IC01 Mock Test Sample 06
This IC01 Licentiate question set focuses on fundamental insurance concepts and principles. It covers terms like exclusions, roles of insurers, and the importance of verifying claims to prevent fraud. It highlights investment-linked products like ULIPs offering protection, growth, and tax benefits. The questions test eligibility criteria for insurance agents and features of life insurance policies such as whole life plans. It also explains components of insurance contracts, including insurer, insured, premium, and sum assured. Additionally, it includes dispute resolution through arbitration and reinsurance concepts like excess of loss, helping learners understand risk transfer and claim handling mechanisms in insurance.
1. What does the term 'Exclusion' mean in insurance terminology?
A. Limits on expenses of an insurance company
B. Perils which are excluded from insurance cover
C. Conditions to activate insurer’s promise
D. Tables showing expectations of death/illness
E. Amendments to standard policy conditions
2. The person, individual or company which grants insurance protection is known as _____.
A. Actuary
B. Underwriter
C. Guarantor
D. Sponsor
E. Insurer
3. An insurer has to verify that the claim is not fraudulent because of the insurer's role as a _________.
A. Trustee
B. Manager of funds
C. Collector of funds
D. Investor of funds
E. Risk manager
4. An ULIP can be an ideal investment for people looking for benefits like _________.
A. Capital Appreciation
B. Insurance Protection
C. Tax Benefits
D. All of the above
E. None of the above
5. Who cannot become an insurance agent?
A. A person with a criminal record
B. A person aged 19
C. A person with cancer
D. A non-commerce graduate
E. A person working in Fire Department
6. In whole life insurance policy, the benefit is paid only on _________.
A. Death
B. Illness
C. Survival
D. After minimum 20 years
E. None of the above
7. Fill in the blanks:
An insurance contract is a contract under which ______ accepts significant insurance risk from ______ by agreeing to compensate by ______ in consideration of ______.
A. B, D, C, A
B. D, B, A, C
C. A, B, D, C
D. D, C, A, B
E. C, A, D, B
8. An insurance contract is a contract under which ______ accepts significant insurance risk from ______ by agreeing to compensate by ______ in consideration of ______.
A. A, B, D, C
B. D, C, A, B
C. C, A, D, B
D. B, D, C, A
E. D, B, A, C
9. Which of the following statements is INCORRECT with respect to 'Arbitration'?
A. It is a judicial process
B. Arbitrators need not be judges/lawyers
C. If one arbitrator, both parties must agree
D. Arbitrators are appointed by parties
E. It is quick and less expensive
10. What is excess of loss?
A. Pooling of premiums and claims
B. Reinsurer decides terms
C. Reinsurer pays only beyond specified loss limit
D. Applies when claim ratio exceeds limit
E. Reinsurer insures himself
