IC24 Mock Test Sample 3
Legal aspects of insurance involve principles of contracts, insurable interest, and statutory regulations. A valid contract requires competent parties, free consent, lawful consideration, and mutual agreement. Insurable interest ensures a financial relationship between parties, while reciprocal promises form agreements. Laws like the Indian Contract Act, Stamp Act, and Insurance Act govern these aspects. Group insurance and assignment rules define policy structures. Arbitration acts as a quasi-judicial method for dispute resolution. Riders like accidental death benefits provide additional coverage. The MWP Act protects beneficiaries such as wife and children. Regulatory provisions and legal doctrines ensure fairness, transparency, and enforceability in insurance and financial contracts.
1. Which of the below statement is correct with regards to stamp duty payable to life insurance policies?
a) Ten paise for every sum insured of Rs.100
b) Twenty paise for every sum insured of Rs.100
c) Ten paise for every sum insured of Rs.1000
d) Twenty paise for every sum insured of Rs.1000
2. As per Section 11 of the Indian Contract Act, who of the below is not competent to enter into a contract?
a) A person who is a minor
b) A person of unsound mind
c) A person who is disqualified from contracting by law
d) All of the above
3. Statement A: A bank or any lender has insurable interest in the life of the person who has taken the loan.
Statement B: A bank or any lender has insurable interest in the property mortgaged against the loan.
a) Only Statement A is True
b) Only Statement B is True
c) Both Statements are True
d) None of the statements are True
4. A customer, Rajesh, agrees to pay Rs. 50 to the shopkeeper and the shopkeeper in return agrees to give Rajesh 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
5. Where an order is passed under the Provincial Insolvency Act and the person is adjudged an insolvent, the whole of his property shall vest in the court or in a _______ appointed by the court.
a) Minor
b) Receiver
c) Sender
d) Agent
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 law
d) All the above
7. In which year was Insurance Ombudsman established?
a) 1992
b) 1994
c) 1996
d) 1998
8. Which of the following statements is False with respect to Insurable Interest?
a) A person has unlimited insurable interest in his own life
b) Husband and wife have insurable interest in each other’s life
c) Parents have insurable interest in the lives of their children
d) Debtor has insurable interest in the life of creditor
9. Promises which form the consideration or part of the consideration for each other are called:
a) Contract
b) Reciprocal promises
c) Agreement
d) Consideration
10. Which of the following statements is True with respect to Insurable Interest?
a) An employer has insurable interest in his employee
b) An employee has insurable interest in employer (to extent of notice period remuneration)
c) Only first statement is true
d) Both statements are true
11. The instruments which are chargeable with duty when executed in India and the amount of duty are indicated in:
a) Schedule I of the Act
b) Schedule II of the Act
c) Schedule III of the Act
d) Schedule IV of the Act
12. Which of the following is not correct about Group Insurance?
a) Level premium is charged
b) Proposal signed by group representative
c) Covering group under single contract
d) Medical examination is exempt
13. In which of the below scenario is a contract discharged by novation?
a) By performance of contract
b) By death of either party
c) By substitution of original contract with new contract
d) By operation of law
14. According to Section 40A, an insurer during the first _______ of his business may pay 40% of first year premium as commission.
a) 5 years
b) 10 years
c) 15 years
d) 20 years
15. When one person signifies to another his willingness to do or abstain from doing something to obtain assent, he is said to make a:
a) Promise
b) Proposal
c) Contract
d) Consideration
16. The beneficiaries of a life insurance policy affected by the MWP Act can be:
a) The wife alone
b) One or more children
c) Wife and one or more children jointly
d) Any of the above
17. The Indian Succession Act was enacted in which year?
a) 1915
b) 1925
c) 1935
d) 1945
18. In which rider a specified amount is paid to nominee on death due to accident?
a) Critical illness rider
b) Accidental death benefit rider
c) Hospitalisation benefit rider
d) None of these
19. If death occurs before all installments are paid, the commuted value of remaining installments is paid to beneficiary.
a) True
b) False
20. ________ is a quasi-judicial procedure which saves time and expenses and avoids unnecessary technicalities.
a) Settlement
b) Negotiation
c) Arbitration
d) Mediation
