Crack the IC-38, Insurance agent exam-2026. Read this study material to become LIC agent, HDFC Life Financial Consultant (FC) or Financial Advisor (Article No.2):

 

#### Basic Principles of Insurance: There are six basic principles of insurance:  1. Insurable interest 2. Utmost good faith 3. Proximate cause 4. Indemnity 5. Subrogation 6. Contribution.

Why is the IC-38 Exam Called That? The IC-38 exam is named after the Insurance Act of 1938, which served as the foundational legislation for regulating the insurance sector in India. "IC" stands for Insurance Certificate (or Insurance Core), while "38" refers to the year of the Act. This exam is a mandatory pre-licensing requirement set by the IRDAI for all prospective insurance agents.

**Tips for the IRDA (IC-38) Exam:** - **Duration:** 1 hour - **Submission:** The exam will automatically submit if not completed within the time limit. - **Questions:** Attempt all questions. **Strategy:** - Start with questions you are confident about. - Avoid spending too much time on lengthy questions.    **Marking:** There is no negative marking. **Results:** Results will be displayed on the screen immediately after submission.

**Important Study Material for Exam Preparation:** 1. **Insurance**: It is defined as the transfer of risk or the sharing of losses by a few among many.    - **Example**: After an event such as a fire, indemnity under Rail Transit policies must be submitted to the railways upon receipt of a claim notice. 2. **Unbundling of Life Insurance Products**: This refers to the separation of protection and savings elements in life insurance. 3. **Minor Proposals**: Ramesh, who is 16, cannot offer life insurance because he is a minor (under 18 years old). 4. The First Premium Receipt (FPR) is proof of insurance. This document is essential because it establishes the date of assumption of the risk, but its value is nil once the policy has been issued. 5. **Motor Insurance Certificate**: This certificate must be kept in the car at all times. 6. **Subrogation**: This term refers to the transfer of all rights and remedies from one party to another. 7. **Health Checkup Expenses**: An IRDAI insurer should cover at least 50% of pre-policy health checkup expenses. 8. **Policy Document**: The third part of the policy document contains specific policy provisions. 9. **Claim Under MRI**: When a claim under Mortgage Redemption Insurance (MRI) is initiated, the money is paid to the borrower, who is then responsible for repaying the creditor. 10. **ESIS**: The complete form of ESIS is the Employees' State Insurance Scheme. 11. **Service Quality**: Cleverness is not an indicator of service quality. 12. **IGMS**: The Integrated Grievances Management System (IGMS) serves as a central repository for insurance grievance data. 13. **Deductible**: A deductible is a method to reduce insurance costs. 14. **Motor Third Party Liability Insurance**: In India, this type of insurance is mandatory. 15. **Economic Value of an Asset**: An asset creates economic value through income generation. 16. **Uberrima Fides**: The principle of disclosing known material facts is known as Uberrima Fides. 17. **IRDAI**: This means Insurance Regulatory and Development Authority of India. 18. **Loss Prevention**: Measures taken to reduce the likelihood of risk are called loss prevention. 19. **Consumer Protection Act**: Under the Consumer Protection Act of 1986, a person who buys goods for resale cannot be classified as a consumer. 20. **Penalties for Agents**: Any individual acting as an insurance agent in violation of the Act may be liable for a penalty of up to ten thousand rupees. Similarly, any insurer or representative who appoints an unqualified individual as an agent may incur a penalty of up to one crore rupees. 21. **Coercion**: If Ramesh threatens to kill Mahesh if he does not sign the contract, it is treated as coercion. 22. **Diversification**: Investing funds across various asset classes is known as diversification. 23. **Financial Planning**: The best time to start financial planning is once you receive your first salary. 24. **Post-Retirement Stage**: In this stage of life, individuals often appreciate their past savings the most. 25. **Policy Schedule**: The policy schedule is part of a standard insurance policy document. 26. **Moral Hazard**: A person who consumes excessive alcohol because he is insured is an example of moral hazard. 27. **Medical Underwriting**: The history of heredity is significant in medical underwriting because certain diseases can be inherited from parents to children. 28. **Judgmental Method**: Sheena, who is suffering from acute diabetes, is evaluated using the judgmental method. 29. **Medical Terminology**:     - The full form of CPT is Current Procedure Terminology.    - The full form of ICD is International Classification of Diseases. 30. **Variable Life Insurance**: This type of insurance is a temporary life insurance policy. 31. **Freelook Period**: The insurance freelook period is 15 days. 32. **Bank Deposits**: Bank deposits are classified under transactional plans. 33. **Nomination**: Nomination is conducted under Section 39. A nomination can include more than one individual; however, nominees do not have rights to the policy. 34.**Claim**: A claim is a demand made by the insured. 35. **Accidental Death Cases**: An inquest report is required in cases of accidental death.

