Q.1 Which of the following types of insurance provides coverage for a specified period and pays the sum assured only on death of the policyholder?
Endowment Policy
Term Insurance
Whole Life Policy
Money Back Policy
Explanation - Term insurance provides coverage for a specific term and pays the sum assured only in case of the death of the policyholder during the term.
Correct answer is: Term Insurance
Q.2 In mutual funds, what is meant by 'Net Asset Value (NAV)'?
Market price of shares
Total assets minus liabilities divided by number of units
Fund's profit percentage
Interest earned on fund investments
Explanation - NAV represents the per-unit value of a mutual fund, calculated as (Total Assets - Liabilities) / Number of Units.
Correct answer is: Total assets minus liabilities divided by number of units
Q.3 Which type of insurance policy combines investment and insurance benefits?
Term Insurance
Endowment Policy
Health Insurance
Fire Insurance
Explanation - Endowment policies provide both life cover and a maturity benefit, making them a combination of investment and insurance.
Correct answer is: Endowment Policy
Q.4 Who regulates the insurance sector in India?
RBI
SEBI
IRDAI
PFRDA
Explanation - The Insurance Regulatory and Development Authority of India (IRDAI) regulates and develops the insurance sector in India.
Correct answer is: IRDAI
Q.5 Which of the following is a key feature of Unit Linked Insurance Plans (ULIPs)?
Fixed maturity benefit
Linking investment with market returns
Only term coverage
Government guaranteed returns
Explanation - ULIPs combine insurance and investment, where part of the premium is invested in market-linked instruments.
Correct answer is: Linking investment with market returns
Q.6 Which of the following is NOT a type of life insurance policy?
Whole Life Policy
Term Insurance Policy
Endowment Policy
Fire Insurance Policy
Explanation - Fire insurance is a non-life insurance, providing coverage against fire-related damages.
Correct answer is: Fire Insurance Policy
Q.7 In mutual funds, what does 'Open-Ended Fund' mean?
Fund units can be bought and sold at any time
Fund units have a fixed maturity period
Fund invests only in government securities
Fund has no investors
Explanation - Open-ended funds allow investors to buy or redeem units at the NAV on any business day, unlike close-ended funds.
Correct answer is: Fund units can be bought and sold at any time
Q.8 What is the primary objective of life insurance?
To provide investment returns
To provide financial protection to dependents in case of death
To earn high market profits
To save tax only
Explanation - Life insurance is primarily meant to ensure financial security for the policyholder's family in case of his/her death.
Correct answer is: To provide financial protection to dependents in case of death
Q.9 Which of the following is considered a short-term debt mutual fund?
Liquid Fund
Equity Fund
Balanced Fund
ULIP Fund
Explanation - Liquid funds are short-term debt mutual funds, investing in instruments with very short maturities, typically up to 91 days.
Correct answer is: Liquid Fund
Q.10 What is the minimum sum assured under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)?
Rs 1 lakh
Rs 2 lakh
Rs 5 lakh
Rs 10 lakh
Explanation - PMJJBY provides life insurance coverage of Rs 2 lakh for death due to any cause, for an annual premium of Rs 436.
Correct answer is: Rs 2 lakh
Q.11 Which type of insurance policy covers medical expenses for illnesses and accidents?
Life Insurance
Health Insurance
Term Insurance
Endowment Policy
Explanation - Health insurance provides financial coverage for medical treatments and hospitalization expenses.
Correct answer is: Health Insurance
Q.12 Which mutual fund invests primarily in equity shares of companies?
Debt Fund
Equity Fund
Hybrid Fund
Liquid Fund
Explanation - Equity funds mainly invest in shares of companies aiming for capital appreciation over the long term.
Correct answer is: Equity Fund
Q.13 What is the term for the regular payment made to an insurance company to keep the policy active?
Premium
Dividend
NAV
Maturity Amount
Explanation - A premium is the periodic payment made to an insurer to maintain life or general insurance coverage.
Correct answer is: Premium
Q.14 Which of the following schemes is specifically designed for senior citizens in India?
Pradhan Mantri Vaya Vandana Yojana
PMJJBY
ULIP
LIC Endowment Policy
Explanation - The PMVVY scheme provides pension benefits to senior citizens aged 60 and above, offering guaranteed interest and safety.
Correct answer is: Pradhan Mantri Vaya Vandana Yojana
Q.15 Which financial product spreads risk by investing in a variety of securities?
Mutual Fund
Term Insurance
Fixed Deposit
ULIP
Explanation - Mutual funds pool money from multiple investors and diversify investments across stocks, bonds, and other instruments to reduce risk.
Correct answer is: Mutual Fund
Q.16 In insurance, what does 'maturity benefit' mean?
Amount paid on policyholder's death
Return received at the end of policy term if the policyholder survives
Premium amount
Policy cancellation fee
Explanation - Maturity benefit is the sum assured plus any bonuses received by the policyholder if he/she survives the policy term.
Correct answer is: Return received at the end of policy term if the policyholder survives
Q.17 What is a 'debt mutual fund' primarily invested in?
Equities
Government and corporate bonds
Commodities
Real estate
Explanation - Debt mutual funds invest mainly in fixed-income instruments like bonds, government securities, and money market instruments.
Correct answer is: Government and corporate bonds
Q.18 Which organization regulates mutual funds in India?
IRDAI
RBI
SEBI
PFRDA
Explanation - The Securities and Exchange Board of India (SEBI) regulates mutual funds to ensure transparency and protect investors.
Correct answer is: SEBI
Q.19 What is the maximum age for entry under the Pradhan Mantri Suraksha Bima Yojana (PMSBY)?
55 years
70 years
50 years
40 years
Explanation - PMSBY provides accidental death and disability cover for people aged 18-70 years at a nominal annual premium.
Correct answer is: 70 years
Q.20 Which of the following insurance types is mandatory for vehicles in India?
Comprehensive Insurance
Third-Party Liability Insurance
Health Insurance
Term Insurance
Explanation - Third-party liability insurance is mandatory under the Motor Vehicles Act to cover damages to third parties in case of an accident.
Correct answer is: Third-Party Liability Insurance
Q.21 Which of the following mutual funds invests in a mix of equity and debt instruments?
Equity Fund
Hybrid Fund
Debt Fund
Liquid Fund
Explanation - Hybrid funds allocate investments to both equity and debt instruments, balancing risk and return.
Correct answer is: Hybrid Fund
Q.22 In insurance, what does 'sum assured' refer to?
Premium paid by policyholder
Guaranteed amount payable by insurer on claim
Investment returns
Policy processing fee
Explanation - The sum assured is the fixed amount that the insurance company promises to pay to the policyholder or nominee in case of death or maturity.
Correct answer is: Guaranteed amount payable by insurer on claim
Q.23 Which of the following is a feature of term insurance?
Provides investment returns
Covers only risk of death
Maturity benefits guaranteed
Pays dividends regularly
Explanation - Term insurance provides pure risk coverage and does not offer investment or savings components.
Correct answer is: Covers only risk of death
Q.24 Which of the following is a benefit of investing in mutual funds?
Diversification of risk
Guaranteed returns
No market exposure
Tax-free principal
Explanation - Mutual funds diversify investments across different securities, reducing the risk of loss due to poor performance of a single asset.
Correct answer is: Diversification of risk