Welcome to the IC 38 Exam Free Mock Test Practice Set-4! This mock test is designed to help you prepare effectively for the IC 38 exam, essential for becoming a licensed insurance agent in India. The questions in this test cover important topics such as insurance principles, regulations, ethics, and policy types, aligned with the official exam pattern.

Solving these questions will strengthen your conceptual understanding, improve accuracy, and build confidence for the exam. Make the most of this mock test to assess your knowledge and enhance your exam readiness!

IC 38 Exam Free Mock Test Practice Set-4

1. Which among the following cannot be an element in a valid insurance contract?

1. Offer and Acceptance
2. Coercion
3. Consideration
4. Legality

Answer: II) Coercion

2. How are the exclusions in group policies different from individual policies?

1. Group policies have more comprehensive exclusions
2. Group policies have fewer exclusions
3. Group policies have identical exclusions
4. Group policies have different exclusions tailored for the group’s requirements

Answer: IV) Group policies have different exclusions tailored for the group’s requirements

3. How does the speed of processing in non-medical underwriting policies compare to traditional policies?

1. Processing delays are longer in non-medical underwriting policies
2. Processing time is the same for both types of policies
3. Non-medical underwriting policies offer faster processing
4. The processing time depends on the sum assured chosen by the applicant

Answer: III) Non-medical underwriting policies offer faster processing

4. If the mortality rate for age 35 is 0.0035, what does it imply?

1. 35 out of 1000 people are expected to die between age 35 and 36
2. 0.0035% of the population will die at age 35
3. 3.5 people out of 1000 will die at age 35
4. 35 people out of 10,000 will die between age 35 and 36

Answer: I) 35 out of 1000 people are expected to die between age 35 and 36

5. What are lifestyle factors that can influence an individual’s health?

1. Environmental conditions and pollution
2. Genetic predisposition to diseases
3. Exercising, eating well, and managing stress
4. Access to healthcare facilities and services

Answer: III)Exercising, eating well, and managing stress

6. What does body language refer to?

1. Only movements
2. Only facial expressions
3. Gestures and facial expressions
4. Talking and walking

Answer: III) Gestures and facial expressions

7. What happens if a claim is ready for payment but the payment cannot be made due to proper identification of the payee?

1. The claim amount is forfeited by the insurer
2. The claim amount is transferred to a different payee
3. The claim amount is held by the insurer for the benefit of the payee and earns interest
4. The claim amount is refunded to the policyholder

Answer: III) The claim amount is held by the insurer for the benefit of the payee and earns interest

8. What is a pension plan?

1. A fund into which money is drawn to support the person after his retirement from work in the form of periodic payments
2. A fund into which money is paid during a person’s employment years and from which money is drawn to support the person after his retirement from work in the form of periodic payments
3. A fund into which money is invested for a fixed term
4. A fund into which money is invested for a variable term

Answer: II) A fund into which money is paid during a person’s employment years and from which money is drawn to support the person after his retirement from work in the form of periodic payments

9. What is pure premium?

1. Premium sufficiently big enough to pay for losses only
2. Premium applicable to marginal members of the society
3. Premium after loading for administrative costs
4. Premium derived from the most recent loss experience period

Answer: I) Premium sufficiently big enough to pay for losses only

10. What is the importance of financial planning?

1. Only to save for the future
2. To invest all savings in high-risk assets
3. To plan for future needs and invest in appropriate assets
4. To spend all money on present needs

Answer: III) To plan for future needs and invest in appropriate assets

11. What is the potential conflict of interest for sales personnel?

1. They have no incentive to generate more business.
2. They prioritize the company’s interests over their own.
3. They may be biased due to their desire for increased business.
4. There is no conflict of interest for sales personnel.

Answer: IV) There is no conflict of interest for sales personnel.

12. What is the purpose of hospitalization indemnity products?

1. To cover expenses related to outpatient medical treatments
2. To protect individuals from the expenditure of hospitalization
3. To provide coverage for pre-existing medical conditions
4. To offer financial assistance for routine medical check-ups

Answer: II) To protect individuals from the expenditure of hospitalization

13. What is the role of a Third Party Administrator (TPA) in health insurance?

1. Issuing unique identity cards to policyholders for hospital admissions.
2. Providing cashless services at network hospitals.
3. Processing claims.
4. Selling health insurance policies to individuals.

Answer: II) Providing cashless services at network hospitals.

