C01 Introduction to Insurance MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on C01 Introduction to Insurance, a fundamental topic in the field of IC38 Life Insurance Agent Exam. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our C01 Introduction to Insurance MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of C01 Introduction to Insurance mcq questions that explore various aspects of C01 Introduction to Insurance problems. Each MCQ is crafted to challenge your understanding of C01 Introduction to Insurance principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC38 Life Insurance Agent Exam tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our C01 Introduction to Insurance MCQs are your pathway to success in mastering this essential IC38 Life Insurance Agent Exam topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of C01 Introduction to Insurance. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

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C01 Introduction to Insurance MCQs | Page 8 of 10

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Q71.
What is one of the primary considerations when deciding whether to opt for insurance?

a.

The probability of an event happening

b.

The value of the insured assets

c.

The size of the insurance premium

d.

The relationship between the cost of transferring risk and its value

Discuss
Answer: (d).The relationship between the cost of transferring risk and its value Explanation:The need to evaluate the cost of transferring risk against its value.
Q72.
In what situation would insurance be most required?

a.

When the probability of an event is high, and the premium is low

b.

When the loss impact is very high, and the premium is very high

c.

When the loss impact is very high, but the probability (and premium) is very low

d.

When there is no possibility of a loss occurring

Discuss
Answer: (c).When the loss impact is very high, but the probability (and premium) is very low Explanation:Insurance is most required when the loss impact is very high, but the probability (and premium) is very low.
Q73.
What is the importance of not risking more than one can afford to lose?

a.

It ensures that all assets are insured

b.

It prevents the need for insurance

c.

It helps maintain a reasonable relationship between risk and value

d.

It ensures that large oil refineries are always insured

Discuss
Answer: (c).It helps maintain a reasonable relationship between risk and value Explanation:Not risking more than one can afford to lose helps maintain a reasonable relationship between the cost of transferring risk and its value.
Q74.
When is it best to insure assets?

a.

When the probability of occurrence (frequency) of a loss is high

b.

When the possible impact (severity) of a loss is low

c.

When both the probability of occurrence is low and the possible impact is high

d.

When there is no possibility of a loss occurring

Discuss
Answer: (c).When both the probability of occurrence is low and the possible impact is high Explanation:It is best to insure assets when the probability of occurrence (frequency) of a loss is low but the possible impact (severity) is high.
Q75.
Which among the following scenarios needs insurance?

a.

The sole bread winner of a family might die untimely

b.

A person may lose his wallet

c.

Stock prices may fall drastically

d.

A house may lose value due to natural wear and tear

Discuss
Answer: (a).The sole bread winner of a family might die untimely Explanation:The sole breadwinner of a family might die untimely. Insurance is not typically needed for other scenarios, as they do not fall under the typical purview of insurance coverage. This scenario typically needs insurance, particularly life insurance, to provide financial protection for the family in case the primary income earner passes away prematurely. Life insurance can help replace the lost income and support the family's financial well-being. So, insurance is needed.
Q76.
Who are the major players in the insurance industry?

a.

Intermediaries

b.

Insurance Regulators

c.

Insurance Marketing Firms

d.

Insurance Companies (Insurers)

Discuss
Answer: (d).Insurance Companies (Insurers) Explanation:Insurance companies (insurers) are the major players in the insurance industry.
Q77.
What is the role of the Insurance Regulator in the insurance market?

a.

Issuing insurance policies

b.

Regulating the entire market

c.

Assessing insurance claims

d.

Selling insurance to customers

Discuss
Answer: (b).Regulating the entire market Explanation:The Insurance Regulator's role is to regulate the entire insurance market.
Q78.
Who are the intermediaries in the insurance industry?

a.

Insurance companies

b.

Customers

c.

Agents, Brokers, Banks, and Point of Sales Persons

d.

Surveyors and Loss Assessors

Discuss
Answer: (c).Agents, Brokers, Banks, and Point of Sales Persons Explanation:Intermediaries in the insurance industry include Agents, Brokers, Banks (through Bancassurance), Insurance Marketing Firms, and Point of Sales Persons.
Q79.
What is the role of Third Party Administrators in the insurance industry?

a.

Regulating the insurance market

b.

Assessing insurance claims

c.

Dealing with Health and Travel Insurance Claims

d.

Selling insurance policies to customers

Discuss
Answer: (c).Dealing with Health and Travel Insurance Claims Explanation:Third Party Administrators deal with Health and Travel Insurance Claims.
Q80.
What responsibility do intermediaries, such as Agents, have towards the customer according to IRDAI regulations?

a.

Only provide information about policies

b.

Ensure all material information about the risk is provided by the insured to insurer

c.

Assess insurance claims

d.

Issue insurance policies to customers

Discuss
Answer: (b).Ensure all material information about the risk is provided by the insured to insurer Explanation:According to IRDAI regulations, intermediaries like Agents have the responsibility to ensure that all material information about the risk is provided by the insured to the insurer.
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