Free Printable PRINCIPLES OF TAKAFUL

1.

Tabarru’ is a sincere donation granted by one party by not requesting exchanges/consideration from the other party.

a)

True

b)

False

2.

The four essential components of Insurable Interest may includes:

I - There must be some property, right, interest, life, limb or potential liability capable of being insured.

II - Any of these above i.e. property, right, interest etc. Must be the subject matter of Insurance.

III - The insured must stand in a formal or legal relationship with the subject matter of the Insurance. Whereby he benefits from its safety, well-being or freedom from liability and would be adversely affected by its loss, damage existence of liability.

IV - The relationship between the insured and the subject matter must be recognized by law.

a)

I & II

b)

II & IV

c)

I, II & III

d)

All of the above

3.

According to the principles of ________________, a higher standard of honesty is obligatory to the participant. A duty of disclosure that remain in force though out the entire policy duration.

a)

Insurable Interest

b)

Utmost Good Faith

c)

Indemnity

d)

Proximate Cause

4.

If a personal fails to provide the ________________, which considered as an important information to the underwriter. The participant can be considered breach the principle of Utmost Good Faith.

a)

Non- disclosure

b)

Innocent

c)

Material fact

d)

Misrepresentation

5.

________________ can be defined as security against financial loss. It's an exact financial compensation or the takaful operator will restore the financial position of a participant as before loss.

a)

Indemnity

b)

Insurable Interest

c)

Contribution

d)

Proximate Cause

6.

The method of Indemnity are as follows except:

a)

Cash

b)

Repair

c)

Replacement

d)

Reinstallment

7.

Transfer of legal rights on behalf of the insured; in order to recover a loss from any liable third parties are known as the principle of________________.

a)

Indemnity

b)

Subrogation

c)

Insurable Interest

d)

Contribution

8.

A negligence made a third party and subsequently exercise a subrogation from the takaful operator in order to recover the loss from the liable third parties are refers to:

a)

Subrogation arising out of contract

b)

Subrogation arising out of a statute

c)

Subrogation arising out of salvage

d)

Subrogation arising from tort

9.

When there are:

· Two or more policies of indemnity exists

· The policies must cover a common interest, common peril, common subject matter and Each policy must be liable for the loss. The following are statement refers to principle of _______________________.

·

a)

Subrogation

b)

Indemnity

c)

Contribution

d)

Proximate Cause

10.

Under the principle _______________, the takaful operator are only liable to the loss caused by and insured perils and not loss caused by uninsured or excepted perils.

a)

Insurable Interest

b)

Indemnity

c)

Contribution

d)

Proximate Cause

11.

.........................emphasises on full disclosure of material facts related to the subject matter by both insurer and insured.

a)

Principle of the Utmost faith

b)

Principle of Subrogation

c)

Principle of Proximate cause

d)

NONE of the above.

12.

Identify the Principle which says that,'The insured should have pecuniary interest in the subject matter'.

a)

Principle of the Utmost faith

b)

Principle of Contribution

c)

Principle of Indemnity

d)

Principle of Insurable Interest

13.

After the claim, the right of the property is transferred to the Insurance Company. Under no circumstances, the insured is allowed to make any profit by sale of scrap. Identify the Principle.

a)

Principle of indemnity

b)

Principle of mitigation

c)

Principle of Subrogation

d)

Principle of proximate cause.

14.

A cargo ship was insured against perils of sea. While the consignment was being loaded few rats also creeped along. During the Voyage, the rats made holes in the ship. Consequently, the sea water entered into the ship and the cargo was damaged. Will he get his claims? If not, why?

a)

Yes, he will get his claim.

b)

No he will not get his claim due to proximate cause.

c)

No he will not get his claim due to mitigation cause.

d)

No he will not get his claim due to subrogation cause.

15.

Which of the following are “Principles of Insurance”. Select as many as you think are correct.

a)

Indemnity

b)

Intimidation

c)

Subrogation

d)

Alliteration

e)

Insurable Interest

16.

.........................emphasises on full disclosure of material facts related to the subject matter by both insurer and insured.

a)

Principle of the Utmost faith

b)

Principle of Subrogation

c)

Principle of Proximate cause

d)

NONE of the above.

17.

what principle states that you cannot make a profit from insurance?

(a)

18.

Subrogation means ...

a)

once the insurance company has given you full compensation for an item, that is all you get

b)

you cannot receive cover from multiple insurance companies

c)

you still own the asset

19.

Which example do you think relates to 'Insurable Interest'

a)

For something to be insured, it must have a price or financial measurement, for example a mobile phone, a tablet, a footballers legs or a car

b)

The customer must let us know all facts which could relate to this insurance

c)

The event that causes the insurance claim

d)

This principle is putting the customer back in the position they were in exactly before the insured event occured

20.

