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31st July 2014, 08:52 AM
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Join Date: Apr 2013
Re: Format for Paper of IRDA Life insurance License exam

The Insurance Regulatory and Development Authority (IRDA) conduct examination for Licentiate in Life Insurance . here I am giving you information about exam pattern for IRDA Life insurance License examination.

Licentiate Exam is offered in two streams –
Licentiate in Life Insurance,
Licentiate in General Insurance (Non Life).

Licentiate in Life Insurance consist of three papers
Principles of Insurance,
Practice of Life Insurance,
Regulation of Insurance Business.

Exam Format--
There is no Negative Mark for wrong answer.
Test Fees (Rs.) 250
Test Duration (in minutes) 60
No. of Questions 50
Maximum Marks 50
Pass Marks (%) 50
Certificate Validity (in years) 3

Sample paper :
1. Insurance is a mechanism to reduce impact of adverse events on
a) Non-value generating assets.
b) Value generating assets.
c) Current assets
d) Fixed assets

2. Perils could be
a) Uncertain
b) Certain
c) Definite
d) Unlikely

3. Insurance is a function of
a) Uncertainty
b) Life
c) Society
d) Loss

4. Insurance works on the principle of
a) Sharing of profits
b) Sharing of assets
c) Sharing of losses
d) Sharing of expenses

5. A) Life Insurance protects the life of the insured.
B) Life Insurance minimizes the financial impact of untimely death.
a) A is correct b) B is correct
c) Both A & B are correct d) Both A & B are wrong

6. Occurrence of ----- has to be ------ & not a -------- of the insured person.
a. peril, uncertain, creation
b. event, certain, creation
c. risk, hazardous, profit
d. event, random, creation

7. For getting insurance you need to pay ------- and get compensated by -----.
a) Compensation, Claims
b) Claims, Premium
c) Premium, Claims
d) Fees, Claims

8. ------------ is the process, which prevents entry of people who do not share the same risk.
a) New Business
b) Valuation
c) Underwriting
d) All of the above

9. Life insurance is ------------- to the state’s efforts in social management.
a) Complementary
b) Supplementary
c) Elementary

10. The insurance company is in the role of --------- where all decisions are taken for the benefit of the community.
a) Caveat Emptor
b) Uberrimae Fides
c) Underwriter
d) Fiduciary.

IRDA Life insurance License exam paper
1) Insurance works on the principle of
a Trust
b Sharing
c Randomness
d All of the above

2 Insurance is legitimate
a when an adverse happening is likely
b When an adverse happening is unlikely
c When an adverse happening is certain
d In all the above three situations

3 Insurance benefits replace
a All physical losses, in full
b All physical losses, partly
c All monetary losses, in full
d The monetary losses, but only to some extent

4 Which one of the following statements is correct?
a People hesitate to buy life insurance because they are not aware of their needs
b People hesitate to buy life insurance because they prefer to enjoy the present
c Both the statements are correct
d Both the statements are wrong

5 Which is the right time for taking life insurance?
a When you are about to get married
b Soon after you have got married
c Just when you are joined a new job
d All the three ‘times’ are right

6 Retention of risk may be done conveniently by
a Large corporations
b Small companies
c Single individuals
d None of the three

7 A valuation is done by a life insurer because
a It is a statutory requirement
b It is necessary to be able to declare dividends to shareholders
c It tells the insurer how well it is managing the business
d All of the above

8 The reason for charging level premiums is
a Risk increases as age increases
b It is convenient to the policyholder
c It is convenient to the insurer
d All the above reasons

9 What does a premium depend upon?
a The place of worship visited by the person to be insured
b The state of health of the policyholder
c The decision of the underwriter
d The report of the agent

10 State which one of the following statements is correct?
a In group insurance, a single policy is issued covering many persons
b A master policy covers servants of a master
c Both the statements above are correct
d Both the statements above are wrong

11 Which one of the following statements is correct?
a In a limited payment policy, there is a maximum limit to the SA
b In a limited payment policy, there is a maximum limit to the term
c Both the statements above are wrong
d Both the statements above are correct

12 Which one of the following statements is true with regard to Children’s policies?
a On vesting, the insured person has an option to change the term of the policy
b On vesting the insured person has an option to increase the SA
c Both the statements above are wrong
d Both the statements above are correct

13 Which of the following could be the basis of the cover in a group policy?
a Height of the life insured
b Age of the life insured
c Size of the insured’s family
d All the three above

