LEGAL PRINCIPLES OF LIFE INSURANCE
(1)Which among the following is an example of coercion?
I. Ramesh signs a contract without having knowledge of the fine print
II. Ramesh threatens to kill Mahesh if he does not sign the contract
III. Ramesh uses his professional standing to get Mahesh to sign a contract
IV. Ramesh provides false information to get Mahesh to sign a contract
Answer:II. Ramesh threatens to kill Mahesh if he does not sign the contract
(2)Which among the following options cannot be insured by Ramesh?
I. Ramesh’s house
II. Ramesh’s spouse
III. Ramesh’s friend
IV. Ramesh’s parents
Answer :III. Ramesh’s friend
(3)Which element of a valid contract deals with premium?
I. Offer and acceptance
II. Consideration
III. Free consent
IV. Capacity of parties to contract
Answer:II. Consideration
(4)_____________ relates to inaccurate statements, which are made without any
fraudulent intention.
I. Misrepresentation
II. Contribution
III. Offer
IV. Representation
Answer :I. Misrepresentation
(5)________________ involves pressure applied through criminal means.
I. Fraud
II. Undue influence
III. Coercion
IV. Mistake
Answer :III. Coercion
(6)Which among the following is true regarding life insurance contracts?
I. They are verbal contracts not legally enforceable
II. They are verbal which are legally enforceable
III. They are contracts between two parties (insurer and insured) as per
requirements of Indian Contract Act, 1872
IV. They are similar to wager contracts
Answer : III. They are contracts between two parties (insurer and insured) as per
requirements of Indian Contract Act, 1872
(7)Which of the below is not a valid consideration for a contract?
I. Money
II. Property
III. Bribe
IV. Jewellery
Answer : III. Bribe
(8)Which of the below party is not eligible to enter into a life insurance contract?
I. Business owner
II. Minor
III. House wife
IV. Government employee
Answer :II. Minor
(9)Which of the below action showcases the principle of “Uberrima Fides”?
I. Lying about known medical conditions on an insurance proposal form
II. Not revealing known material facts on an insurance proposal form
III. Disclosing known material facts on an insurance proposal form
IV. Paying premium on time
Answer :III. Disclosing known material facts on an insurance proposal form
(10)Which of the below is not correct with regards to insurable interest?
I. Father taking out insurance policy on his son
II. Spouses taking out insurance on one another
III. Friends taking out insurance on one another
IV. Employer taking out insurance on employees
Answer :III. Friends taking out insurance on one another
(11)When is it essential for insurable interest to be present in case of life insurance?
I. At the time of taking out insurance
II. At the time of claim
III. Insurable interest is not required in case of life insurance
IV. Either at time of policy purchase or at the time of claim
Answer : I. At the time of taking out insurance
(12)Find out the proximate cause for death in the following scenario?
Ajay falls off a horse and breaks his back. He lies there in a pool of water and
contracts pneumonia. He is admitted to the hospital and dies because of
pneumonia.
I. Pneumonia
II. Broken back
III. Falling off a horse
IV. Surgery
Answer :III. Falling off a horse
(1)Which among the following is an example of coercion?
I. Ramesh signs a contract without having knowledge of the fine print
II. Ramesh threatens to kill Mahesh if he does not sign the contract
III. Ramesh uses his professional standing to get Mahesh to sign a contract
IV. Ramesh provides false information to get Mahesh to sign a contract
Answer:II. Ramesh threatens to kill Mahesh if he does not sign the contract
(2)Which among the following options cannot be insured by Ramesh?
I. Ramesh’s house
II. Ramesh’s spouse
III. Ramesh’s friend
IV. Ramesh’s parents
Answer :III. Ramesh’s friend
(3)Which element of a valid contract deals with premium?
I. Offer and acceptance
II. Consideration
III. Free consent
IV. Capacity of parties to contract
Answer:II. Consideration
(4)_____________ relates to inaccurate statements, which are made without any
fraudulent intention.
I. Misrepresentation
II. Contribution
III. Offer
IV. Representation
Answer :I. Misrepresentation
(5)________________ involves pressure applied through criminal means.
I. Fraud
II. Undue influence
III. Coercion
IV. Mistake
Answer :III. Coercion
(6)Which among the following is true regarding life insurance contracts?
I. They are verbal contracts not legally enforceable
II. They are verbal which are legally enforceable
III. They are contracts between two parties (insurer and insured) as per
requirements of Indian Contract Act, 1872
IV. They are similar to wager contracts
Answer : III. They are contracts between two parties (insurer and insured) as per
requirements of Indian Contract Act, 1872
(7)Which of the below is not a valid consideration for a contract?
I. Money
II. Property
III. Bribe
IV. Jewellery
Answer : III. Bribe
(8)Which of the below party is not eligible to enter into a life insurance contract?
I. Business owner
II. Minor
III. House wife
IV. Government employee
Answer :II. Minor
(9)Which of the below action showcases the principle of “Uberrima Fides”?
I. Lying about known medical conditions on an insurance proposal form
II. Not revealing known material facts on an insurance proposal form
III. Disclosing known material facts on an insurance proposal form
IV. Paying premium on time
Answer :III. Disclosing known material facts on an insurance proposal form
(10)Which of the below is not correct with regards to insurable interest?
I. Father taking out insurance policy on his son
II. Spouses taking out insurance on one another
III. Friends taking out insurance on one another
IV. Employer taking out insurance on employees
Answer :III. Friends taking out insurance on one another
(11)When is it essential for insurable interest to be present in case of life insurance?
I. At the time of taking out insurance
II. At the time of claim
III. Insurable interest is not required in case of life insurance
IV. Either at time of policy purchase or at the time of claim
Answer : I. At the time of taking out insurance
(12)Find out the proximate cause for death in the following scenario?
Ajay falls off a horse and breaks his back. He lies there in a pool of water and
contracts pneumonia. He is admitted to the hospital and dies because of
pneumonia.
I. Pneumonia
II. Broken back
III. Falling off a horse
IV. Surgery
Answer :III. Falling off a horse
