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100+ Free III IC-02 Practice Questions

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2026 Statistics

Key Facts: III IC-02 Exam

100

Online MCQs per paper

III Examination Handbook — Licentiate MCQ pattern

2 hours

Exam duration

III Examination Handbook

60%

Passing mark (75% Distinction)

III Examination Handbook

20

Credit points for IC-02

III credit-point system / Examination Handbook

INR 600

India paper fee (20 credits) w.e.f. 1.4.2026

III Table of Fees / revision-of-fees

11 chapters

IC-02 course syllabus structure

III Professional Examination Syllabus

III IC-02 is a 100-question, 2-hour online MCQ Licentiate paper on life insurance practice. Passing requires 60% (Distinction from 75%). India paper enrollment is INR 600 w.e.f. 1.4.2026, plus INR 800 registration for new candidates. The syllabus spans 11 chapters detailing life plans, premiums, annuities, policy administration, and claim processes.

Sample III IC-02 Practice Questions

Try these sample questions to test your III IC-02 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which of the following bodies is responsible for the overall supervision and control of a life insurance company in India?
A.The Insurance Advisory Committee
B.The Executive Committee of the Life Insurance Council
C.The Board of Directors
D.The Securities and Exchange Board of India (SEBI)
Explanation: The Board of Directors of a life insurance company has the ultimate authority and responsibility for directing, supervising, and controlling its business operations, policy framework, and corporate governance.
2In the organizational structure of a life insurance company, which office acts as the main link between the company and the policyholders/agents for daily operations?
A.Branch Office
B.Divisional Office
C.Central Office
D.Zonal Office
Explanation: The Branch Office is the primary contact point for policyholders and agents. It handles proposal processing, premium collection, policy servicing, and basic claims administration.
3What is the primary role of an Insurance Agent in the distribution setup of a life insurance company?
A.To independently broker deals with multiple insurers on behalf of the customer
B.To audit the financial statements of the insurance company
C.To underwrite medical risks and issue policy contracts directly
D.To act as a direct intermediary representing the insurer to solicit and procure business
Explanation: An insurance agent is appointed by a specific insurer to represent them, solicit insurance business, and assist prospective clients in choosing and completing proposals.
4Under the Insurance Regulatory and Development Authority of India (IRDAI) guidelines, what is the role of the 'Appointed Actuary' in a life insurance company?
A.To manage the sales force and achieve annual premium targets
B.To ensure financial solvency, value liabilities, and certify premium rates
C.To recruit and train corporate agents and insurance brokers
D.To handle legal disputes and draft policy contracts
Explanation: An Appointed Actuary is a statutory position in Indian insurance companies, responsible for monitoring financial solvency, carrying out actuarial valuations, determining premium rates, and advising on surplus distribution.
5Which of the following functions is typically centralized at the Head/Central Office of a life insurance company rather than being delegated to individual branch offices?
A.Premium collection and issuing renewal receipts
B.Investment of funds and product design
C.Acceptance of standard medical proposal forms
D.Registration of nomination and assignment requests
Explanation: Investment of funds must be centralized to maximize returns and ensure compliance with IRDAI investment regulations. Product design and pricing also require specialized actuarial talent located at the head office.
6Under corporate governance norms for insurance companies in India, which committee of the Board of Directors is specifically mandated to oversee the pricing, underwriting, and reinsurance strategies?
A.Audit Committee
B.Investment Committee
C.Nomination and Remuneration Committee
D.Risk Management Committee
Explanation: The Risk Management Committee of the Board oversees the company's risk profile, which includes pricing risk, underwriting risk, and reinsurance arrangements.
7Which of the following constitutes an 'insurance intermediary' under IRDAI regulations?
A.Web aggregators, insurance repositories, and referral partners
B.The Appointed Actuary and statutory auditors
C.The Board of Directors and executive officers of the insurer
D.Third Party Administrators (TPAs) handling claims only
Explanation: Under IRDAI, web aggregators, brokers, repositories, corporate agents, and referral partners are recognized intermediaries that facilitate distribution, policy storage, and customer support.
8Why is the Life Insurance Council formed under Section 64C of the Insurance Act, 1938?
A.To directly sell policies to rural and low-income populations
B.To act as a judicial tribunal for settling insurance claims disputes
C.To act as an advisory body to help maintain professional standards among insurers
D.To license individual insurance agents and brokers
Explanation: The Life Insurance Council represents the life insurers and acts as an advisory body to interact with the regulator, promote best practices, and maintain professional standards in the industry.
9Which of the following factors is the primary basis for estimating mortality rates in life insurance underwriting?
A.The current interest rates offered by government bonds
B.The inflation rate in the national economy
C.The specific expense loadings of the insurance company
D.Historical data from mortality tables representing death rates by age and gender
Explanation: Mortality tables, compiled from historical death records of a large population, provide the probability of death at different ages and genders. This is the foundation for pricing life insurance policies.
10If a life insurance company assumes a higher future interest rate for discounting its liabilities, what is the direct impact on the calculated net premium for a policy?
A.The net premium increases
B.The net premium decreases
C.The net premium remains completely unaffected
D.The net premium doubles to compensate for inflation
Explanation: Higher interest rate assumptions mean the insurer expects higher investment growth on the premiums collected. Therefore, the present value of future claims is lower, resulting in a lower net premium.

