C) Fine or penalty payment

D) Termination of contract

E) None of the above

Report

Q 7. Under what circumstances can an agency be terminated according to the regulation?

A) Offering rebate of the commission

B) Non-renewal of license

C) Assessing claims incorrectly

D) Managing policies improperly

E) Processing applications inaccurately

Report

Q 8. What is the definition of "Life Insurance Business" according to Section 2(11) of the Insurance Act, 1938?

a) "Life Insurance Business" means the business of effecting contracts of insurance upon human lives, including any contract that provides for the payment of annuities upon human lives.

b) "Life Insurance Business" means the business of providing health insurance coverage to individuals and families.

c) "Life Insurance Business" means the business of insuring physical assets such as buildings, machinery, and vehicles against damage and loss.

d) "Life Insurance Business" means the business of insuring marine vessels and cargo against maritime risks.

e) "Life Insurance Business" means the business of providing travel insurance for individuals going on trips or vacations.

Report

Q 9. What do insurers require from agents in each agency year?

A) Minimum business

B) Maximum business

C) No business requirement

D) Monthly reports

E) None of the above

Report

Q 10. Which insurance company has more than 13 lakh agents on its rolls?

A) Postal Life Insurance

B) XYZ Life Insurance Company

C) AAA Life Insurance Company

D) Life Insurance Corporation of India

E) Private Life Insurance Companies

Report

Q 11. In the initial stages of private life insurance companies, what was the typical structure they started with?

A) Head office and branch offices

B) Zonal and regional offices

C) Corporate office and branch offices

D) Regional offices and branch offices

E) Headquarters and regional offices

Report

Q 12. Which form of organization is the most common and owned by shareholders who have contributed to its capital?

A) Companies

B) Partnership firms

C) Proprietorship concerns

D) Cooperative societies

E) Trusts

Report

Q 13. What are the two primary objectives of life insurance companies?

A) Spreading life insurance widely and maximizing savings mobilization

B) Providing health insurance coverage and maximizing profits

C) Offering attractive investment options and ensuring quick claim settlements

D) Providing retirement benefits and minimizing administrative costs

E) Ensuring affordability of premiums and reducing claim payouts

Report

Q 14. What is one of the major functions of an insurance agent?

A) Underwriting policies

b) Processing claims

c) Assessing risk factors

d) Selling life insurance policies

e) Managing investments

Report

Q 15. How is an agency year defined in the case of LIC?

A) The period from the date of agent's appointment to the end of the calendar year

B) The period from the date of agent's appointment to the end of the financial year

C) The period from the date of agent's appointment to the end of the month in which they complete twelve months as agent

D) The period from the date of agent's appointment to the end of the quarter

E) None of the above

Report

Q 16. Which year saw the opening up of the insurance sector in India for private players?

A) 2000

B) 1938

C) 1999

D) 2010

E) 1995

Report

Q 17. In which country does the Japanese life insurance industry heavily depend on agents?

A) India

B) France

C) Holland

D) Belgium

E) Japan

Report

Q 18. Who are the intermediaries responsible for recruiting and training suitable persons as agents in LIC, besides Development Officers?

A) Direct Agents

B) Career Agents

C) Agency Supervisors

D) Branch Managers

E) Corporate Insurance Executives

Report

Q 19. What is the main difference between an insurance agent and an insurance broker?

A) An insurance agent represents multiple insurance companies, while a broker represents only one company

B) An insurance agent charges commission only from the insurer, while a broker charges commission from the customer

C) An insurance agent is licensed by the IRDA, while a broker is not

D) An insurance agent is an intermediary between the customer and the insurance companies, while a broker is an intermediary between the insurer and the public

E) An insurance agent engages in telemarketing activities, while a broker does not

Report

Q 20. Which department is responsible for developing the agency force, market development, and business growth?

A) Business development or Agency or Marketing

B) New business

C) Policyholders' servicing

D) Accounts

E) Actuarial

Report

Q 21. What is the purpose of issuing an insurance policy document?

A) To serve as evidence of the insurance contract

B) To establish the economic status of the insured

C) To decide the premium rate

D) To determine the tenure of the policy

E) To specify the medical conditions for coverage

Report

Q 22. Which regulatory authority is responsible for overseeing the insurance business in India?

A) Insurance Regulatory and Development Authority (IRDA)

B) Reserve Bank of India (RBI)

C) Securities and Exchange Board of India (SEBI)

D) Ministry of Finance

E) Life Insurance Corporation of India (LIC)

Report

Q 23. Which distribution channel contributes the maximum share of life insurance business in developing and developed countries?

