IC-38 Insurance Agent Exam 50 MCQ Questions with Answers – Practice Set 12
IC-38 Insurance Agent Exam MCQ Questions | 50 Fresh Questions with Answers | Insurance Agent Exam Preparation
The IC-38 Insurance Agent Examination covers a broad range of insurance concepts, including life insurance, general insurance, health insurance, policy administration, underwriting, claims, customer protection and professional conduct.
This IC-38 Practice Set 12 contains 50 fresh MCQs with four options and the correct answer immediately after each question. The set is designed for conceptual revision and examination 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 12
1. What is the main purpose of a proposal form?
A. To collect information required for assessing and processing the proposed insurance contract
B. To guarantee claim settlement
C. To replace the policy document permanently
D. To calculate an agent's salary
Answer: A. To collect information required for assessing and processing the proposed insurance contract
2. Who generally completes the proposal form?
A. The proposer or applicant, subject to the applicable process
B. The surveyor in every case
C. The hospital administrator
D. The claims investigator
Answer: A. The proposer or applicant, subject to the applicable process
3. Why must answers in a proposal form be truthful?
A. Incorrect information may affect underwriting and the insurance contract
B. Truthful answers guarantee a bonus
C. Truthful answers eliminate all exclusions
D. Truthful answers automatically reduce premiums
Answer: A. Incorrect information may affect underwriting and the insurance contract
4. What should an agent do if a customer is unable to understand a question in a proposal form?
A. Explain the question appropriately without providing misleading information or fabricating the customer's answer
B. Select an answer without asking the customer
C. Leave every question blank
D. Choose the answer most favourable to the agent
Answer: A. Explain the question appropriately without providing misleading information or fabricating the customer's answer
5. Why should unanswered or incomplete material information in a proposal be addressed?
A. It may be necessary for proper risk assessment and processing
B. It always increases the claim amount
C. It eliminates the need for underwriting
D. It automatically results in policy approval
Answer: A. It may be necessary for proper risk assessment and processing
6. What is proposal scrutiny?
A. Examination of the proposal and submitted information for completeness, consistency and processing requirements
B. Payment of a claim
C. Renewal of a policy
D. Calculation of a vehicle's IDV
Answer: A. Examination of the proposal and submitted information for completeness, consistency and processing requirements
7. What can happen after an insurer receives a proposal?
A. The proposal may be accepted, declined, deferred or processed with additional requirements according to underwriting and applicable procedures
B. It must always be accepted immediately
C. It automatically becomes a claim
D. It is automatically cancelled
Answer: A. The proposal may be accepted, declined, deferred or processed with additional requirements according to underwriting and applicable procedures
8. What is a counter-offer in insurance?
A. An offer by the insurer to provide coverage on terms different from those originally proposed
B. A customer complaint
C. A claim rejection notice
D. A premium receipt
Answer: A. An offer by the insurer to provide coverage on terms different from those originally proposed
9. Why might an insurer make a counter-offer?
A. The assessed risk may require different terms from those requested in the original proposal
B. To avoid issuing every policy
C. To guarantee higher claim payments
D. To replace the customer
Answer: A. The assessed risk may require different terms from those requested in the original proposal
10. What should a customer do after receiving a counter-offer?
A. Review the revised terms before deciding whether to accept them
B. Automatically accept without reading
C. Ignore the revised terms
D. Cancel every existing policy immediately
Answer: A. Review the revised terms before deciding whether to accept them
11. What is policy issuance?
A. The formal creation and issuance of an insurance policy after the insurer accepts the risk and completes applicable requirements
B. The investigation of a claim
C. The cancellation of a policy
D. The filing of a grievance
Answer: A. The formal creation and issuance of an insurance policy after the insurer accepts the risk and completes applicable requirements
12. Why should the policyholder examine the issued policy?
A. To verify important details, benefits, conditions and exclusions
B. To guarantee a claim
C. To eliminate premium payments
D. To change the insurer automatically
Answer: A. To verify important details, benefits, conditions and exclusions
13. What is policy delivery?
A. Providing the issued policy and relevant documents to the policyholder through the applicable delivery method
B. Delivering a vehicle to a garage
C. Delivering hospital medicines
D. Delivering a claim payment only
Answer: A. Providing the issued policy and relevant documents to the policyholder through the applicable delivery method
14. Why is timely policy delivery important?
A. It allows the customer to review the contractual terms and understand the coverage
B. It guarantees future claims
C. It eliminates policy exclusions
D. It automatically increases the sum insured
Answer: A. It allows the customer to review the contractual terms and understand the coverage
