Skip to content

NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Non-Life Insurance Products

A marine cargo policy is taken by an exporter on an invoice value of Rs 50 lakh with 10% added for expected profit and expenses, and the insured value is determined on that basis. During transit, a total loss of the cargo occurs due to an insured peril. What is the maximum amount payable, assuming the sum insured equals the insured value and no deductible applies?

The maximum payable is Rs 55 lakh. Marine cargo is insured on invoice value plus a 10% margin for profit and expenses, so 50 lakh x 1.10 equals Rs 55 lakh, and a total loss under that sum insured is paid in full.

  1. ARs 50 lakh
  2. BRs 55 lakhCorrect
  3. CRs 45 lakh
  4. DRs 60 lakh

Explanation

Insured value = 50 lakh x 1.10 = Rs 55 lakh. With sum insured equal to this and a total loss, the payable amount is Rs 55 lakh. Rs 50 lakh omits the uplift, Rs 45 lakh subtracts instead of adding, and Rs 60 lakh overstates the uplift.

Did you get it right without looking?

One question tells you little. A timed set on Non-Life Insurance Products shows your real accuracy, how long you take and where you lose marks.

Practise Non-Life Insurance ProductsFree diagnostic mock

More Non-Life Insurance Products questions