Insurance and Financial Market Awareness | Topics to Cover and How to Prepare the Section Tips

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By Smartkeeda
25 Nov 2020

The notification of the LIC AAO 2023 examination is finally out after a long wait! This examination differs from the other banking examination due to the addition of a new section- The Insurance and Financial Market Awareness. The section on Insurance and Financial Market Awareness is a part of the second Phase of the LIC AAO Examination 2023. This section has 30 questions carrying 2 marks each, totaling to a total of 60 marks. This has to be done within 20 minutes. There is also a minimum qualifying criteria wherein the student has to score at least a minimum of 30 marks (this is 27 marks for the SC/ST category). Now, 60 marks is a lot and can make or break your result. Also, this section may seem difficult at first glance but in reality, is very scoring. All you need to do is have a clear idea of the topics to be covered under the Insurance and Financial Market Awareness and prepare from a finite syllabus. Your overall score can really increase if the section on Insurance and Financial Market Awareness is done properly. We at Smartkeeda believe half the job is done if the aspirant is well informed and has access to proper material. Thus, we’ll be doing the following in an attempt to make the learning process easier and enjoyable:

  • List all the important topics of Insurance and Financial Market Awareness for preparation: This article focuses on this aspect and would give you a clear idea about the breadth and depth of your preparation.
  • Free quizzes for Insurance and Financial Market Awareness Section: This section will be updated daily with a set of 10 questions from a mixture of financial and insurance questions.

Before jumping into it, let us take a look at the general examination pattern of the Mains or Phase 2 of the LIC AAO 2023:


No. of Questions

Maximum Marks


Reasoning Ability



40 minutes

General Knowledge & Current Affairs



20 minutes

Data Analysis & Interpretation



40 minutes

Insurance & Financial Market Awareness



20 minutes




2 Hours

Descriptive English (Letter Writing & Essay)



30 Minutes


Strategy for the Insurance and Financial Market Awareness section:

The special part about the section on financial market and Insurance awareness is that the time limit in this section should not be an issue ideally. This alone makes it different from the Quantitative aptitude section where the focus is on learning tricks to solve maximum questions in the given time. This is because in the financial market and Insurance awareness section, one would either know the answer or not. There is no calculation involved and no guess work and someone who is well prepared would be able to finish it within 10 minutes! The first step of the strategy is to know the list of topics to be prepared. The list is given below-

Topic List - Insurance and Financial Market Awareness

Financial Market Topics

  • The Indian Financial System- Overview
    • Financial Markets- features and functions
    • Financial Institutions
    • Financial Instruments
  • Financial Markets
    • Money Market
    • Capital Market
      • Primary market
      • Capital Market
  • Money Market Instruments
    • T-Bills- types and features
    • Commercial Paper
    • Certificate of Deposit
    • Commercial Bills
    • Call/notice money market
    • CBLO
  • Primary Market
    • Book building
    • ASBA
    • Anchor investor
    • Green shoe option
    • IPOs and FPOs
    • IDRs and GDRs
    • Qualified Institutional Placement
    • ECBs, FCCBs, Euro issue
  • Secondary Market
    • Functions
    • Listing and de-listing
    • Important SEBI regulations
    • Stock Exchanges
  • Derivatives
    • Forwards
    • Futures
    • Options
    • Exchange traded vs OTC
  • Government Securities Debt Market
  • Forex Markets
  • Financial Institutions
    • RBI
    • SEBI
    • IRDA
    • PFRDA
    • SIDBI
    • EXIM
    • IDFC
    • EXIM
    • NABARD
  • Banking In India
    • Functions
    • Scheduled Commercial Banks- PSBs, private banks and foreign banks
    • Important terminology used in banking sector- SLR, CRR, NPA, CAR, Basel Norms
    • Cooperative Banking
    • NBFCs
    • SARFAESI Act
    • Monetary and Fiscal Policy
    • Money laundering and KYC
  • Important Changes in the Financial sector
  • Disinvestments
  • Financial Inclusion- important milestones
  • Use of technology in financial sector
  • Alternate sources of finance- Bitcoins, Crowdfunding
  • Corporate Governance in Financial Sector
  • The Union Budget
  • Economic Survey
  • Key financial indicators- inflations (WPI and CPI), GDP rate, IIP rate etc

Visit the following sites regularly and make notes of the FAQs and notifications (last 6 months)

  • RBI
  • SEBI
  • IRDA

Insurance Knowledge or Insurance Awareness Topics

  • Insurance Introduction – features and working
  • Life Insurance- History and Evolution
  • LIC
  • General Insurance - History and Evolution
  • GIC
  • Important Insurance Companies-
    • New India Assurance Company Limited
    • United India insurance company limited
    • Oriental Insurance Company Limited
    • National Insurance Company Limited
    • Agriculture Insurance Company of India Limited
    • Private Life Insurance Compnaies
  • Use of Insurance as a tool to manage risk
  • Features of an Insurance Contract
  • Insurance and social security
  • Human Life Value
  • Mutuality and Diversification
  • Principles of Life Insurance
  • Elements of an insurance contract
  • Insurance Pricing- basics
  • Documentation at various stages
  • Traditional Life Insurance products-
    • Term Insurance
    • Whole Life Insurance
    • Endowment insurance
    • Variants
  • Non- Traditional Life Insurance products-
    • Universal Life insurance
    • Variable insurance
    • ULIPs
  • Annuity- types and features
  • Underwriting
  • Claims- Types and procedures
  • Selling Process
  • Customer Service
  • Health Insurance- basics
  • Motor Insurance- basics
  • Property Insurance Basics
  • Married Women’s Property Act
  • Important terminology
  • Grievance Redressal Mechanism
  • Regulatory aspects
    • IRDA
    • Ombudsman
    • IRDA Act 1999
    • Insurance Laws (Amendment) Act 2015
  • Important committees
  • Government schemes-
    • Pradhan Mantri Fasal Bima Yojana
    • Pradhan Mantri Suraskha Bima Yojana
    • Rashtriya Swasthya Bima Yojana
    • Employment State Insurance Scheme
    • Central Government health scheme
    • Aam Aadmi Bima Yojana
    • Janashree Bima Yojana
    • Universal Health Insurance scheme
  •  Important LIC life insurance schemes
  • Latest developments in life insurance – 6 months CAF
  • Important technological changes in insurance

Insurance and Financial Market Awareness Section: Points to remember-

  • The topics on Insurance and Financial Market Awareness are not to be studied in depth. Only the basics need to be covered with an eye on the important current affairs in the last 6 months. This section is easy although somewhat vast.  
  • On the other hand, insurance is to be studied in depth especially about the basic terms and definitions used in it along with regulatory aspects and grievance redressal mechanisms. Another important topic is Insurance related schemes especially the ones introduced in the last 4 years. Insurance schemes offered by LIC are also to be done in detail. Various types of insurance products and how they are different from each other should be memorized thoroughly. Other key points include insurance committees, insurance companies, important government policies like FDI in insurance, any other information in the budget/economic survey etc.
  • For basic understanding of financial awareness, you can go for Bharti Pathak’s Indian Financial System. However, please remember you are NOT to read the book cover to cover. Only a selective coverage of the topics mentioned above is needed.
  • Monthly economic capsule of any publication
  • FAQs on RBI, SEBI and IRDA’s sites along with latest notifications.
  • The latest Economic Survey
  • Latest Budget
  • Latest Financial government schemes – both Centre and State

The above is a highly comprehensive list of topics to be covered for this section. Going forward, we would be providing notes and free study material to help you understand each topic in an easy manner.

Happy Learning!


Smartkeeda (author)

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