Basics of Insurance

Out of 400 houses, each valued at Rs. 20,000, on an average 4 houses get burnt every year resulting in a combined loss of Rs. 80,000. What should be the annual contribution of each house owner to make good this loss? 

• Rs.100/- 
• Rs.200/- 
• Rs.80/- 
• Rs.400/- 

Which of the following statements is true? 

• Insurance is a method of sharing the losses of a ‘few’ by ‘many’
• Insurance is a method of transferring the risk of an individual to another individual 
• Insurance is a method of sharing the losses of a ‘many’ by a few 
• Insurance is a method of transferring the gains of a few to the many 

People exposed to the _______ risk come together and agree that if any one ‘member’ suffers a loss, the same will be shared by others, who will make good to the person who lost.

• different     
• same
• all types of risk 
• All of the above

Risk to human life are

• Living too long
• Dying too early
• Living too long & dying too early both
• None

Loss of human life causes __________ type of loss which can be insured

• economic
• speculative
• emotional
• all of the above

A contract is ___________ 

• An Agreement enforceable by Law
• An agreement not enforceable by law
• Both of the above
• None

Positive Duty to voluntarily disclose, accurately and fully, all facts material to risk being proposed, whether requested or not is known as _________ 

• Insurable interest
• Utmost good faith
• Both
• None

Material fact helps in 

• In fixing the premium 
• In determining whether to take the risk
• Both 
• None

 _____________ principle applies at the inception of the contract

• Insurable interest
• Utmost good faith
• Both
• None

______________ is a basic insurance plan which generally provides a lump sum only when a life insured's unfortunate death.

• Term

• Endowment

• Money Back

• None of them