IC-38 Insurance Agent Exam 50 MCQ Questions with Answers – Practice Set 10
IC-38 Insurance Agent Exam MCQ Questions | 50 Fresh Practice Questions | Insurance Agent Exam Preparation
Preparing for the IC-38 Insurance Agent Examination requires a clear understanding of insurance principles, products, policy provisions, underwriting, claims, customer service and professional responsibilities.
This IC-38 Practice Set 10 contains 50 fresh multiple-choice questions with four options and the correct answer immediately after each question. It is designed for revision, self-assessment and regular practice.
Practice Note: These are educational practice questions and are not actual or leaked examination questions. Candidates should refer to the latest applicable official IC-38 study material for authoritative preparation.
IC-38 Insurance Agent Exam MCQ Questions – Practice Set 10
1. What is a life insurance policy loan?
A. A loan that may be available against the policy's eligible value, subject to policy terms
B. A loan automatically granted to every policyholder
C. A government education loan
D. A claim payment made before death
Answer: A. A loan that may be available against the policy's eligible value, subject to policy terms
2. Why may a policyholder consider a loan against an eligible life insurance policy?
A. To access funds while retaining the policy, subject to applicable terms and conditions
B. To permanently increase the sum assured automatically
C. To avoid all future premiums
D. To convert the policy into health insurance
Answer: A. To access funds while retaining the policy, subject to applicable terms and conditions
3. What can happen if a policy loan and applicable interest remain unpaid?
A. The outstanding amount may affect the benefits or values payable under the policy according to its terms
B. The policy automatically becomes a new insurance contract
C. The nominee automatically receives double the benefit
D. The premium becomes permanently zero
Answer: A. The outstanding amount may affect the benefits or values payable under the policy according to its terms
4. What is the basic idea of a non-forfeiture benefit?
A. Certain eligible policy values or benefits may remain available even when a policy cannot continue in its original form, subject to its terms
B. Every lapsed policy receives its full maturity value immediately
C. All policies remain active without premiums
D. Every policy automatically becomes term insurance
Answer: A. Certain eligible policy values or benefits may remain available even when a policy cannot continue in its original form, subject to its terms
5. What is a paid-up policy?
A. A policy that continues with reduced benefits after premiums cease, where the policy terms provide for such treatment
B. A policy whose full premium is refunded immediately
C. A policy with unlimited additional benefits
D. A policy that has never received a premium
Answer: A. A policy that continues with reduced benefits after premiums cease, where the policy terms provide for such treatment
6. What is the effect of converting an eligible policy to paid-up status?
A. The original benefits may be reduced according to the policy provisions
B. The sum assured always doubles
C. The policy becomes a motor policy
D. The customer receives unlimited coverage
Answer: A. The original benefits may be reduced according to the policy provisions
7. What is revival of a life insurance policy?
A. Restoring an eligible policy that has lapsed, subject to the insurer's applicable requirements
B. Purchasing a completely unrelated insurance policy
C. Increasing the policy term without approval
D. Cancelling an active policy
Answer: A. Restoring an eligible policy that has lapsed, subject to the insurer's applicable requirements
8. Why might an insurer require evidence of continued insurability during revival?
A. To reassess relevant risk after the policy has remained without required coverage for a period
B. To determine the agent's commission
C. To select a nominee automatically
D. To calculate a customer's income tax
Answer: A. To reassess relevant risk after the policy has remained without required coverage for a period
9. What is surrender of a life insurance policy?
A. Voluntarily terminating an eligible policy in accordance with its terms, potentially receiving a surrender value
B. Renewing a policy for another year
C. Adding a rider
D. Increasing the premium
Answer: A. Voluntarily terminating an eligible policy in accordance with its terms, potentially receiving a surrender value
10. Why should a customer understand the consequences before surrendering a policy?
A. Surrender may terminate future policy benefits and the amount received may differ from premiums paid
B. Surrender always increases the sum assured
C. Surrender automatically provides a new policy
D. Surrender guarantees a full refund
Answer: A. Surrender may terminate future policy benefits and the amount received may differ from premiums paid
