How to Prepare Insurance Awareness for LIC AAO 2025?

The LIC AAO 2025 exam is highly competitive for candidates aspiring to join the Life Insurance Corporation of India. The Insurance & Financial Market Awareness section in the Mains exam plays a key role in boosting your overall score.

You’ll have 20 minutes to attempt questions worth 60 marks, making this section crucial for improving your rank. Focus on key insurance topics, recent financial sector updates, and current affairs related to IRDAI, RBI, SEBI, and the economy to strengthen your preparation.

LIC AAO 2025 Exam Pattern

The LIC AAO 2025 recruitment process is divided into three main phases Prelims, Mains, and Interview. Each phase has a specific purpose in selecting candidates for the Assistant Administrative Officer (AAO) post. Understanding the latest exam pattern is crucial for smart preparation and time management during the exam.

Phase I – Prelims

This screening stage has Reasoning, Quantitative Aptitude, and English. Only Reasoning and Quant marks count for shortlisting; English is qualifying. No negative marking. Each section has 20 minutes. Sectional and overall cutoffs apply for Mains selection.

SectionNo. of QuestionMarksDuration
Reasoning Ability353520 min
Quantitative Aptitude353520 min
English Language (qualifying)*30*3020 min
Total1007060 min

Phase II – Mains (For Generalist)

This crucial stage has four objective sections and a qualifying descriptive paper. Objective marks decide your rank. Insurance, Financial Market Awareness, and Professional Knowledge are key scoring areas. The descriptive test must be cleared for interview eligibility.

SectionNo. of QuestionMarksDuration
Reasoning Ability309040 min
General Knowledge & Current Affairs306020 min
Professional Knowledge (Generalist posts)309040 min
Insurance & Financial Market Awareness306020 min
Objective Total120300120 min
Descriptive Test (Essay & Letter/Legal Drafting)2 Qs2530 min

Note: The English Language section in the Prelims will be of qualifying nature only.
Marks obtained in this section will not be counted for the purpose of shortlisting or final ranking. However, you must clear the minimum cutoff in English to qualify for the Mains exam.

Preparation Tips for Insurance Awareness – LIC AAO 2025

The Insurance & Financial Market Awareness section in LIC AAO 2025 Mains can be a major scoring area if prepared well. Focus on understanding basic insurance concepts and staying updated with recent developments. Read newspapers, follow IRDAI and RBI updates, and revise key financial terms regularly. Use mock tests and quizzes to strengthen your accuracy and speed.

Important Topics for Insurance Awareness – LIC AAO 2025

Insurance Awareness is a high-scoring section in LIC AAO 2025. Focus on insurance principles, contract elements, risk management, and regulatory bodies like IRDAI. Cover both life and general insurance products, LIC schemes, government insurance programs, and recent amendments in insurance laws. Grasp claim processes, underwriting, grievance redressal, and latest technological developments in the insurance sector.

Core Topics to Cover

This section forms the foundation of Insurance and Financial Awareness. Focus on the history of banking and insurance in India, the role of key financial regulators (like IRDAI, SEBI, RBI, PFRDA), and stay updated on the latest banking and insurance current affairs, including mergers, schemes, and financial reforms.

SectionSubtopics
History of Banking and InsuranceNationalisation, Evolution of Insurance in India, Major Milestones
Financial Institutions and TermsIRDAI, SEBI, RBI, PFRDA, Insurance Terms, Derivatives, Policies
Current Affairs – Banking & InsuranceRecent Schemes, Mergers, Reforms, Financial Market News

Financial Market Topics

Understanding financial markets is crucial for LIC AAO 2025. Cover money markets, capital markets, primary and secondary markets, derivatives, government securities, and forex markets. Know various financial instruments like T-bills, commercial papers, and certificates of deposit, along with their features and significance.

Main TopicsSubtopics
The Indian Financial SystemOverview
Financial MarketsFeatures and Functions
Financial InstitutionsRBI, SEBI, IRDAI, PFRDA, SIDBI, EXIM, NABARD, IDFC
Financial Instruments & MarketsMoney Market, Capital Market, Primary Market, Secondary Market
Money Market InstrumentsT-Bills (types, features), Commercial Paper, Certificate of Deposit, Commercial Bills, Call/Notice Money Market, CBLO
Primary Market ConceptsBook Building, ASBA, Anchor Investor, Green Shoe Option, IPOs, FPOs, IDRs, GDRs, QIP, ECBs, FCCBs, Euro Issue
Secondary Market ConceptsFunctions, Listing & Delisting, SEBI Regulations, Stock Exchanges
DerivativesForwards, Futures, Options, Exchange Traded vs OTC
Government Securities & Debt MarketGovt Bonds, Treasury Bills
Forex MarketsCurrency Trading and Management

Banking in India

Grasp the structure of Indian banking: public sector banks, private sector banks, foreign banks, cooperative banks, and NBFCs. Understand key terms like CRR, SLR, NPA, Basel norms, and SARFAESI Act. Also, cover financial inclusion, disinvestment, digital banking, fintech innovations, and monetary and fiscal policy updates.

