Answer: A. Manage financial risk. Insurance transfers specified financial risks under a contract.
What is an insurance policy?
A A savings account
B Written insurance contract
C A medical diagnosis
D A tax receipt
Answer: B. Written insurance contract. A policy is the contract describing insurance terms.
Which party provides insurance coverage?
A Beneficiary
B Witness
C Insurer
D Policyholder only
Answer: C. Insurer. The insurer is the company or organization providing coverage.
Who is generally protected by a policy?
A Insurance agent
B Tax authority
C Claim adjuster
D Insured person or property
Answer: D. Insured person or property. The insured is the person or property covered by the policy.
Who usually owns or purchases a policy?
A Policyholder
B Repair contractor
C Hospital receptionist
D Regulator
Answer: A. Policyholder. The policyholder owns the contract and pays premiums as required.
Who may receive a life-insurance benefit?
A Insurance broker
B Named beneficiary
C Claim investigator
D Premium collector
Answer: B. Named beneficiary. A beneficiary is designated to receive specified policy benefits.
What is a premium?
A Amount of every claim
B Policy exclusion list
C Payment for insurance coverage
D Insurer’s annual profit
Answer: C. Payment for insurance coverage. A premium is the amount paid to keep coverage in force.
What does coverage describe?
A Every possible loss
B Only premium dates
C Agent commission
D Risks the policy protects
Answer: D. Risks the policy protects. Coverage identifies events or losses insured under the contract.
What is a policy exclusion?
A A stated uncovered circumstance
B A premium discount
C A claim payment
D A beneficiary name
Answer: A. A stated uncovered circumstance. Exclusions identify situations or losses the policy does not cover.
What is a claim?
A An insurance application
B Request for policy benefits
C A premium schedule
D An agent license
Answer: B. Request for policy benefits. A claim asks the insurer to provide benefits under the policy.
What is a deductible?
A Regular premium amount
B Policy’s expiry date
C Amount paid before coverage
D Beneficiary’s share
Answer: C. Amount paid before coverage. A deductible is an amount the insured may pay before insurer payment, as contract terms specify.
What is a copayment?
A Annual policy limit
B Life-insurance benefit
C Insurance tax
D Fixed share for a service
Answer: D. Fixed share for a service. A copayment is a specified amount paid for a covered service under some health plans.
What does coinsurance usually describe?
A Percentage of covered costs
B Fixed policy term
C Named beneficiary
D Premium due date
Answer: A. Percentage of covered costs. Coinsurance is a percentage share of covered costs in some plans.
What does the policy period identify?
A Agent’s working hours
B Coverage start and end
C Claim review length
D Beneficiary’s age
Answer: B. Coverage start and end. The policy period states when coverage is in force.
Why renew an insurance policy?
A Erase all exclusions
B Guarantee a claim
C Continue eligible coverage
D Change every policy term
Answer: C. Continue eligible coverage. Renewal can continue coverage subject to insurer terms and applicable rules.
What may happen when required premiums remain unpaid?
A Coverage expands automatically
B Claims become guaranteed
C Deductible disappears
D Coverage could lapse
Answer: D. Coverage could lapse. Nonpayment may cause a policy to lapse, subject to its terms and law.
What is a grace period in a policy?
A Extra premium-payment time
B Claim approval deadline
C Coverage exclusion
D Policy beneficiary
Answer: A. Extra premium-payment time. Some policies allow extra time for a premium payment; exact terms vary.
How does insurance pooling work?
A One person funds every loss
B Many contribute toward shared losses
C Claims vanish from records
D Premiums equal all losses
Answer: B. Many contribute toward shared losses. Insurance pools contributions across policyholders to pay covered losses.
What is underwriting?
A Processing every claim
B Paying a premium
C Assessing an insurance risk
D Naming a beneficiary
Answer: C. Assessing an insurance risk. Underwriting evaluates risk to decide whether and on what terms to insure.
What does an insurer assess during underwriting?
A Favorite colors
B Unrelated hobbies only
C Social-media popularity
D Information relevant to risk
Answer: D. Information relevant to risk. Insurers assess information relevant to risk and coverage terms.
What is a proposal form used for?
A Apply for insurance coverage
B Submit every future claim
C Renew a driving license
D Choose a repair shop
Answer: A. Apply for insurance coverage. A proposal form collects application information for the insurer.
Why provide accurate application information?
A Guarantee claim approval
B Support informed underwriting
C Remove policy exclusions
D Lower every premium
Answer: B. Support informed underwriting. Accurate information helps the insurer evaluate the application and set terms.
What may underwriting determine?
A Claim outcome in advance
B Guaranteed investment return
C Eligibility and policy terms
D Future loss date
Answer: C. Eligibility and policy terms. Underwriting may affect acceptance, price, and coverage terms.
What does a sum insured commonly represent?
A Premium paid each month
B Every claim’s guaranteed payout
C Beneficiary’s annual income
D Maximum stated coverage limit
Answer: D. Maximum stated coverage limit. A sum insured commonly sets a stated coverage limit, subject to policy terms.
What is a sum assured often used for?
A Stated life-policy benefit
B Health-plan copayment
C Motor repair deductible
D Annual premium
Answer: A. Stated life-policy benefit. Life policies may specify a sum assured as a benefit amount.
What does indemnity insurance generally aim to do?
A Pay every requested amount
B Cover eligible financial loss
C Provide a fixed bonus
D Remove all deductibles
Answer: B. Cover eligible financial loss. Indemnity generally compensates covered loss under contract limits and terms.
