What is the difference between term life insurance and whole life insurance Mcq?

Latest Types of Insurance MCQ Objective Questions

Types of Insurance Question 1:

Which of the following regulatory bodies regulates the insurance sector in India?

1. TRAI
2. NABARD
3. FSSAI
4. IRDAI
5. None of the above

Answer (Detailed Solution Below)

Option 4 : IRDAI

Win over the concepts of Types of Insurance and get a step ahead with the preparations for Insurance Awareness with Testbook.

The correct answer is IRDAI.

• IRDAI regulatory bodies regulate the insurance sector in India.

​

• The full form of IRDAI is the Insurance Regulatory and Development Authority of India.
• It is a regulatory body under the jurisdiction of the Ministry of Finance, Government of India.
• And is tasked with regulating and promoting the insurance and re-insurance industries in India.
  • Founded: 1999
  • Sector: Insurance
  • Headquarters: Hyderabad
  • Chairperson: Subhash Chandra Khuntia

Types of Insurance Question 2:

Which of the following regulatory bodies regulates the insurance sector in India?

1. TRAI
2. NABARD
3. FSSAI
4. IRDAI
5. RBI

Answer (Detailed Solution Below)

Option 4 : IRDAI

The correct answer is IRDAI.

• IRDAI regulatory bodies regulate the insurance sector in India.

​

• The full form of IRDAI is the Insurance Regulatory and Development Authority of India.
• It is a regulatory body under the jurisdiction of the Ministry of Finance, Government of India.
• And is tasked with regulating and promoting the insurance and re-insurance industries in India.
  • Founded: 1999
  • Sector: Insurance
  • Headquarters: Hyderabad
  • Chairperson: Subhash Chandra Khuntia

Types of Insurance Question 3:

The Life Insurance Corporation(LIC) of India recently introduced a new Non-Linked, Non-Participating, Individual Savings Life Insurance Plan called  Dhan Rekha. What is the minimum sum assured through this policy?

1. ₹1 lakh
2. ₹2 lakh
3. ₹5 lakh
4. ₹10 lakh
5. ₹4 lakh

Answer (Detailed Solution Below)

Option 2 : ₹2 lakh

The correct answer is ₹2 lakh.

• The Life Insurance Corporation of India (LIC) has launched a new savings insurance policy called Dhan Rekha.
• Dhan Rekha was launched by LIC on 13th December 2021.
• The Dhan Rekha is a non-linked, non-participating, individual savings life insurance plan.
• Dhan Rekha plan details & benefits are as follows:

1. The minimum sum assured is ₹2 lakh, with no upper restriction on the maximum sum assured.

2. The minimum age to enter ranges from 90 days to 8 years.

3. The maximum age at the entrance can range from 35 to 55 years old.

4. Maturity and death benefits can be received in installments over a 5-year period.

5. Single premium or limited premium payment options of 10 years, 15 years, or 20 years are available.

6. Offers special premium rates for female lives and is also allowed for the third gender.

• Life Insurance Corporation of India(LIC) is headquartered in Mumbai, Maharashtra.

• MR Kumar is the Chairman of the Life Insurance Corporation of India(LIC).
• Life Insurance Corporation of India(LIC) of India was established in 1956.

Types of Insurance Question 4:

Which of the following regulatory bodies regulates the insurance sector in India?

1. TRAI
2. NABARD
3. FSSAI
4. IRDAI

Answer (Detailed Solution Below)

Option 4 : IRDAI

The correct answer is IRDAI.

• IRDAI regulatory bodies regulate the insurance sector in India.

​

• The full form of IRDAI is the Insurance Regulatory and Development Authority of India.
• It is a regulatory body under the jurisdiction of the Ministry of Finance, Government of India.
• And is tasked with regulating and promoting the insurance and re-insurance industries in India.
  • Founded: 1999
  • Sector: Insurance
  • Headquarters: Hyderabad
  • Chairperson: Subhash Chandra Khuntia

Types of Insurance Question 5:

Shagun – Gift an insurance’ policy is launched by which of the following?

1. General Insurance - Axis Bank
2. SBI General Insurance
3. ICICI Lombard General Insurance Company
4. HDFC Bank
5. None of the above

Answer (Detailed Solution Below)

Option 2 : SBI General Insurance

The correct answer is SBI General Insurance.

