Welcome to the IC 38 Exam Free Mock Test Practice Set-5! 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-5

Q1: Which type of insurance primarily covers the risk of death without savings or maturity benefits?

• A. Whole Life Plan
• B. Endowment Plan
• C. Term Insurance Plan
• D. Money Back Plan

Answer: C. Term Insurance Plan

Q2: What is the primary purpose of insurance?

• A. Risk Elimination
• B. Risk Retention
• C. Risk Transfer
• D. Risk Creation

Answer: C. Risk Transfer

Q3: Which body regulates the insurance industry in India?

• A. SEBI
• B. RBI
• C. IRDAI
• D. NABARD

Answer: C. IRDAI

Q4: Which year was the Life Insurance Corporation (LIC) of India established?

• A. 1947
• B. 1956
• C. 1965
• D. 1972

Answer: 1956

Q5: What is the main principle behind insurance?

• A. Profit Sharing
• B. Risk Pooling
• C. Cost Reduction
• D. Asset Appreciation

Answer: B. Risk Pooling

Q6: Which type of insurance covers damage or loss to property?

• A. Life Insurance
• B. Health Insurance
• C. General Insurance
• D. Pension Insurance

Answer: C. General Insurance

Q7: Which term refers to the amount paid regularly by the policyholder to the insurer?

• A. Sum Assured
• B. Premium
• C. Claim
• D. Benefit

Answer: B. Premium

Q8: Which type of insurance covers hospitalization expenses?

• A. Motor Insurance
• B. Property Insurance
• C. Health Insurance
• D. Term Insurance

Answer: C. Health Insurance

Q9: What is an insurance policy’s maturity amount called?

• A. Sum Assured
• B. Premium
• C. Surrender Value
• D. Claim Amount

Answer: A. Sum Assured

Q10: Who is the person covered under an insurance policy?

• A. Nominee
• B. Policyholder
• C. Insured
• D. Agent

Answer: C. Insured

Q11: What does HLV stand for in insurance?

• A. Human Life Value
• B. Health Life Value
• C. Home Loan Value
• D. High Loss Value

Answer: A. Human Life Value

Q12: Which insurance covers the vehicle owner against accident damage?

• A. Life Insurance
• B. Motor Insurance
• C. Health Insurance
• D. Term Insurance

Answer: B. Motor Insurance

Q13: What is the primary objective of general insurance?

• A. Savings
• B. Investment
• C. Asset Protection
• D. Retirement Planning

Answer: C. Asset Protection

Q14: Which is the oldest insurance company in India?

• A. New India Assurance
• B. LIC
• C. National Insurance
• D. Oriental Insurance

Answer: D. Oriental Insurance

Q15: What is the claim amount paid to the nominee in case of death in a life insurance policy called?

• A. Surrender Value
• B. Maturity Value
• C. Sum Assured
• D. Bonus

Answer: C. Sum Assured

Q16: What is the process of determining the risk profile of a proposer in insurance called?

• A. Underwriting
• B. Actuarial Valuation
• C. Survey
• D. Claim Assessment

Answer: A. Underwriting

Q17: Which insurance product is best suited for retirement planning?

• A. Term Plan
• B. Pension Plan
• C. Endowment Plan
• D. Motor Insurance

Answer: B. Pension Plan

Q18: Which insurance plan provides a lump sum after a fixed period or on death?

• A. Term Plan
• B. Endowment Plan
• C. Whole Life Plan
• D. Group Insurance

Answer: B. Endowment Plan

Q19: Which type of policy returns a portion of the sum assured at regular intervals?

• A. Term Plan
• B. Money Back Plan
• C. Whole Life Plan
• D. Health Insurance

Answer: B. Money Back Plan

Q20: Which is NOT a type of life insurance policy?

• A. Term Insurance
• B. Health Insurance
• C. Whole Life Insurance
• D. Endowment Insurance

Answer: B. Health Insurance

Q21: Who is the beneficiary of an insurance policy?

• A. Policyholder
• B. Nominee
• C. Agent
• D. Underwriter

Answer: A. Policyholder

Q22: What is the period during which a policyholder can cancel an insurance policy without penalty?

• A. Grace Period
• B. Waiting Period
• C. Free Look Period
• D. Lapse Period

Answer: C. Free Look Period

Q23: Which of the following is a key principle of insurance?

• A. Profit Maximization
• B. Insurable Interest
• C. Arbitrage
• D. Risk Creation

Answer: B. Insurable Interest

Q24: Which is an example of non-life insurance?

• A. Endowment Plan
• B. Whole Life Plan
• C. Motor Insurance
• D. Term Plan

Answer: C. Motor Insurance

Q25: What is the minimum number of years a policy must run to get a surrender value?

• A. 1 Year
• B. 2 Years
• C. 3 Years
• D. 5 Years

Answer: C. 3 Years

Q26: Which insurance policy covers loss of income due to disability?

