Functions of Insurance

Define prospectus. Why is it issued? Explain the consequences of misstatements ina prospectus.

Define insurance.

Which among the following is a method of risk transfer?

1. Bank FD

2. Insurance

3. Equity shares

4. Real estate

Insurance is a mechanism that helps reduce adverse consequences through ___________

State True or False. Insurance provides certainty of payment for the risk loss.

1. True

2. False

Mr.Rakshit took an insurance policy against his car after four months he sold it to Mr Sharma. The car was stolen from outside of Mr Sharma's house. Mr.Rakshit made a claim to insurance company. His claim was rejected on the grounds that Mr Rakshit was no longer the car ower, so he has no insurable interest and he has no financial loss with the loss of the car. Was Mr Rakshit right in making a claim?

1. Yes, because he had bought the car.

2. No, because he has already sold the car to Mr Sharma.

Which of the following is a function of insurance?

1. Utmost good faith

2. Insurable Interest

3. Protection

4. All of the above

List any two functions of insurance.

Agree or Disagree: If the cargo does not reach the destination due to some damage or loss in transit, then the shipping company receives the freight charges.

1. Agree

2. Disagree

The accumulated funds of the insurer received by the premium payments by the insured are invested in various ___ generating schemes.

1. Insurance

2. Mutual Fund

3. All of the above

4. Income

The manager of a firm applied for a loan to the bank by submitting a false statement of accounts and got sanctioned a big amount of loan. Which of the value is he violating?

1. The value of cheating by submitting a false statement of account

2. None of the above

3. The value of honest by providing all the required documents

4. The vale of honour by providing all the required documents

1. annuity policy
2. joint life policy
3. whole life policy
4. endowment policy

dummy - State True or False. Insurance provides certainty of payment for the risk loss.

1. True

2. False

While filling the form the insured should be ___________ and ________________ in giving information to the insurance company.

1. untruthful, dishonest

2. positive, dishonest

3. truthful, honest

4. negative, honest

1. No, he will not succeed because he himself offered to pay 18 per cent interest per annum.
2. It is a voidable contract so B will not succeed.
3. He will succeed.
4. None of these.

1. modify his audit report
2. insist it should be disclosed in the notes to financial statements
3. write it in letter of weakness
4. Both B and C

1. needs
2. ownership
3. risk
4. liability

1. Protection
2. Competitiveness
3. Specialisation
4. Credit Facility
5. Social Welfare
6. Current Account
7. Postal Services
8. Transportation