100+ Free III IC-81 Practice Questions

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2026 Statistics

Key Facts: III IC-81 Exam

100

Online MCQs per paper

III Examination Handbook

2 hours

Exam duration

III Examination Handbook

60%

Passing mark (75% Distinction)

III Examination Handbook

Credit points for IC-81

III credit-point system

INR 600

India paper fee (40 credits) w.e.f. 1.4.2026

III Table of Fees

INR 800

Fresh registration (India) w.e.f. 1.4.2026

III Table of Fees

III IC-81 is a 100-question, 2-hour online MCQ Fellowship optional paper (40 credit points) on Mathematical Basis of Life Assurance. Passing requires 60% (Distinction from 75%). India paper enrollment is INR 600 w.e.f. 1.4.2026, plus INR 800 registration for fresh candidates (taxes extra).

Sample III IC-81 Practice Questions

Try these sample questions to test your III IC-81 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1An individual invests ₹1,00,000 at a compound interest rate of 6% per annum. What is the approximate accumulated amount at the end of 5 years?

A.₹1,33,823

B.₹1,30,000

C.₹1,27,628

D.₹1,41,851

Explanation: The accumulated amount is calculated using the formula A = P(1 + r)^n. Here, P = 1,00,000, r = 0.06, and n = 5. A = 1,00,000 * (1.06)^5 = ₹1,33,822.56, which is approximately ₹1,33,823.

2What is the present value of ₹5,00,000 payable at the end of 10 years, assuming a discount rate of 5% per annum?

A.₹3,06,957

B.₹3,15,471

C.₹2,50,000

D.₹3,25,000

Explanation: The present value is calculated using the formula PV = A(1 + r)^-n. PV = 5,00,000 * (1.05)^-10 = ₹3,06,956.63, approximately ₹3,06,957.

3In a mortality table, 'l_x' represents the number of persons alive at exact age x. If l_30 = 9,500 and l_31 = 9,480, what is the probability of a life aged 30 dying before reaching age 31?

A.0.0021

B.0.0210

C.0.9979

D.20.000

Explanation: The probability of dying within one year, q_x, is calculated as d_x / l_x. Here, d_30 = l_30 - l_31 = 9500 - 9480 = 20. q_30 = 20 / 9500 ≈ 0.0021.

4The 'force of mortality', denoted by μ_x, represents:

A.The instantaneous rate of mortality at exact age x.

B.The annual probability of death at age x.

C.The total number of deaths between age x and x+1.

D.The average rate of mortality over the life span.

Explanation: The force of mortality (μ_x) is the continuous analog of the rate of mortality. It measures the instantaneous rate at which lives are dying at exact age x, relative to those surviving to that age.

5Which column in a standard life table indicates the total number of years lived by the l_x survivors between age x and x+1?

A.d_x

B.L_x

C.T_x

D.e_x

Explanation: L_x represents the total number of person-years lived by the cohort between exact ages x and x+1. It is approximated as l_x - 0.5 * d_x.

6The complete expectation of life at age x (denoted by e°_x) is defined as:

A.The exact number of years a person is expected to live before dying.

B.The average number of complete years lived by lives aged x.

C.The average future lifetime of lives aged x.

D.The median age at death for a person currently aged x.

Explanation: The complete expectation of life, e°_x, is the average number of future years lived by a person currently aged exact x. It is calculated as T_x / l_x.

7A whole life assurance provides a benefit upon the death of the insured. The expected present value of a benefit of 1 payable at the end of the year of death for a life aged x is denoted by:

A.A_x

B.a_x

C.A^1_{x:n}

D.ä_x

Explanation: A_x represents the expected present value of a whole life assurance of 1 payable at the end of the year of death.

8If the annual interest rate is 4%, what is the value of the discount factor, v?

A.1.0400

B.0.9615

C.0.0400

D.0.9600

Explanation: The discount factor v is calculated as 1 / (1 + i). With i = 0.04, v = 1 / 1.04 = 0.961538, which is approximately 0.9615.

9A life annuity-due pays 1 at the beginning of each year as long as a life aged x survives. Its present value is denoted by ä_x. How is ä_x related to the whole life assurance A_x under a constant interest rate i and discount rate d?

A.A_x = 1 - d * ä_x

B.A_x = 1 - i * ä_x

C.ä_x = 1 + A_x

D.ä_x = 1 - d * A_x

Explanation: A fundamental relationship in life contingencies is A_x = 1 - d * ä_x. A benefit of 1 at death is equivalent to having 1 immediately, but giving up an annuity-due of the interest-in-advance (d) each year the life survives.

10Net Premium Valuation involves calculating reserves based on:

A.Actual premiums paid and actual current assumptions for mortality, interest, and expenses.

