rap-examination

RAP examination set-3

Here you can find most frequently asked question set on RAP examination. Each set contain fifty questions. as per our expertise we have accumulated the question set here. But recent period it has been observed that they frequently change the set. If you carefully study all sets described here, Your passing score will be good on RAP examination.

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Examination Questions and Answers Set-3

1.   In the context of financial planning, how is the difference between real needs and perceived needs bestdescribed?

  • Real needs are financial needs and perceived needs are non-financial needs.
  • Real needs are actual needs and perceived needs are based on a client’s thoughts and desires.
  • Real needs are identified by the insurance agent and perceived needs are identified by the client.
  • Real needs are needs which satisfy an objective and perceived needs are needs which do not satisfy anobjective.

2.   To fulfil the ‘know your customer’ procedures, at what stage in the financial planning process is theinsurance agent most likely to request a copy of the customer’s photograph?

  • At the end of the fact-find meeting.
  • At the end of the presentation meeting.
  • As soon as the application is accepted by the insurer.
  • As soon as the insurer is ready to issue the policy document.

3.   An agent has recommended an investment product with non-guaranteed benefits. The benefit illustration passed to his client will therefore use assumed annual growth rates of:

  • 5% and 8%
  • 5% and 10%
  • 6% and 8%
  • 6% and 10%

4.   The main purpose of including commission details in the documentation to clients is to increase:

  • competitiveness.
  • efficiency.
  • flexibility.
  • transparency.

5.   A client has been recommended a low-risk investment product by his insurance agent, but the client insiststhe agent arranges for the money to be invested in a higher risk product. What action should the agent take?

  • Carry out these instructions, but document that this contradicts the recommendation.
  • Conduct a new fact-find.
  • Invest a reduced amount of money in this product.
  • Refuse to act for the client.

6.   An insurance agent has advised a client to surrender an existing investment product and start a newinvestment product. What key indicator should be used to determine whether this advice was ethical?

  • The best interests of the client.
  • The difference in potential income and capital growth between the two products.
  • The flexibility of the new product compared to the old one.
  • The views expressed by the client.

7.  What key impact will low persistency levels have on insurance policyholders?

  • An enhancement in product choice.
  • An improvement in investment performance.
  • An increase in insurance cover.
  • A reduction in benefits.

8.   Raju died 5 years before the end of his 30-year endowment insurance policy. What factor most likely causedthe insurer to investigate the claim using the early death claim procedures?

  • He paid the most recent premium during the period of grace.
  • His cover was originally accepted with a premium loading on medical grounds.
  • His death resulted from a recently acquired sudden illness.
  • The policy had lapsed and was revived shortly before he died.

9.   A claim under a term insurance policy is submitted by an individual who has substantially understated his age.As an alternative to paying out the full claim the insurer is most likely to take what action?

  • Deduct the underpaid premiums from the sum insured.
  • Make the policy paid up.
  • Pay out the surrender value.
  • Reject the claim on the grounds of misrepresentation.

10.   On the maturity of an endowment policy, a reduced sum insured is paid out. What is the most likely reasonfor this?

  • The instalments were commuted by the policyholder.
  • The policyholder’s health seriously deteriorated during the policy term.
  • The policy was made paid up during the policy term.
  • The policy was subject to a lien.

11.   What key event is most likely to prevent insurers from ensuring that each insured person brings a fairpremium to the pool for the risk presented?

  • A fraudulent claim.
  • A policy assignment.
  • A steep rise in inflation.
  • A sudden illness.

12.   An insurance agent served an insurer continually and exclusively for 20 years, after which he retired fromwork. In accordance with Section 44 of the Insurance Act 1938, renewal commission due to him after the termination of his agency can only be withheld if:

  • he ceases to remain a resident of India for tax purposes.
  • he survives beyond the age of 75.
  • there has been a change in regulator.
  • there is fraud involved.

13.   Legislation gives which body the power to specify a code of conduct for surveyors and loss assessors?

  • Institute of Insurance and Risk Management.
  • Insurance Regulatory and Development Authority.
  • Life Insurance Council.
  • Securities and Exchange Board of India.

14.   What key legacy has been left by the activities of the Tariff Advisory Committee?

  • A central compensation fund.
  • Customer classification status.
  • Illustrative projection rates.
  • Standard policy wordings.