15. What should a customer do if an important policy detail is incorrect?
A. Contact the insurer or authorised servicing channel for appropriate correction
B. Ignore it until a claim occurs
C. Alter the document personally
D. Destroy the policy document
Answer: A. Contact the insurer or authorised servicing channel for appropriate correction
16. What is a policy alteration request?
A. A request to change an eligible policy detail according to applicable policy and insurer procedures
B. A request to settle a claim
C. A request to change an insurer's ownership
D. A request to cancel every policy
Answer: A. A request to change an eligible policy detail according to applicable policy and insurer procedures
17. What is a change of address in policy servicing?
A. Updating the policyholder's recorded address through the authorised process
B. Changing the insured risk automatically
C. Changing the insurer
D. Increasing the policy benefit
Answer: A. Updating the policyholder's recorded address through the authorised process
18. Why is maintaining an updated address important?
A. Important policy communications and documents may need to reach the policyholder
B. It guarantees claim settlement
C. It removes exclusions
D. It automatically reduces premium
Answer: A. Important policy communications and documents may need to reach the policyholder
19. What is a change of nominee?
A. Updating nomination details through the applicable policy procedure
B. Changing the insurer
C. Increasing the sum insured automatically
D. Filing a claim
Answer: A. Updating nomination details through the applicable policy procedure
20. Why should nomination information be kept updated?
A. It helps ensure that the insurer has current nomination details for relevant policy benefits
B. It guarantees payment to every person named
C. It changes the policyholder automatically
D. It eliminates underwriting
Answer: A. It helps ensure that the insurer has current nomination details for relevant policy benefits
21. What is assignment of a life insurance policy?
A. Transfer of specified rights or interest in the policy from one person to another according to applicable law and policy procedures
B. Appointment of an insurance agent
C. Filing of a health claim
D. Renewal of a motor policy
Answer: A. Transfer of specified rights or interest in the policy from one person to another according to applicable law and policy procedures
22. How is assignment conceptually different from nomination?
A. Assignment can transfer specified policy rights or interest, while nomination generally identifies a person entitled to receive policy money subject to applicable law
B. Both always have exactly the same legal effect
C. Nomination always transfers ownership
D. Assignment only applies to motor insurance
Answer: A. Assignment can transfer specified policy rights or interest, while nomination generally identifies a person entitled to receive policy money subject to applicable law
23. What is a policy revival requirement?
A. A condition or set of requirements that must be satisfied to restore an eligible lapsed policy
B. A requirement for buying a vehicle
C. A hospital admission requirement
D. A claim settlement certificate
Answer: A. A condition or set of requirements that must be satisfied to restore an eligible lapsed policy
24. Why should customers avoid allowing eligible life policies to lapse unnecessarily?
A. A lapse can result in loss or alteration of policy benefits and may require conditions for restoration
B. A lapse always doubles the policy value
C. A lapse guarantees a refund
D. A lapse automatically converts the policy to a new product
Answer: A. A lapse can result in loss or alteration of policy benefits and may require conditions for restoration
25. What is a grace period in insurance?
A. An additional period allowed for payment of a premium after its due date, subject to policy terms
B. A period during which all claims are guaranteed
C. A period during which no policy conditions apply
D. A period for changing the insurer without any procedure
Answer: A. An additional period allowed for payment of a premium after its due date, subject to policy terms
26. Why is the grace period important?
A. It may allow the policyholder additional time to pay a due premium while maintaining coverage according to applicable terms
B. It permanently eliminates premiums
C. It guarantees maturity benefits
D. It removes all exclusions
Answer: A. It may allow the policyholder additional time to pay a due premium while maintaining coverage according to applicable terms
27. What is the significance of the premium due date?
A. It identifies when a scheduled premium payment becomes payable under the policy
B. It determines the nominee
C. It determines the claim investigator
D. It guarantees policy maturity
Answer: A. It identifies when a scheduled premium payment becomes payable under the policy
28. What is a first premium receipt generally associated with?
A. Acknowledgement of the initial premium payment received in connection with a policy or proposal
B. Final claim settlement
C. Policy surrender
D. A hospital discharge summary
Answer: A. Acknowledgement of the initial premium payment received in connection with a policy or proposal
29. Why is the first premium important in life insurance?
A. It forms part of the process by which the proposed insurance arrangement is brought into effect, subject to applicable conditions
B. It automatically guarantees every claim
C. It eliminates underwriting
D. It determines the customer's nominee
Answer: A. It forms part of the process by which the proposed insurance arrangement is brought into effect, subject to applicable conditions