14 Which one of the following statements is true with regard to Children’s policies?
a On vesting, the insured person has an option to change the term of the policy
b On vesting the insured person has an option to increase the SA
c Both the statements above are wrong
d Both the statements above are correct

15 Which one of the following statements is correct?
a Every plan of insurance is a combination of two basic plans
b The name given to a plan indicates the benefits available under the plan
c Both the statements above are correct
d Both the statement s above are wrong

16 Which one of the following statements is correct?
a Underwriting is done only when there is a medical examination
b Medical examination is necessary before a policy can be issued
c Both the statements above are correct
d Both the statements above are wrong

17 Which one of the following statements is correct?
a The underwriter determines the premium to be charged
b The underwriter is an employee of the insurer
c Both the statements above are correct
d Both the statements above are wrong

18 Which one of the following statements is correct?
a If the underwriter feels that the risk is more, he will accept at OR
b If the underwriter feels that the risk is more, he may impose a lien
c Both the statements above are correct
d Both the statements above are wrong

19 Which one of the following statements is correct?
a The schedule of a policy is not altered after the policy is issued
b Changes in the terms of the policy are made through endorsements
c Both the statements above are correct
d Both the statements above are wrong

20 The date of issue of the FPR indicates
a The date when the risk effectively begins
b The date when the next premium falls due
c The date when the policy will commence
d None of the above

21 Which one of the following statements is correct?
a In the case of SSS policies, renewal premium receipts are issued
b In the case of SSS policies, FPRs are issued
c Both the statements above are correct
d Both the statements above are wrong

22 Which one of the following statements is correct?
a Assignee is free from the assignor’s obligations under the policy
b A nomination is automatically cancelled when a loan is taken under the policy
c Both the statements above are correct
d Both the statements above are wrong

23 Which one of the following statements is correct?
a The beneficiaries under the MWP Act can be any member of the family
b A policy can be taken under the MMWP Act for the benefit of parents
c Both the statements above are correct
d Both the statements above are wrong

24 Which one of the following statements is correct?
a Foreclosure can be done only with the consent of the policyholder
b Foreclosure can be done only after informing the policyholder
c Both the statements above are correct
d Both the statements above are wrong

25 Which one of the following statements is correct?
a Revivals are not done unless the entire outstanding premium is paid
b Revivals are not done unless the underwriter agrees
c Both the statements above are correct
d Both the statements above are wrong

26 Which one of the following statements is correct?
a Foreclosure action cannot be taken till a notice is served on the policyholder
b When a foreclosure action is taken, nothing is payable to the policyholder
c Both the statements above are correct
d Both the statements above are wrong

27 Which one of the following statements is correct?
a The beneficiaries under the MWP Act can be any member of the family
b A policy can be taken under the MMWP Act for the benefit of parents
c Both the statements above are correct
d Both the statements above are wrong

28 Which one of the following statements is correct?
a A presumption of death is not the same as proof of death
b Presumption of death allows inheritance of property
c Both the statements above are correct
d Both the statements above are wrong

29 When does a claim arise under an insurance policy?
a Whenever the policyholder feels the need for money
b When the insured events happen
c When a premium is not paid
d Whenever any of the three things mentioned above happen

30 Which one of the following statements is correct?
a Maturity claim cheques are paid to the trustees in a MWP Act case
b Maturity claim cheques are paid to the beneficiaries in a MWP Act case
c Both the statements above are correct
d Both the statements above are wrong

31 If a claim is made in January 2007 under a policy, which commenced in May 2002, stating that the life insured had died in April 2004,
a Section 45 of the Act will not apply
b The claim can be treated as an early claim
c Foul play must be suspected
d All the three statements above are correct

32 Which one of the following statements is correct?
a A policy reported to be lost, may actually have been assigned
b A policy has no value after the payment of survival benefits
c Both the statements above are correct
d Both the statements above are wrong

33 Which one of the following statements is correct?
a The foreign exchange regulations apply if the life insured is a non-resident
b The foreign exchange regulations apply if the claimant is a non-resident
c Both the statements above are correct
d Both the statements above are wrong

34 State which of the following statements is correct
a ULIPs provide for flexibility
b ULIPs are better than traditional policies
c Both the above statements are correct
d Both the above statements are wrong