11. What is a deferred annuity?
A. An annuity in which payments begin at a future date after an accumulation or deferment period
B. An annuity that always pays immediately
C. A motor insurance product
D. A hospital cash policy
Answer: A. An annuity in which payments begin at a future date after an accumulation or deferment period
12. What is an immediate annuity?
A. An annuity under which payments generally begin shortly after the purchase, subject to the product terms
B. An annuity that can never make payments
C. A type of motor insurance
D. A property insurance endorsement
Answer: A. An annuity under which payments generally begin shortly after the purchase, subject to the product terms
13. What is the main purpose of an annuity?
A. To provide a stream of income according to the selected annuity terms
B. To insure a vehicle against theft
C. To cover household contents only
D. To pay hospital bills exclusively
Answer: A. To provide a stream of income according to the selected annuity terms
14. What is an annuity payout frequency?
A. The interval at which annuity payments are made
B. The number of policy exclusions
C. The period used for vehicle inspection
D. The frequency of claim rejection
Answer: A. The interval at which annuity payments are made
15. Which can be a feature considered when selecting an annuity?
A. The desired timing and frequency of income payments
B. The colour of the policy document
C. The agent's office location
D. The customer's preferred bank branch only
Answer: A. The desired timing and frequency of income payments
16. What is the accumulation phase in a deferred annuity?
A. The period before annuity income begins during which the policy value may accumulate according to its terms
B. The period after every claim is rejected
C. The period during which a motor vehicle is repaired
D. The period when a policy is automatically cancelled
Answer: A. The period before annuity income begins during which the policy value may accumulate according to its terms
17. What is a money-back life insurance policy generally designed to provide?
A. Periodic survival benefits during the policy term along with other benefits according to policy terms
B. Only a vehicle repair benefit
C. Only hospitalisation coverage
D. Only a travel benefit
Answer: A. Periodic survival benefits during the policy term along with other benefits according to policy terms
18. How does a money-back policy differ conceptually from a pure term insurance policy?
A. It may provide specified survival benefits during the term, whereas pure term insurance primarily provides death protection for the specified period
B. Both products are always identical
C. Term insurance always provides periodic survival payments
D. Money-back policies never provide death benefits
Answer: A. It may provide specified survival benefits during the term, whereas pure term insurance primarily provides death protection for the specified period
19. What is a Unit Linked Insurance Product (ULIP)?
A. A life insurance product that combines insurance protection with investment linked to specified funds, subject to product terms
B. A motor-only insurance policy
C. A government tax certificate
D. A health claim document
Answer: A. A life insurance product that combines insurance protection with investment linked to specified funds, subject to product terms
20. In a ULIP, what does fund value generally represent?
A. The value of units allocated to the policy based on the applicable unit value
B. The guaranteed claim amount in every situation
C. The agent's commission
D. The customer's annual salary
Answer: A. The value of units allocated to the policy based on the applicable unit value
21. What is an investment fund in a ULIP?
A. A pool of investments corresponding to a particular investment strategy offered under the product
B. A customer's bank savings account
C. A claim settlement account
D. A hospital's cash counter
Answer: A. A pool of investments corresponding to a particular investment strategy offered under the product
22. What does switching generally mean in a ULIP?
A. Moving policy value between available investment funds according to product rules
B. Changing the nominee without documentation
C. Cancelling every insurance benefit
D. Transferring the policy to another insurer automatically
Answer: A. Moving policy value between available investment funds according to product rules
23. Why should a ULIP customer understand charges and product conditions?
A. Charges and conditions can affect policy value, benefits and overall outcomes
B. Charges never affect policy value
C. Understanding charges guarantees investment returns
D. Charges determine the customer's nominee
Answer: A. Charges and conditions can affect policy value, benefits and overall outcomes
24. What is a participating life insurance policy?
A. A policy that may participate in the surplus of the insurer's participating business through bonuses, subject to policy terms
B. A policy that guarantees stock-market returns
C. A motor insurance policy
D. A policy without any contractual benefits
Answer: A. A policy that may participate in the surplus of the insurer's participating business through bonuses, subject to policy terms
