LIC AAO Insurance & Financial Market Awareness Questions and Answers 2023: Previous Year Q/A, Important Topics, & More

LIC AAO Insurance & Financial Market Awareness Questions and Answers  2023 | LIC AAO Insurance & Financial Market Awareness Expected Questions | LIC AAO Insurance Awareness Questions Asked

LIC AAO Insurance & Financial Market Awareness Questions and Answers 2023 | Insurance Awareness for LIC AAO: The Assistant Administrative Officer (Generalist) Posts Examination will be held by the Life Insurance Corporation of India (LIC). You must first register for the LIC AAO(Generalist) Recruitment on the internet Portal in order to apply for the LIC AAO(Generalist) Exam. The applicant who is applying for the exam must review the LIC AAO (Generalist) Insurance & Financial Market Awareness syllabus in order to pass the Rajasthan Suchna Sahayak exam. The IC AAO (Generalist) Insurance & Financial Market Awareness Previous Years Questions is really beneficial when studying for the exam, so they must be included in their study program if they want to ace it. Candidates who are interested in Central Govt Jobs could utilize this.

LIC AAO Recruitment 2023 LIC AAO Syllabus 2023
LIC Assistant Administrative Officer (Generalist) Books 2023 LIC AAO (Generalist) Previous Year Question Papers

How to Prepare Insurance Awareness for LIC AAO

We recommend all the aspirants use the LIC AAO Insurance and Financial Market Awareness PDF for practicing questions of varying difficulty and gaining confidence for their actual exam. Get the latest question papers Here

  • Find out the types of questions that come up in the actual exam.
  • Learn about the difficulties and mistakes that can occur when writing an exam.
  • Solving Insurance Awareness for LIC Assistant Mains PDF/LIC AAO Insurance and Financial Market Awareness PDF and getting adequate training will increase your speed and accuracy.
  • It helps to develop your time management skills to complete the paper on time.
  • You can self-analyze the size of your chosen product with the help of these sheets.

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 Insurance and Financial Market Awareness: Topic Lists

Financial Market Topics

  • The Indian Financial System- Overview
    • Financial Markets- features and functions
    • Financial Institutions
    • Financial Instruments
  • Financial Markets
    • Money Market
    • Capital Market
      • Primary market
      • Capital Market
  • Money Market Instruments
    • T-Bills- types and features
    • Commercial Paper
    • Certificate of Deposit
    • Commercial Bills
    • Call/notice money market
    • CBLO
  • Primary Market
    • Book building
    • ASBA
    • Anchor investor
    • Green shoe option
    • IPOs and FPOs
    • IDRs and GDRs
    • Qualified Institutional Placement
    • ECBs, FCCBs, Euro issue
  • Secondary Market
    • Functions
    • Listing and de-listing
    • Important SEBI regulations
    • Stock Exchanges
  • Derivatives
    • Forwards
    • Futures
    • Options
    • Exchange traded vs OTC
  • Government Securities Debt Market
  • Forex Markets
  • Financial Institutions
    • RBI
    • SEBI
    • IRDA
    • PFRDA
    • SIDBI
    • EXIM
    • IDFC
    • EXIM
    • NABARD
  • Banking In India
    • Functions
    • Scheduled Commercial Banks- PSBs, private banks and foreign banks
    • Important terminology used in banking sector- SLR, CRR, NPA, CAR, Basel Norms
    • Cooperative Banking
    • NBFCs
    • SARFAESI Act
    • Monetary and Fiscal Policy
    • Money laundering and KYC
  • Important Changes in the Financial sector
  • Disinvestments
  • Financial Inclusion- important milestones
  • Use of technology in financial sector
  • Alternate sources of finance- Bitcoins, Crowdfunding
  • Corporate Governance in Financial Sector
  • The Union Budget
  • Economic Survey
  • Key financial indicators- inflations (WPI and CPI), GDP rate, IIP rate etc

