Insurance Products
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Indian Economy and Indian Financial System — JAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is insurance?
Insurance is a contract where one party agrees to indemnify or make good the financial loss suffered by the other on the happening of a specified event.
What is the technical term for the consideration (payment) received by an insurer under an insurance contract?
Premium
What are the two broad categories of insurance products?
Insurance products are broadly categorized into Life Insurance and General (Non-life) Insurance.
Under which insurance principle must a proposer voluntarily disclose all material facts about the risk, even without being specifically asked?
Principle of utmost good faith (uberrimae fidei)
What is the fundamental principle underlying life insurance contracts?
Life insurance is based on the principle of providing a sum assured to the nominee or policyholder on the death of the insured or on survival to the end of the policy term.
What happens to an insurance contract if the insured fails to disclose a material fact at proposal stage, even if not specifically asked?
The contract becomes voidable at the insurer's option
What does a term insurance plan provide?
A term insurance plan provides pure death cover for a specified period; if the insured survives the term, no benefit is paid, making it the most affordable form of life insurance.
After an insurer compensates the insured for a loss caused by a negligent third party, whose rights to recover from that wrongdoer pass to the insurer?
The insured's rights pass to the insurer (principle of subrogation)
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