A) Agency

B) Brokerage

C) Banks

D) Direct mailing

E) None of the above

Report

Q 24. How does life insurance help in mobilizing savings?

A) By providing a lump sum amount at a later date

B) By offering attractive investment options

C) By reducing premiums for policyholders

D) By minimizing administrative costs

E) By maximizing profits for insurance companies

Report

Q 25. What is the consequence of an agent not fulfilling the minimum business requirements?

A) Reduced commission percentage

b) Termination of the agency

c) Higher premiums for clients

d) Mandatory training programs

e) Promotion to a higher tier within the company

Report

Q 26. How may agents be remunerated?

A) Only through fixed monthly salary

B) Only through commission based on business

C) Only through a combination of fixed salary and commission

D) Either through fixed monthly salary, commission, or a combination

E) None of the above

Report

Q 27. How does the Postal Life Insurance procure business under the Rural PLI?

A) Through unemployed youth and extra departmental branch postmasters

B) Through retired employees of the Posts and Telegraphs department

C) Through field officers employed on a commission basis

D) Through agents working part-time

E) Through corporate agents and brokers

Report

Q 28. What is the central office responsible for the final accounting of premiums collected by all post offices in Postal Life Insurance?

A) Chief General Manager

B) Manager

C) District Postal Head Officer

D) Director of Accounts

E) Supervisor

Report

Q 29. What is the purpose of organizing in an organization?

A) To ensure the smooth functioning of activities

B) To enable the organization to carry out its activities

C) To record and share organizational learning

D) To arrange different levels of offices and departments

E) To create distinct levels of responsibilities for supervision

Report

Q 30. What is the aim of the Micro-Insurance Regulations 2005 issued by the IRDA?

A) To spread life insurance widely among the poor and lower-segment people

B) To increase profitability for insurance companies

C) To provide exclusive benefits to high-income individuals

D) To reduce insurance coverage for low-income segments

E) To limit the reach of life insurance to urban areas only

Report

Q 31. How can insurance agents be remunerated?

A) Through salary only

b) Through commission only

c) Through a combination of salary and commission

d) Through bonuses based on customer satisfaction

e) Through stock options in the insurance company

Report

Q 32. Why did Arun nominate his wife in his insurance policy?

A) To ensure his wife receives the insurance policy money after his death

B) To increase the premium rate

C) To alter the terms and conditions of the policy

D) To surrender the policy

E) To choose the annuity (pension) plan

Report

Q 33. When was the Postal Life Insurance (PLI) scheme introduced for the benefit of postal department employees?

A) 1884

B) 1938

C) 1956

D) 1988

E) 1995

Report

Q 34. What is the consequence of agents offering rebates to policyholders?

A) Increase in business

B) Commission reduction

C) Licence cancellation

D) Penalty payment

E) None of the above

Report

Q 35. What is the major function of an agent in the insurance business?

A) Assessing claims

B) Managing policies

C) Selling insurance

D) Underwriting decisions

E) Processing applications

Report

Q 36. How does an insurance agent bring in new business and provide services throughout the term?

A) By representing multiple insurance companies

B) By charging commission from the customer

C) By acting as a mediator between the customer and the insurance companies

D) By offering various policies and addressing policy-related changes

E) By engaging in telemarketing activities and providing customer service

Report

Q 37. Which department handles the administration of policies, premium payments, lapses and revivals, alterations, nominations, assignments, surrenders, loans, and claims?

A) Policyholders' servicing

B) Business development or Agency or Marketing

C) New business

D) Accounts

E) Actuarial

Report

Q 38. Which essential activity of a life insurance company involves attending to various requirements such as nominations, assignments, surrenders, and payment of claims?

A) Attending to various policy requirements

B) Obtaining applications or proposals

C) Issuing the insurance policy document

D) Assessing the risk through underwriting

E) Analyzing the economic status of the insured

Report

Q 39. What is the responsibility of the Head Office of LIC in terms of organizational activities?

A) To look after extraordinary activities such as investment of funds and maintenance of accounts

B) To arrange different levels of offices and departments

C) To ensure smooth functioning of activities

D) To record and share organizational learning

E) To carry out activities necessary for the functioning of the organization

Report

Q 40. Which foreign direct investment (FDI) limit was allowed in the insurance sector for foreign players?

A) 26%

B) 49%

C) 74%

D) 100%

E) No FDI limit

Report

Q 41. What is the term used to describe the distribution of insurance through banks?

