IC38 Practice Questions with Answer – Financial Planning
Financial planning is an important topic in the IC38 Life Insurance exam. It covers financial goals, risk management, savings, and the role of insurance in protecting income. Attempting IC38 practice questions with answer helps in understanding concepts and improves accuracy for the final exam.
IC38 Practice Questions with Answer – Financial Planning MCQs
1. Financial planning mainly helps in:
A. Increasing risk
B. Managing money and risks
C. Avoiding savings
D. Reducing income
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Answer: B
Explanation: It focuses on managing income, expenses, and risks.
2. Financial planning ensures:
A. Loss
B. Financial stability
C. Risk increase
D. Uncertainty
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Answer: B
3. Short-term financial goals are typically for:
A. More than 10 years
B. 5–10 years
C. 1–3 years
D. Lifetime
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Answer: C
4. Medium-term goals usually fall between:
A. 1–2 years
B. 3–5 years
C. 10–15 years
D. Lifetime
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Answer: B
5. Long-term goals include:
A. Buying groceries
B. Emergency fund
C. Retirement planning
D. Monthly bills
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Answer: C
6. Which is an example of short-term goal?
A. Retirement
B. Child education
C. Emergency fund
D. House purchase after 10 years
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Answer: C
7. Financial planning process starts with:
A. Investment
B. Identifying goals
C. Claim settlement
D. Insurance purchase
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Answer: B
8. Risk in financial planning refers to:
A. Profit
B. Uncertainty of loss
C. Savings
D. Income
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Answer: B
9. Insurance is used for:
A. Risk transfer
B. Risk increase
C. Risk avoidance
D. Risk retention
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Answer: A
10. Life insurance helps in:
A. Increasing risk
B. Income replacement
C. Avoiding savings
D. Reducing income
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Answer: B
11. Which step comes after identifying goals?
A. Claim
B. Assess financial situation
C. Premium payment
D. Policy issue
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Answer: B
12. Financial planning must be:
A. One-time
B. Continuous process
C. Optional
D. Temporary
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Answer: B
13. Savings are generally:
A. High risk
B. Low risk
C. No risk
D. Unlimited risk
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Answer: B
14. Investments are made for:
A. Safety only
B. Growth
C. Loss
D. Risk increase
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Answer: B
15. Which is a risk management method?
A. Ignoring risk
B. Risk transfer
C. Increasing risk
D. Avoiding planning
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Answer: B
16. Risk avoidance means:
A. Transfer risk
B. Avoid risky activity
C. Reduce risk
D. Share risk
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Answer: B
17. Risk retention means:
A. Transfer risk
B. Bear risk
C. Avoid risk
D. Reduce risk
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Answer: B
18. Risk reduction involves:
A. Increasing risk
B. Minimizing impact
C. Avoiding planning
D. Ignoring risk
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Answer: B
19. Financial goals depend on:
A. Luck
B. Age and income
C. Weather
D. Government
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Answer: B
20. Which factor affects financial planning?
A. Age
B. Income
C. Family size
D. All of these
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Answer: D
21. Life insurance provides:
A. Profit
B. Financial protection
C. Loss
D. Risk
Answer: B
22. Insurance helps in achieving:
A. Risk increase
B. Financial goals
C. Loss
D. Uncertainty
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Answer: B
23. Emergency fund is for:
A. Investment
B. Unexpected expenses
C. Profit
D. Savings only
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Answer: B
24. Review of financial plan should be:
A. Never
B. Regular
C. Once
D. Optional
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Answer: B
25. Financial planning includes:
A. Only savings
B. Only insurance
C. Savings, investment, protection
D. Only expenses
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Answer: C
26. Which is NOT part of financial planning?
A. Saving
B. Investment
C. Gambling
D. Insurance
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Answer: C
27. Financial planning helps in:
A. Increasing uncertainty
B. Reducing financial risk
C. Avoiding income
D. Increasing loss
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Answer: B
28. Insurance supports:
A. Profit
B. Risk management
C. Loss
D. Expense
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Answer: B
29. Financial planning is important because:
A. Life is predictable
B. Risks are uncertain
C. Income is fixed
D. No expenses
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Answer: B
30. Main aim of financial planning is:
A. Profit
B. Financial security
C. Loss
D. Risk increase
Show Answer
Answer: B
Practice Section
- Read Free IC38 Short Notes on Next Topic
- Revise this topic with short notes on Financial Planning
- Attempt Free MCQs – Introduction to Insurance
- Attempt IC38 Mock Test – Insurance Agent (Life)
- IC38 Exam Preparation Main Page – Life | Non-Life | Health