*Purpose:*
IC-38 (often called the IRDA IC-38 exam) is the standardized pre-recruitment test for candidates seeking to act as *licensed insurance agents / advisors* (Life / General / Health / Composite) in India. Passing the IC-38 (or equivalent approved examination) is a regulatory requirement under IRDAI rules before an agent licence is issued. ([IRDAI][2])
*Who conducts it:*
The *Insurance Institute of India (III)* conducts the IC-38 exam on behalf of IRDAI; other approved exam bodies or training providers may also conduct recognized tests or mock exams. The III also provides official study material (branch-wise). ([insuranceinstituteofindia.com][1])
*Branches / paper types:*
* Life Insurance (Life agents)
* General (Non-Life) Insurance
* Health Insurance
* Composite options (combined branches)
You pick the branch when you register and study branch-specific material. ([nismexams.in][3])
*Eligibility & training (key points from IRDA rules):*
* Minimum age: 18 years.
* Educational requirement: usually 10+2 for urban; there are provisions for rural exceptions in some contexts (check latest III/IRDAI rules).
* Mandatory practical training hours before first licence: IRDAI regulations specify prescribed hours of training (e.g., 100–150 hours depending on composite/branch and candidate qualifications). See the IRDA regulations excerpt for exact training hour rules. ([IRDAI][2])
*Exam pattern (common, current format used by many sources and mock-exam providers):*
* *Number of questions:* 50 multiple-choice questions (MCQs). ([HDFC Life][4])
* *Marks:* 1 mark per question (total 50). ([HDFC Life][4])
* *Duration:* Typically *60 minutes* (1 hour). ([IC38 Mock Test][5])
* *Negative marking:* *No negative marking* in most official mock/exam descriptions — attempt all questions. ([Niva Bupa][6])
* *Passing marks:* *This varies in public sources.* Many current exam guides and training portals state *35% (18/50)* or *40% (20/50)* as the pass mark; some older III pages mention different thresholds for particular courses. Because the pass criterion has changed in the past and sources differ, *check the exam instruction sheet at registration or III’s official exam notice* for the authoritative pass cutoff at the time you sit the exam. (I provide common practice questions below assuming standard 50-MCQ format). ([nismexams.in][7])
*Syllabus – major topics (branch-common topics):*
1. Basics of Insurance: risk, insurable interest, indemnity, principle of insurance.
2. Life Insurance: key products (term, endowment, ULIP), premium concepts, surrender, nomination, bonuses.
3. General Insurance: fire, marine, motor, property, perils, sum insured concepts.
4. Health Insurance: policy types (cashless, indemnity), exclusions, waiting periods, pre-existing conditions.
5. Legal & Regulatory: IRDAI functions, licensing, code of conduct, grievance redressal.
6. Principles of Contract: offer, acceptance, consideration, insurable interest, utmost good faith.
7. Policy servicing, claims process, disclosures, commissions & agency code, ethics and customer-centric selling. ([insuranceinstituteofindia.com][8])
*Study material & prep resources:*
* Official III IC-38 study booklets (branch-wise) — these are primary and authoritative. ([insuranceinstituteofindia.com][1])
* Mock tests and question banks from reputable prep platforms (modelexam, iii-exams, etc.). ([ModelExam][9])
*Exam day logistics & tips:*
* Arrive early with valid photo ID.
* Computer-based test — basic computer literacy helps (mouse, selecting options).
* No calculators unless allowed — practice mental arithmetic and simple percentages.
* Attempt easy questions first; since no negative marking, attempt every question. ([Scribd][10])
50 Highly-Probable MCQs for IC-38 (with correct answers)
Below are 50 practice MCQs that reflect the typical IC-38 syllabus. Use them as revision. I give each question, four options (A–D), and the *correct answer* after the options. (No negative marking assumed; each question = 1 mark.)