A) Bancassurance

B) Brokering

C) Direct mailing

D) Corporate agents

E) None of the above

Report

Q 42. How is the commission to agents specified?

A) As a fixed amount

B) As a percentage of premiums paid

C) Based on the policy duration

D) Based on the number of policies sold

E) None of the above

Report

Q 43. Who is responsible for recruiting and training suitable persons as agents in LIC?

A) Branch Managers

B) Career Agents

C) Development Officers

D) Direct Agents

E) Corporate Insurance Executives

Report

Q 44. Why have private life insurance companies expanded their organizational structure to include zonal and regional offices?

A) To increase the number of offices

B) To open more branch offices

C) To expand their network

D) To improve efficiency in operations

E) To comply with regulatory requirements

Report

Q 45. Which entity has a separate status and identity and is considered a person in the eyes of the law?

A) Organisation

B) Shareholders

C) Employees

D) Directors

E) Competitors

Report

Q 46. Which department in the Life Insurance Corporation of India (LIC) is responsible for compiling and analyzing statistics to calculate insurance risks and premiums?

A) Actuarial

B) Investment

C) Planning

D) Legal

E) Advertisement

Report

Q 47. What is the premium amount that Rajiv pays annually for his life insurance policy?

A) Rs. 50,000

B) Rs. 1 lakh

C) Rs. 20,000

D) Rs. 10,000

E) Rs. 5,000

Report

Q 48. Which organization was formed on 1st September 1956, after the nationalization of the life insurance business in India?

A) Life Insurance Corporation of India (LIC)

B) Reserve Bank of India

C) Postal Life Insurance (PLI)

D) Council of Scientific and Industrial Research

E) Indian Companies Insurance (ICI)

Report

Q 49. What is the term used to describe agents offering concessions to policyholders?

A) Rebating

B) Commission reduction

C) Licensing

D) Concessionaire

E) None of the above

Report

Q 50. According to the code of conduct, what should an agent do when a prospect demands to see their license?

A) Explain all available options

B) Recommend a suitable plan

C) Identify themselves and the insurance company

D) Make enquiries about the prospect's history

E) Disclose the license to the prospect

Report

Q 51. Why are agents essential for selling life insurance?

A) To provide personalised guidance

B) To explain insurance concepts face to face

C) To evaluate risk and understand customer needs

D) To highlight the financial security provided by insurance

E) All of the above

Report

Q 52. Which department requires specialized skills and impacts the whole organization?

A) Actuarial

B) Business development or Agency or Marketing

C) New business

D) Accounts

E) Policyholders' servicing

Report

Q 53. What is the main role of an insurance agent?

A) Acting as a mediator between the customer and insurance companies

B) Providing customer service throughout the term

C) Charging commission from multiple insurers

D) Representing the interests of the principal

E) Engaging in telemarketing activities

Report

Q 54. What is the role of the underwriting officer in the life insurance company?

A) To assess and review insurance proposals and determine the terms of acceptance

B) To issue the insurance policy document

C) To make timely payment of benefits to the policy-holder

D) To analyze the physical and medical conditions of the insured

E) To make timely premium payments on behalf of the policy-holder

Report

Q 55. Which of the following is not a private life insurance company operating in India?

A) Life Insurance Corporation of India (LIC)

B) ICICI Prudential Life Insurance Co. Ltd

C) HDFC Life Insurance Co. Ltd

D) Birla Sun Life Insurance Co. Ltd

E) Aviva Life Insurance Co Ltd

Report

Q 56. Which channel is extensively used by insurers in India due to its extensive network and natural customer base?

A) Agency

B) Brokerage

C) Banks

D) Direct mailing

E) None of the above

Report

Q 57. When may bonus commission be payable to agents?

A) Every year

B) Only on the first year premium

C) Only for a fixed number of years

D) Based on the agent's performance

E) None of the above

Report

Q 58. What is the minimum age requirement to be appointed as an insurance agent?

A) 18 years

B) 20 years

C) 21 years

D) 25 years

E) No age requirement

Report

Q 59. Who represents more than one insurance company and charges commission only from the insurer?

A) Insurance agent

B) Insurance broker

C) Corporate agent

D) Telemarketer

E) Ethical salesman

Report

Q 60. Who acts as an intermediary between the proposer and the insurer in the scenario mentioned?

A) Atul

B) Lalit

C) The insurance company's website

D) Atul's friend

E) The Life Insurance Corporation of India

Report

Q 61. What is the purpose of structuring activities in an organization?