Which example do you think relates to 'Insurable Interest'

a)

Usually, Insurable Interest in established by ownership or possession. Or, you would insure your own car, but not a neighbour’s!

b)

When a customer calls us to make a claim, we must deal with the customer in a totally honest way, and the customer must be honest with us

c)

Imagine a line of dominoes; the last domino in the line falling over is caused by the first domino being knocked originally. Knocking over the first domino is the _________ _______ to that chain of events

d)

We fulfil claims with replacement phones, not necessarily new phones for this reason

21.

Which example do you think relates to 'Insurable Interest'

a)

Insurers expect the customer taking out the cover to have a direct financial interest in the item that they are insuring

b)

The trust that both the insurance company and the insured customer are telling the truth is referred to as this.

c)

The event that causes the insurance claim

d)

Insurance policies such as the one which we are going to be assessing claims for are these type of policies, so we don’t seek to put the customer in a better position than they were before they made the claim, but the same position

22.

Which example do you think relates to 'Utmost Good Faith'

a)

The customer must let us know all facts which could relate to the insurance

b)

Usually, Insurable Interest in established by ownership or possession. Or, you would insure your own car, but not a neighbour’s!

c)

The event that causes the insurance claim

d)

This principle is putting the customer back in the position they were in exactly before the insured event occurred

23.

Which example do you think relates to 'Utmost Good Faith'

a)

When a customer calls us to make a claim, we must deal with the customer in a totally honest way, and the customer must be honest with us

b)

Insurers expect the customer taking out the cover to have a direct financial interest in the item that they are insuring

c)

If a customer wishes to claim for damage of their phone, we need to understand what caused the damage? Was it water, had it been dropped or been thrown maliciously by someone else in an argument? To assess a claim we need to ask good questions to discover this

d)

We fulfil claims with replacement phones, not necessarily new phones for this reason

24.

Which example do you think relates to 'Utmost Good Faith'

a)

The trust that both the insurance company and the insured customer are telling the truth is referred to as this.

b)

The event that causes the insurance claim

c)

For something to be insured, it must have a price or financial measurement, for example a mobile phone, a tablet, a footballers legs or a car

d)

Insurance policies such as the one which we are going to be assessing claims for are these type of policies, so we don’t seek to put the customer in a better position than they were before they made the claim, but the same position

25.

Which example do you think relates to 'Proximate Cause'

a)

The event that causes the insurance claim

b)

This principle is putting the customer back in the position they were in exactly before the insured event occurred

c)

We fulfil claims with replacement phones, not necessarily new phones for this reason

d)

Insurers expect the customer taking out the cover to have a direct financial interest in the item that they are insuring

26.

Which example do you think relates to 'Proximate Cause'

a)

Imagine a line of dominoes; the last domino in the line falling over is caused by the first domino being knocked originally. Knocking over the first domino is the _________ _______ to that chain of events

b)

This principle is putting the customer back in the position they were in exactly before the insured event occurred

c)

Usually, Insurable Interest in established by ownership or possession. Or, you would insure your own car, but not a neighbour’s

d)

The customer must let us know all facts which could relate to the insurance

27.

Which example do you think relates to 'Proximate Cause'

a)

If a customer wishes to claim for damage of their phone, we need to understand what caused the damage? Was it water, had it been dropped or been thrown maliciously by someone else in an argument? To assess a claim we need to ask good questions to discover this

b)

The customer must let us know all facts which could relate to the insurance

c)

Insurers expect the customer taking out the cover to have a direct financial interest in the item that they are insuring

d)

We fulfil claims with replacement phones, not necessarily new phones for this reason

28.

Which example do you think relates to 'Indemnity'

a)

This principle is putting the customer back in the position they were in exactly before the insured event occurred

b)

Imagine a line of dominoes; the last domino in the line falling over is caused by the first domino being knocked originally. Knocking over the first domino is the _________ _______ to that chain of events

c)

The trust that both the insurance company and the insured customer are telling the truth is referred to as this.

d)

Insurers expect the customer taking out the cover to have a direct financial interest in the item that they are insuring

29.

Which example do you think relates to 'Indemnity'

a)

We fulfil claims with replacement phones, not necessarily new phones for this reason

b)

If a customer wishes to claim for damage of their phone, we need to understand what caused the damage? Was it water, had it been dropped or been thrown maliciously by someone else in an argument? To assess a claim we need to ask good questions to discover this

c)

The customer must let us know all facts which could relate to the insurance

d)

For something to be insured, it must have a price or financial measurement, for example a mobile phone, a tablet, a footballers legs or a car

30.

Which example do you think relates to 'Indemnity'

a)

Insurance policies such as the one which we are going to be assessing claims for are these type of policies, so we don’t seek to put the customer in a better position than they were before they made the claim, but the same position

b)

If a customer wishes to claim for damage of their phone, we need to understand what caused the damage? Was it water, had it been dropped or been thrown maliciously by someone else in an argument? To assess a claim we need to ask good questions to discover this

c)

The customer must let us know all facts which could relate to the insurance

d)

Usually, Insurable Interest in established by ownership or possession. Or, you would insure your own car, but not a neighbour’s!