• A. Health Insurance
• B. Accident Insurance
• C. Term Insurance
• D. Travel Insurance

Answer: B. Accident Insurance

Q27: Which type of insurance provides coverage against theft, fire, or natural calamities?

• A. Life Insurance
• B. General Insurance
• C. Term Plan
• D. Pension Plan

Answer: B. General Insurance

Q28: What is a contract between the insured and the insurer called?

• A. Premium
• B. Proposal
• C. Policy
• D. Claim

Answer: C. Policy

Q29: Which of the following is NOT covered under health insurance?

• A. Hospitalization Expenses
• B. Accidental Death
• C. Maternity Costs
• D. Vehicle Damage

Answer: D. Vehicle Damage

Q30: What does the term “premium” refer to?

• A. Compensation paid to the insured
• B. Sum assured
• C. Amount paid for coverage
• D. Commission to the agent

Answer: C. Amount paid for coverage

Q31: What is the primary benefit of insurance?

• A. Risk Avoidance
• B. Risk Transfer
• C. Risk Retention
• D. Risk Creation

Answer: B. Risk Transfer

Q32: Which insurance policy provides lifelong coverage?

• A. Term Plan
• B. Whole Life Plan
• C. Money Back Plan
• D. Endowment Plan

Answer: B. Whole Life Plan

Q33: Which document is issued after the acceptance of the insurance proposal?

• A. Proposal Form
• B. Policy Document
• C. Premium Receipt
• D. Claim Form

Answer: B. Policy Document

Q34: Who is an agent in insurance?

• A. Policyholder
• B. Insurance Seller
• C. Nominee
• D. Beneficiary

Answer: B. Insurance Seller

Q35: What is the insured amount agreed upon in an insurance policy?

• A. Premium
• B. Claim Amount
• C. Sum Assured
• D. Bonus

Answer: C. Sum Assured

Q36: Which of the following is an example of term insurance?

• A. LIC Jeevan Anand
• B. ICICI Pru iProtect Smart
• C. LIC Money Back Policy
• D. HDFC Sanchay Plus

Answer: B. ICICI Pru iProtect Smart

Q37: What is the process of settling insurance claims called?

• A. Premium Processing
• B. Claim Settlement
• C. Policy Issuance
• D. Underwriting

Answer: B. Claim Settlement

Q38: Which insurance plan offers a combination of insurance and investment?

• A. Term Plan
• B. Unit Linked Insurance Plan (ULIP)
• C. Health Insurance
• D. Motor Insurance

Answer: B. Unit Linked Insurance Plan (ULIP)

Q39: Which of the following is NOT a feature of insurance?

• A. Risk Transfer
• B. Savings
• C. Wealth Appreciation
• D. Protection

Answer: C. Wealth Appreciation

Q40: What does IRDAI stand for?

• A. Insurance Regulatory and Development Authority of India
• B. Insurance Reserve and Development Association of India
• C. Investment Regulatory and Development Authority of India
• D. Insurance Rate Determining Association of India

Answer: A. Insurance Regulatory and Development Authority of India

Q41: What is a nominee in life insurance?

• A. Policyholder
• B. Person receiving claim benefits after insured death
• C. Agent
• D. Underwriter

Answer: B. Person receiving claim benefits after insured death

Q42: What is the annual amount paid for maintaining an insurance policy called?

• A. Bonus
• B. Sum Assured
• C. Premium
• D. Claim Amount

Answer: C. Premium

Q43: What is a policy lapse?

• A. Claim Settlement
• B. Policy Termination due to Non-Payment
• C. Premium Reduction
• D. Policy Renewal

Answer: B. Policy Termination due to Non-Payment

Q44: Which insurance covers death due to an accident?

• A. Health Insurance
• B. Life Insurance
• C. Accidental Death Insurance
• D. Endowment Plan

Answer: C. Accidental Death Insurance

Q45: Which insurance policy is suitable for a single trip abroad?

• A. Health Insurance
• B. Motor Insurance
• C. Term Insurance
• D. Travel Insurance

Answer: D. Travel Insurance

Q46: What is the face value of an insurance policy?

• A. Market Value
• B. Sum Assured
• C. Premium Paid
• D. Bonus Amount

Answer: B. Sum Assured

Q47: Who pays the insurance claim amount?

• A. Nominee
• B. Policyholder
• C. Insurer
• D. Agent

Answer: C. Insurer

Q48: What is a surrender value?

• A. Sum Assured
• B. Policy Value on Early Termination
• C. Bonus
• D. Claim Amount

Answer: B. Policy Value on Early Termination

Q49: Which policy pays out a periodic income after retirement?

• A. Term Plan
• B. ULIP
• C. Pension Plan
• D. Money Back Plan

Answer: D. Money Back Plan

Q50: What is a policy term?

• A. Premium Amount
• B. Claim Period
• C. Duration of Policy
• D. Maturity Amount

Answer: C. Duration of Policy