Pre Recruitment qualification for Life agents (Question Set - 001)

1. Insurance business is divided into

a) b) c) d)

Life Insurance, Non-life Insurance, Re-insurance Life Insurance, Marine Insurance, Fire Insurance Life Insurance, Property Insurance, Health Insurance Life Insurance, Credit Insurance, Travel Insurance

2. How are perils and hazards normally distinguished under term insurance policies?

a) Perils are medical factors which influence the risk of dying and hazards are lifestyle activities which influence the risk of dying. b) Perils are risks that policyholders will die before a specified date and hazards are factors which could influence that risk. c) Perils are factors which affect the risk being insured and hazards are the size of the risk being insured. d) Perils are factors which could influence an insured event occurring and hazards are the actual events which will trigger a payout
3. Arun started a 20-year term insurance policy. Once established, when, if at all, is

a) b) c) d) a) b) c) d) a) b) c) d) a) b) c) d)

the insurer next entitled to ask him for proof of continuing good health? At no point After the end of the first 12 months At the point when he changes occupation or retires When a lapsed policy is revive Issuing a new policy Endorsement Corrections on the policy Not allowed

4. Changes in policy can be made by

5. Following Statement is true

Performance of contract is essential in Insurance contract Capacity to contract is only applicable if policy is proposed Legality of object is not the part of Insurance contract A son can have a life insurance on the father Husband wife Brother- sister Bank creditors Friend

6. Insurable interest exists in

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7. Life insurance mainly deals with two risks?

a) b) c) d) a) b) c) d) a) b) c) d)

Premature death Unemployment Living to long Option C & A are correct

8. Which of the following is correct

Dying early is a risk for an individual Living too long is a risk for an individual. Both the above statement are correct Both the above statement are wrong The offer is made and unconditional acceptance is there The offer is made and conditional acceptance is there The offer is made but acceptance is not mandatory The offer and acceptance both are optional person brings a fair premium to the pool for the risk presented? A fraudulent claim A policy assignment A steep rise in inflation A sudden illness The probability of the policy lapsing in future The possibility of moral hazard Both lapse and moral hazard probabilities Neither lapse nor moral hazard Premium is based on expectation of losses Living too long is a risk Both the above statements are correct Both the above statements are wrong

9. A contract is valid if

10. What key event is most likely to prevent insurers from ensuring that each insured

a) b) c) d) a) b) c) d) a) b) c) d) a) b) c) d)

11. Financial underwriting is done to evaluate

12. State which of the following statements is correct

13. Which of the following statement is/are correct?

Proposal form is the basis of contract The policy is the basis of the insurance contract Both are correct Both are wrong

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14. The premium printed on the schedule of the policy is worked out from

a) b) c) d)

Net premiums Risk premiums Office premiums None of the above

15. What normally happens to the sum insured under a life insurance policy once the

a) b) c) d) a) b) c) d) a) b) c) d)

period of the lien expires? It reduces It increases It is temporarily suspended It is replaced by a newly-underwritten sum insure Term Insurance Plan Convertible insurance Plan Micro Insurance Plan All the above

16. Protection means;

17. For the same age and benefits, the premium under a limited payment policy

Will be more than in a non-limited plan Will be less than in non-limited plan Will be the same as in a non-limited plan May be more, less or same as in a non-limited plan & these questions can be classified by Structure Purpose Both the above statements are correct None of the above Online payment of premium Status of policy SMS to policy holders All of the above

18. An agent can ask different types of questions to help understand their clients needs

a) b) c) d) a) b) c) d)

19. How information technology helping insurance company to benefit their business.

20. State which of the following statement are correct

a) Professional advisors can help individuals go through the financial planning process in which they identity their financial needs b) Low risk products offer higher return compared to high risk products c) Both the above statement are correct d) Both the above statement are wrong
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21. Saving products provide?

a) b) c) d)

Regular income Capital growth Both of the above None of the above

22. A life insurer issued a quotation on 10 February, guaranteed for 14 days, which was

a) b) c) d) a) b) c) d)

accepted by the customer on day 10. Consequently the insurer can only decline this risk if the Customer submits a second quotation request Insurer increases its underlying premium rates Market place experiences a significant downturn Material facts change Agent Company Development officer Client

23. The duty to complete the proposal form is

24. What are the saving needs of an individual who have capital?

a) The need to increase their existing wealth as much as possible for future needs b) The need to ensure that a sufficient of capital is left behind as an inheritance for there children c) The need to ensure that there is sufficient income for maintaining a certain life style once they retire d) All the above
25. When undertaking financial planning for individuals without capital, what savings

a) b) c) d) a) b) c) d)

need is likely to be addressed in every single case? Emergency funds Funds for childrens savings Funds for educational costs House purchase funds The medical report The agents confidential report to the insurer The medical referees advice All of the above

26. Which of the following are confidential and will not be given to the proposer

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27. A human being is

a) b) c) d)

An economic asset Has a capacity to generate the income Has a finite life span All of the above policyholder the right to Cancel a health-based exclusion after a symptom-free period Include his parents under the policy Increase cover when a key life event occurs Maintain cover despite a fall in investment value.