31.

Which of the following principles of Insurance denotes a duty of the person seeking insurance to voluntarily disclose all facts material to the risk being proposed whether requested or not?

a)

Insurable Interest

b)

Subrogation

c)

Principle Indemnity

d)

Principle of Utmost Good Faith

32.

Which of the following insurance principles ensures the assured's financial interest on the insured?

a)

Subject matter of insurance

b)

Insurable Interest

c)

Financial Interest

33.

Which of the following insurance principles states that an insured cannot be compensated by an insurance company in excess of their economic loss?

a)

Utmost Good Faith

b)

Principle of Contribution

c)

Causa Proxima

d)

Principle of Indemnity

34.

Which of the following principles of Insurance enables the insured to claim the amount from the third party responsible for the loss?

a)

Insurable Interest

b)

Reinsurance

c)

Principle of Subrogation

d)

Principle of Contribution

e)

Double insurance

35.

What is the name of the Insurance Principle which

the insured can claim the compensation either from all insurers or from any one insurer?

a)

Insurable Interest

b)

Utmost Good Faith

c)

Principle of Subrogation

d)

Principle of Contribution

e)

Proximate Cause

36.

Samʹs stereo was destroyed by a fire. The stereo cost $1200 when it was purchased, but a similar new stereo now costs $1800. Assuming the stereo was 50 percent depreciated, what is the actual cash value of Samʹs loss?

a)

$600

b)

$900

c)

$1200

d)

$1800

37.

When must an insurable interest legally exist in life insurance?

a)

only at the time of the insuredʹs death

b)

only at the inception of the policy

c)

only at the time the beneficiary is paid

d)

both at the time of the insuredʹs death and at the inception of the policy

38.

When must an insurable interest legally exist in property insurance?

a)

only at the time of the loss

b)

only at the inception of the policy

c)

only at the time the loss settlement process takes place

d)

both at the time of the loss and at the inception of the policy

39.

Sueʹs office building was damaged by a fire caused by a careless tenant. After paying Sue for her loss, the insurance company sued the tenant to recover its loss. This suit is based on the principle of

a)

indemnity

b)

insurable interest.

c)

subrogation

d)

utmost good faith.

40.

The indemnity principle is difficult to apply to life insurance because the actual cash value rule (replacement cost less depreciation) is meaningless in determining the value of a human life

a)

TRUE

b)

FALSE

41.

From the viewpoint of an insurer, the prerequisites of an ideally insurable risk include all the following EXCEPT

a)

the loss must be capable of being determined and measured

b)

there must be a large, homogeneous group of exposure units

c)

the loss should not be subject to catastrophic hazard

d)

the peril should be such that the probability of loss is high

42.

Principle of indemnity refers to the rule that a person may collect more than his actual loss in the event of damage caused by an insured peril.

a)

TRUE

b)

FALSE

43.

"Taking right belonging to insured"

a)

insurable interest

b)

subrogation

c)

proximate cause

d)

indemnity

e)

contribution

44.

Principle of causa proxima deals with

a)

Remote cause

b)

Nearest cause

45.

Non-disclosure of material facts, involvement of a fraudulent act,

misrepresentations or false statements is all elements that could invalidate a Takaful certificate under _____

a)

Principle of Utmost Good Fatih

b)

Principle of Contribution

c)

Principle of Proximate Cause

d)

Principle of Indemnity

46.

The takaful scheme in indemnifying the participant, is entitled to recover from third party whose liable for the loss. This statement refers to

a)

Subrogation

b)

Contribution

c)

Proximate Cause

d)

Warranty

47.

This principle is to ensure the participant does not get more than his actual amount of loss to prevent the participant from making profit from the claim

a)

Tabarru'

b)

Indemnity

c)

Warranty

d)

Contribution

48.

Utmost Good Faith principle is applicable at all of these situations, EXCEPT

a)

At the inception of the contract

b)

Upon claim settlement

c)

Renewable of takaful contract

d)

Maturity Period

49.

A cargo ship was insured against perils of sea. While the consignment was being loaded few rats also creeped along. During the Voyage, the rats made holes in the ship. Consequently, the sea water entered into the ship and the cargo was damaged. Will he get his claims? If not, why?

a)

Yes, he will get his claim.

b)

No he will not get his claim due to proximate cause.

c)

No he will not get his claim due to mitigation cause.

d)

No he will not get his claim due to subrogation cause.

50.

Principle of contribution is used to support the principle of indemnity by preventing an insured from collecting twice, once from the insured and a second time from the negligent party.

a)

TRUE

b)

FALSE

PRINCIPLES OF TAKAFUL

Total questions: 50

Worksheet time: 2hrs 51mins

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