15.   Apart from conducting a comprehensive fact-find, the other main action that an insurance agent can take atoutset to minimise the risk of subsequently receiving a customer complaint is to:

  • ask for referrals.
  • offer commission rebates.
  • provide detailed disclosures.
  • register with the Insurance Ombudsman.

16.   An award made by the Insurance Ombudsman will only be binding on the insurer if the:

  • complainant accepts this decision.
  • Consumer Forum is involved in the case.
  • insurer signs a disclaimer.
  • value of the award is less than 2 lakhs.

17.   A policyholder asked his insurance agent for guidance on submitting a claim for the maturity benefit under hislife insurance policy. Due to pressure of work, the agent declined to assist. Consequently, this action is deemed to be a breach of the:

  • General Insurance Council’s guidelines.
  • Insurance Regulatory and Development Authority’s Code of Conduct.
  • Insurance Ombudsman’s protocols.
  • Insurance Brokers Association of India’s membership rules.

18.   During the process of applying for life insurance, the customer discloses confidentially to the insurance agentthat he had a mild stroke four months ago, however this was NOT mentioned on the application form. In accordance with the Insurance Regulatory and Development Authority’s Code of Conduct, how should the insurance agent deal with this information?

  • Ask the policyholder’s doctor to send details to the insurer.
  • Notify the insurer of this matter.
  • Refuse to act for the customer in this case.
  • Respect this confidentiality by not discussing it with anyone else.

19.   Which of the following cannot be insured?        

  • Financial risk
  • Particular risk
  • Pure risk
  • Speculative risk

20.  Mr. Kunal used to participate in Car race. While taking up the Insurance policy he disclosed this information. What kind of hazard does it refers to:

  • Occupational Hazard
  • Fraudulent representation
  • Moral hazard
  • Peril

21.   On 6thAugust, there was a typhoon. Mr.Augustin who had insurance died in typhoon. Now how willthe insurance company categorise this risk?   

  • Under the category of Pure risk
  • Under the category of peril risk
  • Under the category of speculative risk
  • Under the category of dynamic risk

22.   Law of large numbers is worked out by which of the following?

  • Pooling of risk
  • Maintaining insurable interest
  • With utmost good faith
  • Randomness

23.   Insurance companies apply law of _________ to determine the cost of total annual claims:

  • Universe
  • Large numbers
  • Average
  • All Above

24.   Pure risks are those risks where there is:            

  • Loss or no loss
  • Gain or no gain
  • Possibility of any benefits occurring
  • No Possibility of Gain

25.   The type of risk that can be insured against is:  

  • Speculative Risk
  • Pure Risk
  • Pure & Speculative risk
  • Non Financial Risk

26.   Mr. Kunal used to participate in Car race. While taking up the Insurance policy he disclosed this information. What kind of hazard does it refers to:

  • Physical hazard  or  Occupational Hazard
  • Fraudulent representation
  • Moral hazard
  • Peril

27.   Which statement is correct?     

  • lung cancer is peril and smoking is a hazard
  • smoking is peril and lung cancer is hazard
  • Both the statement is correct
  • Both the statement is incorrect

28.   There are two different groups of 100 people. The first group isbetween 30-39 years of age. Of these one person dies before the age26 Probability of death in this case is 1%. The second group is aged60-69 years of these 15 die before the age of 61. The probability of death in this case is 15%.            

  • This shows that frequency of death is high in younger group
  • This shows that frequency of death is low in higher age-groups
  • This shows that frequency of death is high in higher age
  • This shows that frequency of death is same in any age groups

29.   Insurance contract is valid because?      

  •                 Gives revenue for govt
  •                 helps the destitute
  •                 wagering contract
  •                 Contract enforceable by law

30.   Which of the following types of insurances is not a contract of indemnity:      

  •                 Fire Insurance
  •                 Mediclaim (Health Insurance)
  •                 Motor Insurance
  •                 Life Insurance

31.   Ajay does not consume alcohol for a month to not detect during medical test is:             

  •                 Concealment of a material fact
  •                 Fraudulent misrepresentation
  •                 Innocent misrepresentation
  •                 None of the above

32.   Amit is illiterate. He wants to take policy his friend Surya help him in knowing the question and filling the proposal form. What extra requirement is required in this case: 

  • Amit’s photograph
  •                 Amit’s thumb impression only
  •                 policy document need to be registered
  •                 Left thumb Impression of Amit along with a declaration of his friend

33.   Mr. Josh was filling the proposal form but as his mother was sitting beside him even though hedrinks and smokes he ticked “NO” in smoking & drinking column of proposal form. This indicates? 

