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Advanced Wealth Management Course (IIBF) - Paper 4

Part I: Ch 9: Fire Insurance

Q1.

Which type of policy is a package cover meant for industries with an overall sum insured of Rs. 100 crores?

Reinstatement value polices
Agreed bank clause in a fire policy
Industrial all risk policy
Declaration policy

Q2.

Under insurance of up to ________ is permitted in Industrial all risk policy.

10%
15%
20%
25%

Q3.

For Declaration policies issue, the minimum sum to be insured must be at least _________ in any location.

Rs. 1 crore
Rs. 5 crores
Rs. 10 crores
Rs. 50 crores

Q4.

The refund of premium based on the declarations is not permitted beyond ___________ of the premium.

40%
70%
60%
50%

Q5.

Declaration policies cannot be issued for:

Insurance required for short periods
Stocks under process
Both (a) & (b)
Stocks at Railway sidings
All of the above

Q6.

(I) TAC does not permit reinstatement value policies for stocks & goods. (II) Declaration policies cannot be floater policies.

Both the statements are correct
Only statement (I) is correct
Only statement (II) is correct
Both the statements are wrong

Q7.

Reinstatement value policy is a fire policy that specifies that in event of loss, the policy will pay an amount required for reinstatement of the property insured.

True
False

Q8.

The Middle-of-Term cover commences only ________ days after the receipt of the premium.

5 days
10 days
15 days
25 days

Q9.

(I) Partial insurance can only be issued for such items and properties whose market value cannot be readily ascertained. (II) Under Floater policy stocks lying at different locations are covered under one sum insured.

Both the statements are correct
Only statement (I) is correct
Only statement (II) is correct
Both the statements are wrong

Q10.

(I) Variable charges are fixed amount irrespective of the business transacted, which cannot be reduced in direct proportion to any reduction of business. (II) Standing charges are expenses incurred in the production of goods which vary in amount in direct proportion to the volume of business transacted.

Both the statements are correct
Only statement (I) is correct
Only statement (II) is correct
Both the statements are wrong

Q11.

Net Profit is:

Turnover – Variable charges
Turnover – Standing charges
Turnover – (Variable charges + Standing charges)
Turnover + (Variable charges – Standing charges)

Q12.

A typical fire policy does not cover:

Loss, destruction or damage caused by war, and perils arising/kindred to it.
Loss, destruction or damage directly or indirectly caused to the property due to nuclear hazards.
Loss, destruction or damage to the stocks in cold storage premises caused by change in temperature.
Both (a) & (b)
All of the above

Q13.

Long-term policies increase in cover is permitted on a pro rata basis.

True
False

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