IC38 Exam MCQ Free – What Life Insurance Involves

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Looking for IC38 Exam MCQ Free? Here are 30 important practice questions with answers and explanations on What Life Insurance Involves to help you pass the IC38 exam on your first attempt. Prepare effectively for the IC38 exam with these Free Insurance Agent MCQs. These questions are designed as per exam pattern and will help you strengthen your basics.

IC38 Exam MCQ Free on What Life Insurance Involves (30 Questions with Explanations)

1. Human Life Value represents:

A. Property value
B. Future earning capacity
C. Premium
D. Savings

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Answer: B
Explanation: HLV measures future income contribution.

2. HLV is used to:

A. Calculate premium
B. Decide sum assured
C. Pay claims
D. Invest money

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Answer: B

3. HLV formula is:

A. Income × rate
B. Income ÷ rate
C. Contribution ÷ interest rate
D. Premium × years

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Answer: C

4. Life insurance covers:

A. Property loss
B. Human life risk
C. Business loss
D. Theft

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Answer: B

5. Life insurance is a contract of:

A. Indemnity
B. Assurance
C. Guarantee
D. Investment

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Answer: B

6. General insurance is based on:

A. Assurance
B. Indemnity
C. Savings
D. Profit

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Answer: B

7. Death in life insurance is:

A. Uncertain
B. Certain
C. Impossible
D. Optional

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Answer: B

8. What is uncertain in life insurance?

A. Death
B. Premium
C. Time of death
D. Contract

Answer: C

9. Risk in life insurance refers to:

A. Profit
B. Loss of earning capacity
C. Savings
D. Investment

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Answer: B

10. Level premium means:

A. Increasing premium
B. Decreasing premium
C. Constant premium
D. Variable premium

Answer: C

11. Early premium in level premium is:

A. Less
B. Equal
C. More than required
D. Not paid

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Answer: C

12. Risk pooling means:

A. Sharing profits
B. Sharing losses
C. Avoiding risk
D. Increasing risk

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Answer: B

13. Mutuality means:

A. Individual benefit
B. Collective sharing
C. Profit
D. Investment

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Answer: B

14. Policy document is:

A. Receipt
B. Contract proof
C. Proposal
D. Claim form

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Answer: B

15. Life insurance contract provides:

A. Profit
B. Security
C. Loss
D. Risk

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Answer: B

16. Premium depends on:

A. Age
B. Income
C. Location
D. Gender

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Answer: A

17. Probability of death:

A. Decreases
B. Constant
C. Increases with age
D. Random

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Answer: C

18. Life insurance is long-term because:

A. Cheap
B. Covers life
C. Short duration
D. No premium

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Answer: B

19. General insurance is usually:

A. Long-term
B. Short-term
C. Permanent
D. Lifetime

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Answer: B

20. Insurance provides:

A. Profit
B. Risk elimination
C. Financial protection
D. Savings only

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Answer: C

21. HLV helps in:

A. Claim payment
B. Policy issue
C. Insurance planning
D. Premium collection

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Answer: C

22. Asset means:

A. Liability
B. Property with value
C. Expense
D. Loss

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Answer: B

23. Life insurance treats human life as:

A. Liability
B. Asset
C. Expense
D. Loss

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Answer: B

24. Pooling fund is created by:

A. Government
B. Policyholders
C. Agents
D. Banks

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Answer: B

25. Life insurance contract guarantees:

A. Profit
B. Sum assured
C. Premium
D. Bonus

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Answer: B

26. Savings discipline is:

A. Advantage
B. Disadvantage
C. Risk
D. Hazard

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Answer: A

27. Inflation affects:

A. Premium
B. Returns
C. Policy
D. Contract

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Answer: B

28. Insurance provides liquidity through:

A. Premium
B. Loan/surrender
C. Claim
D. Bonus

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Answer: B

29. Life insurance is regulated due to:

A. Risk
B. Guarantee
C. Profit
D. Savings

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Answer: B

30. Main purpose of life insurance is:

A. Profit
B. Investment
C. Protection
D. Tax

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Answer: C

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