IC-38 Exam 2026: Read this article to become an Insurance Advisor, Financial Consultant, and Financial Advisor (Article No. 6):

 

Providing financial protection for home loan borrowers is the objective of Mortgage Redemption Insurance (MRI).

The sum assured under a keyman insurance policy is generally linked to the business's profitability.

Mortgage Redemption Insurance can be categorized as a form of decreasing term life assurance.

Keyman insurance covers losses arising from an extended period during which a key person is unable to work.

A policy is executed under the Married Women’s Property Act (MWP Act). If the policyholder does not appoint a special trustee to receive and manage the benefits under the policy, the sum secured under the policy will be payable to the Official Trustee of the State.

Mahesh ran a business on borrowed capital. Following his sudden death, creditors are working to recover Mahesh's assets. However, a term life insurance policy purchased under Section 6 of the MWP Act is protected from creditors.

Under the MWP Act, maturity claims are paid to trustees.

For MWP Act death claims, payments are made to the trustees.

Ajay pays the insurance premium for his employees. However, the premium for keyman life insurance, where the benefits are payable to Ajay, will not be treated as a deductible expense for employee compensation.

The practice of charging interest to borrowers who pledge their property as collateral, while allowing them to remain in possession of that property, is known as a mortgage.

A Mortgage Redemption Insurance policy protects home loan borrowers.

A policy lapse occurs when an insurance policy becomes inactive or void because the policyholder fails to pay premiums by the due date and any subsequent grace period.

In the case of Unit-Linked Insurance Plans (ULIPs), the insured bears the investment risk.

The term “premium” in relation to an insurance policy refers to the price paid by the insured for purchasing the policy.

Mortality rates, reserves, and management expenses are factors in determining life insurance premiums, but rebates are not considered in this calculation.

Surrendering a policy for its surrender value is called a policy withdrawal.

The excess value of assets over liabilities is one way to define surplus.

The components of ULIP premiums include policy allocation charges, investment risk premiums, and mortality charges. Social security charges are not included.

Life insurance companies may offer a premium rebate based on the sum assured chosen by the buyer.

Interest rates are a crucial factor in determining the premium. The higher the assumed interest rate, the lower the premium.

Business strain arises from excessive expenses during the startup stage.

In insurance company asset valuation, discounted present value refers to the value at which the insurer has acquired its assets.

In the case of a compound bonus, a company expresses the bonus as a percentage of both the base benefit and any existing bonuses.

An endowment assurance plan includes both a death benefit and a survival component.

An example of an endowment assurance plan is the Money Back Plan.

A passport serves as standard proof of age, while a ration card, horoscope, and village panchayat certificate do not qualify as standard age proof.

Increased risky behavior after purchasing insurance can be attributed to moral hazard.

Features such as height, weight, and blood pressure will be checked in a medical examiner's report. However, the proposer's emotional behavior, social status, and truthfulness are not assessed.

A prospectus is a formal legal document used by insurance companies to provide details about their products.

The document used to submit a proposal is commonly called the proposal form.

Standard age proof accepted by insurance companies includes a school certificate, an identity card for defense personnel, and a baptismal certificate. A ration card is not considered standard proof of age.

Money laundering is the process of introducing illegal funds into the economy by concealing their illicit origin, making them appear legally acquired.

If a policyholder is not satisfied with their policy, they can return it within the free-look period, which is 15 days from the date of receipt of the policy document.

If a policy is returned during the free-look period, the insurance company will refund the premium after adjusting for the proportionate risk premium for the coverage period, medical examination expenses, and stamp duty charges.

A PAN card is not a valid proof of address. However, a voter ID card, a bank passbook, and a driving license are accepted as valid proof of address.

The first premium receipt (FPR) serves as evidence that the policy contract has commenced.

A policy document serves as evidence of the contract between the insurer and the insured.

If complex language is used to describe a policy document, it may create ambiguity and will generally be construed in favor of the insured.

The policy document is proof of insurance.

The acceptance of the proposal form or any premium payment does not constitute evidence that the policy has begun. The first premium receipt (FPR) is the official proof that the policy contract has started.

For subsequent premiums received by the insurance company after the first premium, a renewal premium receipt will be issued.

If the insured loses the original life insurance policy document, the insurer will issue a duplicate of the policy without altering the contract.

The policy document must be signed by a competent authority and stamped as per the Indian Stamp Act.

The policy schedule is the first part of a standard insurance policy document.

In a standard insurance policy document, the standard provisions section outlines the rights, privileges, and other conditions applicable to the contract.

A specific policy provision may include a clause that excludes coverage for death due to pregnancy for a woman who is pregnant at the time of writing the contract.

If the insured is a minor, the policyholder must appoint an appointee.

Policy nomination is not canceled if the policy is assigned to the insurer in exchange for a loan. A nomination can be made at the time of policy purchase or later, and it can be changed by making an endorsement on the policy. However, a nominee does not have full rights to the entire claim.

For the policy to have a guaranteed surrender value, premiums must be paid for at least three consecutive years, as required by law.

**Disclaimer:**   This blog aggregates information from multiple open sources and uses multiple summarization tools. Our goal is to provide accurate and high-quality data. However, please be aware that the author is not responsible for any discrepancies, omissions, or errors, along with any consequences that may arise from them.

A Note from the Writer of This Blog: To perform well on the upcoming IC-38 exam, it's essential to review this blog thoroughly multiple times. Take your time to understand the material and explore the details to strengthen your grasp of the concepts. Engaging with the content repeatedly will enhance your knowledge and build your confidence. This blog is the fifth article in the IC-38 exam series. I encourage readers to explore the previous articles available on the website for additional study resources. Best of luck with your preparations—stay confident in your abilities!

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