Visit the following sites regularly and make notes of the FAQs and notifications (last 6 months)

  • RBI
  • SEBI
  • IRDA

Insurance Knowledge or Insurance Awareness Topics

  • Insurance Introduction – features and working
  • Life Insurance- History and Evolution
  • LIC
  • General Insurance – History and Evolution
  • GIC
  • Important Insurance Companies-
    • New India Assurance Company Limited
    • United India insurance company limited
    • Oriental Insurance Company Limited
    • National Insurance Company Limited
    • Agriculture Insurance Company of India Limited
    • Private Life Insurance Compnaies
  • Use of Insurance as a tool to manage risk
  • Features of an Insurance Contract
  • Insurance and social security
  • Human Life Value
  • Mutuality and Diversification
  • Principles of Life Insurance
  • Elements of an insurance contract
  • Insurance Pricing- basics
  • Documentation at various stages
  • Traditional Life Insurance products-
    • Term Insurance
    • Whole Life Insurance
    • Endowment insurance
    • Variants
  • Non- Traditional Life Insurance products-
    • Universal Life insurance
    • Variable insurance
    • ULIPs
  • Annuity- types and features
  • Underwriting
  • Claims- Types and procedures
  • Selling Process
  • Customer Service
  • Health Insurance- basics
  • Motor Insurance- basics
  • Property Insurance Basics
  • Married Women’s Property Act
  • Important terminology
  • Grievance Redressal Mechanism
  • Regulatory aspects
    • IRDA
    • Ombudsman
    • IRDA Act 1999
    • Insurance Laws (Amendment) Act 2015
  • Important committees
  • Government schemes-
    • Pradhan Mantri Fasal Bima Yojana
    • Pradhan Mantri Suraskha Bima Yojana
    • Rashtriya Swasthya Bima Yojana
    • Employment State Insurance Scheme
    • Central Government health scheme
    • Aam Aadmi Bima Yojana
    • Janashree Bima Yojana
    • Universal Health Insurance scheme
  •  Important LIC life insurance schemes
  • Latest developments in life insurance – 6 months CAF
  • Important technological changes in insurance

Which of the following is true about indemnity?

  1. The aim is to place the insured in the same financial condition as he was before the loss-making event.
  2. The aim is to profit from the loss-making event.
  3. The aim is to get the same asset back in the same condition.
  4. The aim is to buy a new asset with the money.
  5. None of the above

Explanation: The principle of indemnity states that the insured would be compensated for the amount of loss he has suffered without making any profit.

What is the cover given to a family in a year under the Ayushman Bharat-National Health Protection Mission?
  1. 1 lakh per annum
  2. 3 lakh per annum
  3. 5 lakh per annum
  4. 7 lakh per annum
  5. 10 lakh per annum

Explanation:  The AB-NHPM aims to target over 10 crore families belonging to poor and vulnerable populations based on Socio Economic and Caste Census 2011 (SECC) database. It will cover of Rs 5 lakh per family per year, taking care of almost all secondary care and tertiary care procedures. There will be no cap on family size and age in the scheme.

The Agriculture Insurance Company of India is headquartered at ________ ?
  1. Delhi
  2. Mumbai
  3. Bhubaneshwar
  4. Pune
  5. Vizag

Explanation:  The Agriculture Insurance Company of India Limited is a limited company headquartered out of New Delhi. AIC aims to provide insurance coverage and financial support to the farmers in the failure of any of the notified crops as a result of natural calamities, pests, and diseases to restore their creditworthiness for the ensuing season; to encourage the farmers to adopt progressive farming practices, high-value in-puts, and higher technology; to help stabilize farm incomes, particularly in disaster years.

