Ms.

Isha kataria
©Name of subject-in-charge (s):

Paper (subject name): PRINCIPLES OF INSURANCE

Paper Code: B.COM 316

Signature(s) of Subject-in-charge (s):

Answer Keys:
1B 2D 3B 4C 5D 6A 7D 8D 9A 10 A

11 C 12 A 13 C 14 D 15 B 16 C 17 B 18 B 19 C 20 B

21 C 22 A 23 B 24 C 25 B 26 A 27 C 28 B 29 B 30 A

TERMINAL TEST, MAY 2023

B.COM 316 Semester VI
Paper Code: B.COM 316 Subject: POI
Time: 21/2Hours Max. Marks: 60

(NOTE: INFLUENCING EVALUATOR BY GIVING NAMES, SYMBOLS ETC. IN ANSWER BOOK

WOULD BE TREATED AS UFMS)

PART A
MCQs : SELECT THE MOST APPROPRIATE ANSWER (10 X 1)

1.  Which of the following principles of Insurance denotes a positive duty of the person seeking insurance
to voluntarily disclose all facts material to the risk being proposed whether requested or not?
a) Insurable Interest
b) Utmost Good Faith
c) Principle of Contribution
d) Principle of loss Minimization

2. Which of the following principles of Insurance tells that an insured may not be compensated by the
insurance company in an amount exceeding the insured’s economic loss?
a) Insurable Interest
b) Utmost Good Faith
c) Principle of Contribution
d) Principle of Indemnity
 3. Which of the following principles of Insurance enables the insured to claim the amount from the third-
party responsible for the loss?
a) Insurable Interest
b) Principle of Subrogation
c) Principle of Contribution
d) Double insurance

4. What is the Principle of Insurance called under which the insured can claim the compensation only to the
extent of actual loss either from all insurers or from any one insurer?
a) Insurable Interest
b) Principle of Subrogation
c) Principle of Contribution
d) Double insurance

5. The insurance plays a role in the economic development of the country in following Ways ___________.
A. Releases capital for new investments.
B. The job potential increases.
C. Money collected is invested in infrastructure.
D. All of the above.

6. On the death of the bread-earner, two losses occur in the family one is loss of human life and the other is
__________.
A. earning power of family.
B. loss of insurance.
C. loss of investment.
D. loss of bank deposits.

7. Valuation in life insurance means ___________.

A. the process of arriving at the profit of a life insurance company.
B. the process of determining the net premium for a life insurance policy.
C. the process of arriving at the bonus in a life insurance company.
D. the process by which the value of all the existing policies is ascertained in a life insurance company

8. Notification of Alteration in Risk is a condition _____________.

A. precedent to liability.
B. subsequent to liability.
C. precedent to the contract.
D. subsequent to the contract.

9.  The whole-life plans in India ___________.

A. pay death benefits only whenever it occurs.
B. pay death benefits after retirement.
C. pay policy benefits after the person attains a certain age, say 80-85 years.
D. pay death benefits after payment of first premium.
10.  The whole-life plans in India ___________.
A. pay death benefits only whenever it occurs.
B. pay death benefits after retirement.
C. pay policy benefits after the person attains a certain age, say 80-85 years.
D. pay death benefits after payment of first premium.
11. . What are with-profit policies?
A. Insurance policies, which can be sold at a profit.
B. Policies which can be pledged to avail loan.
C. Policies under which bonus is paid.
D. Money back plans.
12. Name the Indian insurance organisation which for the first time started charging normal rates of
premium on Indian ________.
A. Bombay Mutual Life Assurance society.
B. Oriental Life Assurance Company.
C. New India Assurance Company.
D. Hindustan C-operating Insurance Society.
13. In case a business firm sets up a private fund to pay out the losses if happens, then that is called as
___________.
A. Individual insurance.
B. family insurance
C. Self-insurance.
D. group insurance
14. Group insurance is ideally suited for covering _______.
A. affluent person in the society.
B. weaker sections of the society.
C. employer-employee groups.
D. both (2) and (3).
15.  The doctrine of Caveat Emptor governs ________.
A. Marine insurance contracts.
B. Commercial contracts.
C. Group insurance contracts.
D. All general insurance contracts.
16.  What is floating policy?
A. A standard fire policy.
B. Policy covering the fixed sum assured stock.
C. A policy that covers stocks located in various godowns under a single policy.
D. A renewable marine policy.
17.  Claim forms are not compulsorily used in ________.
A. fidelity guarantees.
B. marine cargo.
C. machinery breakdown.
D. Others.
18. The burden of proof of the loss within the scope of policy is upon the __________.
A. Insurer.
B. Insured.
C. Surveyor.
D. Defence Lawyer.
19. . If the interest rates in the market are higher, then cost of insurance _________.
A. Increases.
B. moderate.
C. Decreases.
D. no change.
20. ___ means those risks which involve a situation where there is a possibility of gain.
A. Personal risk.
B. Speculative risk.
C. Liability risk.
D. Other risk.
 21. _________ is concerned with the conversion of a firms asset and earning power against risks of
accidental loss.
A. Risk retention.
B. Risk control .
C. Risk management.
D. Risk identification.
22.  __________ is a contract between the insurer and the insured under which the insurer undertakes to
compensate the insured for the loss arising from the risk.
A. Insurance.
B. Agreement.
C. Indemnity.
D. Proximate clause.
23. The ________ has the right to receive the amount assured in the event of death of the insured.
A. Employer.
B. Nominee.
C. Friend.
D. third party.
24.  ________ is the policyholder who transfers the title of the policy.
A. Assignee.
B. Nominee.
C. Assignor.
D. Consignee.
25. . A life insurance policy from LIC may be assigned only after a period of ________.
A. 10 years.
B. 5 years.
C. 3 years.
D. 1 year.
26.  A ________ is the person who sends the proposal form for taking an insurance policy and pays the
premium.
A. Proposer.
B. Nominee.
C. legal advisor.
D. employer.
27.  One who shares the risk under an insurance policy or policies is known as __________.
A. Assurer.
B. Insurer.
C. Co-insurer.
D. Agent.
28. A policy protecting a group of persons, usually employees of a firm generally called as ___________.
A. Fire insurance policy.
B. Group insurance policy.
C. Marine insurance.
D. Automobile insurance.
29.  If a life insured has died a few days before the date of maturity, but after signing discharge from, to
whom should the claim be paid?.
A. Surviving heirs.
B. Nominee.
C. The policy holders bank account.
D. Any of the above three above mentioned.
 The period of time for which the policy will normally remain in existence is known as _______.
A. Policy term.
B. Policy note.
C. Proposed time.
D. Grace time.

PART B
SHORT QUESTIONS: WRITE SHORT NOTES ON ANY TWO OF THE FOLLOWING (2X 5)

1.Define Risk.
2.what is Risk transfer.
3.Define Insurance organization.
4.differentiate between an insurance agent and insurance broker.
5 Explain principle of indemnity.

PART C
LONG QUESTIONS: ANSWER ANY FOUR OUT OF THE FOLLOWING QUESTIONS (4 X 10)
.
1. Insurance is the lifeline for economic development of a nation explain.
2. Discuss the different types of insurance organization and there relevance in current times.
3. Describe the essential characteristics of insurance.
4. Who is an insurance intermediary and why are they important?
5. Why insurance is called a contract ? explain in details the elements of a contract in insurance.
6. Explain the different principles of insurance.
7. What is risk and how it is different from uncertainty?