IC24 Mock Test Sample 1
Legal aspects of life assurance cover principles like valid contracts, insurable interest, assignment, and regulatory provisions. A valid contract requires offer, acceptance, consideration, and competent parties. Insurable interest must exist to prevent wagering. Assignment transfers policy rights, while nomination appoints beneficiaries. Laws such as the Insurance Act, Indian Evidence Act, and AML guidelines regulate operations. Critical illness policies provide lump sum benefits on diagnosis. Group insurance is renewable annually. Nationalisation of life insurance occurred in 1956. Regulatory bodies like FATF help combat money laundering. Constitutional features and lawful consideration are essential legal concepts influencing insurance contracts and financial transactions in India.
1. Under the facultative type of reinsurance, the case may be sent to more than one reinsurer, and the reinsurer who gives the most competitive offer is chosen by the insurance company. This is termed as:
a) Facultative discounting
b) Treaty shopping
c) Treaty discounting
d) Facultative shopping
2. The Memorandum of Foreign Exchange Regulations issued by RBI governs which of the following?
a) Issue of life insurance policies in rupees and foreign currencies to non-residents
b) Collection of premia
c) Reinsurance
d) All of the above
3. Which of the following is FALSE with respect to insurable interest?
a) Employee has insurable interest on employer’s life
b) Employer has insurable interest on employee’s life
c) Surety has insurable interest on debtor’s life
d) Debtor has insurable interest on the life of surety
4. A license issued under Section 42D shall remain in force for a period of _______ only from the date of issue.
a) 1 year
b) 2 years
c) 3 years
d) 4 years
5. Under Section 108 of the Indian Evidence Act, 1872 if a person has not been heard of for ___________, there is a presumption which is rebuttable.
a) 4 years
b) 5 years
c) 6 years
d) 7 years
6. A person is competent to contract if he:
a) Is of the age of majority
b) Is of sound mind
c) Is not disqualified from contracting by any law
d) All of the above
7. Which of the following is correct about Assignment?
a) It is the process of appointment of a person to receive the death claim
b) It can be made only by the life-assured on the policy of his own life
c) It is applicable only where the Insurance Act, 1938 is applicable
d) It can be done only after the commencement of the policy
8. What are all the elements of a valid contract?
a) Proposal and acceptance and their communication
b) Parties to the contract and their capacity
c) Consideration
d) All of the above
9. FATF as used in Money Laundering stands for:
a) Financial Advisory Task Force
b) Financial Action Task Force
c) Financial Amendment Task Force
d) Faculty Advisory Task Force
10. Critical Illness policy eases the financial pressure of an individual by providing _______ on diagnosis of covered condition:
a) Reimbursement of actual cost
b) Lump sum payment
c) Daily cash allowance
d) Health care services in international speciality hospitals
11. In a critical illness rider the benefit is payable at the time of:
a) Death of the life insured
b) Diagnosis of the illness
c) Producing the medical bills
d) Discharge from the hospital
12. Group Insurance plans are renewable on a yearly basis. Say whether True or False:
a) True
b) False
13. Which of the following is correct about Nationality?
a) It has reference to the jural relationship under municipal law
b) It is intimately connected with civil rights under municipal law
c) All citizens are nationals of a particular state
d) All nationals may not be citizens of the State
14. A customer, Rajesh, agrees to pay Rs. 50 to the shopkeeper and in return receives a gift voucher of Rs. 50. This is a set of promises which form consideration for each other. This is called:
a) Consideration
b) Promises
c) Agreement
d) Contract
15. Under Section 80CCD deposits made by a Central Government employee or other employee up to _______ of salary are deductible:
a) 5%
b) 10%
c) 15%
d) 20%
16. In which year was life insurance business nationalised in India?
a) 1958
b) 1956
c) 1957
d) 1959
17. Which of the following are the salient features of the Constitution?
a) Preamble
b) Fundamental Rights
c) Directive Principles
d) Independence of Judiciary
e) All of the above
18. Vimal promises to obtain employment in public service for Meena, and Meena promises to pay Rs. 25,000. This consideration is:
a) Valid consideration
b) Unlawful consideration
c) Partially valid consideration
d) Partially unlawful consideration
19. If the net wealth of an individual is Rs. 35,00,000, then the wealth tax payable is:
a) Rs. 35,000
b) Rs. 3,500
c) Rs. 5,000
d) Rs. 500
20. Which was the first legislation for insurance in India?
a) Insurance Act
b) Insurance Rules
c) Life Insurance Companies Act
d) Insurance Regulatory Authority (IRA) Act