• SBI General Insurance, one of the leading general insurance companies in India, announced the launch of first-of-its-kind offering, ‘Shagun – Gift an Insurance”, a unique gift of Personal Accident policy.

• The product was filed by SBI General under the Insurance Regulatory and Development Authority’s (IRDAI) Sandbox regulations.
• The key differentiating feature of the policy is that it can be gifted to anyone you want, which means it is not necessary for the policy buyer to be related to the insured.

• State Bank of India is an Indian multinational, public sector banking and financial services statutory body.
  • Chairperson: Dinesh Kumar Khara
  • Headquarters: Mumbai
  • Founded: 1st July 1955 

Top Types of Insurance MCQ Objective Questions

Any such transaction, in which property is transferred in the name of one person and payment is made by another person, is called _______.

1. Hawala
2. Benami transaction
3. Money laundering
4. Black money

Answer (Detailed Solution Below)

Option 2 : Benami transaction

The correct answer is a Benami transaction.

• In a Benami transaction, a property is transferred or held by one person (Mr A, the ‘Benamidar’) and the consideration for such property is paid by another person (Mr B, the ‘beneficial owner’) for whose benefit such property is held. The following transactions also fall under the definition of Benami transactions:
  • Where a property related transaction is carried out under a fictitious name – The Benamidar can also be a fictitious person
  • Where the owner of the property has no knowledge / denies having any knowledge of the ownership of such property
  • Where the person providing the consideration is untraceable or fictitious – the identity of the beneficial owner may also be unknown.

• Hawala is an informal method of transferring money without any physical money actually moving. It is described as a "money transfer without money movement".
• Hawala is used today as an alternative remittance channel that exists outside of traditional banking systems.
• Transactions between hawala brokers are made without promissory notes because the system is heavily based on trust and the balancing of hawala brokers' books.
• KEY TAKEAWAYS
  • Hawala (sometimes referred to as underground banking) is a way to transmit money without any currency actually moving.
  • Hawala networks have been used since ancient times, and today are widely found among ex-pats sending remittances home.
  • Hawala provides anonymity in its transactions, as official records are not kept and the source of money that is transferred cannot be traced.
  • Hawala is also finding a footing in the world of financial technology, which grants access to money transfers among the unbanked and underbanked populations of the world.
  • Some countries, like India, have made hawala illegal due to its informal nature and absence of regulation or oversight
• Money laundering is the process of changing large amounts of money obtained from crimes, such as drug trafficking, into origination from a legitimate source.
  • It is a crime in many jurisdictions with varying definitions.
•  Black money is funds earned on the black market, on which income and other taxes have not been paid.
  • Also, the unaccounted money that is concealed from the tax administrator is called black money.

Which of the following regulatory bodies regulates the insurance sector in India?

1. TRAI
2. NABARD
3. FSSAI
4. IRDAI

Answer (Detailed Solution Below)

Option 4 : IRDAI

The correct answer is IRDAI.

• IRDAI regulatory bodies regulate the insurance sector in India.

​

• The full form of IRDAI is the Insurance Regulatory and Development Authority of India.
• It is a regulatory body under the jurisdiction of the Ministry of Finance, Government of India.
• And is tasked with regulating and promoting the insurance and re-insurance industries in India.
  • Founded: 1999
  • Sector: Insurance
  • Headquarters: Hyderabad
  • Chairperson: Subhash Chandra Khuntia

Shagun – Gift an insurance’ policy is launched by which of the following?

1. General Insurance - Axis Bank
2. SBI General Insurance
3. ICICI Lombard General Insurance Company
4. HDFC Bank
5. None of the above

Answer (Detailed Solution Below)

Option 2 : SBI General Insurance

The correct answer is SBI General Insurance.

• SBI General Insurance, one of the leading general insurance companies in India, announced the launch of first-of-its-kind offering, ‘Shagun – Gift an Insurance”, a unique gift of Personal Accident policy.

• The product was filed by SBI General under the Insurance Regulatory and Development Authority’s (IRDAI) Sandbox regulations.
• The key differentiating feature of the policy is that it can be gifted to anyone you want, which means it is not necessary for the policy buyer to be related to the insured.