Which of the following is NOT an IRDAI-approved insurance repository?
  1. CDSL Insurance Repository Limited
  2. CAMS Insurance Repository Services Limited
  3. National Insurance-policy Repository
  4. Karvy Insurance Repository Limited
  5. SHCIL Projects Limited

Explanation:  The Insurance Regulatory and Development Authority originally issued licenses to five entities to act as Insurance Repositories. But SHCIL Projects Limited surrendered its Insurance Repository license in September 2015. The remaining four are:

– CDSL Insurance Repository Limited

– Karvy Insurance Repository Limited

– National Insurance-policy Repository

– CAMS Insurance Repository Services Limited

The asset which is being insured must definitely be which of the following?
I. Has economic value
II. Is graded regularly
III. Has to be physical

  1. Only I
  2. Only II
  3. Only I and II
  4. Only I and III
  5. All of the above

Explanation:  The asset should have economic value and can be either

i. May be physical (like a car or a building) or

ii. May be non-physical (like name and goodwill) or

iii. May be personal (like one’s eyes, limbs, and other aspects of one’s


It does NOT need to be graded regularly.

Both I and III are correct.

  1. Back up
  2. Super annulation fund
  3. Reserve
  4. Trust Fund
  5. None of the above


Explanation: Premiums collected in the early years of the contract are held in trust by the insurance company for the benefit of its policyholders. The amount so collected is called a Reserve.

The saving component of the level premium is known as ____

  1. Term component
  2. Protection component
  3. Cash component
  4. Risk component
  5. None of the above



The level premium has two components.

  • The first is known as the term or protection component, consisting of that portion of the premium actually needed to pay the cost of the risk.
  • The second is known as the cash value element. It is made up of accumulated excess payments of the policyholder. It constitutes the savings component.
The adage- do not put all your eggs in one basket- is also known as ____
  1. Mutuality
  2. Diversification
  3. Value ascertain
  4. Investment
  5. Insurance

Explanation:  Under diversification, the funds are spread out among various assets (placing the eggs in different baskets). Under diversification, we have funds flowing from one source to many destinations.

Which of the following is not a part of life insurance?
  1. Risk
  2. Contract
  3. Asset
  4. Mutuality
  5. All are part


The following elements are part of the Life Insurance industry:


The chance of loss is known as __

  1. Peril
  2. Risk
  3. Uncertainty
  4. Probability
  5. None of the above

Explanation:  The asset may lose its value if a certain event happens. This chance of loss is called as risk

Postal Life Insurance was introduced in which year?
  1. 1880
  2. 1884
  3. 1889
  4. 1895
  5. 1899

Explanation: In 1884, postal life insurance was first offered. It is one of the earliest life insurance programs for the benefit of employees in the public and semi-public sectors. It includes personnel of local and state governments, public sector organizations (PSUs), universities, government-funded institutes of higher learning, nationalised banks, municipal and autonomous entities, and joint ventures with at least a 10% government/PSU interest. Additionally, officers and personnel of the Defense services and paramilitary forces are given access to the insurance facility. Additionally, it oversees the Department of Posts’ Gramin Dak Sevaks, or extra-departmental employees, group insurance program.

Which of the following plans is NOT offered by Postal Life Insurance?

Explanation: Whole Life Assurance (SURAKSHA), Convertible Whole Life Assurance (SUVIDHA), Endowment Assurance (SANTOSH), Anticipated Endowment Assurance (SUMANGAL), Joint Life Assurance (YUGAL SURAKSHA), and Children Policy are the six types of policies that PLI offers (BAL JEEVAN BIMA).

Under the Sampoorna Gram Bima Yojana, what is the minimum number of households to be covered in one village?
  1. 50
  2. 75
  3. 90
  4. 100
  5. 150

Explanation:  In each of the country’s revenue districts, at least one village with at least 100 families will be identified as part of the Sampoorna Bima Gram (SBG) Yojana, and efforts will be made to provide each home in that village with at least one RPLI (Rural Postal Life Insurance) insurance. The main goal of this project is to reach every home in the specified Sampoorna Bima Gram hamlet.


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