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Sample Question Paper of IRDA LIC Agent Exam:

IRDA LIC Agent Exam Paper 1
1. The definition of rural area is where the total population is __________ (over 5000/ over 10000 / less
than 5000)
2. Who in the insurance company is responsible for the solvency of the company_______________
3. The principal is responsible for _________ of the agents
a) all acts b) Some acts c) Specified acts d) Basic acts
4. An agent is expected to report on proponents ___________ status
a) Financial b) Medical c) Both d) None of the earlier
5. In case of corporate agents, the amount of commissions earned from a corporate / organization /
group / can not exceed ____ of total commissions
a) 30%, b) 40%, c) 50%, d) 60%
6. State true or false - The issue of licenses required u/s 42 of the Insurance Act, 1938, is regulated by
the IRDA Act of 2000 _______________.
7. The amount paid to an agent for procuring policies is called
a) Commission
b) Fees
c) Salary
d) Honorarium
8. _____________ is a document issued under the law authorizing a person to act as an insurance agent
a) Mandate
b) License
c) Certificate
d) Appointment
9. Which statement is Appropriate
A) Going through the existing policies of a prospect whom he is meeting for the first time, the agent
suggest that he should allow 3 of them to lapse & go in for a new policies
B) Going through the existing policy of a prospect whom he was meeting for first time, the agent suggest
that nomination be made & offered to get them registered by the office
a) A Statement
b) B Statement
c) Both Statement
d) Neither of Statement
10. True or False
a) Nomination can be changed any number of times.
b) Assignment can be effected at the proposal stage.
c) License fee for renewal of agent’s licence is Rs. 100/-.
d) Level premium creates reserves.
e) Agent is an employee of Insurance Company.
f) An employer has no insurable interest in the lives of his employees.
g) An agent can work for two life insurance companies at the same time.
h) Under deferred annuity system, the annuity begins within the first year.
i) For a sum assured of Rs.20, 000/- the rebate for large sum assured is Re.1/-.
j) Individual policies are issued in Group Insurance.
k) The bonus is declared under all plans.
l) Insurance can be granted to those women who observe purdah.
11. Under _______________ premium system the premium is the same throughout the policy term.
a) Level premium
b) Single Premium
c) Regular Premium
12. _______________ is the price paid to purchase an insurance product. premium
13. For half-yearly mode of premium rebate allowed is ______________ 1.5 %
14. Surrender means ___________ (Renewal /Termination / Revival) of the contract.
15. If a proposer does not disclose fully all the material facts at the time of proposal, the principle of
__________ (Indemnity / Insurable Interest / Utmost Good faith) is violated.
16. Commission on second year’s premium payable for Endowment policy for 15 years is
__________percent (5/7.5/101)
17. Age nearer birthday as on 20.5.2000 of a person with date of birth 13.7.1974 is ____________ years
(25/26/27)
18. Before a person decides to buy Life Insurance he is only a _______ and when he buys life Insurance
he becomes ________ ( proposer(1)/Life assured(2) / Nominee/ Assignee/Claimant)
19. The terminal bonus is paid to those policies which become claim after completing ___________
years as in force policies (10/15/20)
Mention ‘Appropriate ‘ or ‘Inappropriate’ against each of the following statements –
20. Agent interferes with the clients of other agents.
21. Agent advises to discontinue the earlier, policy of the policy holder taken by another agent.
22. Agent is more concerned with the commission he will earn then the benefit to the prospect.
23. Agent does not collect the premium at the time of sale.
24. Agent becomes argumentative when prospect raises objection.
Say True of False
25. Agent is an employee of insurance company.
26. If a policy document is lost, claim amount cannot be paid.
27. An absolute assignment executed by L.A can be altered by him.
28. Age proof is not important is L.A. Policies.
29. LIC investigates all those death claims which occur within the first 2 years from the date of issue of
first premium receipt.