• State Bank of India is an Indian multinational, public sector banking and financial services statutory body.
  • Chairperson: Dinesh Kumar Khara
  • Headquarters: Mumbai
  • Founded: 1st July 1955 

Which among the following is a policy that offers both the options of investment as well as insurance?

1. Unit Linked Insurance Plan
2. Health Insurance
3. Term Insurance
4. Motor Insurance
5. None of the above

Answer (Detailed Solution Below)

Option 1 : Unit Linked Insurance Plan

• Unit Linked Insurance Plan is such that it gives the investors the option to invest in various instruments such as bonds, stocks etc. along with insurance cover.
• Health Insurance is issued in order to cover the expenses towards medical treatment of a patient.
• Term Insurance is the purest form of insurance in which there is only insurance cover.
• Motor Insurance is issued in order to honour claims arising out of accidents injuring third party or own damage of the vehicle.

Types of Insurance Question 10:

Under the Unit Linked Insurance Plan what is the lock-in period in years?

1. 2 years
2. 3 years
3. 4 years
4. 5 years
5. 6 years

Answer (Detailed Solution Below)

Option 4 : 5 years

A correct answer is an option(4) i.e 5 years.

• ULIP ( Unit Linked Insurance Plan) is the life insurance plan in which the insurer provides risk cover, as well as the investment option to the policyholder in which part of the installment goes for the investment and part of the installment, goes for the securing life of the policyholder.
• The investments made are subject to risks associated with the capital markets, the risks in the plan are bear by the policyholder.
• ULIP plans come with a lock-in period of 5 years.
• The first ULIP was launched by the Unit Trust of India in the year 2001.
• Investment in ULIPs is eligible for tax benefits up to a maximum of Rs. 1.5 lakhs under Section 80c of the Income Tax Act. 

Note - 

• Unit Trust of India (UTI) was established in 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India.
• UTI is the first mutual fund company established in India.
• Life Insurance refers to a policy or cover whereby the policyholder can ensure financial freedom for his/her family members after death.

Types of Insurance Question 11:

Any such transaction, in which property is transferred in the name of one person and payment is made by another person, is called _______.

1. Hawala
2. Benami transaction
3. Money laundering
4. Black money

Answer (Detailed Solution Below)

Option 2 : Benami transaction

The correct answer is a Benami transaction.

• In a Benami transaction, a property is transferred or held by one person (Mr A, the ‘Benamidar’) and the consideration for such property is paid by another person (Mr B, the ‘beneficial owner’) for whose benefit such property is held. The following transactions also fall under the definition of Benami transactions:
  • Where a property related transaction is carried out under a fictitious name – The Benamidar can also be a fictitious person
  • Where the owner of the property has no knowledge / denies having any knowledge of the ownership of such property
  • Where the person providing the consideration is untraceable or fictitious – the identity of the beneficial owner may also be unknown.

• Hawala is an informal method of transferring money without any physical money actually moving. It is described as a "money transfer without money movement".
• Hawala is used today as an alternative remittance channel that exists outside of traditional banking systems.
• Transactions between hawala brokers are made without promissory notes because the system is heavily based on trust and the balancing of hawala brokers' books.
• KEY TAKEAWAYS
  • Hawala (sometimes referred to as underground banking) is a way to transmit money without any currency actually moving.
  • Hawala networks have been used since ancient times, and today are widely found among ex-pats sending remittances home.
  • Hawala provides anonymity in its transactions, as official records are not kept and the source of money that is transferred cannot be traced.
  • Hawala is also finding a footing in the world of financial technology, which grants access to money transfers among the unbanked and underbanked populations of the world.
  • Some countries, like India, have made hawala illegal due to its informal nature and absence of regulation or oversight
• Money laundering is the process of changing large amounts of money obtained from crimes, such as drug trafficking, into origination from a legitimate source.
  • It is a crime in many jurisdictions with varying definitions.
•  Black money is funds earned on the black market, on which income and other taxes have not been paid.
  • Also, the unaccounted money that is concealed from the tax administrator is called black money.

Types of Insurance Question 12:

Which of the following regulatory bodies regulates the insurance sector in India?