About the III IC-02 Exam

IC-02 Practice of Life Insurance is one of the foundational papers for the Licentiate certification from the Insurance Institute of India. The course provides a deep dive into the operational, mathematical, legal, and claims-related practices of life insurance in India. The 11-chapter syllabus covers organizational structures, premium calculations, life insurance plans, annuities, group schemes, ULIPs, underwriting/applications, policy documents, lapsation and revival, assignment and nomination, and policy claim settlement. Passing the online MCQ exam awards 20 credits.

Questions

100 scored questions

Time Limit

2 hours

Passing Score

60% (Distinction at 75% or above)

Exam Fee

INR 600 per subject (20 credit points) for India candidates; fresh candidates also pay INR 800 registration (inclusive of life membership). Taxes extra. Fees w.e.f. 1.4.2026 per III Table of Fees. Study course material is purchased separately. (Insurance Institute of India (III))

III IC-02 Exam Content Outline

8 questions

Organisational Structure

Board, administrative offices, field offices, intermediary roles, and regulatory oversight.

10 questions

Premiums and Bonuses

Mortality table, interest rates, expense loadings, net and office premiums, actuarial valuation, and bonuses.

10 questions

Plans of Life Insurance

Term insurance, whole life, endowment, money-back, joint life, and other standard plans.

8 questions

Annuities

Immediate and deferred annuities, annuity options, pension plans, and pricing factors.

8 questions

Group Insurance

Group eligibility, group term life, superannuation schemes, gratuity benefits, and pricing.

8 questions

Unit-Linked Life Insurance Products

ULIP structure, fund types, NAV calculations, charges, and risk factors.

10 questions

Applications and Acceptance

Proposal form, medical reports, agent's confidential report, underwriting process, and extra premiums.

10 questions

Policy Document

Preamble, operative clause, terms and conditions, endorsements, policy schedule, and free-look period.

10 questions

Payment of Premium, Surrender, Lapsed Policy and Revival

Grace period, premium payment modes, non-forfeiture provisions, surrender value, and revival.

10 questions

Assignment, Nomination, Loan and Fore-closure

Legal status of assignment vs nomination, loan terms, interest calculations, and fore-closure.

8 questions

Policy Claims

Maturity claims, survival benefits, death claims, early vs non-early death claims, and settlement documentation.

How to Pass the III IC-02 Exam

What You Need to Know

  • Passing score: 60% (Distinction at 75% or above)
  • Exam length: 100 questions
  • Time limit: 2 hours
  • Exam fee: INR 600 per subject (20 credit points) for India candidates; fresh candidates also pay INR 800 registration (inclusive of life membership). Taxes extra. Fees w.e.f. 1.4.2026 per III Table of Fees. Study course material is purchased separately.

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

III IC-02 Study Tips from Top Performers

1Familiarize yourself with life insurance premium calculations, including the elements of mortality, interest, and expense loadings.
2Understand the difference between assignment (transfer of rights) and nomination (right to receive claim proceeds).
3Study standard life insurance plans like term, endowment, money-back, and whole life, noting their distinctive features and payout structures.
4Learn the legal and operational details of policy documents, including the free-look period, grace period, and revival conditions.
5Practice computation-based questions for premiums, surrender values, and loan eligibility limits.

Frequently Asked Questions

How many questions are on the III IC-02 exam?

The exam consists of 100 multiple-choice questions (MCQs) to be completed in 2 hours online.

What is the passing score for the IC-02 exam?

The passing mark is 60%. Candidates scoring 75% or above receive a Distinction certificate.

What does the IC-02 syllabus cover?

It covers 11 chapters, spanning organizational setup, premium calculation, insurance plans, annuities, group schemes, ULIPs, proposal underwriting, policy documents, revivals, assignment/nomination, and claims settlement.

What is the fee for enrolling in the IC-02 exam?

Effective April 1, 2026, the paper enrollment fee is INR 600, plus an INR 800 registration fee for new candidates (taxes extra).