Direction (Qs.1 to 10): Read the following passage carefully and answer the questions given below it. Certain words are given in bold to help you locate them while answering some of the questions.
Insurance companies are widening their net and looking at India’s vast hinterland. Global insurance majors such as AIG and Aviva increasingly see rural India as a growth area. One of the reasons for this is the huge gap in per capita spending on life insurance between developed and emerging markets. While developed markets spend $1,887 on life insurance, emerging markets spend only $46. It’s no surprise that many companies are targeting the rural population and tailoring their policies to meet the requirements of this segment. So villagers now have the option of insuring their cow or television set for as low as Rs20-40 a month. If a cow dies, the policyholder is likely to get as much as Rs.8,000.
Though the premium amounts are very small, insurance companies see this as a way of entering a market that is sure to grow over the next few years. For long, LIC has had a market monopoly in India and still holds 90 per cent of the life insurance sector. With foreign competition the insurance sector is going through a churn. The entry of new players has meant that there is now intense competition to woo consumers. This is welcome since even by developing country standards, India is woefully under-insured. Without any sort of government safety net, a majority of India’s population has no cover for old age or unforeseen contingencies. This is where micro-insurance schemes can make a difference.
Such schemes are, however, not without their difficulties. Collecting premium and verifying claims can be time-consuming, especially in rural India. To get around this, insurance companies are using locals or self-help groups as agents to access rural markets. For death insurance claims, companies are willing to forgo the usual death certificates and accept signatures of a panchayat member or a village elder. Such innovative measures have ensured that several insurance companies at least have a presence in rural India. The challenge, however, is to move from micro-insurance to covering crops and health. For this to happen, it would help if people formed collectives and went in for group insurance. This would be particularly useful for farmers who cultivate the same crops on small plots of land. Health and crop insurance for small farmers would also have the additional benefit of eliminating the dreaded moneylender who benefits from the precarious condition of the rural poor.
Question No : 1
What is attracting the insurance companies towards the villages in India?
(1) Rural areas generate more revenue than urban areas in India
(2) Indian villages offer immense potential for insurance firms which is still to be tapped
(3) Villages in India are more insurance-friendly than even the villages in the developed world
(4) Insurance companies see Indian villages as relatively risk-free areas
(5) None of theseQuestion No : 2
Many insurance companies are tailoring their policies to meet the requirements of rural people because
(1) they are a more stubborn and rigid lot
(2) these people are not found in a financially sound position throughout the year
(3) insurance companies are in fierce competition with each other to capture the rural segment
(4) the needs of the rural people are much different from those of the urban people
(5) None of theseQuestion No : 3
What would be the possible outcome if insurance firms launch policies with heavy premium amounts in village areas?
(1) Such policies would become the prerogative of the dreaded moneylender only
(2) Such policies would become an instant hit with rich and influential segment
(3) Such an initiative would fail to yield desired results on a large scale
(4) It would add to the woes of the economically weaker segment
(5) None of theseQuestion No : 4
What does the emerging markets’ per capita spending on life insurance of $46 against developed markets’ $1,887 reflect?
(1) Insurance companies have little scope and opportunity in emerging markets
(2) There are few takers of insurance policies in emerging markets
(3) Insurance has not been a profitable area of business in emerging markets
(4) There is fierce competition in the insurance sector in emerging markets
(5) None of theseQuestion No : 5
Which of the following is ‘true’ in the context of the passage?
(1) There lies a vast potential for insurance sector in countryside areas of India
(2) Urban India has more to offer than rural India in the area of insurance
(3) Global insurance firms eye India as a low return market
(4) LIC has prevented the entry of other insurance companies in the Indian market
(5) None of theseQuestion No : 6
What makes insurance firms forgo the usual death certificates for death insurance claims in villages?
(1) Death certificates are generally not issued in rural areas
(2) People in villages usually do not seek death certificates from authorities
(3) Generally rural people do not die in hospital from where death certificate is issued
(4) It is much easy to get a forged death certificate in our villages
(5) None of theseQuestion No : 7
TAILORING
(1) pruning
(2) adjusting
(3) stretching
(4) negotiating
(5)unfolding
Question No : 8
MONOPOLY
(1) dominance
(2) bargain
(3) presence
(4) hold
(5) strategy
Question No : 9
UNFORESEEN
(1) tragic
(2) grave
(3) predictable
(4) severe
(5) precarious
Question No : 10
INNOVATIVE
(1) detrimental
(2) naive
(3) complex
(4) obsolete
(5) cumbersome