B.Premiums required to exactly cover benefits based on the original assumptions at policy issue, ignoring expenses.

C.The gross premiums charged to the customer minus a fixed profit margin.

D.Only the surrender values guaranteed to the policyholders.

Explanation: Net Premium Valuation (NPV) uses the 'net premium', which is calculated at issue to strictly cover the expected death/survival benefits without allowance for expenses or profit, and discounts future net premiums against future benefits using the original valuation basis.

About the III IC-81 Exam

The III IC-81 Mathematical Basis of Life Assurance exam is a 40-credit Fellowship optional paper that evaluates candidate understanding of life-contingency mathematics for life assurance — commutation functions, premiums, reserves, and surplus. The syllabus encompasses various modules detailed below.

Assessment

100 objective multiple-choice questions in a single online computer-based paper. IC-81 is a 40-credit Fellowship optional subject under the Insurance Institute of India (III) professional credit system.

Time Limit

2 hours

Passing Score

60% (Distinction at 75% or above)

Exam Fee

INR 600 per subject (40 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. (Insurance Institute of India (III))

III IC-81 Exam Content Outline

5 questions

Commutation Functions

Practice questions focusing on commutation functions concepts.

3 questions

Net Premiums

Practice questions focusing on net premiums concepts.

3 questions

Assurance Types

Practice questions focusing on assurance types concepts.

2 questions

Accumulation

Practice questions focusing on accumulation concepts.

2 questions

Force Of Mortality

Practice questions focusing on force of mortality concepts.

2 questions

Assurance Functions

Practice questions focusing on assurance functions concepts.

2 questions

Premium Conversion

Practice questions focusing on premium conversion concepts.

2 questions

Gross Premiums

Practice questions focusing on gross premiums concepts.

2 questions

Prospective Reserves

Practice questions focusing on prospective reserves concepts.

2 questions

Sources Of Surplus

Practice questions focusing on sources of surplus concepts.

2 questions

Annuities

Practice questions focusing on annuities concepts.

2 questions

Valuation Assumptions

Practice questions focusing on valuation assumptions concepts.

2 questions

Fractional Ages

Practice questions focusing on fractional ages concepts.

2 questions

Continuous Annuities

Practice questions focusing on continuous annuities concepts.

2 questions

Pure Endowment

Practice questions focusing on pure endowment concepts.

2 questions

Mortality Profit

Practice questions focusing on mortality profit concepts.

1 questions

Discounting

Practice questions focusing on discounting concepts.

1 questions

Present Value

Practice questions focusing on present value concepts.

1 questions

Mortality Rates

Practice questions focusing on mortality rates concepts.

1 questions

Life Table Functions

Practice questions focusing on life table functions concepts.

1 questions

Expectation Of Life

Practice questions focusing on expectation of life concepts.

1 questions

Discount Factor

Practice questions focusing on discount factor concepts.

1 questions

Net Premium Valuation

Practice questions focusing on net premium valuation concepts.

1 questions

Retrospective Reserves

Practice questions focusing on retrospective reserves concepts.

1 questions

Surplus

Practice questions focusing on surplus concepts.

1 questions

Bonus Distribution

Practice questions focusing on bonus distribution concepts.

1 questions

Zillmerisation

Practice questions focusing on zillmerisation concepts.

1 questions

Force Of Interest

Practice questions focusing on force of interest concepts.

1 questions

Select Tables

Practice questions focusing on select tables concepts.

1 questions

Amount At Risk

Practice questions focusing on amount at risk concepts.

1 questions

Survival Probabilities

Practice questions focusing on survival probabilities concepts.

1 questions

Continuous Assurance

Practice questions focusing on continuous assurance concepts.

1 questions

Equivalence Principle

Practice questions focusing on equivalence principle concepts.

1 questions

Multiple Lives

Practice questions focusing on multiple lives concepts.

1 questions

Reversionary Annuities

Practice questions focusing on reversionary annuities concepts.

1 questions

Modified Reserves

Practice questions focusing on modified reserves concepts.

1 questions

Participating Policies

Practice questions focusing on participating policies concepts.

1 questions

Nominal Rates

Practice questions focusing on nominal rates concepts.

1 questions

Decrement Tables

Practice questions focusing on decrement tables concepts.

1 questions

Multiple Decrements

Practice questions focusing on multiple decrements concepts.

1 questions

Thieles Equation

Practice questions focusing on thieles equation concepts.

1 questions

Reserve Patterns

Practice questions focusing on reserve patterns concepts.

1 questions

Terminal Bonus

Practice questions focusing on terminal bonus concepts.

1 questions

Pricing Basis

Practice questions focusing on pricing basis concepts.