14. What type of expenses are typically covered under the medical expense extension of personal accident policies?

1. Only hospitalization expenses
2. Only medical costs related to surgeries
3. All medical expenses incurred after the accident
4. Only outpatient medical expenses

Answer: III) All medical expenses incurred after the accident

15. When may the insurer recommend “On account payment” of a claim in non-life insurance?

1. When the claim is found to be in order
2. When the insured faces some problems in regards to the assessment
3. When the completion of assessment may take some time
4. When the loss is large and the completion of assessment may take some time

Answer: IV) When the loss is large and the completion of assessment may take some time

16. Which of the following benefits are provided by the Corona Rakshak policy?

1. Hospital cash benefit
2. Reimbursement of medical expenses
3. Complete sum insured benefit
4. Travel expenses coverage

Answer: III) Complete sum insured benefit

17. Which option correctly identifies the method used to make amendments to the policy at the time of issuance?

1. Warranty
2. Endorsement
3. Alteration
4. Modifications are not possible

Answer: II) Endorsement

18. According to the declaration statement, what is the responsibility of the proposer?

1. To disclose only partial information
2. To declare False information
3. To provide True and complete information
4. To provide information on behalf of others

Answer: III) To provide True and complete information

19. How can building close relationships with customers benefit an insurance agent?

1. It helps in expanding the business
2. It reduces the need for agents to work hard
3. It decreases the number of claims made by customers
4. It makes the agent more popular than the insurance company.

Answer: I) It helps in expanding the business

20. How have advancements in medical science affected critical illnesses?

1. They have made critical illnesses more common among the population
2. They have reduced the severity and impact of critical illnesses
3. They have increased the survival rates for major diseases
4. They have eliminated the need for specialized insurance coverage

Answer: III) They have increased the survival rates for major diseases

21. In India, which type of insurance is mandatory if one wants to drive on a public road?

1. Personal accident cover for the owner-driver
2. Own damage cover for the car
3. Third party insurance
4. Comprehensive insurance cover

Answer: III) Third party insurance

22. What are the prohibitions for insurance agents while soliciting or procuring insurance business?

1. Offering different rates, advantages, terms and conditions other than those offered by one’s insurer
2. Demanding or receiving a share of proceeds from the beneficiary under an insurance contract
3. Inducing the prospect to omit any material information or submit wrong information in the proposal form
4. All of the above

Answer: IV) All of the above

23. What does Keyman insurance compensate with?

1. Actual losses incurred
2. A fixed monetary sum as specified on the insurance policy
3. Compensation in the form of company shares
4. Indemnity for the key person’s income loss

Answer: II) A fixed monetary sum as specified on the insurance policy

24. What happens if the insured dies during the term of a Money Back policy?

1. The premiums paid are returned to the insured’s nominees
2. The sum assured is paid in full to the insured’s nominees
3. The sum assured and bonuses accrued are paid as death benefit
4. The policy becomes null and void

Answer: III) The sum assured and bonuses accrued are paid as death benefit

25. What is acceptance in a contract?

1. When a person signifies his/her willingness to do something
2. When a person accepts a proposal
3. When a person pays the deposit amount
4. None of the above

Answer: II) When a person accepts a proposal

26. What is the definition of health provided by the World Health Organization (WHO)?

1. Health is the absence of disease or infirmity.
2. Health is the state of physical and mental wellbeing.
3. Health is the absence of social problems and diseases.
4. Health is a state of complete physical, mental, and social wellbeing, not merely the absence of disease or infirmity.

Answer: IV) Health is a state of complete physical, mental, and social wellbeing, not merely the absence of disease or infirmity.

27. What is the importance of providing great customer service as an insurance agent?

1. It helps the agent earn more commission
2. It creates a memorable experience for the customer
3. It helps the agent acquire new customers more easily
4. It does not have any impact on the success of the agent

Answer: II) It creates a memorable experience for the customer

28. What is the primary concern addressed by a critical illness policy?

1. The need for routine medical check-ups and preventive care
2. The availability of advanced medical treatments for major diseases
3. The financial burden associated with surviving a critical illness
4. The risk of developing chronic diseases in the future

Answer: III) The financial burden associated with surviving a critical illness

29. What is the purpose of life insurance products?

1. To increase the earning capabilities of an individual
2. To create an estate in the name of the insurer
3. To provide protection against the loss of economic value due to death or disability
4. To provide certain rates of return on investments

Answer: III) To provide protection against the loss of economic value due to death or disability

30. What is typically excluded in Overseas Medical/Travel Insurances?

1. Pre-existing diseases
2. Accidental injuries
3. Mental disorders
4. Loss of baggage

Answer: I) Pre-existing diseases

31. What type of payment do benefit-based products provide?

1. Monthly installments
2. Lump sum payment
3. Reimbursement of medical expenses
4. Cashless treatment facility

Answer: II) Lump sum payment

32. When the insured person has an adverse medical history, what diseases are included in the detailed questionnaire in the proposal form?

1. Asthma
2. Diabetes
3. Arthritis
4. Migraine

Answer: II) Diabetes

33. Which of the following diseases may have a waiting period in health insurance policies?

1. Heart attack
2. Cataract
3. Diabetes
4. Asthma

Answer: II) Cataract

34. Who mandated the establishment of a separate channel for senior citizens’ health insurance claims and grievances?

1. The Ministry of Health
2. The Insurance Regulatory and Development Authority of India (IRDAI)
3. The World Health Organization (WHO)
4. The Association of Health Insurers

Answer: II) The Insurance Regulatory and Development Authority of India (IRDAI)

35. Apart from the private sector, which other sectors are involved in providing healthcare services?

1. Only the government sector
2. Only the NGOs and the voluntary sector
3. Both the NGOs and the voluntary sector, as well as the government sector
4. None, only the private sector is involved