1. *Insurance essentially is a method of —*
A. Transferring risk from many to few
B. Sharing the losses of a few by many
C. Eliminating risk altogether
D. Increasing risk exposure
*Answer: B*
2. *Which principle requires the policyholder to reveal all material facts to the insurer?*
A. Indemnity
B. Insurable interest
C. Utmost good faith (uberrimae fidei)
D. Proximate cause
*Answer: C*
3. *In life insurance, 'sum assured' refers to —*
A. The premium paid by policyholder
B. The amount payable on death or maturity as specified in the policy
C. Total premiums collected by insurer
D. Insurer’s profit margin
*Answer: B*
4. *Which one of these is a pure risk?*
A. Investing in shares
B. Buying a lottery ticket
C. Fire destroying a house
D. Starting a business for profit
*Answer: C*
5. *Which policy provides coverage only for the period of insurer’s liability and pays the face amount on death only?*
A. Endowment policy
B. Whole life policy
C. Term insurance policy
D. Money-back policy
*Answer: C*
6. *In general insurance, indemnity means —*
A. The insured can make profit from a claim
B. The insured should be restored to the same financial position as before the loss
C. The insurer pays double the loss amount
D. The insurer pays only accumulated profits
*Answer: B*
7. *Which of the following is NOT an insurance risk?*
A. Fire destroying goods in a warehouse
B. Fraud by manager causing loss
C. Market risk for listed equity portfolio held by investor
D. Theft of insured vehicle
*Answer: C*
8. *Nomination in life insurance is primarily for —*
A. Claim settlement to nominee after policyholder’s death
B. Tax deduction benefit
C. Increasing policy’s sum insured
D. Changing premium payment mode
*Answer: A*
9. *Which authority regulates the insurance sector in India?*
A. RBI
B. SEBI
C. IRDAI (Insurance Regulatory and Development Authority of India)
D. MCA
*Answer: C*
10. *Which of the following is an exclusion commonly found in health insurance?*
A. Accidental injuries during the policy term
B. Pre-existing conditions during waiting period
C. Treatment for sudden acute onset illness after waiting period
D. Hospitalization due to accidental fracture
*Answer: B*
11. *Which document contains the terms, coverage and conditions of an insurance contract?*
A. Proposal form
B. Brochure
C. Policy document
D. Premium receipt
*Answer: C*
12. *What is 'reinsurance'?*
A. Insurance of life only
B. Insurance purchased by an insurer from another insurer to limit loss exposure
C. Buying two identical policies for same risk
D. Government insurance for public property
*Answer: B*
13. *If an insurer offers to insure a risk and the insured accepts, the contract is formed at the moment of —*
A. Proposal submission
B. Premium payment
C. Acceptance of the offer by insurer (if offer is by insured) or acceptance by insured (if insurer’s offer) depending on who made the offer
D. Claim settlement
*Answer: C*
14. *What is 'sum insured' in general insurance?*
A. Maximum liability of insurer under the policy
B. Minimum premium charged
C. Amount of bonus added to policy
D. Agent’s commission amount
*Answer: A*
15. *Which principle applies to fire insurance about the cause of loss?*
A. Principle of proximate cause
B. Principle of subrogation
C. Principle of utmost good faith
D. Principle of contribution
*Answer: A*
16. *Which of the following is a life insurance rider?*
A. Motor addendum
B. Critical illness rider
C. Fire floatation rider
D. Marine extension
*Answer: B*
17. *What does 'waiting period' in health insurance mean?*
A. Time insurer takes to settle any claim
B. Period after policy inception during which certain claims (e.g., pre-existing diseases) are not payable
C. Time allowed for premium payment
D. Policy free look period
*Answer: B*
18. *Which of these is NOT a function of IRDAI?*
A. Regulating rates of personal income tax
B. Protecting policyholder interests
C. Regulating insurance companies and intermediaries
D. Promoting competition and efficiency in the insurance market
*Answer: A*
19. *Which principle prevents the insured from receiving more than the actual loss?*
A. Indemnity
B. Utmost good faith
