POST GRADUATE DIPLOMA IN ADVANCED FINANCIAL PLANNING AND WEALTH

MANAGEMENT BATCH - I (10-11)

MID-TERM EXAMINATION
RISK ANALYSIS & INSURANCE PLANNING
TOTAL MARKS: 15 TIME: 1 HR

1. NAME OF THE CANDIDATE: ( IN CAPITAL LETTERS)

2. DATE 3. SIGNATURE OF THE CANDIDATE

2 0 1 0

4. RULES AND REGULATIONS

A) THIS BOOK LET CONTAINS SECTION – A, SECTION – B, SECTION – C. ALL QUESTIONS ARE

COMPULSORY.

B) SECTION A – 1 MARKS, SECTION B – 2 MARKS & SECTION C – 4 MARKS EACH.

C) ANSWER SECTIONS A, SECTION B & SECTION C IN THE QUESTION BOOKLET.

D) PERSONAL ITEM S, SUCH AS LAPTOPS, BOOKS AND NOTES, ARE NOT ALLOWED IN THE

EXAMINATION ROOM. KEEP YOUR MOBILE SWITCHED OFF INSIDE THE EXAMINATION ROOM.

E) DURING EXAMINATIONS, CANDIDATES MUST OBEY ANY INSTRUCTIONS GIVEN BY THE

INVIGILATORS;

F) CANDIDATES WILL NOT BE ALLOWED TO ENTER AN EXAMINATION ROOM AFTER THE

EXAMINATION HAS BEEN IN PROGRESS FOR 30 MINUTES.

G) ALL WORK, INCLUDING ROUGH WORK, MUST BE WRITTEN IN THE QUESTION BOOKLET.

H) A CANDIDATE MUST NOT COMMUNICATE IN ANY WAY WITH ANOTHER CANDIDATE DURING
THE EXAMINATION AND MUST NOT DISTURB OTHER CANDIDATES.

I) CANDIDATES MUST NOT LEAVE THEIR EXAMINATION DESKS DURING AN EXAMINATION

EXCEPT WITH THE PERMISSION OF AN INVIGILATOR

J) CANDIDATES MUST STOP WORK WHEN INSTRUCTED TO DO SO BY THE INVIGILATOR.

K) NO CANDIDATE MAY USE UNFAIR MEANS IN AN EXAMINATION OR HELP OR ATTEMPT TO HELP

ANY OTHER CANDIDATE TO USE UNFAIR MEANS IN AN EXAMINATION.

L) BREAKING ANY OF THE EXAMINATION RULES MAY CONSTITUTE UNFAIR MEANS.

5. TOTAL MARKS OBTAINED

INVIGILATOR’S SIGNATURE___________________; EXAMINER’S SIGNATURE__________________;

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Q1. Which of the following is not the principle of insurance?

A. Principle of Subrogation.
B. Principle of Indemnity.
C. Principle of Utmost Good Faith.
D. Principle of Gravity.

Q2. The type of insurance depends on

A. The peril
B. The risk
C. Neither the peril nor the risk
D. Both the peril and the risk

Q3. A human being

A. Is an economic asset
B. Is an income earning asset
C. Is a perishable asset
D. All the above

Q4. A contract with a minor:

A. Is voidable at the option of either party

B. May be admissible in special cases.
C. Is absolutely void
D. None of the above

Q5. The principle of utmost good faith does not apply to

A. Facts of common knowledge

B. Facts of law
C. Facts which are not material for underwriting
D. All the three kinds of facts mentioned above

Q6. Reinsurance is the name given to

A. An individual taking insurance for the second time.

B. An insurer placing insurance with another insurer.
C. Both the above situations.
D. Neither of the above situations.

Q7. An insurer, as a trustee, is responsible to the

A. The policyholders
B. The IRDA
C. The Government
D. All the above

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Q8. Mr. Ravi has taken a shop on rent in Karol Bagh with the proviso that he himself had to pay the
insurance premium for fire and other perils on the shop and not the owner of the shop. Which of the
step of risk management process is followed in this case?

A. Risk Control.
B. Risk Transfer.
C. Risk Retention.
D. Risk Reduction.

Q9.Select the right statement

A. The existence of insurable interest is decided by

A. The interest which the proposer has in the asset being insured
B. The relationship between the proposer and the object of insurance
C. The legal decisions on these matters
D. All of the above

B. If there does not exist any Insurable interest in the policy, the contract is said to be:

A. Voidable at the option of insurer.

B. Void at the option of insured.
C. Voidable at the option of Insured.
D. Void ab initio.

C. With reference to life insurance:

A. The claim payable is subject to the principle of indemnity

B. The claim payable will depend on the Sum Assured
C. The claim payable will depend on the income of the deceased person
D. The claim payable will depend on the size of the family left behind

D. In life insurance

A. The principle of utmost good faith continues to operate till the policy becomes a claim
B. Facts which happen after the policy has commenced, need not be reported
C. Illnesses after the policy has commenced must be informed to the insurer.
D. All the above three statements are correct

Q10. Which of the following risks are insurable?

A. Speculative
B. Economic
C. Sure to happen
D. All of the above

Q11. Mr. Vineet Jain has Fire and Misc. Insurance. When the insurable interest should exist, in order to
make an admissible claim?

A. At the time of Loss.

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 B. At the inception time.
C. Both A & B.
D. None of the above.

Q12. Mr. Rahul misrepresented the facts to insurance company with reference to the fact of already
having an indemnity policy. The contract is:

A. Voidable at the option of insured.

B. Voidable at the option of insurer.
C. Void ab initio.
D. None of the above.

Q13 (A). 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

Q13 (B). Which one of the following statements is correct?

A. A physical hazard affects the probability of death

B. Body measurements may indicate physical hazards
C. Both the statements above are correct
D. Both the statements above are wrong

Q14. Insurance compensates losses

A. By replacing the original asset

B. To the full extent of lost income,
C. Only to the extent of insured amount
D. All the three ways.

Q15. Rahul agrees to pay Manish Rs 1,00,000/- if Manish house is burnt, in exchange of Manish paying
Rs 5,000/- as premium. Which type of transaction is this?

A. Wagering Contract.
B. Betting.
C. Gambling.
D. Contract of Insurance.

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