1. A PAN card is not considered standard address proof. 2. A horoscope is not accepted as age proof. 3. The complete form of HLV is Human Life Value. 4. Universal Life Insurance was introduced in the USA in 1979. 5. A ULIP (Unit Linked Insurance Plan) is classified as a non-traditional product. 6. The death benefit in a ULIP is the higher amount between the sum assured and the fund value. 7. In a ULIP, the risk is borne by the policyholder. 8. Insurance is an intangible product. 9. The complete form of PPN is Preferred Provider Network. 10. A network provider assists with cashless hospitalization. Hospitals have tie-ups with the insurer. 11. A Tertiary Health Center provides specialized or costly treatment. 12. Geriatric problems refer to diseases related to old age. 13. The Employees' State Insurance Act (ESI) was enacted in 1948, with the state government's share in the scheme being 12.5%. 14. ASHAs (Accredited Social Health Activists) are vital community health volunteers under India's National Rural Health Mission (NRHM). 15. The establishment of healthcare facilities is determined by population density, in line with Indian Public Health Standards (IPHS) and the National Health Mission (NHM).

**Health Centre Guidelines:** #### Sub-centres:  - **Plain Areas**: One sub-centre per 5000 people. - **Hilly, Tribal, or Desert Areas**: One sub-centre per 3,000 people. A Primary Health Centre (PHC) serves a population of up to 30,000 people and is staffed by 15 members. A Community Health Centre (CHC) is designated for a population of 100,000 people. It oversees four Primary Health Centres (PHCs) and employs 21 staff members.

The full NPPA form is the National Pharmaceutical Pricing Authority. Currently, there are five standalone health insurers in India.  Third Party Administrators (TPAs): TPAs do not sell health insurance plans; they provide services on behalf of insurance companies.  Domiciliary hospitalization refers to treatment provided at home. The complete form of AYUSH is Ayurveda, Yoga, Unani, Siddha, and Homeopathy. **Inpatient**: Hospitalization for over 24 hours.  **Outpatient**: Hospitalization within 24 hours. To receive hospitalization benefits, the insured individual must be admitted to a hospital for over 24 hours. In health insurance, pre-existing conditions are typically covered after a 48-month waiting period.

Mortality-related life insurance costs increase with age. A prospectus means detailed information. A proposal form is the basis of the contract. A policy document serves as evidence of the contract. The Insurance Regulatory and Development Authority (IRDA) acts as the insurance regulator, while the Reserve Bank of India (RBI) regulates the banking sector.  A Whole Life Plan is a convertible plan.  The presumption of death is set at seven years.  A term plan is the lowest premium plan, primarily designed for protection.  An insurance agent must be licensed under Section 42. The Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002, effective from April 2002, require insurers in India to meet high standards of transparency, prompt service, and fair treatment. Key requirements include clear disclosure of policy terms, a mandatory 15-day free-look period, structured grievance redressal mechanisms, and efficient claim processing. A composite agent is authorized to handle both life and non-life insurance business. Insurance agents must complete 35 hours of renewal training. Both Section 5 and Section 6 of the Married Women's Property Act (MWPA) empower married women. Section 5 allows married women to purchase life insurance policies independently, while Section 6 enables married men to buy life insurance to protect their wives and children from creditors and family disputes. Section 64A of the Insurance Act, 1938, which originally addressed the incorporation of the Insurance Association of India, was removed by the Insurance Laws (Amendment) Act, 2015, effective December 26, 2014. Therefore, this section is no longer in effect. Section 64VB of the Insurance Act, 1938, stipulates that no insurer can assume risk in India without receiving the premium in advance. This ensures payment is received before coverage begins, preventing liability for losses incurred before the premium is paid. Key requirements include payment by cash or cheque before coverage starts and strict handling of refunds.

**Disclaimer:** The information above has been collected from open sources and summarized using various tools. While we aim to provide accurate and high-quality information, the author of this blog is not responsible for any discrepancies, omissions, or errors, or for any consequences arising from them.

Please review this document multiple times to ensure you gain enough knowledge to pass the exam. Good luck!

+++The end+++