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.

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C03 Principles of Insurance MCQs | Page 5 of 7

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Q41.
In the context of insurable interest, what is the subject matter of insurance related to?

a.

The property being insured against

b.

The insurer's financial interest in the policy

c.

The intrinsic value of the property

d.

The insurance premium paid by the insured

Discuss
Answer: (a).The property being insured against Explanation:The subject matter of insurance relates to the property being insured against, which has an intrinsic value of its own.
Q42.
When should insurable interest be present in a life insurance policy?

a.

Only at the time of taking the policy

b.

Only at the time of a claim

c.

At both the time of taking the policy and the time of a claim

d.

It is not required in life insurance

Discuss
Answer: (a).Only at the time of taking the policy Explanation:In life insurance, insurable interest should be present at the time of taking the policy.
Q43.
In general insurance, when should insurable interest be present?

a.

Only at the time of taking the policy

b.

Only at the time of a claim

c.

At both the time of taking the policy and the time of a claim

d.

It is not required in general insurance

Discuss
Answer: (c).At both the time of taking the policy and the time of a claim Explanation:In general insurance, insurable interest should be present both at the time of taking the policy and at the time of a claim with some exceptions.
Q44.
When must insurable interest be present in marine cargo insurance?

a.

Only at the time of taking the policy

b.

Only at the time of a claim

c.

At both the time of taking the policy and the time of a claim

d.

It is not required in marine cargo insurance

Discuss
Answer: (b).Only at the time of a claim Explanation:In marine cargo insurance, insurable interest is required only at the time of loss.
Q45.
In which types of insurance should insurable interest be present both at the time of taking the policy and at the time of loss?

a.

Life insurance

b.

General insurance

c.

Health and personal accident insurance

d.

Marine cargo insurance

Discuss
Answer: (c).Health and personal accident insurance Explanation:In health and personal accident insurance, insurable interest should be present both at the time of taking the policy and at the time of loss.
Q46.
What is proximate cause in insurance and how does it apply to non-life insurance claims?

a.

Proximate cause is the immediate event that causes a loss, and it always refers to the last event before a loss.

b.

Proximate cause is the last event that immediately precedes a loss.

c.

Proximate cause is the predominant cause that sets in motion a chain of events leading to a loss, and it may not be the last event before the loss.

d.

Proximate cause is not relevant in insurance.

Discuss
Answer: (c).Proximate cause is the predominant cause that sets in motion a chain of events leading to a loss, and it may not be the last event before the loss. Explanation:Proximate cause in insurance is the predominant cause that sets in motion a chain of events leading to a loss, and it may not be the last event before the loss.
Q47.
What is the definition of proximate cause?

a.

Proximate cause is the first event that triggers a chain of events leading to a result.

b.

Proximate cause is the cause of death in life insurance policies.

c.

Proximate cause is the last event that immediately precedes a loss.

d.

Proximate cause is the active and efficient cause that sets in motion a chain of events leading to a result.

Discuss
Answer: (d).Proximate cause is the active and efficient cause that sets in motion a chain of events leading to a result. Explanation:Proximate cause is defined as the active and efficient cause that sets in motion a chain of events which brings about a result.
Q48.
In what situations does the principle of proximate cause become applicable in insurance?

a.

The principle of proximate cause always applies in insurance.

b.

It becomes applicable when determining the cause of death in life insurance.

c.

It is only relevant when accidental death benefits are claimed.

d.

The principle of proximate cause becomes applicable in specific situations, such as accidental death benefits.

Discuss
Answer: (d).The principle of proximate cause becomes applicable in specific situations, such as accidental death benefits. Explanation:The principle of proximate cause becomes applicable in specific situations, such as when accidental death benefits are claimed.
Q49.
What are some examples of losses that may be paid by business under fire insurance policies but cannot be considered proximately caused by fire?

a.

Damage to property caused by water used to extinguish fire

b.

Damage to property caused by fire brigade in execution of their duty

c.

Damage to property during its removal from a burning building to a safe place

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:All of the above are examples of losses that may be paid by businesses under fire insurance policies but cannot be considered proximately caused by fire.
Q50.
Mr. Pinto contracted pneumonia as a result of lying on wet ground after a horse riding accident. The pneumonia resulted in death of Mr. Pinto. What is the proximate cause of the death?

a.

Pneumonia

b.

Horse

c.

Horse riding accident

d.

Bad luck

Discuss
Answer: (c).Horse riding accident Explanation:In this case, while pneumonia was the immediate cause of death, the proximate cause, which set in motion the chain of events leading to pneumonia and ultimately Mr. Pinto's death, was the horse riding accident. The wet ground and exposure to the elements due to the accident were the direct consequences of the horse riding accident, making it the predominant cause.
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