IC-38 Insurance Agent Exam 50 MCQ Questions with Answers – Practice Set 18
IC-38 Insurance Agent Exam MCQ Questions | 50 Fresh Questions | Fire, Marine, Personal Accident, Travel and General Insurance
Preparing for the IC-38 Insurance Agent Examination requires understanding not only basic insurance principles but also different classes of general insurance and their specific features.
This IC-38 Practice Set 18 contains 50 fresh multiple-choice questions with four options and the correct answer immediately after each question. The set focuses particularly on fire insurance, marine insurance, personal accident insurance, travel insurance, money insurance and specialized general insurance concepts.
Practice Note: These are educational practice questions created for examination preparation. They are not actual or leaked examination questions. Candidates should refer to the latest applicable official IC-38 study material and policy wordings for authoritative preparation.
IC-38 Insurance Agent Exam MCQs – Practice Set 18
1. What is the primary subject matter of fire insurance?
A. Financial loss arising from insured damage to property caused by covered perils
B. Only accidental death
C. Only medical expenses
D. Retirement income
Answer: A. Financial loss arising from insured damage to property caused by covered perils
2. Which of the following is generally associated with fire insurance?
A. Property
B. Human life only
C. Pension income only
D. Motor driving licence
Answer: A. Property
3. Which event can be considered a fire insurance peril when covered under the applicable policy?
A. Lightning
B. Retirement
C. Normal depreciation
D. Change of occupation
Answer: A. Lightning
4. What does explosion generally refer to in property insurance?
A. A sudden release of energy producing an explosive effect, subject to policy terms
B. Gradual wear and tear
C. Ordinary temperature variation
D. Routine maintenance
Answer: A. A sudden release of energy producing an explosive effect, subject to policy terms
5. What is spontaneous combustion?
A. Combustion occurring due to internal heating without an external flame being applied
B. Fire caused exclusively by lightning
C. Damage caused by ordinary rainfall
D. Damage caused by theft
Answer: A. Combustion occurring due to internal heating without an external flame being applied
6. Why is the distinction between insured and uninsured perils important in fire insurance?
A. A claim generally depends on whether the cause of loss falls within the policy coverage
B. Every loss is automatically covered
C. It determines the customer's age
D. It determines the nominee
Answer: A. A claim generally depends on whether the cause of loss falls within the policy coverage
7. What is storm in the context of property insurance?
A. A weather event involving strong winds or atmospheric disturbance, subject to applicable coverage
B. A type of insurance fraud
C. A policy cancellation
D. A premium payment method
Answer: A. A weather event involving strong winds or atmospheric disturbance, subject to applicable coverage
8. What does inundation generally mean?
A. Flooding or accumulation of water over normally dry land, subject to policy wording
B. Theft of property
C. Mechanical breakdown
D. Accidental death
Answer: A. Flooding or accumulation of water over normally dry land, subject to policy wording
9. Why is the cause of property damage important when making a fire insurance claim?
A. The policy responds according to the covered perils and exclusions
B. The cause never matters
C. It determines the customer's age
D. It automatically determines the claim amount
Answer: A. The policy responds according to the covered perils and exclusions
10. What is impact damage in property insurance?
A. Damage caused when an external object strikes the insured property, where covered
B. Damage caused by normal aging
C. Loss of future income
D. Loss of a policy document
Answer: A. Damage caused when an external object strikes the insured property, where covered
11. Why are exclusions important in property insurance?
A. They identify circumstances or losses that are not covered under the policy
B. They guarantee every claim
C. They increase every claim automatically
D. They replace the sum insured
Answer: A. They identify circumstances or losses that are not covered under the policy
12. What is the purpose of the sum insured in property insurance?
A. It represents the maximum amount of insurance cover subject to policy terms and conditions
B. It guarantees the market value of every property
C. It represents the customer's annual income
D. It represents the insurance agent's commission
Answer: A. It represents the maximum amount of insurance cover subject to policy terms and conditions
13. Why is correct property valuation important when arranging insurance?
A. It helps establish an appropriate level of insurance coverage
B. It eliminates all exclusions
C. It guarantees a claim
D. It removes the need for risk assessment
Answer: A. It helps establish an appropriate level of insurance coverage
14. What is underinsurance in property insurance?
A. Insuring property for an amount lower than its relevant insurance value
B. Insuring property twice
C. Insuring a vehicle against theft
D. Cancelling a policy
Answer: A. Insuring property for an amount lower than its relevant insurance value
15. What is the purpose of a fire insurance claim survey?
A. To assess the circumstances, cause and extent of the insured loss as required
B. To determine the customer's retirement age
C. To select the nominee
D. To calculate life expectancy
Answer: A. To assess the circumstances, cause and extent of the insured loss as required
