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Term Insurance Quiz: 10 Questions with Answers

Written by the Quizzeela team · Reviewed by Utsav Raj
Last checked · 10 questions · Easy

Term insurance protects your family if something happens to you. Test what you know before you buy.

New to this topic? Read the guide firstTerm Insurance: Meaning, How It Works and How Much Cover You Need Play as a timed quiz and earn coins

1A term life policy pays out when:

  1. Every five years
  2. You buy a house
  3. The insured person dies during the policy term
  4. You retire
Show answer
Answer: C. The insured person dies during the policy term. Term insurance pays the sum assured to the nominee if the insured dies during the term.

2In a pure term plan, if you outlive the term you usually get:

  1. Double the premium back
  2. A new policy automatically
  3. A free car
  4. Nothing back
Show answer
Answer: D. Nothing back. Pure term plans have no maturity benefit. That is why they cost much less than savings-type plans.

3Who is a "nominee"?

  1. The insurance agent
  2. The bank manager
  3. The doctor
  4. The person who receives the claim money
Show answer
Answer: D. The person who receives the claim money. The nominee is the person you name to receive the payout.

4Term insurance premiums are usually lower when you buy:

  1. After a major illness
  2. Premiums never change
  3. Young and healthy
  4. After retirement
Show answer
Answer: C. Young and healthy. Younger, healthier buyers are lower risk, so they usually pay less for the same cover.

5A "rider" is:

  1. A type of tax
  2. A person on a bike
  3. A late fee
  4. An optional extra benefit added to a policy
Show answer
Answer: D. An optional extra benefit added to a policy. Riders, like accidental death or critical illness cover, add benefits for an extra premium.

6The "free-look period" lets you:

  1. Review a new policy and return it if you do not like it
  2. Get free health check-ups
  3. Change the nominee for free forever
  4. Skip premiums for free
Show answer
Answer: A. Review a new policy and return it if you do not like it. After you receive a new policy, you get a short time to review and cancel it for a refund, minus some charges.

7"Claim settlement ratio" means:

  1. How fast the website loads
  2. The agent's commission
  3. Your yearly premium
  4. The share of claims an insurer paid out of those received
Show answer
Answer: D. The share of claims an insurer paid out of those received. It shows what percentage of claims the insurer settled in a year.

8Hiding a smoking habit when buying term insurance can:

  1. Has no effect
  2. Lower your premium safely
  3. Increase your cover
  4. Lead to the claim being rejected
Show answer
Answer: D. Lead to the claim being rejected. Wrong or hidden information can be a reason to reject a claim. Always disclose honestly.

9Who regulates insurance companies in India?

  1. NPCI
  2. IRDAI
  3. RBI
  4. SEBI
Show answer
Answer: B. IRDAI. The Insurance Regulatory and Development Authority of India (IRDAI) regulates insurers.

10A common rule of thumb for life cover is about how many times your yearly income?

  1. 10 to 15 times
  2. 50 times
  3. 100 times
  4. 1 to 2 times
Show answer
Answer: A. 10 to 15 times. Many planners suggest 10 to 15 times yearly income, adjusted for loans and goals. It is a rough guide, not advice.
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Sources: IRDAI policyholder handbooks and insurer glossaries. For learning only, not financial, tax or insurance advice. Found a mistake? Use "Report a mistake" in the timed quiz.