IC26 - ASSOCIATE - Life Insurance Finance - 3

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Q 1. What should internal audit/inspection departments of insurance companies verify regularly regarding AML/CFT policies?

Customer satisfaction surveys.

Compliance with policies, procedures, and controls relating to money laundering activities.

Marketing campaign effectiveness.

Sales revenue.

Employee productivity.

Q 2. Which of the following statements is true regarding the relationship between assets, liabilities, and capital?

Total assets are always equal to total liabilities and capital

Total liabilities are always greater than total assets

Capital is considered an expense

Liabilities represent everything the entity owns or controls

Assets are only related to capital, not liabilities

Q 3. What is the primary advantage of the Endowment insurance plan?

It provides cover only during retirement years

It combines family protection and savings elements

Premiums are payable only for a few months

It offers the highest sum assured

It is the cheapest form of life insurance cover

Q 4. Which part of the premium received on unit-linked policies consists of unit capital and unit capital premium accounts?

Non-Unit Fund

Premium Allocation Charges

Unit Fund

Unit Capital

Premium Deposit

Q 5. Which of the following is an example of a direct expense in unit-linked plans?

Employee salaries

Rent and taxes

Fund management expenses

Commission payments to agents

Legal and professional charges

Q 6. What is the purpose of physical verification of furniture, fixtures, office equipment, and library books?

To determine the original cost price of the items.

To assess the value of obsolete items.

To reconcile additions or depletions with the corresponding entries in the books of accounts.

To calculate the total depreciation.

To obtain a certificate from the officers using the items.

Q 7. What is the main reason for the necessity of human resource reporting in organizations?

To increase employee salaries and bonuses

To improve productivity

To ensure comparability and completeness of financial statements

To reduce corporate income taxes

To provide investment opportunities for employees

Q 8. What is a related party transaction?

A. Any transaction conducted between enterprises

B. A transfer of resources or obligation between related parties, regardless of whether a price is charged

C. A transaction involving a significant amount of money

D. A transaction conducted within the same geographical segment

E. None of the above

Q 9. Where does the trading of shares occur after they have been allotted to investors?

Primary Market

Secondary Market

Money Market

Banking Market

Insurance Market

Q 10. What is the purpose of Section 115B of the Income Tax Act 1961?

Computation of profits of life insurance business.

Adjustment of tax paid by deduction at source.

Exemption from deduction at source.

Tax on profits and gains of life insurance business.

None of the above.

Q 11. What payment methods are advised for premiums beyond Rs. 50,000 according to the guidelines?

Cash, demand drafts, and credit cards.

Cheques, demand drafts, credit cards, or any other banking channels.

Only cheques.

Credit cards and mobile wallets.

Only demand drafts.

Q 12. What is the main purpose of preparing a balance sheet?

To record day-to-day transactions

To confirm the arithmetical accuracy of ledger accounts

To show the financial condition of an organization on a specific date

To calculate profits and losses

To list all ledger accounts and their balances

Q 13. What is the meaning of "Lapse" in the context of life insurance policies?

The policyholder receives a lump sum payment.

The policy becomes paid up for a reduced sum assured.

The policy is canceled due to discontinued premiums.

The policyholder surrenders all rights under the policy.

The policy matures and pays out the sum assured.

Q 14. Which method of providing for outstanding premiums is more popular among insurance companies?

Method 1

Method 2

Method 3

Method 4

Method 5

Q 15. How are direct expenses like commission and medical expenses amortized in unit-linked plans?

They are not amortized

They are charged proportionately to the fund every year

They are fully charged at the end of the insurance policy term

They are recovered from policyholders

None of the above


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