25. What is a non-participating life insurance policy?
A. A policy that does not participate in distributed surplus through bonuses in the manner applicable to participating policies
B. A policy that has no contractual benefit
C. A policy available only to companies
D. A health insurance policy
Answer: A. A policy that does not participate in distributed surplus through bonuses in the manner applicable to participating policies
26. What is a life insurance bonus?
A. An additional benefit that may be declared or attached under certain participating policies according to applicable terms
B. A mandatory discount on every premium
C. A refund of every premium
D. A claim penalty
Answer: A. An additional benefit that may be declared or attached under certain participating policies according to applicable terms
27. What is domiciliary hospitalisation?
A. Medical treatment at the patient's residence under specified circumstances and subject to applicable policy conditions
B. Treatment available only outside India
C. Treatment exclusively at a foreign hospital
D. A motor accident repair service
Answer: A. Medical treatment at the patient's residence under specified circumstances and subject to applicable policy conditions
28. What is a day-care procedure in health insurance?
A. A medical procedure requiring less than the conventional 24-hour hospitalisation period but covered under applicable policy conditions
B. Any treatment performed at home
C. Every outpatient consultation
D. A procedure that is never covered
Answer: A. A medical procedure requiring less than the conventional 24-hour hospitalisation period but covered under applicable policy conditions
29. Why is the list of covered day-care procedures important?
A. Coverage depends on the applicable policy terms and specified procedures
B. Every medical procedure automatically qualifies
C. It determines the policyholder's age
D. It replaces the health insurance proposal
Answer: A. Coverage depends on the applicable policy terms and specified procedures
30. What are pre-hospitalisation expenses?
A. Eligible medical expenses incurred before hospitalisation for a covered condition, subject to policy terms
B. Expenses incurred only after policy expiry
C. Motor repair expenses
D. Insurance agent training expenses
Answer: A. Eligible medical expenses incurred before hospitalisation for a covered condition, subject to policy terms
31. What are post-hospitalisation expenses?
A. Eligible medical expenses incurred after hospitalisation for a covered condition, subject to policy terms
B. Expenses incurred before purchasing any policy
C. Agent recruitment expenses
D. Vehicle registration expenses
Answer: A. Eligible medical expenses incurred after hospitalisation for a covered condition, subject to policy terms
32. Why should a health insurance customer check pre- and post-hospitalisation coverage?
A. The eligible period and expenses depend on the policy terms and may have specified limits
B. Every medical expense is automatically covered
C. It guarantees unlimited hospitalisation
D. It eliminates all exclusions
Answer: A. The eligible period and expenses depend on the policy terms and may have specified limits
33. What is a critical illness policy generally designed to cover?
A. Specified critical illnesses according to defined policy conditions
B. Every minor illness without conditions
C. Only vehicle accidents
D. Property theft
Answer: A. Specified critical illnesses according to defined policy conditions
34. Why is the definition of a critical illness important?
A. Payment depends on whether the diagnosed condition satisfies the policy's specified definition and requirements
B. Every illness automatically qualifies
C. It determines the customer's premium receipt number
D. It replaces medical diagnosis
Answer: A. Payment depends on whether the diagnosed condition satisfies the policy's specified definition and requirements
35. What is a top-up health insurance plan generally intended to do?
A. Provide additional health insurance coverage above a specified deductible, subject to policy terms
B. Replace every existing insurance policy automatically
C. Cover only motor damage
D. Eliminate all medical exclusions
Answer: A. Provide additional health insurance coverage above a specified deductible, subject to policy terms
36. What is a super top-up health insurance plan generally designed to cover?
A. Eligible expenses above an aggregate deductible during the specified policy period, subject to terms
B. Only the first rupee of every hospital bill
C. Vehicle repair expenses
D. Life insurance maturity benefits
Answer: A. Eligible expenses above an aggregate deductible during the specified policy period, subject to terms