35 State which of the following statements is correct
a In ULIPs, the offer bid spread is the difference between the two prices
b In ULIPs, the offer bid spread, will in some cases be zero
c Both the above statements are correct
d Both the above statements are wrong

36 State which of the following statements is correct
a In ULIPs the insurance cover must be a minimum multiple of the premium
b ULIPs can be surrendered after two years
c Both the above statements are correct
d Both the above statements are wrong

37 State which one of the following statements is correct
a Life insurance is the best savings scheme for all persons
b Life insurance is the best investment scheme for young persons
c Both the statements above are correct
d Both the statements above are wrong

38 Which of the following statements is correct?
a An insurance agent has fixed working hours
b An insurance agent has to mark his attendance in office every day
c An insurance agent works according to his schedule
d An insurance agent cannot do any other work

39 State which one of the following statements is correct
a When vital information is not disclosed, the policyholder is benefited
b When a claim is repudiated, the agent’s trustworthiness is affected
c Both the statements above are correct
d Both the statements above are wrong

40 State which one of the following statements is correct?
a The social sector is not only in the urban areas
b The social sector includes the unorganized sector
c Both the statements above are correct
d Both the statements above are wrong

41 State which one of the following statements is correct?
a The Ombudsman’s authority is limited to claims matters only
b The Ombudsman is not a judicial authority
c Both the statements above are correct
d Both the statements above are wrong

42 State which one of the following statements is correct?
a The tax provisions are the same for all kinds of savings
b The tax provisions are included in the Constitution
c Both the statements above are correct
d Both the statements above are wrong

43 A proposal for SA of Rs. 10 lakhs with DAB for monthly mode under SSS. Proposer had a previous policy of Rs. 5 lakhs with DAB. Proposal was accepted with health extra of Rs. 2.75 per thousand SA premium for DAB Re 1 per thousand. 5% extra for monthly mode. large SA rebate of Rs 2/- per thousand for 1 lakh and above. Tabular premium Rs. 48.20 maximum total SA on which DAB is allowed is Rs. 10/- lakhs.

Find monthly (SSS) premium, rounded off to the next higher rupee
a 4102
b 4121
c 4183
d 4195

44 Find out surrender value on the basis of following data (the answer to be rounded off to the next lower rupee). SA Rs.30, 000 DOC- 15.6.1992, Endowment with profit – 30 years Due date of last premium paid 15-06-2007 mode half yearly Accrued bonus Rs.750/- per thousand SA. SV factor 23%
a 3670
b 3765
c 8740
d None of these

45 A money back policy for SA. of Rs.50,000/- Matured after 25 years. urvival benefits of 15% each had been paid at the end of 5th, 10th, 15th, and 20th years. Bonus had accrued at Rs.965/- per Rs.1000/- SA. Interim bonus @ Rs.25/- per thousand SA is payable. What is the maturity claim amount?
a 68250
b 69500
c 98250
d 99500

Correct Answers :

1 d 16 d 31 d 2 a 17 c 32 a 3 d 18 b 33 c 4 c 19 c 34 a 5 d 20 a 35 c 6 a 21 b 36 a 7 d 22 d 37 d 8 d 23 d 38 c 9 c 24 b 39 b 10 a 25 d 40 c 11 c 26 a 41 b 12 c 27 d 42 d 13 b 28 c 43 b 14 c 29 b 44 c 15 a 30 a 45 b

