C04 Features of Insurance Contracts MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on C04 Features of Insurance Contracts, 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 C04 Features of Insurance Contracts 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 C04 Features of Insurance Contracts mcq questions that explore various aspects of C04 Features of Insurance Contracts problems. Each MCQ is crafted to challenge your understanding of C04 Features of Insurance Contracts 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 C04 Features of Insurance Contracts MCQs are your pathway to success in mastering this essential IC38 Life Insurance Agent Exam topic.

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C04 Features of Insurance Contracts MCQs | Page 1 of 5

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Q1.
What is the primary purpose of an insurance contract?

a.

To provide financial protection against all risks

b.

To ensure that the insurer makes a profit

c.

To transfer all risks to the insurer

d.

To provide financial protection against specified risks in exchange for a premium

Discuss
Answer: (d).To provide financial protection against specified risks in exchange for a premium Explanation:The primary purpose of an insurance contract is to provide financial protection against specified risks in exchange for a premium.
Q2.
What governs all contracts in India, including insurance contracts?

a.

The Indian Insurance Act, 1938

b.

The Insurance Regulatory and Development Authority of India (IRDAI)

c.

The Indian Contract Act, 1872

d.

The Insurance Ombudsman

Discuss
Answer: (c).The Indian Contract Act, 1872 Explanation:All contracts in India, including insurance contracts, are governed by the Indian Contract Act, 1872.
Q3.
What are the two primary parties involved in an insurance contract?

a.

The proposer and the policyholder

b.

The insurance agent and the policyholder

c.

The insurer and the insured

d.

The broker and the policyholder

Discuss
Answer: (c).The insurer and the insured Explanation:The two primary parties involved in an insurance contract are the insurer and the insured.
Q4.
What are the elements of a valid contract as per the Indian Contract Act, 1872?

a.

Proposal and policy

b.

Offer and acceptance

c.

Premium and claim

d.

Agent and broker

Discuss
Answer: (b).Offer and acceptance Explanation:The elements of a valid contract as per the Indian Contract Act, 1872 are offer and acceptance.
Q5.
When does a proposal for insurance become a policy?

a.

When the proposal is accepted

b.

When the premium is paid

c.

When the policy bond is issued

d.

When the insurance agent signs the proposal

Discuss
Answer: (a).When the proposal is accepted Explanation:A proposal for insurance becomes a policy when it is accepted by the insurer.
Q6.
What is the primary consideration from the insured's perspective in an insurance contract?

a.

The promise to indemnify

b.

Premium

c.

Agreement between the parties

d.

Free consent

Discuss
Answer: (b).Premium Explanation:The primary consideration from the insured's perspective in an insurance contract is the payment of the premium.
Q7.
Which principle ensures that both parties agree to the same thing in the same sense in an insurance contract?

a.

Consensus Ad-Idem

b.

Capacity of the parties

c.

Legality

d.

Free consent

Discuss
Answer: (a).Consensus Ad-Idem Explanation:The principle that ensures that both parties agree to the same thing in the same sense in an insurance contract is "Consensus Ad-Idem."
Q8.
When is consent to an agreement considered free in an insurance contract?

a.

When it is caused by undue influence

b.

When it is caused by fraud

c.

When it is not caused by coercion, fraud, misrepresentation, or mistake

d.

When it is caused by mistake

Discuss
Answer: (c).When it is not caused by coercion, fraud, misrepresentation, or mistake Explanation:Consent to an agreement in an insurance contract is considered free when it is not caused by coercion, fraud, misrepresentation, or mistake.
Q9.
Who must be legally competent to enter into an insurance contract?

a.

The insurance agent

b.

The policyholder's family members

c.

Both parties to the contract

d.

Minors

Discuss
Answer: (c).Both parties to the contract Explanation:Both parties to the insurance contract must be legally competent to enter into the contract.
Q10.
What should be the nature of the object in an insurance contract?

a.

Unlawful

b.

Legal

c.

Ambiguous

d.

Specific

Discuss
Answer: (b).Legal Explanation:The object of an insurance contract must be legal; insurance cannot be had for illegal acts.
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