What is a peril in insurance?
A Premium payment method
B Policy document
C Cause of potential loss
D Beneficiary’s contact
Answer: C. Cause of potential loss. A peril is a cause of loss, such as fire or theft.
What is a hazard in risk assessment?
A A guaranteed claim
B A coverage limit
C A premium receipt
D Condition increasing loss likelihood
Answer: D. Condition increasing loss likelihood. A hazard is a condition that may increase the chance or severity of loss.
Why read policy exclusions before buying?
A Understand uncovered situations
B Guarantee lowest price
C Remove waiting periods
D Skip application questions
Answer: A. Understand uncovered situations. Exclusions show circumstances the policy may not cover.
What is an insurance rider?
A Claim receipt
B Optional added policy provision
C Premium tax
D Renewal reminder
Answer: B. Optional added policy provision. A rider adds or changes coverage under a policy, subject to its terms.
What is an endorsement?
A Automatic claim approval
B Premium refund guarantee
C Written policy change
D Agent identity card
Answer: C. Written policy change. An endorsement records a change to the insurance contract.
What may a policy schedule summarize?
A Every law in the country
B All insurer claims
C Agent’s sales targets
D Insured details and limits
Answer: D. Insured details and limits. A schedule commonly lists policy-specific details, limits, and dates.
Why read the full policy wording?
A Understand detailed terms
B Replace the schedule
C Guarantee a claim
D Avoid paying premiums
Answer: A. Understand detailed terms. The wording explains coverage, conditions, and exclusions in detail.
What can an insurance agent do?
A Set every regulator rule
B Explain and arrange products
C Guarantee claim payment
D Change terms without approval
Answer: B. Explain and arrange products. Agents can help explain or arrange products within their authority.
How may a broker differ from a tied agent?
A Always works for government
B Never discusses coverage
C May represent multiple insurers
D Pays all claims
Answer: C. May represent multiple insurers. Some brokers can compare offerings from multiple insurers; roles vary by jurisdiction.
What should a buyer verify about an intermediary?
A Social-media follower count
B Personal hobbies
C Office decoration
D License and authorization
Answer: D. License and authorization. Use appropriately licensed or authorized insurance intermediaries.
Which documents may help when making a claim?
A Policy and loss records
B Unrelated shopping receipts
C Another person’s policy
D Old advertisements
Answer: A. Policy and loss records. Relevant records and the policy help support claim review.
Does every submitted claim get paid automatically?
A Yes, every request
B No, terms determine eligibility
C Only online claims
D Only first claims
Answer: B. No, terms determine eligibility. The insurer reviews a claim against coverage, exclusions, and conditions.
What should policy details match?
A An agent’s advertisement
B A different person’s policy
C Application and insured information
D An unrelated receipt
Answer: C. Application and insured information. Check the issued policy against information submitted in the application.
Where should a policyholder first raise a service complaint?
A Unverified social account
B Random payment link
C Unknown messaging group
D Insurer’s grievance channel
Answer: D. Insurer’s grievance channel. The insurer’s official grievance channel is a documented first step.
What can a regulator grievance portal do?
A Record and track complaints
B Guarantee claim approval
C Sell replacement coverage
D Set personal premiums
Answer: A. Record and track complaints. Official portals can record and track grievances; they do not promise a particular claim outcome.
Should a policyholder pay a fee to submit a regulator complaint?
A Pay any caller immediately
B Check official regulator guidance
C Scan unknown QR codes
D Share bank passwords
Answer: B. Check official regulator guidance. Use official regulator guidance; IRDAI warns its Bima Bharosa portal does not demand payments from complainants.
What is a practical way to compare insurance policies?
A Compare premium alone
B Choose the longest title
C Compare coverage and exclusions
D Copy a friend’s choice
Answer: C. Compare coverage and exclusions. Compare coverage, limits, exclusions, deductibles, and other contract terms.
Why consider a deductible when comparing policies?
A It names the beneficiary
B It sets the policyholder
C It guarantees renewal
D It affects out-of-pocket cost
Answer: D. It affects out-of-pocket cost. A deductible changes how much the insured may pay on covered losses.
Can the cheapest premium always indicate best fit?
A No, needs and terms matter
B Yes, always
C Only for life cover
D Only online
Answer: A. No, needs and terms matter. Price alone does not show whether coverage and exclusions fit a person’s needs.
What should a buyer check before paying a premium?
A Only the logo
B Coverage, limits, and exclusions
C Agent’s personal opinion
D Social-media reviews
Answer: B. Coverage, limits, and exclusions. Review policy terms and insurer documents before purchase.
Why keep a copy of the policy?
A Avoid all renewals
B Guarantee every claim
C Access contract details later
D Replace insurer records
Answer: C. Access contract details later. A policy copy makes coverage and conditions available when needed.
How do insurance rules differ across countries?
A Rules are identical globally
B Only premiums differ
C Policies need no jurisdiction
D Local laws and terms vary
Answer: D. Local laws and terms vary. Insurance regulations and contract terms vary by location and product.
What should guide a complaint escalation?
A Official local process
B A caller’s payment demand
C An anonymous link
D An unrelated insurer
Answer: A. Official local process. Follow the regulator or ombudsman process applicable in the policyholder’s jurisdiction.
Which statement about insurance is accurate?
A Every risk is covered
B Coverage depends on contract terms
C All claims are paid
D Premiums guarantee profit
Answer: B. Coverage depends on contract terms. Coverage is limited by the contract’s terms, exclusions, and conditions.