C. Insurable interest
D. Contribution
*Answer: A*
20. *What is 'surrender value' in life insurance?*
A. Amount payable to the insured on making claim for accidental death
B. Refund amount to policyholder when policy is terminated before maturity (subject to terms)
C. Commission given to agent at policy sale
D. Penalty for not paying premium
*Answer: B*
21. *Which one of the following is true about 'insurable interest'?*
A. It must exist only at the time of claim
B. It must exist both at the time of making the contract and at the time of loss (for property insurance at time of loss; for life insurance usually at inception)
C. It is optional in insurance contracts
D. It is same as nominee’s right
*Answer: B*
22. *A policyholder does not disclose a known serious disease on proposal form. This is an example of violating —*
A. Subrogation
B. Warranty
C. Utmost good faith (misrepresentation / non-disclosure)
D. Contribution
*Answer: C*
23. *What is 'proximate cause' used for in claims?*
A. Determining nearest hospital for cashless facility
B. Determining the effective/natural cause that produced the loss and is sufficiently connected to it for the purpose of claim settlement
C. Fixing premium rates annually
D. Assigning nominees
*Answer: B*
24. *Which policy is primarily designed to provide savings with life cover?*
A. Term insurance
B. Endowment policy
C. Pure risk policy
D. Credit insurance
*Answer: B*
25. *Policy loan facility is commonly available under —*
A. Non-participating term policy
B. Participating whole life or endowment policies with surrender value (i.e., with cash value)
C. Only general insurance policies
D. Accident-only covers
*Answer: B*
26. *In motor insurance, 'third-party liability' covers —*
A. Damage to insured vehicle only
B. Injury or damage caused to third parties by the insured vehicle
C. Theft of insured vehicle only
D. Acts of God damaging vehicle
*Answer: B*
27. *Which of the following best describes 'subrogation'?*
A. Insurer’s right to recover from a third party who caused the loss, after indemnifying insured
B. Insured’s right to change insurer anytime
C. Agent’s right to sue insurer for commission
D. Insurer charging extra premium for high risk
*Answer: A*
28. *What is the usual effect of policy 'endorsement'?*
A. It cancels the policy permanently
B. It modifies or adds terms to the existing policy contract
C. It pays immediate claim to insured
D. It is another name for nomination
*Answer: B*
29. *Which of the following is NOT a duty of an insurance agent under IRDAI code?*
A. Disclose identity and insurer when selling a product
B. Misrepresent terms to finalize a sale quickly
C. Act in the best interest of the customer
D. Disclose commission if asked by the prospect
*Answer: B*
30. *What is 'free look period' in life insurance?*
A. Period to claim accidental death benefits only
B. Period (usually 15 days/30 days depending on product) after receipt of policy during which the policyholder can return the policy for full/partial refund of premium if not agreeable to terms
C. Period to make the first premium payment only
D. A waiting period for pre-existing diseases
*Answer: B*
31. *Which tax benefit is commonly available on life insurance premiums under Indian tax law (subject to prevailing laws)?*
A. No benefit ever
B. Deduction under section 80C (subject to limits) for premiums paid for life insurance policies (check current tax laws for limits and conditions)
C. Full tax exemption on commission received by agent
D. Tax on maturity amount only
*Answer: B*
32. *Which of the following statements about ULIPs is true?*
A. They are pure term insurance plans with no investments
B. ULIPs combine investment (fund units) and life insurance cover where part of premium is invested in funds and units are allotted to the policyholder
C. ULIPs are only for health insurance
D. ULIPs offer guaranteed returns like bank fixed deposits
*Answer: B*
33. *Which body is responsible for grievance redressal related to insurance distributors and companies?*
A. IRDAI and insurer’s internal grievance redressal mechanisms; policyholders can escalate to IRDAI and Ombudsman as per guidelines.