30. What is the "commencement of risk" in insurance?
A. The point from which the insurer's coverage obligation begins according to the applicable policy terms
B. The date when an agent joins the insurer
C. The date when a customer opens a bank account
D. The date of every future claim
Answer: A. The point from which the insurer's coverage obligation begins according to the applicable policy terms
31. Why is commencement of risk important?
A. It helps establish the period during which the insured risk is covered under the policy
B. It determines the customer's salary
C. It eliminates exclusions
D. It guarantees renewal
Answer: A. It helps establish the period during which the insured risk is covered under the policy
32. What is a policy anniversary?
A. The yearly recurrence of the policy's commencement or relevant anniversary date, according to the policy
B. The date of a claim investigation
C. The date of every premium payment
D. The date of vehicle registration
Answer: A. The yearly recurrence of the policy's commencement or relevant anniversary date, according to the policy
33. Why can a policy anniversary be relevant in life insurance?
A. Certain policy benefits, bonuses, premium events or servicing actions may be linked to policy years or anniversaries
B. It automatically doubles the sum assured
C. It guarantees surrender value
D. It replaces the policy document
Answer: A. Certain policy benefits, bonuses, premium events or servicing actions may be linked to policy years or anniversaries
34. What is a maturity date?
A. The date on which a policy reaches the end of its specified term and applicable maturity benefits become due according to its terms
B. The date when the first premium is paid
C. The date when a claim is rejected
D. The date when an agent receives training
Answer: A. The date on which a policy reaches the end of its specified term and applicable maturity benefits become due according to its terms
35. What is a maturity claim?
A. A claim arising because the insured policy has reached its maturity according to the policy terms
B. A claim caused by vehicle theft
C. A claim for hospitalisation
D. A complaint about an agent
Answer: A. A claim arising because the insured policy has reached its maturity according to the policy terms
36. What is a death claim in life insurance?
A. A claim arising from the death of the life insured, subject to policy terms and applicable requirements
B. A claim for vehicle repair
C. A claim for policy renewal
D. A claim for changing an address
Answer: A. A claim arising from the death of the life insured, subject to policy terms and applicable requirements
37. Why may proof of death be required for a life insurance claim?
A. To establish the occurrence of the insured event and process the claim according to applicable requirements
B. To determine the agent's commission
C. To increase the sum assured
D. To renew the policy
Answer: A. To establish the occurrence of the insured event and process the claim according to applicable requirements
38. What is a discharge voucher or discharge-related document in claims?
A. A document that may record acknowledgement or discharge of the insurer's liability for an accepted settlement, according to the applicable process
B. A proposal form
C. A premium receipt
D. A policy schedule
Answer: A. A document that may record acknowledgement or discharge of the insurer's liability for an accepted settlement, according to the applicable process
39. What is partial settlement of a claim?
A. Settlement of the admissible portion of a claim when the full amount claimed is not payable under the policy terms
B. Automatic rejection of every claim
C. Settlement of every claim in full
D. Renewal of a policy
Answer: A. Settlement of the admissible portion of a claim when the full amount claimed is not payable under the policy terms
40. Why might a claim be settled for less than the amount claimed?
A. Applicable limits, deductibles, exclusions, policy conditions or assessment may restrict the payable amount
B. The insurer can reduce any claim without reason
C. Every claim is automatically reduced
D. Agents determine the final amount personally
Answer: A. Applicable limits, deductibles, exclusions, policy conditions or assessment may restrict the payable amount
41. What is claim repudiation?
A. Rejection of a claim by the insurer when the claim is not payable under the applicable policy terms or requirements
B. Payment of every claim
C. Policy renewal
D. Premium collection
Answer: A. Rejection of a claim by the insurer when the claim is not payable under the applicable policy terms or requirements
42. Why should the reason for claim repudiation be communicated appropriately?
A. The customer should understand the basis for the insurer's decision and available processes for further clarification or grievance
B. It guarantees that the claim will later be paid
C. It eliminates policy exclusions
D. It changes the policy automatically
Answer: A. The customer should understand the basis for the insurer's decision and available processes for further clarification or grievance
43. What is a claim settlement intimation?
A. Communication informing the relevant party about the outcome or status of a claim settlement
B. A proposal form
C. A premium reminder
D. A nomination form
Answer: A. Communication informing the relevant party about the outcome or status of a claim settlement
44. What is a claim settlement amount?
A. The amount determined as payable by the insurer for an admissible claim according to the policy terms
B. The amount initially requested in every claim
C. The agent's commission
D. The customer's annual income
Answer: A. The amount determined as payable by the insurer for an admissible claim according to the policy terms
