NIOS Class 10 Business Studies Chapter 10 Insurance Services Solutions to each chapter is provided in the list so that you can easily browse throughout different chapters NIOS Class 10 Business Studies Chapter 10 Insurance Services Notes and select need one. NIOS Class 10 Business Studies Chapter 10 Insurance Services Question Answers Download PDF. NIOS Study Material of Class 10 Business Studies Notes Paper 215.
NIOS Class 10 Business Studies Chapter 10 Insurance Services
Also, you can read the NIOS book online in these sections Solutions by Expert Teachers as per National Institute of Open Schooling (NIOS) Book guidelines. These solutions are part of NIOS All Subject Solutions. Here we have given NIOS Class 10 Business Studies Chapter 10 Insurance Services Solutions, NIOS Secondary Course Business Studies Solutions for All Chapter, You can practice these here.
Insurance Services
Chapter: 10
NIOS TEXTBOOK QUESTIONS ANSWERS
Intext Questions 10.1
Which of the following statements are true and which are false?
(i) The possibility of loss or damage to goods or human beings is known as risk.
Ans:- True.
(ii) Change of fashion is a personnel risk.
Ans:- False.
(iii) Losses caused by uncertain events of insured goods have to be borne by businessmen themselves.
Ans:- False.
(iv) Some risks can be taken care of by precautions such as risk of breakdown of machinery.
Ans:- True.
(v) Insurance is the means of shifting risks of loss to a party willing and qualified to share the loss.
Ans:- True.
(vi) The amount paid by the insured to the insurer is known as premium.
Ans:- True.
Intext Questions 10.2
Fill in the blanks with suitable words given in brackets.
(i) Insurance is a means of spreading the ________ of a few among many. (loss, expense)
Ans:- Loss.
(ii) The members of the business community feel ________ because of insurance. (secured, unsecured)
Ans:- Secured.
(iii) Insurance companies invest their funds in corporate and Government ______ (loans, securities)
Ans:- Securities.
(iv) Insurance is an aid to ________ as well as commerce. (industry, trade).
Ans:- Industry.
Intext Questions 10.3
Which of the following statements are true and which are false?
(i) Marine insurance contracts are ordinary contracts while life insurance is a contract of indemnity.
Ans:- False.
(ii) Fire insurance covers the risk of loss by fire where the cause of fire is immaterial for making a claim from the insurance company.
Ans:- True.
(iii) A ship may be insured against loss by perils of sea.
Ans:- True.
(iv) For an endowment policy, the insured has to continue paying premium for the whole life.
Ans:- False.
(v) In life insurance, premium may be paid in a lump sum or in annual instalments.
Ans:- True.
(vi) In marine insurance, time policy is often used for hull insurance.
Ans:- True.
(vii) Fidelity insurance is not compulsory for owners of business.
Ans:- True.
(viii) The principle underlying the contract of indemnity is to ensure that the insured cannot make profit out of insurance.
Ans:- True.
Intext Questions 10.4
Fill in the blanks using appropriate word(s).
(i) The principle of utmost good faith is based on ____________ between insurer and insured.
Ans:- Mutual trust and confidence.
(ii) In a life insurance contract the insurer must have insurable interest at the time of ___________.
Ans:- Contract.
(iii) The purpose behind the principle of ___________ is that the insured is not allowed to make profit from the insurance contract.
Ans:- Indemnity.
(iv) If there are two or more insurers and the insurance claim is paid by one of them, other insurers have to contribute ________ to the insurer who has paid the claim.
Ans:- Proportionately.
| Terminal Exercise |
1. What is meant by ‘business risk’?
Ans:- Business risk refers to a threat to the company’s ability to achieve its financial goals. In business, risk. means that a company’s or an organisation’s plans may not turn out as originally planned or that it may. In simple words, business risks are those factors that increase the chances of losses in a business and reduce opportunities of profit.
2. Define Insurance.
Ans:- Insurance is the means by which risks of loss or damage can be shifted to another party called the insurer on the payment of a charge known as premium.
Insurance is a contract between the insurer and insured whereby the insurer undertakes to pay the insured a fixed amount, in exchange for a fixed sum known as premium, on the happening of a certain event (like at a certain age or on death), or compensate the actual loss when it takes place, due to the causes mentioned in the contract.
3. Why is insurance considered important? List any two reasons.
Ans:- Because Insurance plays a significant role particularly in view of the large-scale production and distribution of goods in the national and international market. It is an aid to both trading and industrial enterprises, which involve huge investments in properties and plants as well as inventories of raw materials, components and finished goods. The members of the business community feel secured by means of insurance as they get assurance that by contributing a token amount they will be compensated against a loss that may take place in future.
Insurance plans will help you pay for:
(i) Medical emergencies.
(ii) Hospitalisation.
(iii) Contraction of any illnesses and treatment. and
(iv) Medical care required in the future.
