IC02 Mock Test Sample 20
These questions cover important life insurance concepts such as disclosure, annuities, premiums, claims, and policy servicing. Non-disclosure of material facts (like scuba diving) can affect claims, but after 5 years (Section 45), policies generally cannot be questioned. Premiums are calculated considering mortality, interest, and expenses. Annuity plans protect against longevity risk, while indexed annuities link returns to external indices. Agents must act ethically, even if clients insist otherwise. Concepts like level premium, grace period, revival schemes, and nomination rules are essential for policy management. Overall, the focus is on risk assessment, customer protection, and regulatory compliance in insurance practices.
1. Mr. Menon purchased a life insurance policy but he hid the fact that he practices active scuba diving. Six years later he died in a scuba diving accident. What will happen to his death claim?
a) The claim will be settled as this was an innocent misrepresentation
b) The claim will be settled but the sum assured will be lower than what was mentioned in the policy
c) The claim may be settled as the claim cannot be called in question after 5 years
d) The claim will not be settled as the insured did not disclose truthfully
2. Which of these is/are calculated taking into account likely future experiences in respect of mortality, interest and expenses?
a) Rider benefits
b) Bonus
c) Risk cover
d) Premium
3. Which of these options is a Non Variable Annuity contract whose interest crediting mechanism is tied to some external index?
a) Equity Indexed Annuity
b) Debt Indexed Annuity
c) Variable Annuity
d) Flexible Premium Indexed Annuity
4. The schedule of a policy document does not contain which of these dates?
a) Date of proposal
b) Date of maturity
c) Date of commencement
d) Nominee date of birth
5. __________ plans take care of risk of living too long
a) General Insurance Policy
b) Health Insurance Policy
c) Annuity Plans
d) Personal Health and Accident Policy
6. Find out which of the given statements is incorrect
a) An organisation must have a purpose
b) An organisation is identified by its actions
c) An organisation is identified by the building it occupies
d) An organisation can sue and be sued
7. Why does a policy holder choose to pay a slightly higher amount of premium for the same amount of insurance cover?
a) Due to higher risk cover
b) Due to higher valuation surplus
c) Due to rider benefits
d) Due to higher sum assured
8. An insurance agent advises his client on a low risk investment product but the client insists on a high risk product. What should the agent do?
a) Say No to the client and not do the investment
b) Carry out these recommendations but document that this contradicts his recommendations
c) Do a new fact finding study
d) Invest a lower amount in the high risk product
9. The period between the loan approval date and the anniversary date of the policy is known as___________
a) Vesting period
b) Broken period
c) Deferment period
d) Foreclose period
10. Under which method do employers pay gratuity from current year revenues?
a) Internal reserve method
b) Internal trust
c) Group gratuity scheme
d) Pay as you go method
11. If there are two nominees, how will the policy money be paid?
a) Multiple nomination is not possible
b) A joint discharge would be given by both nominees
c) Claim proceeds will be paid jointly to all nominees
d) Both 2 and 3
12. Who is entitled to the maturity claim?
a) Nominee
b) Assignee when there is no assignment registered
c) Policyholder himself if there is no assignment
d) Appointee
13. The share of each policyholder in the life fund is a notional figure. It is the result of:
a) Higher premiums paid in early years
b) Premium paid for survivorship benefits
c) Interest earned on excess premiums
d) All 1, 2 and 3
14. What kind of premium keeps the premium constant throughout the policy term?
a) Level premium
b) Net premium
c) Gross premium
d) Risk premium
15. __________ is an extended period allowed for premium payment after due date
a) Late fee period
b) Grace Period
c) Bonus Period
d) None of the above
16. Select the expanded form of OR in life insurance
a) Oral Rehydration
b) Once Renewed
c) Ordinary Rates
d) Ordinary Renewal
17. In what circumstances will the agency be terminated?
a) Non-renewal of licence
b) Permanent incapacity
c) Offering rebate
d) All of the above
18. Incorrect health information provided by policyholder is a case of
a) Adverse Selection
b) Loading
c) Level Premium
d) None of the above
19. Who is an Annuitant?
a) The person who buys annuity
b) The person who guarantees the annuity
c) The person who sells the annuity
d) The person who advertises annuity
20. Which type of revival scheme applies without evidence of good health?
a) Special Revival Scheme
b) Loan-Cum-Revival Scheme
c) Installment Revival Scheme
d) Ordinary Revival Scheme