B. RBI only
C. Ministry of Finance exclusively handles individual claims directly
D. Local police station only
*Answer: A*
34. *Which of the following is a principle applied when two insurers cover the same risk?*
A. Utmost good faith
B. Contribution — each insurer shares proportional liability so insured should not be indemnified more than loss
C. Insurable interest
D. Subrogation only
*Answer: B*
35. *Which of the following is true of ‘cashless’ health insurance facility?*
A. Policyholder pays full hospital bill and claims are settled later only
B. Insurer settles eligible bills directly with the network hospital subject to policy terms and pre-authorization
C. There is no network hospital involved
D. Cashless always covers all exclusions
*Answer: B*
36. *Which of these is NOT covered in a basic fire insurance policy?*
A. Damage due to lightning and fire
B. Damage due to earthquakes (if earthquake perils included, but often separate cover needed)
C. Theft while premises unoccupied (generally excluded unless specifically covered)
D. Fire caused by acts of God if excluded explicitly
*Answer: C*
37. *Which of the following best describes 'moral hazard'?*
A. Risk due to physical deterioration of an asset
B. Increased risk of loss due to the insured’s dishonest or careless behavior after obtaining insurance (e.g., deliberately causing loss)
C. Risk due to natural disasters
D. Risk associated with moral philosophy classes
*Answer: B*
38. *'Grace period' in premium payment means —*
A. Period allowed beyond the due date during which premium can be paid without policy lapsing (subject to policy terms)
B. Period to cancel policy only
C. Period to increase sum insured only
D. Period for claim settlement only
*Answer: A*
39. *Which of the following is an objective of insurance marketing/agency?*
A. Maximize insurer’s frauds
B. Provide customers with need-based advice and help them choose appropriate products ethically
C. Avoid disclosure to clients always
D. Mislead customers to purchase higher commission policies always
*Answer: B*
40. *Under IRDAI rules, an insurance agent before first licensing must —*
A. Pass the pre-recruitment exam and complete prescribed training hours from an approved institution as per regulations
B. Only submit identity proof with no training
C. Be a graduate in law only
D. Be aged above 50 only
*Answer: A* ([IRDAI][2])
41. *Which of the following is TRUE about 'assignment' of a life policy?*
A. Assignment is transfer of rights under the policy to another person; it must be in writing and notice given to the insurer
B. Assignment increases the premium only
C. Assignment is not permitted under any circumstances
D. Assignment automatically changes nominee names only
*Answer: A*
42. *Which of the following is true about 'bonus' in participating (with-profits) life policies?*
A. Bonus reduces the sum insured always
B. Bonus is declared by insurer from surplus and added to policy as per terms (reversionary/terminal bonuses etc.)
C. Bonus is paid only in case of claims due to theft
D. Bonus is the same as agent commission
*Answer: B*
43. *Which of the following describes 'average clause' in property insurance?*
A. It allows full claim irrespective of under-insurance
B. It reduces claim proportionately if the insured is under-insured (i.e., where sum insured is less than actual value, claim paid is proportionate)
C. It doubles the claim if insured is under-insured
D. It applies in life insurance only
*Answer: B*
44. *Which of the following is true about 'policyholder protection' by IRDAI?*
A. IRDAI frames regulations protecting policyholder interests, sets licensing norms for agents and grievance redressal systems including Ombudsman mechanism
B. IRDAI directly pays claims on behalf of policyholders always
C. IRDAI manages bank accounts of policyholders
D. IRDAI sets school curriculum for students only
*Answer: A* ([IRDAI][2])
45. *What is 'sum paid on maturity' in a typical endowment policy?*
A. Only incremental bonus amount without basic sum assured
B. Maturity benefit payable on policy completion (sum assured + bonuses as applicable)
C. Premium refunded only
D. Agent's commission returned to policyholder
*Answer: B*
46. *Which of the following is the primary reason for insurers to reinsure?*
A. To avoid paying agent commission
B. To share large exposures and protect solvency by spreading risk with other insurers
C. To increase premium rate arbitrarily
D. To avoid claim settlements entirely
*Answer: B*
47. *Which law/principle prevents insured from claiming from more than one insurer the total loss exceeding actual loss?*
A. Proximate cause
B. Contribution and indemnity principles (they ensure insured is not over-indemnified)
C. Utmost good faith
D. Free look period
*Answer: B*
48. *Which of the following best describes 'cash value' in life insurance?*
A. Immediate loan facility (if policy has surrender/cash value) and accumulated savings element available under certain policies
B. Premium amount only
C. Government tax only
D. Nominee's right always sum assured only
*Answer: A*
49. *Which of these actions by an agent is allowed under IRDAI code of conduct?*
A. Give false information to secure sale
B. Disclose product features clearly and act in best interest of the client
C. Encourage misrepresentation on proposal form to get cover
D. Hide clauses to speed up sale
*Answer: B*
50. *Which of the following statements about 'policy renewal' is correct?*
A. Renewal is automatic and free of conditions even if premium not paid (always)
B. Renewal requires payment of due premium within grace period; otherwise policy may lapse; provisions exist for revival subject to conditions and underwriting
C. Renewal is same as assignment
D. Renewal means policy becomes void after grace period automatically without revival option
*Answer: B*
# Quick practice plan & tips
1. *Start with III study material* (branch booklet) — it's the exam base. ([insuranceinstituteofindia.com][1])
2. *Practice 50-question mocks* under 60 minutes. Time management is key. ([ModelExam][9])
3. *Focus on basic principles*: indemnity, insurable interest, utmost good faith, proximate cause, subrogation, contribution — these appear frequently.