4. What does ‘Endowment’ life policy mean?
Ans:- An endowment policy on the other hand, runs for a limited period or upto a certain age of the insured. The sum assured becomes due for payment at the end of the specified period or on the death of the insured, if it occurs earlier.
5. What is a ‘Voyage Policy’?
Ans:- Voyage Policy is intended for a particular voyage, without any consideration for time. It is used mostly for cargo insurance.
6. What is meant by ‘Hull’ insurance?
Ans:- The owner of the ship may insure it against loss on account of perils of the sea. When the ship is the subject matter of insurance, it is known as hull insurance.
7. How is insurance important as an aid to trade and industry? Explain.
Ans:- The risk can occur in a business; it can be fire, accident, theft or damage to equipment or products. There may be accidental fire in the godown, workers of the factory may go on strike. You may not be able to anticipate or control some of these possibilities. This is the concept of risk. Risk is the possibility of loss or damage due to factors over which the businessman has little or no control.
All business activities are subject to uncertain events or happenings and may suffer loss or damage. Timely precaution can be taken to avoid some of the losses. But certain losses and damages have either to be borne by the businessman himself, or if possible, shared with others. Insurance provides cover against all such risks and is therefore helpful for a business to recover once it has been affected by any of the above mentioned risks. Without insurances Natural hazards, accidents, theft or burglary can affect the financial status of a business or a family.
8. How does whole life policy differ from endowment life policy? Why is life insurance also called life assurance?
Ans:- A whole life policy runs for the whole life of the insured and premium is payable all along. The sum assured becomes due for payment to the heirs of the insured only after his death. An endowment policy on the other hand, runs for a limited period or up to a certain age of the insured. The sum assured becomes due for payment at the end of the specified period or on the death of the insured, if it occurs earlier.
A contract of life insurance (also known as ‘life assurance’) is a contract whereby the insurer undertakes to pay a certain sum either on the death of the insured or on the expiry of a certain number of years. The word assurance is usually used in life insurance policies because the policyholder is assured that his plan beneficiaries will receive the predetermined sum assured at his death or he will receive the predetermined amount on maturity, as defined under the policy terms.
9. Explain the types of risks which are covered by
(i) Motor Vehicles insurance.
(ii) Fidelity insurance.
Ans:- Types of risks which are covered in Motor vehicles insurance are: The risks of damage of the vehicle by accident or loss by theft, as also risks of liability arising out of injury or death of third party involved in an accident.
(ii) Types of risks which are covered in Fidelity insurance are: The risks of loss on account of fraud and dishonesty on the part of employees handling cash or in charge of stores.
10. What purpose does Marine Insurance Policy serve? Explain the different types of marine policies, which may be of use to exporters and importers.
Ans:- Marine insurance is an agreement by which the insurance company agrees to indemnify the owner of a ship or cargo against risks, which are incidental to marine adventures. It also includes insurance of the risk of loss of freight due on the cargo. Marine insurance that covers the risk of loss of cargo by storm is known as cargo insurance. The owner of the ship may insure it against loss on account of perils of the sea. When the ship is the subject matter of insurance, it is known as hull insurance.Further, where freight is payable by the owner of cargo on safe delivery at the port of destination, the shipping company may insure the risk of loss of freight if the cargo is damaged or lost.
The followings are the different types of marine insurance policies:
(a) Time Policy: This policy insures the subject matter for specified period of time, usually for one year. It is generally used for hull insurance or for cargo when small quantities are insured.
(b) Voyage Policy: This is intended for a particular voyage, without any consideration for time. It is used mostly for cargo insurance.
(c) Mixed Policy: Under this policy the subject matter (hull, for example) is insured on a particular voyage for a specified period of time. Thus, a ship may be insured for a voyage between Mumbai and Colombo for a period of 6 months under a mixed policy.
(d) Floating Policy: Under this policy, a cargo policy may be taken for a round sum and whenever some cargo is shipped the insurance company declares its value and the total value of the policy is reduced by that amount. Such shipments may continue until the total value of the policy is exhausted.
11. A person suffering from cancer did not disclose this fact while taking a life insurance policy. Name the principle he violated and explain it in about 50 words.
Ans:- The principle violated in this scenario is the principle of utmost good faith, also known as uberrimae fidei. This principle requires both parties in an insurance contract to disclose all material facts that could affect the risk being insured. By failing to disclose their cancer diagnosis, the individual breached this principle.
12. At what time there should be insurable interest in
(a) Life insurance.
(b) fire insurance. and
(c) Marine insurance.
Ans:- (i) Life insurance: A contract of life insurance is a contract whereby the insurer undertakes to pay a certain sum either on the death of the insured or on the expiry of a certain number of years. In return, the insured agrees to pay an amount as premium either in a lump sum or in periodical instalments, annually, half-yearly, quarterly or monthly.
(ii) Fire insurance: In the fire insurance insurable interest must exist both at the time of the contract and at the time of loss.
(iii) Marine insurance: The insurable interest must exist at the time the loss occurs.