16. What is marine insurance primarily associated with?
A. Risks connected with marine transportation and related property or interests
B. Only life insurance
C. Only hospital expenses
D. Only retirement products
Answer: A. Risks connected with marine transportation and related property or interests
17. What is marine cargo insurance designed to cover?
A. Insurable interests in goods or cargo during transportation, subject to policy terms
B. Only the health of the ship's crew
C. Only vehicle registration
D. Only personal savings
Answer: A. Insurable interests in goods or cargo during transportation, subject to policy terms
18. What is a voyage policy?
A. A marine insurance policy covering a specified voyage
B. A life insurance policy covering retirement
C. A health policy covering hospitalisation
D. A motor policy covering vehicle registration
Answer: A. A marine insurance policy covering a specified voyage
19. What is a time policy in marine insurance?
A. A policy providing cover for a specified period, subject to its terms
B. A policy covering only one specific hospital visit
C. A policy covering only one vehicle accident
D. A policy without an expiry date
Answer: A. A policy providing cover for a specified period, subject to its terms
20. What is a valued marine policy?
A. A policy in which the value of the insured interest is agreed or specified for insurance purposes
B. A policy with no insured value
C. A policy covering only personal accidents
D. A policy covering only medical expenses
Answer: A. A policy in which the value of the insured interest is agreed or specified for insurance purposes
21. What is an unvalued marine policy?
A. A policy where the value of the insured interest is not finally agreed in advance and is determined according to applicable principles and policy terms
B. A policy without any coverage
C. A policy covering only life risks
D. A policy covering only theft from a home
Answer: A. A policy where the value of the insured interest is not finally agreed in advance and is determined according to applicable principles and policy terms
22. What is an open policy in marine insurance generally intended for?
A. Repeated shipments where declarations are made as required under the arrangement
B. A single hospitalisation
C. A single motor accident
D. A retirement pension
Answer: A. Repeated shipments where declarations are made as required under the arrangement
23. Why can an open policy be useful to businesses?
A. It can facilitate insurance arrangements for multiple shipments during the relevant period
B. It eliminates all marine risks
C. It guarantees profits on exports
D. It replaces customs procedures
Answer: A. It can facilitate insurance arrangements for multiple shipments during the relevant period
24. What is general average in marine insurance?
A. A principle under which certain extraordinary sacrifices or expenditures made for the common safety may be shared among the relevant interests
B. The average premium paid by all customers
C. The average annual income of a ship owner
D. The average age of cargo
Answer: A. A principle under which certain extraordinary sacrifices or expenditures made for the common safety may be shared among the relevant interests
25. What is particular average?
A. A partial loss suffered by a particular insured interest rather than a general sacrifice shared among interests
B. A retirement benefit
C. A health insurance deductible
D. A motor insurance bonus
Answer: A. A partial loss suffered by a particular insured interest rather than a general sacrifice shared among interests
26. What is the purpose of a warehouse-to-warehouse clause in marine cargo insurance?
A. It can define the period or extent of transit-related coverage between specified points, subject to policy terms
B. It determines the warehouse rent
C. It guarantees cargo delivery
D. It eliminates all transit risks
Answer: A. It can define the period or extent of transit-related coverage between specified points, subject to policy terms
27. What does the principle of seaworthiness generally relate to?
A. The suitability and fitness of a vessel for the intended voyage
B. The value of a life insurance policy
C. The health of a policyholder
D. The amount of motor insurance premium
Answer: A. The suitability and fitness of a vessel for the intended voyage
28. What is the purpose of marine insurance documentation?
A. To establish relevant details about the insured interest, voyage, cargo and coverage
B. To guarantee that cargo will never be damaged
C. To replace customs documentation in every situation
D. To determine the ship captain's salary
Answer: A. To establish relevant details about the insured interest, voyage, cargo and coverage
29. What does Personal Accident insurance primarily cover?
A. Specified financial consequences arising from accidental bodily injury, death or disability according to policy terms
B. Normal illness only
C. Retirement income
D. Property depreciation
Answer: A. Specified financial consequences arising from accidental bodily injury, death or disability according to policy terms
30. What is accidental death benefit under a Personal Accident policy?
A. A benefit payable when the insured dies due to an accident covered under the policy
B. A benefit payable for normal retirement
C. A benefit payable for every illness
D. A benefit payable for vehicle servicing
Answer: A. A benefit payable when the insured dies due to an accident covered under the policy
31. What does Permanent Total Disablement generally mean?
A. A covered disability that permanently and totally prevents the insured from performing specified activities or work, according to policy terms
B. A temporary absence from work
C. A minor injury with no disability
D. Normal retirement
Answer: A. A covered disability that permanently and totally prevents the insured from performing specified activities or work, according to policy terms