30. LI is a short term contract.
31. Terminal and final additional bonus is the same
32. Employers have no insurable interest in the lives of their employees.
33. A person aged 17 years can be granted agency.
34. Renewal of license is not essential.
35. Disclosure of material facts by the proposer in not necessary
36. Proposal form is the basis of the contract.
37. Broker represents only one insurance company.
38. Assignment can be effected at the time of completion of proposal.
39. Assignment cancels the previous nomination effected on the policy.
40. Insurer is legally bound to remind policy holders about premium due.
41. The nominee must be a closer relation of L.A.
42. Revival of a lapsed policy is allowed.
43. The nominee becomes entitled to policy moneys on maturity of policy.
44. Age is a relevant factor in risk assessment.
45. Nomination can be cancelled by a will.
46. Contract of insurance comes into force only when insurance policy is issued.
50. A lapsed policy can be revived within a period of ------ years from the date of first unpaid premium.
a) Three
b) Four
c) Five
d) Six
51. Renewal receipts are not issued in respect of policies under
a) Salary Saving Scheme
b) Non Participatory Policies
c) Savings Plan
d) None of the above
52. Bonus notices are
a) Sent to individual policyholders
b) Not sent to individual policyholders
c) Sent in advance
d) Sent once in two years
53. L.I.C. allows a rebate of ----- and ------for yearly and half yearly mode
a) 1.5%, 3%
b) 3%, 1.5%
c) 3%, 5%
d) 1.5%, 5%
54. For monthly mode L.I.C.
a) Charges 1.5% extra
b) Charges 3% extra
c) Charges 5% extra
d) Does not charge extra

IRDA LIC Agent Exam Paper 2
(1) Potential purchaser of product is called ________________
(a) Prospect
(b) Consumer
(c) Customer
(d) Client
(2) If policyholder is in grievance,__________________ will solve
(a) Grievance officer
(b) Court order
(c) Ombudsman
(d) All the above
(3) 20,000 policies in the 5th year are to be made from _________sector
(a) Rural
(b) Social
(c) None
(d) Urban
(4) Insurance Agent is governed by ____________________
(a) Contract act
(b) Insurance Act
(c) IRDA
(d) All above
(5) Doctors appointed by insurers will be _____________
(a) General Physicians
(b) Specialists
(c) Surgeons
(d) All of above
(6) __________is the document produced to establish one’s age
(a) Birth Certificate
(b) Affidavit
(c) License
(d) Proof of age
(7) Who is the person who identifies the customer and get the necessary insurance for him ?
(a) Intermediary
(b) Retailer
(c) Broker
(d) Agent
(8) Which kind of Insurance plan can meet all need of a proponent?
(a) Endowment
(b) Money Back
(c) Multipurpose
(d) None of them
(9) The principal is responsible for __________ agent
(a) All the acts of agent
(b) Specified acts of agent
(c) Some of acts agent
(d) None of them
(10) Which of the following statements are True:
a) It is the agent’s responsibility to ensure that all material information is made available
b) If the proposal paper is incomplete, the agent will be held accountable
(a) A Statement
(b) B Statement
(c) Both Statement
(d) Neither of Statement
(11) In the case of a policy under the provision of M.W.P. ACT who can make the death claim?
(a) Beneficiary
(b) Life insured Heirs
(c) Trustee
(d) Any of the above
(12) Which kind policies are not entitled bonuses?
(a) Non participatory
(b) Money back
(c) Children’s
(d) Whole life
(13) Claim in question is Rs.23 lakh which consumer court will it go to:__________
(14) A policy which has run for 8 years can be called into question if there is a__________________
(a) Fraud
(b) Misrepresentation
(b) Mistake
(c) None of above
(15) What would be the paid up value of a 25-year-old endowment policy for Rs.50, 000 taken in Oct
1988, if the last ½ year’s premium paid was in Oct 2000?____________
(16) Which of the following statements are True:
a) An insurance agent can be sued under the Consumer Protection Act
b) The Consumer Protection Act does not apply to Govt. Company.
a) A Statement
b) B Statement
c) Both Statements
d) Neither of Statement
(17) If the proponent has no insurable interest in the insured the underwriter will
(a) Accept with reduce sum assured
(b) Decline the proposal
(c) Accept with lien
(d) Accept with extra premium
(18) What is paid by the insurer when the policyholder decides to discontinue the policy
(a) Forfeiture
(b) Surrender Value
(c) Intermediate Claim
(d) Lapse
(19) A person employed to act on behalf of another in dealing with a third person is called
_____________
(a) Lawyer
(b) Broker
(c) Employee
(d) Agent
(20) Which are true
a) Proof of age is necessary for proposal and not for agency application
b) After business is complete agent has no role
a) A Statement
b) B Statement
c) Both Statements
d) Neither of the Statement
(21) Which are true
a) Insurance is necessary to cover risk of living too long
b) Insurance helps one to be less dependent on others
a) A Statement
b) B Statement
c) Both Statements
d) Neither of the Statement
(22) Which statement is not appropriate
A) When the prospect said that he had taken sick leave for a few days because he wanted to go
outstation for an interview, the agent suggested he need not mention it
B) Agent suggested to the prospect not to mention the fact that the cause of death of one of the
brothers who had died young was cardiac arrest, it was mentioned as accident
a) A Statement
b) B Statement
c) Both Statements
d) Neither of the Statement
(23) Which statement is not appropriate
A) The necessity for medical examination depends on S.A.
