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.
| Section | No. of Question | Marks | Duration |
| Reasoning Ability | 35 | 35 | 20 min |
| Quantitative Aptitude | 35 | 35 | 20 min |
| English Language (qualifying)* | 30* | 30 | 20 min |
| Total | 100 | 70 | 60 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.
| Section | No. of Question | Marks | Duration |
| Reasoning Ability | 30 | 90 | 40 min |
| General Knowledge & Current Affairs | 30 | 60 | 20 min |
| Professional Knowledge (Generalist posts) | 30 | 90 | 40 min |
| Insurance & Financial Market Awareness | 30 | 60 | 20 min |
| Objective Total | 120 | 300 | 120 min |
| Descriptive Test (Essay & Letter/Legal Drafting) | 2 Qs | 25 | 30 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.
| Section | Subtopics |
| History of Banking and Insurance | Nationalisation, Evolution of Insurance in India, Major Milestones |
| Financial Institutions and Terms | IRDAI, SEBI, RBI, PFRDA, Insurance Terms, Derivatives, Policies |
| Current Affairs – Banking & Insurance | Recent 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 Topics | Subtopics |
| The Indian Financial System | Overview |
| Financial Markets | Features and Functions |
| Financial Institutions | RBI, SEBI, IRDAI, PFRDA, SIDBI, EXIM, NABARD, IDFC |
| Financial Instruments & Markets | Money Market, Capital Market, Primary Market, Secondary Market |
| Money Market Instruments | T-Bills (types, features), Commercial Paper, Certificate of Deposit, Commercial Bills, Call/Notice Money Market, CBLO |
| Primary Market Concepts | Book Building, ASBA, Anchor Investor, Green Shoe Option, IPOs, FPOs, IDRs, GDRs, QIP, ECBs, FCCBs, Euro Issue |
| Secondary Market Concepts | Functions, Listing & Delisting, SEBI Regulations, Stock Exchanges |
| Derivatives | Forwards, Futures, Options, Exchange Traded vs OTC |
| Government Securities & Debt Market | Govt Bonds, Treasury Bills |
| Forex Markets | Currency 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.
| Topics | Subtopics |
| Structure & Functions | Scheduled Commercial Banks: PSBs, Private Banks, Foreign Banks |
| Important Banking Terms | SLR, CRR, NPA, CAR, Basel Norms |
| Cooperative Banking | Structure and Working |
| NBFCs | Functions and Regulations |
| Key Acts | SARFAESI Act |
| Policy Frameworks | Monetary & Fiscal Policy, Disinvestment, Financial Inclusion Milestones |
| Money Laundering & KYC | Anti-Money Laundering Laws, KYC Norms |
| Technology in Financial Sector | FinTech, Digital Payments |
| Alternative Finance | Bitcoins, Crowdfunding |
| Corporate Governance | Regulatory Frameworks |
| Budget & Survey | Union Budget, Economic Survey |
| Key Economic Indicators | WPI, 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.
| Topics | Subtopics |
| Insurance Introduction | Features & Working |
| Life Insurance (History & Evolution) | LIC |
| General Insurance (History & Evolution) | GIC |
| Important Insurance Companies | New India Assurance, United India Insurance, Oriental Insurance, National Insurance, Agriculture Insurance, Private Life Insurance Companies |
| Insurance Concepts | Insurance as Risk Management Tool, Insurance Contract Features, Social Security, Human Life Value, Mutuality & Diversification |
| Principles of Life Insurance | Contract Elements, Pricing, Documentation |
| Traditional Life Insurance Products | Term, Whole Life, Endowment (and Variants) |
| Non-Traditional Life Insurance Products | Universal Life, Variable Insurance, ULIPs |
| Annuities | Types & Features |
| Underwriting | Basics |
| Claims | Types & Procedures |
| Sales Process | Selling & Customer Service |
| Other Insurance Types | Health, Motor, Property, Married Women’s Property Act |
| Grievance Redressal Mechanisms | IRDAI, Ombudsman, Grievance Process |
| Regulatory Acts | IRDA Act 1999, Insurance Laws (Amendment) Act 2015 |
| Important Committees | Regulatory & 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 Schemes | Key LIC Schemes |
| Latest Developments | 6 Months Current Affairs |
| Technological Developments | InsurTech 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 Points | Actionable Tips |
| Focus on Insurance | Prioritize terms, definitions, regulations, grievance redressal |
| Government Schemes | Focus on last 4 years, LIC schemes especially |
| Insurance Committees & Policies | Cover key decisions like FDI policies |
| Budget & Economic Survey | Study key points of Union Budget & Survey |
| Current Affairs | Revise last 6 months: RBI, SEBI, IRDAI updates |
| Monthly Capsules | Follow monthly economic capsules for simplified updates |
Best Book For LIC AAO Insurance and Financial Awareness Preparation:
| Book Name | Author/Publication |
| Indian Financial System | Bharati V Pathak |
| Financial Awareness for Competitive Exams | Disha Publication |
| Disha Publication | Pratiyogita Darpan |
Insurance Awareness Preparation for LIC AAO Frequently Asked Questions:
Ans. LIC AAO exam is considered difficult to crack. But with proper study plan and strategy on can clear this exam easily.
Ans. Absolutely, they boost speed, accuracy, and help with exam-like practice.
Ans. There is no limits on the number of attempts a candidate can take.
Ans. The selection process of LIC AAO involves three stages
Prelims
Mains
Interview
Ans. Focus on insurance basics, IRDAI updates, financial institutions, and government schemes.
Ans. Yes, especially last 6 months of insurance, RBI, SEBI, and financial market updates.
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