28. The main purpose of the guaranteed insurability rider benefit is to give the

a) b) c) d)

29. Annuity has an accumulation phase in case of deferred annuity. Which statements

are true in these regards a) It is beneficial because one has death cover b) One may accumulate in any of the insurance company and chose to take pension fro any other insurance company c) One has to careful in selecting the insurance company depending on the prevailing rates d) Accumulation rate is fixed as 4.5% for all pension plans for all companies
30. Health Insurance is needed because

a) b) c) d) a) b) c) d) a) b) c) d)

Life is very uncertain Cost of healthcare has increased significantly Premium increases with age All the above In first 2 years of the policy and revival For entire term of the policy At the time of taking claim At the time of renewal Endowment Plans Money back Plan Annuity Plans With A & B

31. Sec-45 is applicable

32. One can buy additional insurance cover with the help of term rider in case of

33. State which of the following statement are correct

a) Professional advisors can help individuals go through the financial planning process in which they identity their financial needs b) Low risk products offer higher return compared to high risk products c) Both the above statement are correct
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d) Both the above statement are wrong

34. The need for investment advice from an insurance agent normally results from what

a) b) c) d)

overriding key factor? Absence of any long-term goals Inability to priorities future financial needs Lack of market knowledge Shortage of available funds receipt of the policy document? 5 days 10 days 15 days 20 days

35. How long is the free look-in period under a term insurance policy from the date of

a) b) c) d) a) b) c) d) a) b) c) d) a) b) c) d) a) b) c) d)

36. Age proof helps the company to

Decide the correct premium and profile of the customer Decide the right plan to be given to customer It is just a formality It for the identity proof Additional Cover at nominal cost Flexibility Tax benefits All the above Stops the issuance of the policy Excludes certain benefits Increases the premium Reduces the premium A good command of the clients local language and dialect A friendly approach towards clients Both the above statements are correct None of the above

37. Riders offer the following benefits

38. Exclusion clause

39. Good communication skills include

40. EPF means employer provident fund

a) TRUE b) FALSE

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41. A client has been recommended a low-risk investment product by his insurance

a) b) c) d) a) b) c) d) a) b) c) d)

agent, but the client insists the agent arranges for the money to be invested in a higher risk product. What action should the agent take? Carry out these instructions, but document that this contradicts the recommendation Conduct a new fact-find Invest a reduced amount of money in this product Refuse to act for the client Word of mouth publicity for the agent Chances of up selling More reference generation for the agent All the above Insurance Institute of India Insurance Regulatory & Development Authority Indian penal code Reserve bank of India the first year Thirty Percent Twenty percent Thirty Five Percent None of this

42. A satisfied client will lead to

43. ___________ has laid down the Code of Conduct for all agents

44. An Agent can receive maximum of ________ %of the premium as commission in

a) b) c) d)

45. A claim under a term insurance policy is submitted by an individual who has

a) b) c) d)

substantially understated his age. As an alternative to paying out the full claim the insurer is most likely to take what action? Deduct the underpaid premiums from the sum insured Make the policy paid up Pay out the surrender value Reject the claim on the grounds of misrepresentation is the most likely reason for this? The installments were commuted by the policyholder The policyholders health seriously deteriorated during the policy term The policy was made paid up during the policy term The policy was subject to a lien

46. On the maturity of an endowment policy, a reduced sum insured is paid out. What

a) b) c) d)

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47. Raju died 5 years before the end of his 30-year endowment insurance policy. What

a) b) c) d)

factor most likely caused the insurer to investigate the claim using the early death claim procedures? He paid the most recent premium during the period of grace His cover was originally accepted with a premium loading on medical grounds His death resulted from a recently acquired sudden illness The policy had lapsed and was revived shortly before he die now wants some pension plan for himself. What option should he consider Immediate Annuity Deferred Annuity Any of the option Too late to think of pension plan at 60 Does not face any potential expenses He will face potential expenses of utility bills, property tax, repairs etc Both the statements are correct Both the statements are wrong company TRUE FALSE Agents cannot judge risk None of the above statements are correct

48. Devesh is turning 60 years and is expecting to get money from PF and Gratuity. He

a) b) c) d) a) b) c) d)

49. Right now your client Kishore is staying in his own house. He

50. Agents are at the best position to judge RISK profile of the client for the insurance

a) b) c) d)

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