IRDA Life insurance License exam paper
Fill in the blanks using only one of the alternatives provided in bracket.
1. The definition of rural area is where the total population is __________ (over 5000/ over 10000 / less
than 5000)
2. Who in the insurance company is responsible for the solvency of the company_______________
3. The principal is responsible for _________ of the agents
a) all acts b) Some acts c) Specified acts d) Basic acts
4. An agent is expected to report on proponents ___________ status
a) Financial b) Medical c) Both d) None of the earlier
5. In case of corporate agents, the amount of commissions earned from a corporate / organization /
group / can not exceed ____ of total commissions
a) 30%, b) 40%, c) 50%, d) 60%
6. State true or false - The issue of licenses required u/s 42 of the Insurance Act, 1938, is regulated by
the IRDA Act of 2000 _______________.
7. The amount paid to an agent for procuring policies is called
a) Commission
b) Fees
c) Salary
d) Honorarium
8. _____________ is a document issued under the law authorizing a person to act as an insurance agent
a) Mandate
b) License
c) Certificate
d) Appointment
9. Which statement is Appropriate
A) Going through the existing policies of a prospect whom he is meeting for the first time, the agent
suggest that he should allow 3 of them to lapse & go in for a new policies
B) Going through the existing policy of a prospect whom he was meeting for first time, the agent suggest
that nomination be made & offered to get them registered by the office
a) A Statement
b) B Statement
c) Both Statement
d) Neither of Statement
10. True or False
a) Nomination can be changed any number of times.
b) Assignment can be effected at the proposal stage.
c) License fee for renewal of agent’s licence is Rs. 100/-.
d) Level premium creates reserves.
e) Agent is an employee of Insurance Company.
f) An employer has no insurable interest in the lives of his employees.
g) An agent can work for two life insurance companies at the same time.
h) Under deferred annuity system, the annuity begins within the first year.
i) For a sum assured of Rs.20, 000/- the rebate for large sum assured is Re.1/-.
j) Individual policies are issued in Group Insurance.
k) The bonus is declared under all plans.
l) Insurance can be granted to those women who observe purdah.
11. Under _______________ premium system the premium is the same throughout the policy term.
a) Level premium
b) Single Premium
c) Regular Premium
12. _______________ is the price paid to purchase an insurance product. premium
13. For half-yearly mode of premium rebate allowed is ______________ 1.5 %
14. Surrender means ___________ (Renewal /Termination / Revival) of the contract.
15. If a proposer does not disclose fully all the material facts at the time of proposal, the principle of
__________ (Indemnity / Insurable Interest / Utmost Good faith) is violated.
16. Commission on second year’s premium payable for Endowment policy for 15 years is
__________percent (5/7.5/101)
17. Age nearer birthday as on 20.5.2000 of a person with date of birth 13.7.1974 is ____________ years
(25/26/27)
18. Before a person decides to buy Life Insurance he is only a _______ and when he buys life Insurance
he becomes ________ ( proposer(1)/Life assured(2) / Nominee/ Assignee/Claimant)
19. The terminal bonus is paid to those policies which become claim after completing ___________
years as in force policies (10/15/20)
Mention ‘Appropriate ‘ or ‘Inappropriate’ against each of the following statements –
20. Agent interferes with the clients of other agents.
21. Agent advises to discontinue the earlier, policy of the policy holder taken by another agent.
22. Agent is more concerned with the commission he will earn then the benefit to the prospect.
23. Agent does not collect the premium at the time of sale.
24. Agent becomes argumentative when prospect raises objection.
Say True of False
25. Agent is an employee of insurance company.
26. If a policy document is lost, claim amount cannot be paid.
27. An absolute assignment executed by L.A can be altered by him.
28. Age proof is not important is L.A. Policies.
29. LIC investigates all those death claims which occur within the first 2 years from the date of issue of
first premium receipt.
30. LI is a short term contract.
31. Terminal and final additional bonus is the same
32. Employers have no insurable interest in the lives of their employees.
33. A person aged 17 years can be granted agency.
34. Renewal of license is not essential.
35. Disclosure of material facts by the proposer in not necessary
36. Proposal form is the basis of the contract.
37. Broker represents only one insurance company.
38. Assignment can be effected at the time of completion of proposal.
39. Assignment cancels the previous nomination effected on the policy.
40. Insurer is legally bound to remind policy holders about premium due.
41. The nominee must be a closer relation of L.A.
42. Revival of a lapsed policy is allowed.
43. The nominee becomes entitled to policy moneys on maturity of policy.
44. Age is a relevant factor in risk assessment.
45. Nomination can be cancelled by a will.
46. Contract of insurance comes into force only when insurance policy is issued.
50. A lapsed policy can be revived within a period of ------ years from the date of first unpaid premium.
a) Three
b) Four
c) Five
d) Six
51. Renewal receipts are not issued in respect of policies under
a) Salary Saving Scheme
b) Non Participatory Policies
c) Savings Plan
d) None of the above
52. Bonus notices are
a) Sent to individual policyholders
b) Not sent to individual policyholders
c) Sent in advance
d) Sent once in two years
53. L.I.C. allows a rebate of ----- and ------for yearly and half yearly mode
a) 1.5%, 3%
b) 3%, 1.5%
c) 3%, 5%
d) 1.5%, 5%
54. For monthly mode L.I.C.
a) Charges 1.5% extra
b) Charges 3% extra
c) Charges 5% extra
d) Does not charge extra


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