Question 1

Under the Insurance Act 1938, what is the minimum period of continuous premium payment required before a life insurance policy acquires a surrender value?

Accepted Answer

Source: Insurance Act 1938, Section 45. Section 45 provides that a life insurance policy shall acquire a surrender value only if premiums have been paid for a minimum of 3 consecutive years. Before the completion of 3 years, the policy cannot be surrendered and the policyholder has no right to claim a surrender value.

Question 2

Which of the following is NOT covered under a standard General Insurance policy as per IRDAI guidelines?

Accepted Answer

Source: IRDAI General Insurance Regulations 2016 and Standard Policy Conditions. Standard general insurance policies cover losses due to fire, theft, accident, and natural calamities. However, losses arising from war, civil unrest, nuclear hazard, and deliberate acts by the policyholder are typically excluded under standard exclusion clauses mandated by IRDAI.

Question 3

Under the Insurance Act 1938, which section governs the nomination of a beneficiary in a life insurance policy?

Accepted Answer

Source: Insurance Act 1938, Section 39. Section 39 explicitly provides that a policyholder may nominate a person or persons to receive the policy monies in the event of the policyholder's death. The nomination can be made at the time of effecting the policy or at any time thereafter, and can be changed or cancelled by the policyholder before maturity or surrender of the policy.

Question 4

What is the maximum age limit for entry into a standard term life insurance policy as per IRDAI guidelines?

Accepted Answer

Source: IRDAI Life Insurance Regulations 2016 and Standard Product Guidelines. While IRDAI does not prescribe a uniform maximum entry age across all insurers, the standard practice in the Indian insurance industry is that term life insurance policies typically allow entry up to age 65 years. However, some insurers may offer policies with higher entry ages (up to 70 years) subject to medical underwriting and IRDAI approval.

Question 5

What is the minimum lock-in period for a Unit Linked Insurance Plan (ULIP) as per IRDAI regulations?

Accepted Answer

Source: IRDAI Unit Linked Insurance Products Regulations 2019. The minimum lock-in period for ULIPs is 5 years from the date of commencement of the policy. During this lock-in period, the policyholder cannot surrender the policy or withdraw funds, except in cases of death of the life assured or terminal illness as defined by IRDAI.

Question 6

Under IRDAI guidelines, what is the maximum period within which a life insurance claim must be settled by the insurer?

Accepted Answer

Source: IRDAI Master Circular on Life Insurance Claims 2023. The insurer must settle a valid life insurance claim within 30 days of receipt of all required documents and completion of investigation. If the claim is rejected, the insurer must communicate the rejection with detailed reasons within the same 30-day period.

Question 7

Under IRDAI guidelines, which of the following statements correctly describes the Free Look Period in life insurance policies?

Accepted Answer

Source: IRDAI Master Circular on Life Insurance Products (2024) and Insurance Act 1938, Section 41. The Free Look Period is a statutory right granted to policyholders to review the policy document after purchase. For policies sold through distance marketing (online/postal), the free look period is 30 calendar days from the date of receipt of the policy document. For policies sold through agents or in person, the period is 15 calendar days. During this period, the policyholder can return the policy and receive a full refund of premiums paid, minus any stamp duty or medical examination charges.

Question 8

Under IRDAI regulations, what is the minimum sum assured for a term insurance policy, and what is the typical maximum age limit for entry into a term insurance policy?

Accepted Answer

Source: IRDAI Master Circular on Life Insurance Products (2024). The minimum sum assured for term insurance policies is typically ₹25 lakhs (₹25,00,000), though some insurers may offer lower amounts depending on product design and underwriting guidelines. The maximum entry age for term insurance is generally 65 years, which is higher than endowment policies (55 years) because term insurance is pure risk coverage with no investment component. Some insurers may extend this to age 70 for specific term products.

Question 9

Under the Insurance Act 1938, which section deals with the repudiation of claims by an insurer, and what is the statutory time limit within which an insurer must settle or repudiate a claim?

Accepted Answer

Source: Insurance Act 1938, Section 45 and IRDAI Claims Settlement Regulations (2024). Section 45 of the Insurance Act 1938 governs the repudiation of claims. An insurer must settle a claim within 30 days of receipt of all required documents and proof. If the insurer repudiates a claim, it must communicate the repudiation in writing with detailed reasons within 30 days. Failure to settle or repudiate within 30 days results in the claim being deemed accepted, and the insurer must pay interest at 12% per annum on the claim amount from the date of claim.

Question 10

Under IRDAI regulations, what is the maximum age limit for entry into a traditional endowment life insurance policy, and what is the typical maximum maturity age?

Accepted Answer

Source: IRDAI Master Circular on Life Insurance Products (2024). For traditional endowment policies, the maximum entry age (issue age) is typically 55 years, though some insurers may offer policies up to age 60 depending on product design. The maximum maturity age is generally 80 years. This means a 55-year-old can purchase an endowment policy with a 25-year term, maturing at age 80. These limits are set to ensure insurability and manageable underwriting risk.

