C. To provide financial protection against uncertain risks
D. To avoid paying taxes
Insurance is a risk transfer mechanism that provides financial protection against uncertain losses.
2. Which principle of insurance states that the insured should not gain profit from insurance but only be compensated for the actual loss?
A. Principle of Indemnity
B. Principle of Contribution
C. Principle of Utmost Good Faith
D. Principle of Proximate Cause
The Principle of Indemnity ensures that the insured is restored to the financial position prior to loss, without profit.
3. A person took insurance for a house worth ₹50 lakhs but insured it for only ₹25 lakhs. In case of partial loss, which principle will apply?
A. Principle of Indemnity
B. Principle of Contribution
C. Principle of Utmost Good Faith
D. Principle of Under-insurance (applied under Indemnity)
In under-insurance, claim settlement is done on a proportionate basis as per the principle of indemnity.
4. Which of the following is NOT a fundamental principle of insurance?
A. Principle of Subrogation
B. Principle of Liquidity
C. Principle of Contribution
D. Principle of Utmost Good Faith
Liquidity is not a principle of insurance. The main principles are Indemnity, Utmost Good Faith, Insurable Interest, Subrogation, Contribution, and Proximate Cause.
5. Life insurance is classified under which type of insurance?
A. Life Insurance
B. General Insurance
C. Marine Insurance
D. Fire Insurance
Insurance is broadly classified into Life Insurance and General Insurance. Life insurance covers human life contingencies.
6. Motor insurance, health insurance, fire insurance, and marine insurance come under which classification?
A. Life Insurance
B. Social Insurance
C. General Insurance
D. Reinsurance
General insurance includes all non-life insurance products such as motor, health, fire, and marine.
7. Which of the following is an example of General Insurance business?
A. Endowment Policy
B. Whole Life Policy
C. Term Insurance
D. Motor Insurance
Motor insurance falls under General Insurance, which covers non-life risks such as motor, fire, marine, and health.
8. Group insurance schemes are generally offered to:
A. Only high-net-worth individuals
B. Members of an organization or association
C. Individual policyholders
D. Non-resident Indians only
Group insurance is issued to a group such as employees of a company, members of an association, or cooperative societies.
9. Under a group insurance scheme, the premium is generally:
A. Higher than individual insurance
B. Equal to individual policy premium
C. Lower due to risk pooling and large coverage
D. Decided only by IRDAI
Group insurance premium is lower as the risk is spread across a large number of members, reducing per-head cost.
10. Which of the following is an objective of Micro Insurance?
A. To provide insurance cover to low-income and weaker sections of society
B. To provide large-value insurance contracts
C. To insure only corporate organizations
D. To offer reinsurance to big companies
Micro insurance aims at providing affordable insurance products to low-income and rural populations.
11. As per IRDAI Micro Insurance Regulations, the maximum sum assured under general micro-insurance shall not exceed:
A. ₹25,000
B. ₹1,00,000
C. ₹2,00,000
D. ₹5,00,000
As per IRDAI, the maximum cover for micro-insurance is capped at ₹5,00,000 to ensure affordability and reach for the weaker sections.
12. Which of the following is a commonly offered product under Micro Insurance?
A. Corporate Health Insurance
B. Crop and Cattle Insurance
C. International Travel Insurance
D. Commercial Property Insurance
Micro insurance focuses on rural and weaker sections, covering risks like health, crops, cattle, and small assets.
13. Which of the following is an insurance-based social security scheme launched by the Government of India?
A. Atal Pension Yojana
B. Pradhan Mantri Jan Dhan Yojana
C. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
D. Stand Up India Scheme
PMJJBY is a life insurance scheme providing ₹2 lakh cover at an affordable premium for citizens aged 18–50 years.
14. Pradhan Mantri Suraksha Bima Yojana (PMSBY) provides accidental insurance coverage up to:
A. ₹2 lakh
B. ₹1 lakh
C. ₹5 lakh
D. ₹10 lakh
PMSBY offers accidental insurance cover of ₹2 lakh (₹1 lakh for partial disability) at a premium of ₹20 per year.
15. Bancassurance refers to:
A. Banks selling only their own insurance subsidiaries’ policies
B. Insurance companies investing in banks
C. Mergers between banks and insurers
D. Banks acting as corporate agents or brokers to distribute insurance products
Bancassurance is the partnership between banks and insurers where banks distribute insurance products as agents or brokers.
16. Which of the following is NOT an advantage of Bancassurance?
A. Wider reach of insurance products
B. Reduced customer base for banks
C. Additional income for banks
D. Convenience for customers
Bancassurance increases customer base, provides extra income, and benefits insurers and customers; it does not reduce the customer base.
17. The Insurance Ombudsman scheme was introduced to:
A. Provide a cost-effective and speedy redressal mechanism for insurance policyholders
B. Regulate insurance premium rates
C. License new insurance companies
D. Supervise bancassurance tie-ups
The Insurance Ombudsman was set up to resolve complaints of policyholders against insurers quickly, fairly, and at no cost.
18. What is the maximum monetary value of a complaint that can be filed before the Insurance Ombudsman?
A. ₹20 lakh
B. ₹25 lakh
C. ₹50 lakh
D. ₹1 crore
As per IRDAI regulations, complaints up to ₹50 lakh can be filed before the Insurance Ombudsman for resolution.
19. What is the annual premium for Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)?
A. ₹20
B. ₹436
C. ₹330
D. ₹500
PMJJBY is a life insurance scheme offering ₹2 lakh cover at an annual premium of ₹436 for individuals aged 18–50 years.
20. What is the eligibility age for Pradhan Mantri Suraksha Bima Yojana (PMSBY)?
A. 18–50 years
B. 18–60 years
C. 18–70 years
D. 21–65 years
PMSBY provides accidental insurance cover for individuals aged 18–70 years at a nominal premium of ₹20 per annum.
21. Under PMJJBY, what is the risk cover amount provided to the nominee in case of the death of the insured?
A. ₹2 lakh
B. ₹1 lakh
C. ₹5 lakh
D. ₹10 lakh
PMJJBY provides a life insurance cover of ₹2 lakh in case of death of the insured during the policy period.
22. Which of the following statements about PMSBY is correct?
A. Premium is ₹436 annually
B. It covers natural death
C. Eligibility is up to 50 years of age
D. It provides accidental insurance cover of ₹2 lakh
PMSBY is an accidental insurance scheme providing ₹2 lakh cover for accidental death or disability at a premium of ₹20 per annum.
23. Which bank account requirement is mandatory for enrollment under PMJJBY and PMSBY?
A. NRI account
B. Savings bank account with auto-debit facility
C. Current account only
D. Fixed deposit account
Both PMJJBY and PMSBY require a savings bank account with auto-debit facility for annual premium deduction.
24. Who is the nodal agency responsible for regulating PMJJBY and PMSBY schemes?
A. Ministry of Finance
B. Ministry of Labour
C. Life Insurance Corporation of India (LIC) and Public Sector General Insurance Companies
D. NABARD
LIC administers PMJJBY, while Public Sector General Insurance Companies manage PMSBY on behalf of the Government of India.