45. What is a claim reserve revised during claim processing?
A. An insurer may update its estimated liability as additional information becomes available
B. A customer may automatically increase the sum insured
C. A policyholder may cancel a claim without notice
D. A premium is automatically refunded
Answer: A. An insurer may update its estimated liability as additional information becomes available
46. What is the purpose of claim assessment?
A. To determine the admissibility and amount payable under the policy based on the available facts and terms
B. To determine the customer's future salary
C. To appoint insurance agents
D. To calculate the insurer's tax automatically
Answer: A. To determine the admissibility and amount payable under the policy based on the available facts and terms
47. Why should customers retain copies of claim-related documents?
A. Copies can provide a useful record of information submitted during the claim process
B. Copies guarantee claim approval
C. Copies increase the policy benefit
D. Copies remove exclusions
Answer: A. Copies can provide a useful record of information submitted during the claim process
48. What is policy servicing?
A. Administrative assistance and authorised changes or requests relating to an existing insurance policy
B. Only the payment of claims
C. Only the sale of new policies
D. Vehicle repair
Answer: A. Administrative assistance and authorised changes or requests relating to an existing insurance policy
49. Which is an example of policy servicing?
A. Updating eligible customer details through the authorised process
B. Creating an unauthorised insurance product
C. Changing a policy document manually
D. Guaranteeing a claim
Answer: A. Updating eligible customer details through the authorised process
50. Why is accurate policy administration important?
A. Errors in policy records can affect communication, servicing and the administration of contractual benefits
B. It guarantees unlimited coverage
C. It eliminates premiums
D. It automatically increases claim amounts
Answer: A. Errors in policy records can affect communication, servicing and the administration of contractual benefits
Important IC-38 Topics Covered in Practice Set 12
This set focuses on:
Proposal forms
Proposal scrutiny
Proposal processing
Counter-offers
Policy acceptance
Policy issuance
Policy delivery
Policy corrections
Policy alteration
Address changes
Nomination changes
Assignment
Nomination versus assignment
Policy revival
Grace period
Premium due date
First premium receipt
Commencement of risk
Policy anniversary
Maturity date
Maturity claims
Death claims
Proof of death
Discharge-related documents
Partial claim settlement
Claim repudiation
Claim settlement communication
Claim settlement amount
Claim reserves
Claim assessment
Claim documentation
Policy servicing
Policy administration
IC-38 Exam Preparation Tips
1. Learn the Insurance Process in Sequence
A useful way to revise is to understand the basic flow:
Proposal → Scrutiny → Underwriting → Acceptance/Counter-offer → Premium → Policy Issuance → Policy Delivery → Servicing → Claim
2. Understand Proposal-Related Terms
Do not confuse:
Proposal
Counter-offer
Acceptance
Policy issuance
Policy delivery
Each represents a different stage or concept.
3. Revise Life Policy Administration
Important terms include:
Policy anniversary
Grace period
Revival
Nomination
Assignment
Maturity
Surrender
Paid-up status
4. Understand Claim Outcomes
A claim may be:
Accepted
Partially settled
Repudiated
Under assessment
Settled after required documentation
The outcome depends on the policy terms and facts of the claim.
5. Remember the Importance of Documentation
Accurate documents support:
Underwriting
Policy issuance
Policy servicing
Claim assessment
Claim settlement
Customer communication
Frequently Asked Questions About IC-38
What is a counter-offer?
A counter-offer is an offer by the insurer to provide insurance on terms different from those originally proposed.
What is policy issuance?
Policy issuance is the formal creation and issuance of the insurance policy after applicable acceptance and processing requirements are completed.
What is policy delivery?
Policy delivery means providing the issued policy and relevant documents to the policyholder through the applicable method.
What is a policy anniversary?
It is the yearly recurrence of the policy's commencement or relevant anniversary date.
What is a maturity claim?
A maturity claim arises when an eligible life insurance policy reaches the end of its specified term and the applicable maturity benefit becomes payable according to the policy terms.
What is claim repudiation?
Claim repudiation means rejection of a claim because it is not payable under the applicable policy terms or requirements.
What is partial claim settlement?
It occurs when only the admissible portion of the amount claimed is payable according to the policy.
What is policy servicing?
Policy servicing includes authorised administrative assistance and changes relating to an existing insurance policy.
Conclusion
IC-38 Practice Set 12 provides another 50 fresh questions focusing on the insurance lifecycle, from proposal submission and policy issuance to policy servicing and claim settlement.
These questions are particularly useful for understanding the practical sequence of insurance transactions and the terminology commonly used in insurance operations.
For authoritative preparation, candidates should supplement MCQ practice 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 resources and competitive examination preparation materials.