37. What is the key conceptual difference between a top-up and a super top-up?
A. A top-up generally applies the deductible to an individual claim, while a super top-up may consider cumulative eligible expenses during the policy period
B. Both are always identical
C. A super top-up is always a life insurance policy
D. A top-up never has a deductible
Answer: A. A top-up generally applies the deductible to an individual claim, while a super top-up may consider cumulative eligible expenses during the policy period
38. What is a motor vehicle's Insured Declared Value (IDV) generally associated with?
A. The insured value of the vehicle for applicable own-damage coverage and related claim purposes, subject to policy terms
B. The vehicle's annual fuel consumption
C. The driver's salary
D. The third-party medical bill in every accident
Answer: A. The insured value of the vehicle for applicable own-damage coverage and related claim purposes, subject to policy terms
39. Why is IDV important in motor insurance?
A. It can be relevant to the maximum payable amount for certain own-damage claims, subject to policy conditions
B. It determines the driver's licence validity
C. It guarantees payment of all third-party claims
D. It determines fuel prices
Answer: A. It can be relevant to the maximum payable amount for certain own-damage claims, subject to policy conditions
40. What is a motor insurance add-on?
A. An optional additional coverage available with a base policy, subject to its terms
B. A mandatory government tax
C. A replacement for the entire insurance policy
D. A premium receipt
Answer: A. An optional additional coverage available with a base policy, subject to its terms
41. Why should a customer examine motor insurance add-ons carefully?
A. Each add-on has specific coverage, conditions, exclusions and applicable premium
B. Every add-on provides unlimited coverage
C. Add-ons are always free
D. Add-ons eliminate the base policy
Answer: A. Each add-on has specific coverage, conditions, exclusions and applicable premium
42. What is a cashless garage facility in motor insurance?
A. A facility where eligible repairs can be arranged at a network garage under applicable insurer procedures and policy terms
B. A facility where no insurance policy is required
C. A facility available at every garage automatically
D. A cash payment made to the vehicle owner without assessment
Answer: A. A facility where eligible repairs can be arranged at a network garage under applicable insurer procedures and policy terms
43. What is a break-in inspection in motor insurance?
A. An inspection that may be required when insurance is renewed after a gap or when applicable coverage has not been continuously maintained
B. A routine vehicle sale
C. A driving test
D. A claim settlement payment
Answer: A. An inspection that may be required when insurance is renewed after a gap or when applicable coverage has not been continuously maintained
44. Why might a motor insurer require a break-in inspection?
A. To assess the vehicle's condition before accepting or renewing applicable coverage after a break in insurance
B. To determine the driver's income
C. To calculate life insurance bonuses
D. To issue a health insurance card
Answer: A. To assess the vehicle's condition before accepting or renewing applicable coverage after a break in insurance
45. What is a total loss in motor insurance generally associated with?
A. A situation where the vehicle is treated as a total loss according to applicable policy conditions and assessment
B. Every minor scratch
C. Every repairable accident
D. Every claim below the deductible
Answer: A. A situation where the vehicle is treated as a total loss according to applicable policy conditions and assessment
46. What is constructive total loss?
A. A situation where the cost or circumstances of recovering/repairing the vehicle meet the policy's applicable criteria for treating it as a total loss
B. Any small repair
C. A routine service
D. A premium refund
Answer: A. A situation where the cost or circumstances of recovering/repairing the vehicle meet the policy's applicable criteria for treating it as a total loss
47. Why may an FIR be relevant to a motor theft claim?
A. It can provide official documentation of the reported theft and support the claim process
B. It determines the vehicle's fuel efficiency
C. It replaces the insurance policy
D. It guarantees claim settlement regardless of policy terms
Answer: A. It can provide official documentation of the reported theft and support the claim process
48. What should a policyholder generally do after discovering an insured vehicle theft?
A. Report the theft promptly to the appropriate authorities and notify the insurer according to policy procedures
B. Wait until policy expiry
C. Sell the vehicle immediately
D. Remove all policy documents
Answer: A. Report the theft promptly to the appropriate authorities and notify the insurer according to policy procedures