32. What is Permanent Partial Disablement?
A. A permanent disability involving partial loss of specified physical functions as defined by the policy
B. Complete temporary absence from work
C. Normal sickness
D. Loss of a policy document
Answer: A. A permanent disability involving partial loss of specified physical functions as defined by the policy
33. What is Temporary Total Disablement?
A. A temporary condition caused by a covered accident that completely prevents the insured from performing specified work or activities for the relevant period
B. Permanent loss of life
C. Normal retirement
D. Permanent partial disability
Answer: A. A temporary condition caused by a covered accident that completely prevents the insured from performing specified work or activities for the relevant period
34. Why is the definition of disability important in Personal Accident insurance?
A. Benefits depend on whether the condition satisfies the policy's definition and conditions
B. Every injury receives the same benefit
C. It determines the customer's age
D. It replaces the policy schedule
Answer: A. Benefits depend on whether the condition satisfies the policy's definition and conditions
35. What is travel insurance primarily designed to address?
A. Specified risks associated with travel, subject to the policy coverage
B. Long-term retirement planning
C. Home loan repayment only
D. Agricultural production only
Answer: A. Specified risks associated with travel, subject to the policy coverage
36. Which of the following may be covered under a travel insurance policy?
A. Baggage loss, subject to policy terms
B. Normal household electricity bills
C. Retirement pension
D. Regular grocery expenses
Answer: A. Baggage loss, subject to policy terms
37. What is trip cancellation cover?
A. Cover for specified financial loss resulting from cancellation of a trip due to covered reasons under the policy
B. A guarantee that every trip will be completed
C. A motor insurance benefit
D. A retirement benefit
Answer: A. Cover for specified financial loss resulting from cancellation of a trip due to covered reasons under the policy
38. Why should a traveller check exclusions before purchasing travel insurance?
A. Certain circumstances, destinations, activities or losses may not be covered
B. Exclusions increase every benefit
C. Exclusions guarantee reimbursement
D. Exclusions determine passport validity
Answer: A. Certain circumstances, destinations, activities or losses may not be covered
39. What is travel medical insurance generally intended to cover?
A. Specified medical expenses arising during travel, subject to policy terms
B. All medical expenses for life
C. Only home renovation expenses
D. Vehicle registration charges
Answer: A. Specified medical expenses arising during travel, subject to policy terms
40. Why should travellers disclose relevant information when purchasing travel insurance?
A. Accurate information helps the insurer assess eligibility and coverage appropriately
B. Disclosure is never required
C. It guarantees every claim
D. It automatically reduces the premium
Answer: A. Accurate information helps the insurer assess eligibility and coverage appropriately
41. What is money insurance?
A. Insurance designed to cover specified risks involving money, subject to policy terms
B. Insurance that guarantees investment profits
C. Insurance covering only human life
D. Insurance covering only medical treatment
Answer: A. Insurance designed to cover specified risks involving money, subject to policy terms
42. Why may businesses need money insurance?
A. Businesses may face risks involving loss of money during specified situations such as transit or handling
B. It guarantees business profits
C. It replaces accounting systems
D. It eliminates all financial risks
Answer: A. Businesses may face risks involving loss of money during specified situations such as transit or handling
43. What is fidelity guarantee insurance primarily concerned with?
A. Financial loss arising from dishonest acts of specified employees, subject to policy terms
B. Damage caused by earthquakes only
C. Medical expenses of employees only
D. Retirement benefits
Answer: A. Financial loss arising from dishonest acts of specified employees, subject to policy terms
44. Which situation is most relevant to fidelity guarantee insurance?
A. An employee dishonestly misappropriating the employer's money
B. A customer suffering from a common cold
C. A vehicle requiring routine servicing
D. A traveller changing flight seats
Answer: A. An employee dishonestly misappropriating the employer's money
45. What is machinery breakdown insurance intended to address?
A. Specified accidental physical loss or damage to insured machinery, subject to policy terms
B. Retirement income
C. Life insurance maturity benefits
D. Normal employee absenteeism
Answer: A. Specified accidental physical loss or damage to insured machinery, subject to policy terms
46. Why is regular maintenance important even when machinery is insured?
A. Insurance does not generally replace the responsibility to maintain equipment properly
B. Maintenance automatically increases the sum insured
C. Maintenance guarantees every claim
D. Maintenance eliminates all exclusions
Answer: A. Insurance does not generally replace the responsibility to maintain equipment properly
47. What is electronic equipment insurance generally designed to cover?
A. Specified accidental physical loss or damage to insured electronic equipment, subject to policy terms
B. Retirement savings
C. Life insurance bonuses
D. Normal household expenses
Answer: A. Specified accidental physical loss or damage to insured electronic equipment, subject to policy terms