1. TRAI
2. NABARD
3. FSSAI
4. IRDAI
5. RBI

Answer (Detailed Solution Below)

Option 4 : IRDAI

The correct answer is IRDAI.

• IRDAI regulatory bodies regulate the insurance sector in India.

​

• The full form of IRDAI is the Insurance Regulatory and Development Authority of India.
• It is a regulatory body under the jurisdiction of the Ministry of Finance, Government of India.
• And is tasked with regulating and promoting the insurance and re-insurance industries in India.
  • Founded: 1999
  • Sector: Insurance
  • Headquarters: Hyderabad
  • Chairperson: Subhash Chandra Khuntia

Types of Insurance Question 13:

Which of the following regulatory bodies regulates the insurance sector in India?

1. TRAI
2. NABARD
3. FSSAI
4. IRDAI

Answer (Detailed Solution Below)

Option 4 : IRDAI

The correct answer is IRDAI.

• IRDAI regulatory bodies regulate the insurance sector in India.

​

• The full form of IRDAI is the Insurance Regulatory and Development Authority of India.
• It is a regulatory body under the jurisdiction of the Ministry of Finance, Government of India.
• And is tasked with regulating and promoting the insurance and re-insurance industries in India.
  • Founded: 1999
  • Sector: Insurance
  • Headquarters: Hyderabad
  • Chairperson: Subhash Chandra Khuntia

Types of Insurance Question 14:

 The term used when the insurance is placed simultaneously with more than one insurer is known as _______.

1. Group Insurance
2. Co-Insurance
3. Re-Insurance
4. Double Insurance
5. None of the these.

Answer (Detailed Solution Below)

Option 2 : Co-Insurance

A correct answer is an option(2) i.e Co-Insurance.

• Group Insurance Cover: Group Insurance cover is bought by an employer for his employees in which employees and their dependents are covers under a single policy The premium in group insurance is lower than an individual health insurance policy.
  • Group insurance plans are usually standardized in nature and offer the same benefits to all employees.
• Co-insurance: Co-insurance is the term used when the insurance is placed simultaneously with more than one insurer, it is called co-insurance. This happens in the case of large businesses, this insurance business is divided with a lead insurer ( insurance company ) who negotiates the terms of the policy and then pass on the respective share of the premium to the other insurers.
• Double insurance: It means the policyholder has double insurance on the same risk and the same interest then it is said to be as double insurance.
• Re-Insurance: It is the type of insurance in which insurer transfers its large portion of the risk to the other insurers so that it can bear the risk in a proportion way.

Note - General Insurance Corporation (GIC-Re) is the only re-insurer in India, its headquarters is in Mumbai.

Types of Insurance Question 15:

Family Floater cover is the component of which among of the following insurance policy?

1. Travel insurance
2. Health Insurance
3. Marine Insurance
4. Motor Insurance
5. None of these

Answer (Detailed Solution Below)

Option 2 : Health Insurance

A correct answer is an option(2) i.e Health insurance.

• Health insurance is the insurance in which the policyholder is covered for medical and surgical expenses during the tenure of the policy.It can be further classified as : 
  • Comprehensive health insurance cover: It is the complete package of the health cover that includes almost all the healthcare facility and healthcare needs and ensures complete peace of mind, regardless of the situation of life.
  • Family Floater cover: It is the type of health insurance in which the whole family is covered under the single plan. Any family member covered under the policy can claim in case of hospitalization and surgical expenses.
  • Individual Health Insurance Cover: Individual Health Insurance Cover is a type of health insurance that covers the health expenses of an insured individual. These policies pay for surgical and hospitalization expenses of an insured individual till the cover limit is reached.
  • Group Health Cover: Group Health Insurance cover is bought by an employer for his employees. The premium in group insurance is lower than an individual health insurance policy.
    • Group health plans are usually standardized in nature and offer the same benefits to all employees.
  • Critical Illness Health Cover: Critical Illness Policy covers the expenses involved in treating life-threatening diseases like a tumor, permanent paralysis, etc.
    • These policies usually pay a lump sum amount to the insured persons on the diagnosis of serious diseases covered in the policy.
    • Unlike other policies, Individual Health Insurance and Family Floater Policy, hospitalization is not required, only the diagnosis of the disease is enough to claim the benefits.

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