These essential MCQ questions are selected from the most important topics in LIC AAO (Assistant Administrative Officer) examinations 2026. Sections include Insurance Industry Knowledge, Indian Economy, General Awareness, Current Affairs, Indian History and General Knowledge — important for LIC AAO Preliminary and Mains examinations. For truely unlimited daily MCQ practice, visit Vooo AI Education.
🛡️ LIC AAO General Knowledge
1LIC stands for:
Answer: A — Life Insurance Corporation
LIC (Life Insurance Corporation of India) was established on 1 September 1956 when the Indian government nationalised 245 private insurance companies. Headquartered in Mumbai, LIC is India's largest insurance company and one of the largest financial institutions in India. It is owned by the Government of India and manages assets worth over ₹40 lakh crore.
LIC (Life Insurance Corporation of India) was established on 1 September 1956 when the Indian government nationalised 245 private insurance companies. Headquartered in Mumbai, LIC is India's largest insurance company and one of the largest financial institutions in India. It is owned by the Government of India and manages assets worth over ₹40 lakh crore.
2IRDAI stands for:
Answer: A — Insurance Regulatory and Development Authority of India
IRDAI (Insurance Regulatory and Development Authority of India) is the apex regulatory body for the insurance sector in India, established in 1999 under the IRDA Act. Headquartered in Hyderabad, it regulates and promotes the insurance industry, protects policyholders' interests and ensures growth of the insurance sector.
IRDAI (Insurance Regulatory and Development Authority of India) is the apex regulatory body for the insurance sector in India, established in 1999 under the IRDA Act. Headquartered in Hyderabad, it regulates and promotes the insurance industry, protects policyholders' interests and ensures growth of the insurance sector.
3The principle of "Utmost Good Faith" in insurance means:
Answer: B — Both parties must disclose all material facts
Uberrimae Fidei (Utmost Good Faith) is a fundamental insurance principle requiring both the insurer and the insured to disclose all material facts relevant to the contract. Concealment of material information can void the policy. This distinguishes insurance contracts from ordinary commercial contracts where "buyer beware" (caveat emptor) applies.
Uberrimae Fidei (Utmost Good Faith) is a fundamental insurance principle requiring both the insurer and the insured to disclose all material facts relevant to the contract. Concealment of material information can void the policy. This distinguishes insurance contracts from ordinary commercial contracts where "buyer beware" (caveat emptor) applies.
4Which is the largest life insurance company in India?
Answer: C — LIC of India
LIC (Life Insurance Corporation of India) is India's largest life insurance company with about 66% market share in new business premium. It has over 290 million policyholders, 2,048 branch offices and 13.5 lakh agents. Despite private sector competition since 2000, LIC remains dominant. The Government of India listed LIC on the stock exchange in May 2022.
LIC (Life Insurance Corporation of India) is India's largest life insurance company with about 66% market share in new business premium. It has over 290 million policyholders, 2,048 branch offices and 13.5 lakh agents. Despite private sector competition since 2000, LIC remains dominant. The Government of India listed LIC on the stock exchange in May 2022.
5India's GDP growth rate is measured by:
Answer: B — Ministry of Statistics and Programme Implementation (MoSPI)
India's GDP data is compiled and released by the National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI). The base year for GDP calculations is 2011-12. India uses both Gross Value Added (GVA) and GDP = GVA + Net taxes on products to measure economic output.
India's GDP data is compiled and released by the National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI). The base year for GDP calculations is 2011-12. India uses both Gross Value Added (GVA) and GDP = GVA + Net taxes on products to measure economic output.
6The term "Surrender Value" in insurance refers to:
Answer: B — Amount paid if policy is terminated before maturity
Surrender Value is the amount the policyholder receives if they cancel (surrender) a life insurance policy before its maturity date. It is less than the total premiums paid plus bonuses. Policies typically acquire surrender value only after 3 years of premium payment. Guaranteed Surrender Value is fixed; Special Surrender Value may be higher.
Surrender Value is the amount the policyholder receives if they cancel (surrender) a life insurance policy before its maturity date. It is less than the total premiums paid plus bonuses. Policies typically acquire surrender value only after 3 years of premium payment. Guaranteed Surrender Value is fixed; Special Surrender Value may be higher.
7Which award is considered the Oscar of Insurance globally?
Answer: C — Geneva Association Award
The Geneva Association (International Association for the Study of Insurance Economics) is a leading global think-tank for the insurance industry. It gives prestigious awards for research in insurance and risk management. The organization connects CEOs of leading insurance companies worldwide and conducts research on global insurance trends.
The Geneva Association (International Association for the Study of Insurance Economics) is a leading global think-tank for the insurance industry. It gives prestigious awards for research in insurance and risk management. The organization connects CEOs of leading insurance companies worldwide and conducts research on global insurance trends.
8The PM Jeevan Jyoti Bima Yojana provides life cover of:
Answer: B — ₹2 lakh
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) provides life insurance cover of ₹2 lakh for death due to any cause. The annual premium is ₹436 (revised). It is available to people aged 18-50 years with a savings bank account. Along with PMSBY (accident cover), it forms part of India's financial inclusion and social security mission.
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) provides life insurance cover of ₹2 lakh for death due to any cause. The annual premium is ₹436 (revised). It is available to people aged 18-50 years with a savings bank account. Along with PMSBY (accident cover), it forms part of India's financial inclusion and social security mission.
9India's insurance penetration (premium as % of GDP) is approximately:
Answer: B — 3.2%
India's insurance penetration (insurance premium as a percentage of GDP) is about 3.2% — significantly lower than the global average of 7%. Life insurance penetration is about 2.9% and non-life is about 0.3%. The low penetration represents a huge growth opportunity. IRDAI aims to achieve "Insurance for All by 2047."
India's insurance penetration (insurance premium as a percentage of GDP) is about 3.2% — significantly lower than the global average of 7%. Life insurance penetration is about 2.9% and non-life is about 0.3%. The low penetration represents a huge growth opportunity. IRDAI aims to achieve "Insurance for All by 2047."
10The concept of "Moral Hazard" in insurance refers to:
Answer: B — Tendency to take more risks because of insurance coverage
Moral hazard is the tendency of insured people to take greater risks or be less careful because they know they are covered by insurance. For example, a person with comprehensive car insurance may drive less carefully. Insurance companies address moral hazard through deductibles (excess), co-payments and careful underwriting of risks.
Moral hazard is the tendency of insured people to take greater risks or be less careful because they know they are covered by insurance. For example, a person with comprehensive car insurance may drive less carefully. Insurance companies address moral hazard through deductibles (excess), co-payments and careful underwriting of risks.
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