Dear Aspirants, LIC AAO is one 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. Insurance & Financial Market Awareness section comprises of 30 questions. Insurance & Financial Market Awareness questions plays an important role in boosting up the score in mains examination and also helps in interview. Here we are providing new series of Practice Questions on Insurance awareness. Aspirants can make use of it, to improve score in Insurance & Financial Market Awareness section.
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1) In Insurance Sector, what is the full form of NSP?
a) New System of Premium
b) Net Service Premium
c) National System of Pension
d) Net Single Premium
e) New Single Plan
2) In which year General Insurance Corporation of India is notified as Reinsurer?
a) 2000
b) 1999
c) 2002
d) 2005
e) 2008
3) What term is used to refer the making compensation payments to one party by the other for the loss occurred?
a) Mitigation
b) Insurability
c) Indemnity
d) Annuity
e) Liability
4) A policy taken by a person on the life of another person who is his employee or connected with the business is called ________.
a) Business Insurance
b) Facultative Insurance
c) Keyman Insurance
d) Treaty Insurance
e) Credit Risk Insurance
5) Under a money back policy, the payment of sum assured to the insured which has become due by instalments is known as _________.
a) Claim Amount
b) Guaranteed Insurance Sum
c) Survival Benefit
d) Surrendered value
e) Insurable Interest
6) National Insurance Academy located in ________
a) Chennai
b) Calcutta
c) Pune
d) Hyderabad
e) None of these
7) A single Insurance company offers both life and non-life policies is known as _________
a) Service Provider
b) Composite Insurer
c) Mutual Insurance Company
d) Single Plan insurance
e) None of the Above
8) Which organization pays the insurance premium for getting the bank deposits insured?
a) There is no payment of premium
b) Account holders
c) Individual banks
d) RBI
e) None of the given options is true
9) Insurance Policy which is provided as an additional layer of security to those who are at risk for being sued for damages to other people’s property or injuries caused to others in an accident is known as ______
a) Internet Liability Insurance
b) Kidnap/Ransom Insurance
c) Inland Marine Insurance
d) Umbrella Insurance
e) None of these
10) Insurance that pays claims arising out of incidents that occur during the policy term, even if they are filed many years later is known as _____
a) Nursing Home Insurance
b) Kidnap/Ransom Insurance
c) Inland Marine Insurance
d) Occurrence Policy
e) None of these
Answers:
1) Answer: d)
Net Single Premium is the full form of NSP. Net Single Premium (NSP) is defined as the present value of the future death benefit. The assumptions of NSP are Premiums are paid at the beginning of the policy year, Death claims are paid at the end of the policy year and the death rate is uniform throughout the year
2) Answer: a)
General Insurance Corporation of India is notified as Reinsurer in 2000and through administrative instruction, its supervisory role over the four subsidiaries was ended.With the General Insurance Business (Nationalisation) Amendment Act 2002, GIC ceased to be a holding company of its subsidiaries.GIC was formed for the purpose of superintending, controlling and carrying on the business of general insurance.
3) Answer: c)
Indemnity means making compensation payments to one party by the other for the loss occurred. It means security, protection and compensation given against damage, loss or injury. According to the principle of indemnity, an insurance contract is signed only for getting protection against unpredicted financial losses arising due to future uncertainties. The characteristic of being acceptable for insurance is called insurability. An annuity is a financial product that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees.
4) Answer: c)
Keyman insurance is taken by a business firm on the life of key employee(s) to protect the firm against financial losses, which may occur due to the premature demise of the Keyman. The ‘keyman’ should hold less than 51% shares of the company. The total number of shares of the company held by the keyman and his family should be less than 70%. The insurance worth of a keyman is 10 times of the keyman’s annual compensation package.
5) Answer: c)
Survival Benefit is the payment of sum assured to the incurred person which has become due by instalments under a money back policy. Surrender Value is the value payable to the policyholder in the event of terminating the policy before the maturity of the policy. The reasonable concern of a person to obtain insurance for any individual or property against unforeseen events is called Insurable Interest.
6) Answer: c)
National Insurance Academy (NIA) is situated in Pune, India. Founded in 1980 by the Finance Department of the Indian government with capital patronage from LIC and public sector general insurance industry.
7) Answer: b)
Composite Insurer refers to an insurance company which sells both casualty insurance and life insurance against damage to household contents, automobiles, and travel plans.
8) Answer: c)
Individual banks pays the insurance premium for getting the bank deposits insured.
9) Answer: d)
Umbrella insurance is extra liability insurance. It is designed to help protect you from major claims and lawsuits and as a result it helps protect your assets and your future
10) Answer: d)
An Occurrence policy protects you from any covered incident that “occurs” during the policy period, regardless of when a claim is filed. An occurrence policy will respond to claims that come in – even after the policy has been cancelled – so long as the incident occurred during the period in which coverage was in force.