1 questions

Deferred Annuities

Practice questions focusing on deferred annuities concepts.

1 questions

Deferred Assurance

Practice questions focusing on deferred assurance concepts.

1 questions

Valuation Of Bonuses

Practice questions focusing on valuation of bonuses concepts.

1 questions

Facklers Formula

Practice questions focusing on facklers formula concepts.

1 questions

Surrender Values

Practice questions focusing on surrender values concepts.

1 questions

Annuity Relationships

Practice questions focusing on annuity relationships concepts.

1 questions

Appointed Actuary

Practice questions focusing on appointed actuary concepts.

1 questions

Asset Shares

Practice questions focusing on asset shares concepts.

1 questions

Mortality Functions

Practice questions focusing on mortality functions concepts.

1 questions

Single Premium Annuity

Practice questions focusing on single premium annuity concepts.

1 questions

Lapse Risk

Practice questions focusing on lapse risk concepts.

1 questions

Reserve Formulas

Practice questions focusing on reserve formulas concepts.

1 questions

Annuity Certain

Practice questions focusing on annuity certain concepts.

1 questions

Select Mortality

Practice questions focusing on select mortality concepts.

1 questions

Pricing Assumptions

Practice questions focusing on pricing assumptions concepts.

1 questions

Negative Reserves

Practice questions focusing on negative reserves concepts.

1 questions

Cost Of Capital

Practice questions focusing on cost of capital concepts.

1 questions

Effective Rate

Practice questions focusing on effective rate concepts.

1 questions

New Business Strain

Practice questions focusing on new business strain concepts.

1 questions

Ulip Valuation

Practice questions focusing on ulip valuation concepts.

1 questions

Temporary Annuities

Practice questions focusing on temporary annuities concepts.

1 questions

Paid Up Value

Practice questions focusing on paid up value concepts.

1 questions

Joint Life Annuities

Practice questions focusing on joint life annuities concepts.

1 questions

Last Survivor Annuities

Practice questions focusing on last survivor annuities concepts.

1 questions

Guaranteed Surrender Values

Practice questions focusing on guaranteed surrender values concepts.

1 questions

Gross Premium Valuation

Practice questions focusing on gross premium valuation concepts.

1 questions

Reversionary Bonus

Practice questions focusing on reversionary bonus concepts.

1 questions

Compound Bonus

Practice questions focusing on compound bonus concepts.

1 questions

Perpetuities

Practice questions focusing on perpetuities concepts.

1 questions

Types Of Tables

Practice questions focusing on types of tables concepts.

1 questions

Expense Reserves

Practice questions focusing on expense reserves concepts.

1 questions

Limited Payment Premiums

Practice questions focusing on limited payment premiums concepts.

1 questions

Reinsurance

Practice questions focusing on reinsurance concepts.

1 questions

Deferred Probabilities

Practice questions focusing on deferred probabilities concepts.

1 questions

Discount Rate

Practice questions focusing on discount rate concepts.

1 questions

Profit Testing

Practice questions focusing on profit testing concepts.

How to Pass the III IC-81 Exam

What You Need to Know

Passing score: 60% (Distinction at 75% or above)
Assessment: 100 objective multiple-choice questions in a single online computer-based paper. IC-81 is a 40-credit Fellowship optional subject under the Insurance Institute of India (III) professional credit system.
Time limit: 2 hours
Exam fee: INR 600 per subject (40 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.

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-81 Study Tips from Top Performers

1Study the official III IC-81 coursebook chapter by chapter before mixed mocks.

2Review the core regulations and guidelines relating to this paper.

3Sit full 100-question, 2-hour mocks aiming above 60%, with Distinction practice at 75%+.

Frequently Asked Questions

How many questions are on the III IC-81 exam?

The III objective papers, including IC-81, consist of 100 multiple-choice questions completed in 2 hours online.

What is the IC-81 passing score?

Passing marks for III online MCQ papers are 60% or above. Candidates scoring at least 75% earn Distinction in that subject.

How many credit points does IC-81 carry?

IC-81 is a Fellowship optional subject carrying 40 credit points under the Insurance Institute of India credit system.

Is IC-81 a Licentiate or Fellowship paper?

IC-81 Mathematical Basis of Life Assurance is offered as a 40-credit Fellowship optional paper and is examined as an online MCQ.

100+ Free III IC-81 Practice Questions

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Key Facts: III IC-81 Exam

Sample III IC-81 Practice Questions

About the III IC-81 Exam

III IC-81 Exam Content Outline

How to Pass the III IC-81 Exam

What You Need to Know

Keys to Passing

III IC-81 Study Tips from Top Performers

Frequently Asked Questions