48. Why should an insurance agent understand the difference between property damage and liability insurance?
A. Property insurance generally addresses damage to insured property, while liability insurance addresses legal liability to third parties within the policy scope
B. Both always cover exactly the same losses
C. Liability insurance only covers retirement
D. Property insurance only covers human life
Answer: A. Property insurance generally addresses damage to insured property, while liability insurance addresses legal liability to third parties within the policy scope
49. What is the importance of policy exclusions in specialized general insurance?
A. They clarify situations, causes or losses for which the insurer does not provide coverage
B. They guarantee all claims
C. They increase the sum insured
D. They determine the customer's bank balance
Answer: A. They clarify situations, causes or losses for which the insurer does not provide coverage
50. What should an insurance agent do when a customer asks whether a specialized loss is covered?
A. Check the applicable policy wording, coverage and exclusions before providing a definitive answer
B. Guarantee that the claim will be paid
C. Give an answer based only on the product name
D. Tell the customer that every loss is covered
Answer: A. Check the applicable policy wording, coverage and exclusions before providing a definitive answer
Quick Revision – IC-38 Practice Set 18
This set covers important concepts from:
Fire insurance
Property insurance
Fire and allied perils
Lightning
Explosion
Spontaneous combustion
Storm
Inundation
Impact damage
Property valuation
Marine insurance
Marine cargo insurance
Voyage policy
Time policy
Valued marine policy
Unvalued marine policy
Open marine policy
General average
Particular average
Warehouse-to-warehouse coverage
Seaworthiness
Personal Accident insurance
Accidental death
Permanent Total Disablement
Permanent Partial Disablement
Temporary Total Disablement
Travel insurance
Baggage cover
Trip cancellation
Travel medical insurance
Money insurance
Fidelity guarantee insurance
Machinery breakdown insurance
Electronic equipment insurance
Property versus liability insurance
IC-38 Exam Preparation Tips
1. Learn Different General Insurance Classes
Do not study general insurance as one broad category. Understand the purpose of individual products such as:
Fire → Property risks
Marine → Transit and marine-related risks
Personal Accident → Accidental injury/death/disability
Travel → Specified travel-related risks
Fidelity Guarantee → Employee dishonesty-related financial loss
2. Remember That Coverage Depends on the Policy
A loss does not become payable simply because it sounds similar to an insured risk.
Always consider:
Insured Peril + Coverage + Conditions − Exclusions
3. Revise Marine Insurance Terminology
Important terms include:
Voyage Policy
Time Policy
Valued Policy
Unvalued Policy
Open Policy
General Average
Particular Average
Seaworthiness
Warehouse-to-Warehouse Clause
4. Understand Personal Accident Benefits
Remember the distinction between:
Accidental Death
Permanent Total Disablement
Permanent Partial Disablement
Temporary Total Disablement
The exact benefit depends on the applicable policy wording.
5. Don't Promise Claim Settlement
An insurance agent should not guarantee that a particular claim will be paid.
The appropriate approach is to:
Understand the incident.
Check the policy.
Verify coverage.
Check exclusions and conditions.
Guide the customer through the appropriate claim process.
Frequently Asked Questions About IC-38 Practice Set 18
What is fire insurance?
Fire insurance provides protection against specified property losses caused by covered perils according to the policy terms.
What is marine cargo insurance?
Marine cargo insurance covers specified insurable interests in goods or cargo during transportation, subject to the policy terms.
What is a voyage policy?
A voyage policy provides marine insurance coverage for a specified voyage.
What is general average?
General average is a marine insurance principle under which certain extraordinary sacrifices or expenditures made for the common safety may be shared among the relevant interests.
What does Personal Accident insurance cover?
It generally provides specified benefits for accidental death or disability covered by the policy.
What is travel insurance?
Travel insurance provides coverage for specified risks associated with travel, such as eligible medical expenses, baggage-related losses or trip cancellation, depending on the policy.
What is fidelity guarantee insurance?
It protects against specified financial losses resulting from dishonest acts of covered employees, subject to policy conditions.
What should an agent do if they are unsure whether a loss is covered?
The agent should check the applicable policy wording, coverage, conditions and exclusions instead of making an unsupported promise.
Conclusion
IC-38 Practice Set 18 provides 50 fresh questions covering several important areas of general insurance, including fire, marine, personal accident, travel, money, fidelity guarantee, machinery breakdown and electronic equipment insurance.
Understanding these concepts can help candidates handle both definition-based and scenario-based questions in their IC-38 preparation.
For effective preparation, revise the concepts repeatedly and always cross-check technical details with the latest applicable official IC-38 study material and policy wording.
Continue practising with PDFnotebooks for more IC-38 Insurance Agent Exam MCQs, insurance notes, question banks and competitive examination resources.