Answer: III) Both the NGOs and the voluntary sector, as well as the government sector

36. How can one appear confident and self-assured through body language?

1. Slouching and avoiding eye contact
2. Purposeful and deliberate gestures, but avoiding eye contact
3. Solid eye contact with a “smiling” face and standing tall with shoulders held back
4. None of the above

Answer: III) Solid eye contact with a “smiling” face and standing tall with shoulders held back

37. How is a positive diagnosis of a covered vector borne disease confirmed under the policy?

1. Self-declaration by the policyholder
2. Medical examination by any practitioner
3. Laboratory examination and confirmation by a medical practitioner
4. Online diagnosis through a mobile app

Answer: III) Laboratory examination and confirmation by a medical practitioner

38. In Scenario 1, why did the insurance company reject the claim?

1. The damage was due to normal wear and tear, which was excluded from the policy
2. The damage was due to an excluded peril in the policy
3. The car was too old to be insured
4. None of the above

Answer: I) The damage was due to normal wear and tear, which was excluded from the policy

39. What are rating factors?

1. Elements used by insurers to determine the risk of insuring a person or entity
2. Elements used by insurers to determine the amount of profit they will make
3. Elements used by insurers to determine the length of the insurance policy
4. Elements used by insurers to determine the types of coverage offered

Answer: I) Elements used by insurers to determine the risk of insuring a person or entity

40. What are the steps involved in underwriting?

1. Assessment and evaluation of hazard and risk, formulation of policy coverage, and rate fixing
2. Gathering customer information, selling insurance policies, and collecting premiums
3. Identifying potential risks, hiring underwriters, and processing claims
4. Creating a pool of premiums, identifying the types of risks, and setting premiums

Answer: I) Assessment and evaluation of hazard and risk, formulation of policy coverage, and rate fixing

41. What happens if the policyholder dies after the maturity of the policy?

1. The nominee is not entitled to any proceeds or benefits.
2. The appointee becomes the beneficiary of the policy.
3. The nominee is entitled to the proceeds and benefits of the policy .
4. The claim amount is forfeited by the insurance company.

Answer: III) The nominee is entitled to the proceeds and benefits of the policy .

42. What is active listening?

1. Interrupting the speaker with counter-arguments
2. Allowing the speaker to finish each point before asking questions
3. Ignoring the speaker and preparing a rebuttal
4. Engaging in external distractions

Answer: II) Allowing the speaker to finish each point before asking questions

43. What is risk retention in managing risk?

1. Transferring the responsibility for losses to another party
2. Making changes in hazardous operations and equipment
3. Deciding to bear the risk and its effects by oneself
4. Reducing the frequency and sizes of losses through education and training

Answer: III) Deciding to bear the risk and its effects by oneself

44. What is the difference between “Conditions” and “Warranties” in an insurance contract?

1. Conditions are optional provisions, while warranties are mandatory provisions.
2. Conditions form the basis of the agreement, while warranties are additional clauses.
3. Conditions are related to fraudulent claims, while warranties are related to claim filing.
4. Conditions are applicable to health insurance, while warranties are applicable to other types of insurance.

Answer: II) Conditions form the basis of the agreement, while warranties are additional clauses.

45. What is the Integrated Grievance Management System (IGMS)?

1. A central repository of insurance grievance data
2. A tool for monitoring grievance redress in the industry
3. Both A and B
4. None of the above

Answer: III) Both A and B

46. What is the primary objective of micro-insurance products?

1. To provide high-value coverage to affluent individuals
2.  To offer insurance solutions exclusively to urban sectors
3. To protect low-income individuals from rural and informal sectors
4. To provide comprehensive coverage for all income groups

Answer: III) To protect low-income individuals from rural and informal sectors

47. What is the purpose of mass policies in health insurance?

1. To provide coverage for high-income individuals
2. To offer specialized coverage for specific medical conditions
3. To cover government employees and officials
4. To provide health insurance for very poor sections of the population

Answer: IV) To provide health insurance for very poor sections of the population

48. What is the role of an insurer in the insurance process?

1. Assess the risk, collect premiums, pool risks and premiums, and pay those who suffer the loss
2. Own the assets and manage the funds
3. Manage the contributions and decide who receives compensation
4. None of the above

Answer: I) Assess the risk, collect premiums, pool risks and premiums, and pay those who suffer the loss

49. What kind of funds can policyholders choose from in unit linked policies?

1. Equity Fund, Debt Fund, Balanced Fund and Money Market Fund
2. Growth Fund, Income Fund, Value Fund and Index Fund
3. Blue Chip Fund, Small Cap Fund, Mid Cap Fund and Large Cap Fund
4. Aggressive Fund, Defensive Fund, Sectoral Fund and Thematic Fund

Answer: I) Equity Fund, Debt Fund, Balanced Fund and Money Market Fund

50. When was the Central Government Health Scheme (CGHS) introduced?

1. 1947
2. 1954
3. 1986
4. 2001

Answer: II) 1954