  •                 He has breached the non-disclosure of the fact
  •                 He has breached the duty of disclosure by concealing the facts
  •                 He has breached the company by fraudulent information
  •                 He had done an innocent misrepresentation

34.   Which of the following is not a type of bonus? 

  •                 Simple reversionary bonus
  •                 Inception bonus
  •                 Compound reversionary bonus
  •                 Terminal bonus

35.   The most important features of a Valid contract are:     

  •                 Offer and acceptance and capacity to contract
  •                 Offer and acceptance and consideration
  •                 Consideration and capacity to contract
  •                 Consideration and legality of object

36.   Mr. Nikhil makes an offer of Rs 20 lacs SA to Insurance Co. XYZ. Inresponse to this Insurance co. XYZ offers a SA to the tune of max. Rs10 lacs (counter offer). At this stage Nikhil and Company X can enterinto a valid contract?   

  •                 Yes Nikhil and Insurance Co. can enter into a valid contract
  •                 Nikhil and Insurance Co. cannot enter into valid contract.
  • Nikhil and Insurance Co. can enter into a valid contract if Nikhil unconditionally accepts the offer.
  • Nikhil and Insurance company can enter into a valid contractif he sends a request to the Ombudsman

37.   Policy taken by husband and wife jointly is called as…..:

  •                 Group Insurance Policy
  •                 Family Floater policy
  •                 Joint life policy
  •                 Joint Account policy

38.   Mr.Akash filled the proposal form but before submitting to the company he discussed with theagent that he is not sure whether he can pay for 15 years. This attitude affects which part of thecontract?  

  •                 Consideration in the contract
  •                 Capacity to contract
  •                 Consensus ad idem
  •                 Offer and Acceptance in the contract

39.   Human life is exposed to different type of risks. Which of these risks is not currently covered by Indian insurers?              

  •                 Early death
  •                 Illness
  •                 Living too long
  •                 Unemployment not caused by disability

40.   Rishabh Agarwal is a 40 years businessman. He leads a healthylifestyle. Every morning he practices yoga and abstains from smoking tobacco and alcohol. There is a family history of diabetes and both hisparents suffer from it. But Rishabh himself is not diagnosed withdiabetes. Based on this case which of the following statement is true?              

  •                 He can be given insurance as he maintains a healthy lifestyle
  •                 He cannot be insured as his parents are diagnosed with diabetes
  •                 He cannot be insured as he is 40 years old
  •                 He can be given insurance with premium loading

41.   The type of risk that can be insured against is:  

  •                 Speculative Risk
  •                 Pure Risk
  •                 Pure & Speculative risk
  •                 Non Financial Risk

42.   Which category of insurance has nature of low frequency but high severity?     

  •                 Marine Insurance
  •                 Crop Insurance
  •                 Airline Insurance
  •                 Life Insurance

43.   Law of large numbers is worked out by which of the following?

  •                 Pooling of risk
  •                 Maintaining insurable interest
  •                 With utmost good faith
  •                 Randomness

44.   Which of the following cannot be insured?        

  •                 Financial risk
  •                 Particular risk
  •                 Pure risk
  •                 Speculative risk

45.   If a person consumes alcohol regularly and does not disclose the same in proposal form – what is the type of hazard?              

  •                 Moral
  •                 Physical
  •                 Both are correct
  •                 Both are wrong

46.   In insurance terms the risk of suffering a disability is best described as what type of risk?            

  •                 Financial.
  •                 Fundamental
  •                 Homogenous.
  •                 Speculative

47.   Akshat is a relatively cautious person. In insurance terms this will normally increase the likelihood that he will:  

  •                 be considered an above average insurance risk
  •                 be considered a below average insurance risk
  •                 require insurance cover
  •                 require reinsurance cover

48.   Level of risk is determined by: 

  • The probability of the occurrence of a certain event and the extent of losses likely to be suffered due to the occurrence of the event.
  •                 Needs of the people for various types of protections.
  •                 The various types of risks to which the subject matter of insurance is exposed to
  •                 The experience of a company in a particular region.

49.   Which of the following risks are insurable?         

  •                 Financial Risk
  •                 Non-financial Risk
  •                 Both are correct
  •                 None of them

50. Insurance Companies provide cover only for:   

  •                 Specified Risks
  •                 Unspecified risks
  •                 Excluded risks
  •                 Speculative risks

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