49. What is the purpose of a motor insurance claim survey or assessment?
A. To assess the loss or damage and determine the claim in accordance with policy terms
B. To determine the customer's income
C. To renew the vehicle registration
D. To select the policy nominee
Answer: A. To assess the loss or damage and determine the claim in accordance with policy terms
50. Why should an insurance agent avoid guaranteeing a specific claim amount before assessment?
A. The payable amount depends on the policy terms, facts of loss, applicable limits, assessment and other relevant conditions
B. Agents can always determine claims independently
C. Every claim has the same amount
D. Claim assessment is unnecessary
Answer: A. The payable amount depends on the policy terms, facts of loss, applicable limits, assessment and other relevant conditions
Important IC-38 Topics Covered in Practice Set 10
This set focuses on several additional areas of insurance knowledge:
Life insurance policy loans
Non-forfeiture benefits
Paid-up policies
Revival
Surrender
Deferred annuity
Immediate annuity
Annuity income
Accumulation period
Money-back policies
ULIPs
Fund value
Investment funds
Fund switching
Participating policies
Non-participating policies
Life insurance bonuses
Domiciliary hospitalisation
Day-care procedures
Pre-hospitalisation expenses
Post-hospitalisation expenses
Critical illness insurance
Top-up health insurance
Super top-up health insurance
IDV in motor insurance
Motor insurance add-ons
Cashless garages
Break-in inspection
Total loss
Constructive total loss
Theft claims
FIR and motor claims
Motor claim assessment
IC-38 Exam Preparation Tips
1. Learn Product Features Conceptually
Do not simply memorise product names. Understand what each product is designed to do and how its benefits operate.
2. Pay Attention to Policy Conditions
Words such as "subject to policy terms," "specified conditions," "eligible expenses" and "applicable limits" are important in insurance questions.
3. Understand Life Insurance Policy Values
Revise the differences between:
Surrender value
Paid-up value
Policy loan
Death benefit
Maturity benefit
Annuity income
4. Revise Modern Life Insurance Products
ULIPs require an understanding of concepts such as:
Units
Fund value
Investment funds
Fund switching
Charges
Insurance protection
5. Practise Health Insurance Terminology
Pay special attention to:
Day-care procedures
Domiciliary hospitalisation
Pre-hospitalisation expenses
Post-hospitalisation expenses
Critical illness
Top-up
Super top-up
6. Understand Motor Insurance Terminology
Important concepts include:
IDV
Add-ons
Cashless garages
Break-in inspection
Total loss
Constructive total loss
Theft claims
Frequently Asked Questions About IC-38
What is a policy loan?
A policy loan is a loan that may be available against an eligible life insurance policy's value, subject to the policy terms.
What is a paid-up policy?
A paid-up policy is an eligible policy that continues with reduced benefits after premiums stop, according to its applicable terms.
What is a deferred annuity?
A deferred annuity is an annuity in which income payments begin at a future date after a deferment or accumulation period.
What is a ULIP?
ULIP stands for Unit Linked Insurance Product. It combines life insurance protection with investment linked to specified funds, subject to product terms.
What is a top-up health insurance plan?
A top-up plan generally provides additional health coverage above a specified deductible, subject to its policy conditions.
What is a super top-up plan?
A super top-up generally considers eligible medical expenses cumulatively during a specified policy period after the applicable aggregate deductible is crossed.
What is IDV in motor insurance?
IDV, or Insured Declared Value, is a value associated with a vehicle's applicable own-damage insurance coverage and certain claim calculations, subject to policy terms.
What is constructive total loss?
Constructive total loss refers to circumstances where a vehicle may be treated as a total loss according to the applicable policy criteria, often involving the economics or feasibility of recovery or repair.
Conclusion
IC-38 Practice Set 10 provides 50 additional questions covering life insurance policy provisions, annuities, ULIPs, health insurance benefits and motor insurance concepts.
Regularly solving fresh MCQs can help candidates identify weak areas and improve their understanding of insurance terminology.
For authoritative examination preparation, always combine practice questions with the latest applicable official IC-38 study material and examination guidance.
Keep practising with PDFnotebooks for more IC-38 Insurance Agent Exam MCQs, insurance notes, study materials and competitive examination resources.