TopicsSubtopics
Structure & FunctionsScheduled Commercial Banks: PSBs, Private Banks, Foreign Banks
Important Banking TermsSLR, CRR, NPA, CAR, Basel Norms
Cooperative BankingStructure and Working
NBFCsFunctions and Regulations
Key ActsSARFAESI Act
Policy FrameworksMonetary & Fiscal Policy, Disinvestment, Financial Inclusion Milestones
Money Laundering & KYCAnti-Money Laundering Laws, KYC Norms
Technology in Financial SectorFinTech, Digital Payments
Alternative FinanceBitcoins, Crowdfunding
Corporate GovernanceRegulatory Frameworks
Budget & SurveyUnion Budget, Economic Survey
Key Economic IndicatorsWPI, CPI, GDP Rate, IIP Rate

Insurance Knowledge / Awareness Topics

This section requires strong command over insurance basics, life and general insurance history, types of insurance products (term, endowment, ULIPs, annuities), principles of insurance contracts, and underwriting. Also, study claim processes, grievance redressal mechanisms, and key LIC and government insurance schemes launched in recent years.

TopicsSubtopics
Insurance IntroductionFeatures & Working
Life Insurance (History & Evolution)LIC
General Insurance (History & Evolution)GIC
Important Insurance CompaniesNew India Assurance, United India Insurance, Oriental Insurance, National Insurance, Agriculture Insurance, Private Life Insurance Companies
Insurance ConceptsInsurance as Risk Management Tool, Insurance Contract Features, Social Security, Human Life Value, Mutuality & Diversification
Principles of Life InsuranceContract Elements, Pricing, Documentation
Traditional Life Insurance ProductsTerm, Whole Life, Endowment (and Variants)
Non-Traditional Life Insurance ProductsUniversal Life, Variable Insurance, ULIPs
AnnuitiesTypes & Features
UnderwritingBasics
ClaimsTypes & Procedures
Sales ProcessSelling & Customer Service
Other Insurance TypesHealth, Motor, Property, Married Women’s Property Act
Grievance Redressal MechanismsIRDAI, Ombudsman, Grievance Process
Regulatory ActsIRDA Act 1999, Insurance Laws (Amendment) Act 2015
Important CommitteesRegulatory & Advisory Committees
Government Schemes (Insurance-Based)PM Fasal Bima Yojana, PM Suraksha Bima Yojana, Rashtriya Swasthya Bima Yojana, ESI Scheme, CGHS, Aam Aadmi Bima Yojana, Janashree Bima Yojana, Universal Health Insurance Scheme
LIC Life Insurance SchemesKey LIC Schemes
Latest Developments6 Months Current Affairs
Technological DevelopmentsInsurTech Innovations

Preparation Tips for LIC AAO 2025

Focus heavily on insurance concepts as this carries maximum weight. Prioritize recent government schemes, LIC policies, regulatory updates, and important financial committees. Regularly follow IRDAI, SEBI, and RBI updates for the latest notifications. Use monthly current affairs capsules and revise budget & economic survey highlights thoroughly.

Key PointsActionable Tips
Focus on InsurancePrioritize terms, definitions, regulations, grievance redressal
Government SchemesFocus on last 4 years, LIC schemes especially
Insurance Committees & PoliciesCover key decisions like FDI policies
Budget & Economic SurveyStudy key points of Union Budget & Survey
Current AffairsRevise last 6 months: RBI, SEBI, IRDAI updates
Monthly CapsulesFollow monthly economic capsules for simplified updates

Best Book For LIC AAO Insurance and Financial Awareness Preparation:

Book NameAuthor/Publication
Indian Financial SystemBharati V Pathak
Financial Awareness for Competitive ExamsDisha Publication
Disha PublicationPratiyogita Darpan

Insurance Awareness Preparation for LIC AAO Frequently Asked Questions:

Q1. Is LIC AAO difficult exam?

Ans. LIC AAO exam is considered difficult to crack. But with proper study plan and strategy on can clear this exam easily.

Q2. Are mock tests helpful for this section?

Ans. Absolutely, they boost speed, accuracy, and help with exam-like practice.

Q3. How many attempts are there in LIC AAO exam?

Ans. There is no limits on the number of attempts a candidate can take.

Q4. What is the selection process of LIC AAO?

Ans. The selection process of LIC AAO involves three stages
Prelims
Mains
Interview

Q5. Which topics are most important for Insurance Awareness?

Ans. Focus on insurance basics, IRDAI updates, financial institutions, and government schemes.

Q6. Is current affairs important for LIC AAO Insurance Awareness?

Ans. Yes, especially last 6 months of insurance, RBI, SEBI, and financial market updates.



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