WAEC Insurance 2018 past questions

Checked by the Skolra question team · Last updated 15 October 2026

Ten questions from the 2018 WAEC Insurance paper, with answers and explanations. We hold 48 questions from this paper, and the Skolra app has all of them.

WAEC Insurance 2018 questions and answers

1. 1.Musa lent Obinna the sum of N2,000,000 in February 2015 which he promised to pay back at the end of the year. Musa decided to effect a life policy on Obinna for a sum of N20,000. The subject matter of insurance in the package is?
   1. A
      The N2,000,000 debt
   2. B
      Musa's own life
   3. C
      The life of Obinna
      Correct
   4. D
      The life policy document
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   Answer: C

   The subject matter of insurance is the actual thing insured — Obinna's life — while the debt is the subject matter of the contract giving rise to Musa's insurable interest.
2. 2.Insurer XYZ is jointly covered for two lines surplus treaty reinsurance by reinsurers I,J,K and L for a retention limit of N120,000. The amount of cession for reinsurer K if all reinsurers share the risk equally with the sum insured of N360,000 is?
   1. A
      N60,000
      Correct
   2. B
      N90,000
   3. C
      N120,000
   4. D
      N240,000
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   Answer: A

   Retention is N120,000, leaving a surplus of N360,000 − N120,000 = N240,000 to be ceded under the two-line surplus treaty. Shared equally among the four reinsurers (I, J, K, L), each — including K — receives N240,000 ÷ 4 = N60,000.
3. 3.The right to effect a contract of insurance on the life of a debtor by the creditor is?
   1. A
      Insurable interest
      Correct
   2. B
      Indemnity
   3. C
      Contribution
   4. D
      Subrogation
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   Answer: A

   A creditor has insurable interest in the debtor's life to the extent of the outstanding debt, justifying a policy on the debtor's life.
4. 4.Car plying the road seeking passengers for payment of fares are classified by insurers as?
   1. A
      Private vehicles
   2. B
      Articulated vehicles
   3. C
      Institutional vehicles
   4. D
      Commercial vehicles used for hire or reward
      Correct
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   Answer: D

   Vehicles plying the road to carry fare-paying passengers fall under commercial (hire or reward) vehicle classification, which attracts higher premiums than private-use vehicles.
5. 5.A loss assessor in a claim settlement process is representing the interest of the?
   1. A
      The reinsurer
   2. B
      The insurer
   3. C
      The insured/policyholder
      Correct
   4. D
      NAICOM
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   Answer: C

   Unlike a loss adjustor who acts for the insurer, a loss assessor is engaged by the insured to help present and negotiate their claim.
6. 6.A condition which the insuring public would use to evaluate the financial stability of an insurer is?
   1. A
      Solvency margin
      Correct
   2. B
      Advertising expenditure
   3. C
      Number of policies sold
   4. D
      Number of branches
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   Answer: A

   The solvency margin (excess of assets over liabilities) indicates an insurer's ability to meet its claims obligations, making it the key measure of financial stability.
7. 7.Payment of compensation under professional indemnity insurance would be influenced by?
   1. A
      Proof of the professional's negligence, error or omission
      Correct
   2. B
      The number of years the firm has existed
   3. C
      The location of the professional's office
   4. D
      The age of the professional
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   Answer: A

   Professional indemnity insurance responds when a claim arises from the insured professional's negligent act, error or omission, so compensation hinges on proof of such negligence.
8. 8.Basanya's vehicle was hit at the rear by Jaguna's vehicle. The two vehicles had a minimum cover (third-party only). Estimate of repairs: Basanya's - N155,000; Jaguna's - N75,000. The compensation would be calculated as
   1. A
      N40,000
   2. B
      N230,000
   3. C
      N75,000
   4. D
      N155,000
      Correct
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   Answer: D

   Compensation under third-party property damage cover is based solely on the third party's loss (Basanya's repairs, N155,000), since Jaguna's policy indemnifies only the party he damaged, not his own vehicle.
9. 9.A reinsurance cover of N100,000 in excess of N20,000 was entered by insurer K with reinsurer M. In the event of a loss amounting to N120,000, M would pay?
   1. A
      N100,000
      Correct
   2. B
      N20,000
   3. C
      N120,000
   4. D
      N80,000
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   Answer: A

   Insurer K retains the first N20,000; the excess-of-loss treaty covers the next N100,000 (N100,000 excess of N20,000, layer limit N120,000). Since the N120,000 loss exceeds the retention by exactly N100,000, reinsurer M pays the full layer of N100,000 (N120,000 − N20,000).
10. 10.The winding up of an insurance is legally required to be based on a petition written from not less than
    1. A
       500 policyholders
    2. B
       50 policyholders
       Correct
    3. C
       10 policyholders
    4. D
       5 policyholders
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    Answer: B

    Nigerian insurance law requires a winding-up petition against an insurer to be brought by not less than 50 policyholders (or one-twentieth of the total, whichever is less), preventing frivolous petitions.

The questions come from past JAMB, WAEC and NECO papers. We use software to help write the answer options and explanations, and every answer is checked twice before it goes on the site. How we check

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Practise all 48 questions we hold from the 2018 paper, on a timed CBT screen

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