C03 Principles of Insurance MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on C03 Principles of 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 C03 Principles of 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 C03 Principles of Insurance mcq questions that explore various aspects of C03 Principles of Insurance problems. Each MCQ is crafted to challenge your understanding of C03 Principles of 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 C03 Principles of 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 C03 Principles of Insurance. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your C03 Principles of Insurance knowledge to the test? Let's get started with our carefully curated MCQs!

C03 Principles of Insurance MCQs | Page 4 of 7

Discover more Topics under IC38 Life Insurance Agent Exam

Q31.
Which of the following is considered a material fact for a motor insurance proposal?

a.

Number of passengers in the vehicle

b.

Vehicle's registration number

c.

Color of the vehicle

d.

Date of purchase and Regional Registration authority

Discuss
Answer: (d).Date of purchase and Regional Registration authority Explanation:The date of purchase and Regional Registration authority are considered material facts for a motor insurance proposal.
Q32.
What is the term for a statement made during the negotiation of an insurance contract, whether it is a statement of fact, belief, intention, or expectation?

a.

Disclosure

b.

Misrepresentation

c.

Fraud

d.

Deception

Discuss
Answer: (b).Misrepresentation Explanation:A statement made during the negotiation of an insurance contract is called a representation. Misrepresentation refers to inaccurate statements made without fraudulent intention.
Q33.
What type of misrepresentation relates to inaccurate statements made without fraudulent intention?

a.

Concealment

b.

Innocent Misrepresentation

c.

Fraudulent Misrepresentation

d.

Deceptive Misrepresentation

Discuss
Answer: (b).Innocent Misrepresentation Explanation:Innocent Misrepresentation relates to inaccurate statements made without fraudulent intention during the negotiation of an insurance contract.
Q34.
When does an insurance contract generally become void due to misrepresentation?

a.

When any misrepresentation occurs

b.

When there is a clear case of concealment

c.

When there is fraudulent misrepresentation

d.

When there is any misrepresentation, whether innocent or fraudulent

Discuss
Answer: (c).When there is fraudulent misrepresentation Explanation:An insurance contract generally becomes void when there is a clear case of concealment with the intent to deceive or when there is fraudulent misrepresentation.
Q35.
Under what conditions can a Life Insurance policy be called into question on the ground of Fraud by the insurer, as specified in the amended Insurance Act of 1938?

a.

Anytime during the policy term

b.

Within one year of policy issuance

c.

Within three years from the date of policy issuance, commencement of risk, revival of the policy, or the rider to the policy, whichever is later

d.

Within five years from the date of policy issuance

Discuss
Answer: (c).Within three years from the date of policy issuance, commencement of risk, revival of the policy, or the rider to the policy, whichever is later Explanation:A Life Insurance policy can be called into question on the ground of Fraud by the insurer within three years from the date of issuance of the policy, the date of commencement of risk, the date of revival of the policy, or the date of the rider to the policy, whichever is later, as specified in the amended Insurance Act of 1938.
Q36.
In case the policyholder is not alive, who bears the onus of disproving fraud in a Life Insurance policy?

a.

The insurer

b.

The legal representatives, nominees, or assignees

c.

The insured's family

d.

The insurance broker

Discuss
Answer: (b).The legal representatives, nominees, or assignees Explanation:In case the policyholder is not alive, the onus of disproving fraud in a Life Insurance policy lies upon the legal representatives, nominees, or assignees.
Q37.
What are the three essential elements of insurable interest?

a.

Property, right, and interest

b.

Property, interest, and freedom

c.

Right, life, and potential liability

d.

Interest, potential liability, and financial loss

Discuss
Answer: (a).Property, right, and interest Explanation:The three essential elements of insurable interest are that there must be property, right, and interest capable of being insured, and these must be the subject matter of insurance, and the insured must bear a legal relationship to the subject matter such that they stand to benefit by its safety or suffer financial loss by any loss, damage, injury, or creation of liability.
Q38.
What is the primary difference between gambling and insurance?

a.

In gambling, one can win or lose, whereas in insurance, there is only one consequence – loss to the insured.

b.

In gambling, the outcome is unpredictable, whereas in insurance, the outcome is always predictable.

c.

In gambling, there is no financial interest involved, whereas in insurance, a financial interest is crucial.

d.

In gambling, both parties benefit, whereas in insurance, only the insured benefits.

Discuss
Answer: (a).In gambling, one can win or lose, whereas in insurance, there is only one consequence – loss to the insured. Explanation:The primary difference between gambling and insurance is that in gambling, one can win or lose, whereas in insurance, there is only one consequence – loss to the owner of the insured property.
Q39.
If Mr. Patel has a mortgage loan on his house and has repaid part of the loan, does he have an insurable interest in the house?

a.

No, because he does not fully own the house.

b.

Yes, because he has a financial interest in the house for the outstanding loan amount.

c.

No, because he has a mortgage on the house.

d.

Yes, because he is the owner of the house.

Discuss
Answer: (b).Yes, because he has a financial interest in the house for the outstanding loan amount. Explanation:Yes, Mr. Patel has an insurable interest in the house for the outstanding loan amount. Insurable interest can exist when there is a financial interest in the property, not necessarily full ownership.
Q40.
What is the subject matter of an insurance contract?

a.

The property being insured against

b.

The insured's financial interest in the property

c.

The value of the property

d.

The intrinsic value of the property

Discuss
Answer: (b).The insured's financial interest in the property Explanation:The subject matter of an insurance contract is the insured's financial interest in the property being insured against. It is the insured's financial interest that is covered by the insurance policy.
Page 4 of 7