A) To stabilize processes and avoid wasteful conflicts

B) To define authority and responsibility

C) To assign responsibilities for results

D) To clarify decisions on activities, location, and resources

E) To ensure smooth functioning of activities

Report

Q 62. How long is the term of Rajiv's life insurance policy?

A) 20 years

B) 10 years

C) 5 years

D) 30 years

E) It is not mentioned

Report

Q 63. Which entities were not merged with the Life Insurance Corporation of India (LIC) during the nationalization?

A) Postal Life Insurance (PLI) and insurance departments of some States

B) Indian companies

C) Branches of foreign companies

D) Provident societies

E) None of the above

Report

Q 64. What does section 41 of the Insurance Act 1938 prohibit?

A) Minimum business requirements

B) Offering rebates to policyholders

C) Monthly reports submission

D) Licensing process

E) None of the above

Report

Q 65. What should an agent do when recommending a suitable plan to a prospect?

A) Make enquiries about the prospect's history

B) Ensure delivery of the policy to the insured

C) Explain the nature and importance of information in the proposal form

D) Inform the insurer about any material fact

E) Impress upon the prospect the need to disclose all material information truthfully

Report

Q 66. What is the main advantage of having a live interaction with an insurance agent?

A) Personalised guidance

B) Easy access to insurance company websites

C) Recommendations from friends

D) Understanding different insurance products

E) Clearing doubts about insurance policies

Report

Q 67. What are the sources for finding prospective insurance agent candidates?

A) Press advertisements

B) Reference from other agents, staff, clients

C) College campuses

D) Employment agencies

E) All of the above

Report

Q 68. In the organizational structure of Postal Life Insurance, who is responsible for overseeing all PLI operations in the district, including sales and payment of claims?

A) Chief General Manager

B) Manager

C) District Postal Head Officer

D) Director of Accounts

E) Supervisor

Report

Q 69. What is the meaning of "organisation" in the context of management?

A) It is a structure controlled by a group of individuals working towards a common goal

B) It refers to the arrangement of activities necessary for the functioning of the organization

C) It is a legal entity created for a specific purpose

D) It is a person in the eyes of the law with the ability to collect wealth and do business

E) It is the learning recorded in the organization's files

Report

Q 70. Which life insurance company operates under the joint venture of three entities: Bank of India, Union Bank of India, and Dai-ichi Life?

A) Star Union Dai-ichi Life Insurance Co.Ltd

B) India First Life Insurance Co. Ltd.

C) IDBI Federal Life insurance Co. Ltd.

D) Canara H.S.B.C. Oriental Bank of Commerce Life Insurance Co. Ltd.

E) AEGON Religare Life Insurance Co. Ltd.

Report

Q 71. In the year 2008-2009, what percentage of business for LIC came through individual agents in India?

A) 97%

B) 83%

C) 8%

D) 50%

E) None of the above

Report

Q 72. Under what conditions are agents entitled to receive commission for the rest of their lives?

A) If they have worked for at least 1 year

B) If they have worked for at least 5 years and done a minimum of Rs. 50,000 business

C) If they have worked for at least 10 years

D) If they have completed a specific number of policies

E) None of the above

Report

Q 73. Who needs to obtain licenses like individual agents in companies, firms, banks, cooperative societies, etc.?

A) Development Officers

B) Direct Agents

C) Career Agents

D) Corporate Insurance Executives

E) Agency Supervisors

Report

IC02 - Practice of Life Insurance

IC02 - Practice of Life Insurance

Chapter 01

IC02 - Practice of Life Insurance

Q 1. What is the minimum requirement for business to be done by an agent in each agency year?

Q 2. Under the Insurance Act, who needs to be licensed by the IRDA to work as an insurance agent?

Q 3. What does the structure of an organization refer to?

Q 4. What is the term used for the process of analyzing and assessing the risk associated with an insurance proposal?

Q 5. When was the Rural PLI scheme made available to the general public in rural areas?

Q 6. What is the penalty for agents involved in rebating?

Q 7. Under what circumstances can an agency be terminated according to the regulation?

Q 8. What is the definition of "Life Insurance Business" according to Section 2(11) of the Insurance Act, 1938?

Q 9. What do insurers require from agents in each agency year?

Q 10. Which insurance company has more than 13 lakh agents on its rolls?

Q 11. In the initial stages of private life insurance companies, what was the typical structure they started with?

Q 12. Which form of organization is the most common and owned by shareholders who have contributed to its capital?

Q 13. What are the two primary objectives of life insurance companies?

Q 14. What is one of the major functions of an insurance agent?

Q 15. How is an agency year defined in the case of LIC?

Q 16. Which year saw the opening up of the insurance sector in India for private players?

