LIC AAO Insurance Awareness Questions 2019 (Day – 68)

Dear Aspirants, LIC AAO is one of the most important exam in the competitive examination. LIC AAO mains exam consists of four sections i.e. Reasoning ability, Data Analysis & Interpretation, General knowledge & Current affairs and Insurance & Financial Market Awareness. LIC AAO Insurance Awareness & Financial Market Awareness section comprises of 30 questions. LIC AAO Insurance Awareness Questions 2019 play an important role in boosting up the score in mains examination and also helps in the interview. Here we are providing a new series of LIC AAO Insurance Awareness Questions 2019. Aspirants can make use of this LIC AAO Insurance Awareness Questions 2019, to improve score in the Insurance & Financial Market Awareness section.

[WpProQuiz 6512]

1) Which among the following is NOT an example of a peril?

a) Earthquake

b) Fire

c) Landslide

d) Brand Value Erosion

e) All are perils

2) A condition that creates or increases the probability of a loss is known as –

a) Mortality

b) Hazard

c) Impairment

d) Insurable interest

e) None of the above

3) Which of the following best defines the term mortality rate?

a) It refers to the life span of an insured person.

b) It refers to the number of deaths for a specific set of people.

c) It refers to the latest population data shared by the government.

d) It refers to the number of accidents in a year.

e) None of the above

4) A contract which involves providing regular income for a specific period of time is known as?

a) Annuity

b) Actuary

c) Premium

d) Underwriting

e) None of the above

5) Which of the following is not an insurance repository?

a) CDSL

b) NDSL

c) GIC – Re

d) LIC

e) Both C and D

6) Any changes to be done in the policy are usually done via which of the following instruments?

a) Endorsement

b) Rider

c) Condition

d) Amendment

e) Contract

7) The length of time after a premium is due and unpaid during which the policy remains in force is known as –

a) Free look period

b) Grace period

c) Extended period

d) Renewable period

e) None of the above

8) Which of the following is NOT included while calculating the actual cash value in insurance?

I.Cost of new property

II. Depreciation

III. Insurance value

a) Only I

b) Only III

c) Only I and II

d) Only II and III

e) All are included

9) The ratio of losses suffered to insurance coverage is referred to as –

a) Cover ratio

b) Burning ratio

c) Capacity ratio

d) Actuarial ratio

e) Borderline ratio

10) Which among the following is defined as Pro Rata Cancellation of an insurance policy?

a) It is the cancellation of policy within the policy period.

b) It is the cancellation of a policy outside the policy period but within the free look period.

c) It is the suspension of a policy since the premium paid is less than required.

d) It is the cancellation of a policy during the grace period due to notice by the insured.

e) It is the cancellation of a policy by partial repayment of premium.

11) In life insurance, a risk that can result in either a break –even situation or a loss is known as –

a) Pure Risk

b) Partial risk

c) Superficial risk

d) Uninsurable risk

e) Loss

Answers :

1) Answer: d)

A peril is defined as the cause of any loss whereas the event of that loss is known as the risk. Any cause of loss such as fire, landslide, earthquake etc. is termed as perils whereas the financial loss suffered by anybody is known as the risk. It is to be remembered that insurance can cover only financial losses and not non-monetary losses.

2) Answer: b)

A condition that creates or increases the probability of a loss is known as a Hazard.

3) Answer: b)

Mortality rate, or death rate, is a measure of the number of deaths (in general, or due to a specific cause) in a particular population, scaled to the size of that population, per unit of time.

4) Answer: a)       

A contract providing income for a specified period of time, or duration of life for a person or persons is known as annuity. It involves a series of regular set of payments over a period of time.

5) Answer: e)

Central Depository Services Ltd is a central securities depository based in Mumbai. Its main function is the holding securities either in certificated or uncertificated (dematerialized) form, to enable book entry transfer of securities.

National Securities Depository Limited is an Indian central securities depository based in Mumbai. It was established on 8 November 1996 as the first electronic securities depository in India with national coverage.

Both C and D are insurance companies and not repositories.

6) Answer: a)

An endorsement is a written amendment affecting the declarations, insuring agreements, exclusions, or conditions of an insurance policy: a rider.

7) Answer: b)

The length of time after a premium is due and unpaid during which the policy, including all riders, remains in force is known as the grace period.

8) Answer: b)

Actual Cash Value (ACV) is a method of valuing insured property, or the value computed by that method. It is not equal to the replacement cost value (RCV). ACV is computed by subtracting depreciation from replacement cost. The depreciation is usually calculated by establishing a useful life of the item determining what percentage of that life remains. This percentage multiplied by the replacement cost equals the ACV.

9) Answer: b)

The ratio of losses suffered to the amount of insurance in effect is Burning Ratio.

10)Answer: e)

Pro Rata Cancellation of insurance policy takes place when a contract is cancelled after adjustment of premium amount for the time during which the contract has been in force. It is also known as the short rate cancellation.

Please note that it is not applicable for the policies in force during the free look period of 15 days from the date of commencement of the policy since in that case whole premium is refunded to the insured.

11) Answer: a)

In insurance, a risk that can result in either a break –even situation, or a loss is known as pure risk.