SBI Clerk Mains English Sectional Mock Test 03

1. Read the passage carefully and answer the questions that follow. Most families buy insurance the way they buy a lottery ticket: hoping to get something back. When a policy pays nothing because nothing went wrong, they feel cheated, and many let it lapse. This view gets insurance exactly backwards. The purpose of a health or crop policy is not to earn a return but to make a rare, ruinous loss bearable. A family that pays a small premium every year and never claims has not wasted money; it has bought years of protection against a hospital bill that could have forced it to sell land. Agents sometimes encourage the confusion by selling products that mix insurance with savings and promise 'money back' at maturity. These plans feel safer to buyers because something is returned, but they usually offer far less cover for the same premium. A household that needs protection would often be better served by a plain term or health policy and a separate savings account. Changing this mindset is difficult because the benefit of insurance is a disaster that does not happen, or that happens without destroying a family. Explaining it with real stories, such as a neighbour whose surgery was paid for, tends to work better than tables of figures.

   Q1.According to the passage, why do many families let their insurance policies lapse?

   • A.They have already made several claims
   • B.They feel cheated when the policy pays nothing
   • C.The policies cover too many risks
   • D.The premiums are raised every year
   • E.Agents refuse to renew their policies

2. Q2.What, according to the author, is the real purpose of a health or crop policy?

   • A.To earn a good return on the premium
   • B.To reduce the price of hospital treatment
   • C.To help families buy land
   • D.To make a rare but ruinous loss bearable
   • E.To replace a savings account

3. Q3.What does the author say about 'money back' plans?

   • A.They give the highest cover available
   • B.They usually give far less cover for the same premium
   • C.They are illegal for agents to sell
   • D.They have no maturity benefit
   • E.They are the best choice for every household

Start the test to answer these. Correct answers and explanations are shown after you submit.