Test Your IC 01 Principles of Insurance Mock Tests Knowledge in 5 Minutes

1. What term describes the primary cause that leads to a financial loss?

A. Accident B. Peril C. Hazard D. Risk

2. How are the concepts of risk and probability related in insurance?

A. Higher probability means lower risk. B. Higher probability means higher risk. C. There is no relationship between them. D. Probability reduces the risk.

3. Risks resulting from changes in the economy, technology, or consumer fashions are called:

A. Static risks B. Social risks C. Dynamic risks D. Political risks

4. Which of the following is NOT a building-related risk reduction feature?

A. Smoke detectors B. Alarm systems C. Helmets D. Emergency exits

5. Which of the following is a recognized technique for transferring risk?

A. Purchasing an insurance policy B. Outsourcing business tasks C. Using indemnity agreements D. All of the above

6. What is the primary focus of insurance coverage?

A. Protection of life and health B. Financial coverage for unexpected losses C. Protection of assets D. All of the above

7. On which mathematical principle does the insurance industry primarily function?

A. The Law of Large Numbers B. The Principle of Sharing C. Probability theory D. All of the above

8. On which date was the Life Insurance Corporation (LIC) of India established?

A. 1st October 1959 B. 1st September 1956 C. 31st September 1966 D. 1st October 1965

9. Insurance companies collect money from many people and place it into a:

A. Pension Fund B. Security Fund C. Risk Pool D. Interest Account

10. A proposer who smokes or is overweight might be classified by an insurer as:

A. A standard risk B. A sub-standard risk C. A catastrophic risk D. An uninsurable risk