B) The nature of employment may be a factor to dispense with medical exam
a) A Statement
b) B Statement
c) Both Statements
d) Neither of the Statement
(24) Why does an office conduct special inquiry in the case of death claim which arose after 4 years
(a) As precaution
(b) As a Routine
(c) On suspicion of suppression of facts
(d) For large sum assured
(25) Loans is available only in the policy if
(a) It is a with profit policy
(b) The S.A exceeds Rs.10,000/-
(c) It is in facts underwriter decision
(d) None of the above
(26) Which statement is true
A Lapsed policy can be revived whenever the policy holder choose
B A paid up policy is a lapsed policy
(a) Only statement A
(b) Only statement B
(c) Both false
(d) Both statement
(27) When do the non-forfeiture provision apply
a) When policy is surrendered
b) When loan is taken
c) When premium is not paid
d) All above
(28) True – False
A - DAB is automatic in all life insurance policies
B- DAB is an option on payment of additional payment
(29) True – False
A - Insurance works on the law of large numbers
B - Insurance is possible only when there are many policyholders
(30) True – False
A - A policy that has been in force for 10 years can be called into question for misrepresentation
B - A policy which has been for 10 years called into question for fraud.
(31) True – False
A - An agent must find out the details of proponent and report the same to the insurer. T
B - The income of the proponent must be made known to the insurer.
(32) Loan under policy should not exceed
(a) S.V
(b) S.A.
(c) total premium paid
(d) Bonus
(33) Disability is related to
(a) Sickness
(b) Old age
(c) Loss of limb
(d) all of them
(34) Agent is subject to
(a) IRDA regulation
(b) Term of appointment
(c) Agent’s manual
(d) All of above
(35) The agent has _______freedom to act on behalf of insurer
(a) Limited
(b) Specified
(c) full
(d) none of the above
(36) Write true or false
a) Insurance is an individual issue and not a social one. -
b) “Uberrimae Fides” means “utmost Good Faith”.
c) Whole life policy is the best solution for most of the needs of a person. -
d) There are no “participating” policies in life insurance. -
e) There is no single premium endowment plan. -
F) Loan “Value” is equal to 90% of “Surrender Value”.
(37) Calculate Premium
Date of Birth = 3.06.1954
Date of Calculation = 1.01.2001
Date of commencement of policy = 1.12.2000
Term = 19 years
Sum assured = Rs.1,00,000/-
Mode = Ordinary – monthly
Accident benefit for Rs.50, 000/- only is required.
Tabular Premiums Age 45 = 76.00
Age 46 = 76.80
Age 47 = 78.00
AGE TO BE TAKEN 46 ANS 659
(38) Calculate the premium on basis of data given below:
Age 35 years
S.A.Rs.60, 000/-
T & T 75 - 20
Tabular premium Rs.68.70 per 1000/- mode I) yearly – II) half yearly –
DAB & EPDB Allowed, Occupational Extra Rs.2 per 1000 per year
(39) Calculate paid up value and special S.V.
S.A. Rs.30, 000 /-
T and T 14 - 15
D.O.C. 18.12.1985
L.P.P. 18.3.1991
Mode Quarterly
Bonus addition: Rs.396/- per 1000/- S.A.
S.V.factor 44.2
(44) Match the following
A B
a) Proposal C) let the buyer beware
b) ad idem D) evidence of contract
c) Caveat Emptor E) Pension
d) Policy A) basis of contract
e) Annuity B) of the same mind
(45) Say True or False.
a) A person’s insurable interest in his own life is _____(Unlimited / 10 times his salary / equal to his
assets / non of these)
b) How many years must elapse after cancellation of a license, before a new license can be issued (three
/ four / five)
c) To whom should an application for agency license be given ______________(IRDA / Insurer
/Controller of Insurance / any of them)
d) Who fixes the limits of doctors for medical examinations _____________ (IRDA / Medical council /
Insurer / None of these)
e) Life Insurance premiums are determined by __________ (Accountants / Underwriter / Actuary)
(46) Calculate paid up value and S.V. in the following case
S.A. Rs. 30,000/-
Mode Half yearly
D.O.C. 28/10/1985
L.P.P. 28/04/1996
S.V. Factor 45
TT 14-25
Bonus Addition Rs.770 per 1000/- S.A.
(47) The route or process through which a product is carried to the customer is known as DISTRIBUTION
CHANNEL
(48) Age nearer birthday as on 18/06/2000 of a person with date of birth 28/12/1961 is ________39
(49) The days of grace for monthly mode of premium is ___________ days.15
(50) EDLI scheme is linked to the payment of ________________ (Gratuity / Provident fund / pension)
(51) State whether true or false.
1. Group Gratuity Scheme is beneficial to both the employer as well as employees.
2. Financial planning is not necessary, but agent should seek maximum premium from the customer.
3. There should be no inducement, incase or kind, passing from agent to customer for taking out life
insurance.
4. Agents generally get something over and above legitimate commission amount from the insurer.
5. Insurance Advisor is an agent of the insurer and therefore insurer is bound by the acts or omissions of
the advisers, there being the principal-agent relationship.
6. As long as the insurer gets the minimum business from an agent, the insurer cannot terminate the
agency of such agent.
7. All the information asked in a proposals form is relevant to the assessment of the risk.
8. ONCE the policy lapses there is no way the policy holder can re-start the policy
9. “Nomination” is not compulsory.
10. “Early” claims can be investigated by the insurer.