4. *Memorize common policy terms* (free look, surrender, grace period, nomination, assignment, waiting period).
5. *Regulatory awareness*: Know IRDAI functions, agent code of conduct, licensing and training rules. ([IRDAI][2])
# Sources & where to verify (authoritative)
* Insurance Institute of India — IC-38 study booklets (Life/Health/General). ([insuranceinstituteofindia.com][1])
* IRDAI regulations & licensing rules (licensing, training hours, code of conduct). See IRDA documents. ([IRDAI][2])
* Recent exam prep guides / mock test providers summarizing pattern and passing marks (useful but verify with III on day of exam). ([nismexams.in][7])
If you want, I can now:
* Convert these 50 MCQs into a timed practice test (one hour, randomized).
* Generate an answer sheet + explanations for each MCQ (detailed rationale).
* Create a printable PDF of the MCQs or a set of flashcards for quick revision.
My Publications
Which of those would you like next?
[1]: https://www.insuranceinstituteofindia.com/downloads/IC38/ALEnglish.pdf?utm_source=chatgpt.com "ic 38 english"
[2]: https://irdai.gov.in/document-detail?documentId=398730&utm_source=chatgpt.com "form irda-agents-va"
[3]: https://www.nismexams.in/blog/ic-38-life-vs-general-vs-health-insurance-exams-how-to-choose-the-right-mock-test-for-each-branch/1026?utm_source=chatgpt.com "IC 38 Life vs General vs Health | How to Pick the Right ..."
[4]: https://www.hdfclife.com/insurance-advisor/irda-exam-for-insurance-agent?srsltid=AfmBOooxoU9tTx8nXexNmnQmcEal0_pj1NknmdFcSJj1rAKQFbSJ9jk5&utm_source=chatgpt.com "IRDA Exam for Life Insurance Agent in India"
[5]: https://www.workwithlic.com/what-is-the-ic-38-examination-how-to-clear-it?utm_source=chatgpt.com "What is the IC 38 Examination? How to Clear it ?"
[6]: https://www.nivabupa.com/health-insurance-articles/top-irda-exam-questions-you-must-practice.html?utm_source=chatgpt.com "Top IRDA Exam Questions You Must Practice in 2025"
[7]: https://www.nismexams.in/blog/ic-38-insurance-exam-2025-latest-syllabus-updated-pattern-and-marking-scheme-for-lic-and-irdai-aspirants/1029?utm_source=chatgpt.com "IC 38 Insurance Exam 2025 | Updated Syllabus, Pattern & ..."
[8]: https://www.insuranceinstituteofindia.com/downloads/IC38/AHEnglish.pdf?utm_source=chatgpt.com "ic-38 insurance agents health"
[9]: https://modelexam.in/iii-exams/ic38-mock-tests.html?utm_source=chatgpt.com "IC38 Mock Tests | Life, General & Health Insurance Exams"
[10]: https://www.scribd.com/document/526810969/IC-38-Question-Bank-Sure-Pass?utm_source=chatgpt.com "IC - 38 - Question - Bank - Sure Pass | PDF | Insurance"
No comments:
Post a Comment
thank you