Q 17. In which country does the Japanese life insurance industry heavily depend on agents?

Q 18. Who are the intermediaries responsible for recruiting and training suitable persons as agents in LIC, besides Development Officers?

Q 19. What is the main difference between an insurance agent and an insurance broker?

Q 20. Which department is responsible for developing the agency force, market development, and business growth?

Q 21. What is the purpose of issuing an insurance policy document?

Q 22. Which regulatory authority is responsible for overseeing the insurance business in India?

Q 23. Which distribution channel contributes the maximum share of life insurance business in developing and developed countries?

Q 24. How does life insurance help in mobilizing savings?

Q 25. What is the consequence of an agent not fulfilling the minimum business requirements?

Q 26. How may agents be remunerated?

Q 27. How does the Postal Life Insurance procure business under the Rural PLI?

Q 28. What is the central office responsible for the final accounting of premiums collected by all post offices in Postal Life Insurance?

Q 29. What is the purpose of organizing in an organization?

Q 30. What is the aim of the Micro-Insurance Regulations 2005 issued by the IRDA?

Q 31. How can insurance agents be remunerated?

Q 32. Why did Arun nominate his wife in his insurance policy?

Q 33. When was the Postal Life Insurance (PLI) scheme introduced for the benefit of postal department employees?

Q 34. What is the consequence of agents offering rebates to policyholders?

Q 35. What is the major function of an agent in the insurance business?

Q 36. How does an insurance agent bring in new business and provide services throughout the term?

Q 37. Which department handles the administration of policies, premium payments, lapses and revivals, alterations, nominations, assignments, surrenders, loans, and claims?

Q 38. Which essential activity of a life insurance company involves attending to various requirements such as nominations, assignments, surrenders, and payment of claims?

Q 39. What is the responsibility of the Head Office of LIC in terms of organizational activities?

Q 40. Which foreign direct investment (FDI) limit was allowed in the insurance sector for foreign players?

Q 41. What is the term used to describe the distribution of insurance through banks?

Q 42. How is the commission to agents specified?

Q 43. Who is responsible for recruiting and training suitable persons as agents in LIC?

Q 44. Why have private life insurance companies expanded their organizational structure to include zonal and regional offices?

Q 45. Which entity has a separate status and identity and is considered a person in the eyes of the law?

Q 46. Which department in the Life Insurance Corporation of India (LIC) is responsible for compiling and analyzing statistics to calculate insurance risks and premiums?

Q 47. What is the premium amount that Rajiv pays annually for his life insurance policy?

Q 48. Which organization was formed on 1st September 1956, after the nationalization of the life insurance business in India?

Q 49. What is the term used to describe agents offering concessions to policyholders?

Q 50. According to the code of conduct, what should an agent do when a prospect demands to see their license?

Q 51. Why are agents essential for selling life insurance?

Q 52. Which department requires specialized skills and impacts the whole organization?

Q 53. What is the main role of an insurance agent?

Q 54. What is the role of the underwriting officer in the life insurance company?

Q 55. Which of the following is not a private life insurance company operating in India?

Q 56. Which channel is extensively used by insurers in India due to its extensive network and natural customer base?

Q 57. When may bonus commission be payable to agents?

Q 58. What is the minimum age requirement to be appointed as an insurance agent?

Q 59. Who represents more than one insurance company and charges commission only from the insurer?

Q 60. Who acts as an intermediary between the proposer and the insurer in the scenario mentioned?

Q 61. What is the purpose of structuring activities in an organization?

Q 62. How long is the term of Rajiv's life insurance policy?

Q 63. Which entities were not merged with the Life Insurance Corporation of India (LIC) during the nationalization?

Q 64. What does section 41 of the Insurance Act 1938 prohibit?

Q 65. What should an agent do when recommending a suitable plan to a prospect?

Q 66. What is the main advantage of having a live interaction with an insurance agent?

Q 67. What are the sources for finding prospective insurance agent candidates?

Q 68. In the organizational structure of Postal Life Insurance, who is responsible for overseeing all PLI operations in the district, including sales and payment of claims?

Q 69. What is the meaning of "organisation" in the context of management?

Q 70. Which life insurance company operates under the joint venture of three entities: Bank of India, Union Bank of India, and Dai-ichi Life?

Q 71. In the year 2008-2009, what percentage of business for LIC came through individual agents in India?

Q 72. Under what conditions are agents entitled to receive commission for the rest of their lives?

Q 73. Who needs to obtain licenses like individual agents in companies, firms, banks, cooperative societies, etc.?

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