Question 11

Under IRDAI regulations, what is the minimum period for which a life insurance policy must remain in force before the policyholder can exercise the surrender option without penalty?

Accepted Answer

Source: IRDAI Master Circular on Life Insurance Products (2024) and Insurance Act 1938, Section 45. A life insurance policy becomes eligible for surrender value only after it has been in force for a minimum of 3 full years and all due premiums have been paid. This is the statutory surrender period. Surrender before 3 years may result in forfeiture or reduced value depending on the policy terms.

Question 12

Under the Insurance Act 1938, which section governs the nomination of a beneficiary in a life insurance policy, and what is the key characteristic of nomination?

Accepted Answer

Source: Insurance Act 1938, Section 39. Section 39 empowers a policyholder to nominate one or more persons to receive policy proceeds. Nomination is a directive to the insurer and does not transfer ownership of the policy — the nominee has no rights during the policyholder's lifetime. The nomination can be changed or cancelled at any time before policy maturity or claim.

Question 13

Under the IRDAI (Integrated Ombudsman Scheme), 2017, what is the maximum compensation amount that an Ombudsman can award in a single complaint without requiring approval from the Insurance Regulatory and Development Authority?

Accepted Answer

Source: IRDAI (Integrated Ombudsman Scheme), 2017, Regulation 12. Explanation: The IRDAI Integrated Ombudsman Scheme, 2017 empowers Ombudsmen to award compensation up to ₹30 lakh in a single complaint without requiring prior approval from IRDAI. This limit was increased from the earlier ₹20 lakh to ₹30 lakh to enhance the Ombudsman's authority and provide faster redressal to policyholders. Awards exceeding ₹30 lakh require IRDAI approval. This scheme applies to all insurance sectors: life, general, and health.

Question 14

Under the IRDAI (Protection of Policyholders' Interests) Regulations, 2017, what is the maximum period within which a general insurance company must settle a claim after receiving all required documents?

Accepted Answer

Source: IRDAI (Protection of Policyholders' Interests) Regulations, 2017, Regulation 6.3. Explanation: General insurance companies are mandated to settle claims within 30 days of receiving all necessary documents and information from the policyholder. This regulation applies uniformly across all general insurance segments including motor, health, and property insurance. Failure to settle within this period attracts interest at the rate of 2% per annum above the RBI base rate.

Question 15

Under Section 45 of the Insurance Act, 1938, after what period can an insurer NOT repudiate a life insurance policy on the ground of misstatement or non-disclosure?

Accepted Answer

Source: Insurance Act, 1938, Section 45. Explanation: Section 45 establishes that after 3 years from the date of issuance of a life insurance policy, the insurer cannot repudiate the policy on grounds of misstatement, concealment, or non-disclosure of material facts, except in cases of fraud. This is a critical consumer protection provision that prevents insurers from denying claims after the contestation period expires. The 3-year period is absolute and non-negotiable.

Question 16

Under the IRDAI (Obligations of Insurers to Observe Fair Conduct Code) Regulations, 2015, which of the following is NOT a mandatory component of the Fair Conduct Code that insurers must implement?

Accepted Answer

Source: IRDAI (Obligations of Insurers to Observe Fair Conduct Code) Regulations, 2015, Regulation 3. Explanation: The Fair Conduct Code mandates that insurers must: (1) conduct business with integrity and fair dealing; (2) ensure fair treatment of customers; (3) maintain transparency in all dealings; (4) handle complaints fairly and promptly; and (5) maintain confidentiality of customer information. The regulation does NOT mandate insurers to guarantee claim settlement within 24 hours — this is not a Fair Conduct Code requirement. Claim settlement timelines are governed separately under the Protection of Policyholders' Interests Regulations.

Question 17

Under the IRDAI (Cashless Health Insurance) Regulations, 2020, what is the minimum number of network hospitals that a health insurance company must maintain in a metropolitan city with population above 10 lakh?

Accepted Answer

Source: IRDAI (Cashless Health Insurance) Regulations, 2020, Schedule I. Explanation: The regulation mandates that health insurance companies must maintain a minimum network of 50 hospitals in metropolitan cities with population above 10 lakh. This requirement ensures adequate accessibility of cashless facilities to policyholders in major urban centers. The network requirement varies based on city classification: 50 for metros (>10 lakh), 25 for tier-1 cities (5-10 lakh), and 10 for tier-2 cities (<5 lakh).

Question 18

Under Section 38 of the Insurance Act, 1938, an assignment of a life insurance policy is valid only if the insurer is notified within what period after the assignment?

Accepted Answer

Source: Insurance Act, 1938, Section 38. Explanation: Section 38 governs the assignment of insurance policies. While the assignment itself can be made at any time, the assignment is valid against the insurer only if the insurer is notified of the assignment within 30 days of the assignment date. Notification to the insurer is essential because it binds the insurer to recognize the assignee's rights. Failure to notify within 30 days does not invalidate the assignment between the parties, but it may not be enforceable against the insurer.

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