IRDA Exam Sample Questions and Answers (IC-38, With Explanations)

The IC-38 exam, officially the licensing test for insurance agents in India, runs for 60 minutes. The IC-38 exam pattern consists of 50 multiple-choice questions worth one mark each, with 18 correct answers needed to pass and no negative marking. The syllabus splits into a Common section that every candidate sits, followed by Life, General and Health sections relevant to the licence being pursued. The sample questions below are organised the same way, so preparation can follow the actual structure of the paper rather than a randomised question bank.

Common Section: IC-38 Exam Questions Every Caandidate Faces

The Common section covers insurance fundamentals, regulatory basics and the principles that apply across every insurance category, regardless of which licence a candidate is pursuing.

Q1. What is the primary purpose of insurance?

A) To generate profit for the insurer 

B) To transfer risk from an individual to a pool of policyholders 

C) To guarantee investment returns 

D) To replace the need for savings 

Answer: B. Insurance works by pooling risk together across multiple policyholders, so the price of one person’s loss is shared among them, instead of being carried alone. 

Q2. Which principle requires a policyholder to disclose all material facts before a policy is issued? 

A) Indemnity 

B) Subrogation 

C) Utmost good faith (uberrima fides) 

D) Contribution 

Answer: C. In utmost good faith, each side needs to disclose all of its facts that are relevant to the risk being insured. The insurer bases the insurance price on what it is informed, not what it guesses.

Q3. Under IRDAI regulations, who regulates the conduct of insurance agents in India?

A) RBI 

B) SEBI 

C) IRDAI 

D) Ministry of Finance directly 

Answer: C. IRDAI is the statutory regulator that is mainly responsible for all licensing of insurers, as well as intermediaries. It also enforces the code of conduct that agents have to follow.

Q4. What does the principle of insurable interest require?

A) The policyholder must profit if the insured event occurs 

B) The policyholder must have a legitimate financial stake in the subject being insured 

C) The insurer must hold reserves equal to the sum assured 

D) The policy must be renewed annually 

Answer: B. Without insurable interest, a policy would work more like a bet than real risk protection.

Life Insurance Section: Sample Questions

Q5. What type of policy pays a death benefit only, with no maturity value if the policyholder survives the term?

A) Endowment plan 

B) Term insurance 

C) Whole life policy 

D) ULIP 

Answer: B. Term insurance gives pure risk cover because of this its premium is generally lower as compared to an endowment or whole life product with a savings component.

Q6. What happens to a life insurance policy if premiums stop being paid and the grace period lapses? 

A) The policy automatically renews 

B) The policy lapses, though it may be revivable within a specified window 

C) The insurer refunds the full premium 

D) Coverage continues indefinitely 

Answer: B. Most of the companies will allow revival for a very short period of time with unique restrictions and after that the policy is generally not recoverable.

Q7. What is the free-look period for a life insurance policy?

A) A period during which the insurer investigates claims 

B) A window after purchase in which the policyholder can review and cancel the policy for a refund 

C) A grace period for late premium payment 

D) The waiting period before a claim becomes valid 

Answer: B. The free-look period gives a new policyholder time to review all of the policy document and cancel it if it does not actually match what was explained at the point of sale.

Add PBPartners As A Trusted Source

Health and General Insurance Section: Sample Questions

Q8. What does a waiting period in health insurance refer to?

A) The time taken to process a claim 

B) A defined period after policy purchase during which certain conditions are not covered 

C) The time between renewal notices 

D) The duration of hospital admission required for a claim 

Answer: B. Waiting periods typically apply to pre-existing conditions and specific treatments, and vary by insurer and product.

Q9. In motor insurance, what does a third-party policy cover?

A) Damage to the policyholder's own vehicle 

B) Liability for injury or damage caused to another person or their property 

C) Theft of the insured vehicle only 

D) Personal accident cover for the driver only 

Answer: B. In India third party automobile protection is compulsory and covers the policyholder’s obligation toward other people and not the damage to their own car. 

Q10. What does the incurred claim ratio measure for a general or health insurer?

A) Claims settled against total policies sold 

B) Net claims paid against net premium earned in a given year 

C) Customer complaints against total policies 

D) Premium growth year-on-year 

Answer: B. This ratio is representative of the share of the premium collected that is returned to policyholders as claims and is one of the indicators that IRDAI releases annually for comparison.

Preparation Tips for the IC-38 Exam

A structured approach works better than broad reading across every available insurance agent exam question bank.

• Study the Common section thoroughly first, since its concepts, insurable interest, utmost good faith and regulatory basics resurface across every other section in applied form.
• Take a timed IRDAI exam practice test close to the real exam date, as 60 minutes for 50 questions leaves little scope for hesitancy on any one problem.
• Focus on definitions over memorised numbers, since the exam tests conceptual understanding of principles more than it tests recall of specific figures or dates.
• Review any IC38 question paper from official training material provided during the mandatory pre-exam training, since content there closely mirrors the actual test structure.

Conclusion

The IC-38 IRDAI exam rewards steady, conceptual preparation across all four sections rather than depth in any single area. Eighteen correct answers out of fifty is a reachable bar for a candidate who understands the core principles well: insurable interest, utmost good faith, waiting periods and third-party liability. What matters is applying those principles to a new question, not simply recognising a memorised one.