Chapter 15: Insurance — Online MCQ Test
COMMERCE · CLASS 11th · Tamil Nadu State Board
Practice Chapter 15: Insurance with a free chapter-wise online MCQ test.
This chapter covers: This chapter introduces risk management and fundamental insurance principles. Students study indemnity utmost good faith insurable interest life marine and fire insurance types alo....
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Chapter 15: Insurance — Important Questions & Answers
What is insurance?
- A. A method of making quick profit
- B. A way of transferring risk from one person to an insurance company
- C. A form of saving only for future investment
- D. A tax paid to the government
Answer: B. A way of transferring risk from one person to an insurance company
Insurance is a device for transferring risk from the insured to the insurer in return for a premium.
Insurance is a device for transferring risk from the insured to the insurer in return for a premium.
The principle that requires both parties to disclose all material facts honestly is called:
- A. Indemnity
- B. Insurable interest
- C. Utmost good faith
- D. Contribution
Answer: C. Utmost good faith
Utmost good faith means the insured and insurer must disclose all important facts fully and honestly.
Utmost good faith means the insured and insurer must disclose all important facts fully and honestly.
A shop owner insures the stock in his shop against loss by fire. This is an example of:
- A. Life insurance
- B. Fire insurance
- C. Marine insurance
- D. Reinsurance
Answer: B. Fire insurance
Fire insurance covers losses caused by fire to property such as buildings, stock, and machinery.
Fire insurance covers losses caused by fire to property such as buildings, stock, and machinery.
Which statement is correct about fire insurance?
- A. It covers only life-related risks
- B. It is a contract of indemnity
- C. It always gives fixed payment regardless of loss
- D. It does not require insurable interest
Answer: B. It is a contract of indemnity
Fire insurance compensates for the actual loss suffered, so it follows the principle of indemnity.
Fire insurance compensates for the actual loss suffered, so it follows the principle of indemnity.
A policyholder wants insurance that provides payment to nominees after his death and is not based on actual financial loss. Which insurance is appropriate?
- A. Marine insurance
- B. Fire insurance
- C. Life insurance
- D. Burglary insurance
Answer: C. Life insurance
Life insurance provides a sum assured on death or maturity and does not operate on the indemnity principle.
Life insurance provides a sum assured on death or maturity and does not operate on the indemnity principle.