CBSE Class 11th Business Studies Test - t4a

Free Business Studies - Class 11th (CBSE) - Test - t4a - Business Services

Time: 1 hour                                                                                                                               Marks: 40

Q1. Which Banking Service permits withdrawal of money more than the balance in the account?

1. Saving Account
2. Barker’s Cheque
3. Bank Overdraft
4. Fixed Deposit Account

Q2. Insurable interest must exist at the time of loss, but may be absent at the time of taking the policy, only in case of

1. Life Insurance
2. Fire Insurance
3. Marine Insurance
4. All of the above

Q3. "It is the duty of the insured to take preventive measures to minimize the loss of the property." Identify the principle of insurance in the given picture.

1. Mitigation of loss
2. Subrogation
3. Proximate cause
4. Indemnity

Q4. Without disclosing that he is suffering from TB, Mr. A gets himself insured against death for ₹10,00,000. He lives for another 3-4 years and dies due to TB. The Insurance company came to know about Mr. A’s illness only after his death. Now, under these circumstances, the insurance company is not liable to pay anything to the dependents of Mr. A, as the contract between the insurance company and Mr. A is void.

Identify the principle of insurance to which the above example relates:

1. Utmost Good Faith
2. Insurable Interest
3. Indemnity
4. Subrogation

Q5. The charge by the insurer on account of providing services is called _____________.

1. Profit
2. Dividend
3. Premium
4. Installment

Q6. The person or firm who gets compensation through the insurance policy is called

1. Insured
2. Insurer
3. Premium
4. None of these

Q7. Mr. Rohan is the owner of a factory engaged in manufacturing crackers. He insured his factory against fire. While taking the insurance policy, he did not disclose the product being manufactured, as this would have led to paying a much higher premium. Once the factory was severely damaged by fire, but the Insurance Company refused to accept his claim. He filed a case against the company. The court favoured the Insurance Company on the ground that Mr. Rohan had not revealed the fact related to the type of product being manufactured. So, the contract of insurance is voidable at the discretion of the insurer.

Which principle of insurance has been violated by Mr. Rohan?

1. Principle of Indemnity
2. Principle of Utmost Good Faith
3. Principle of Proximate Cause
4. All of these

Q8. Banker's cheque is also known as ____________.

1. Bank Draft
2. Pay Order
3. EFT
4. USSD

Q9. The purpose of insurance is to bring the insured to the same financial position as he was before the loss. This is related to

1. Principle of indemnity
2. Principle of causa proxima
3. Principle of utmost good faith
4. Principle of insurable interest

Q10. Which principle of insurance lays down that the cause for the loss must be related to the subject matter of the insurance contract?

1. Principle of Utmost Good Faith
2. Principle of Indemnity
3. Principle of Causa Proxima
4. Principle of Mitigation of Loss

Q11. Write the difference between Insurance and Assurance.

Q12. Why is life insurance considered a contract of assurance?

Q13. Sikha is running a general store. The store was insured against natural disasters like flood, earthquake, and theft with Hindustan General Insurance Company for the amount of ₹50 lakh. Heavy rain in the city caused massive floods, and the store was looted by people, which was caught on CCTV. She filed the store insurance claim with the insurance company for the loss of ₹13 lakh for the material and furniture spoiled, and also ₹25 lakh for food and stock due to flood damage. The insurance company refused to accept the claim for ₹25 lakh as the flood damage occurred due to a natural disaster. Sikha argued that she is paying a premium only for ₹50 lakh, and the CCTV footage accepted the claim of ₹13 lakh. Sikha argued that the fundamental principle of insurance should be to pay the full claim of ₹43 lakh.

What is the principle of insurance to which the above example relates?

Q14. Mr. Ramanan hides a particular disease of his health from the insurance company. While getting his life insurance done, he was not truthful about his disease. Explain the concept of insurance to which the above example is related.

Q15. Two friends Mr. Narayan Mishra and Mr. Govind Rai got different types of Insurance policies done. Mr. Narayan Mishra got his house insured for ₹50,00,000 by ‘New India Insurance Company’. The Company thought that there was a great risk involved in it. It got the insurance for ₹30,00,000 out of it done by ‘National Insurance Company’. After some days there was an Earthquake and Mr. Mishra’s house was completely destroyed. ‘New India Insurance Company’ made the full payment of ₹50,00,000 to Mr. Mishra. Now ‘New India Insurance Company’ gets the payment of ₹30,00,000 from ‘National Insurance Company’. In this way, the first company (New India Insurance Company) got its risks reduced.
The other friend, Mr. Govind Rai got his life insured by ‘Reliance Life Insurance Company Ltd.’, and Life Insurance Corporation of India for ₹10,000 and ₹5,00,000 respectively. He survived up to the end of the fixed period.

1. Identify the two types of insurance contracts entered into by both the friends in the above paragraph.
2. Identify and explain the type of insurance is indicated in the insurance contract done by Mr. Narayan Mishra.
3. Identify and explain the type of insurance contract is indicated in Mr. Govind Rai’s insurance contract in which two insurance companies are involved?

Q16. Chirag got his pen manufacturing factory insured against fire. His factory caught fire and some of his employees took advantages of the situation and stole stock of pens. Chirag made a claim of damages caused by fire including loss due to pens being stolen. The insurance company agreed to pay damages caused by fire only. It refused to pay for loss caused by stolen pens on the ground that loss by theft was a remote cause and not proximate one.

1. What does principle of Cause Proxima State?
2. Give the names and nature of two causes resulting in losses for Mr. Chirag.
3. Is Mr. Chirag right in claiming loss due to stole pens?

Q17. Write a detailed note on various facilities offered by Indian Postal Department.

The End