Insurance Processes - Quiz 1

20 Questions | Total Attempts: 176

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Insurance Processes - Quiz 1

Questions and Answers
  • 1. 
    Person/company who buys insurance is called:
    • A. 

      Insurer

    • B. 

      Insurance company

    • C. 

      Insured

    • D. 

      Contractor

  • 2. 
    The institution who sells insurance is called:
    • A. 

      Insured

    • B. 

      Insurer/Carrier

    • C. 

      Underwriter

  • 3. 
    Sum insured is the amount that Insurer has to pay to the insured in case of loss. 
    • A. 

      True

    • B. 

      False

  • 4. 
    The amount payed frequently by insured which provides insurance to him is:
    • A. 

      Coverage

    • B. 

      Reserve

    • C. 

      Premium

    • D. 

      Sum insured

  • 5. 
    Insured provides lower amount of money in form of premium frequently, but insurer has to pay higher amount called sum insured if unforeseen event happens. This law characteristic of insurance is called:
    • A. 

      Personal

    • B. 

      Conditional

    • C. 

      Unilateral

    • D. 

      Aleatory

  • 6. 
    Insurer is forced to pay a claim, but insured is not forced to pay a premium. This is unilateral characteristic of inusrance.
    • A. 

      True

    • B. 

      False

  • 7. 
    Insurers are covering whichs types of risk?
    • A. 

      Pure

    • B. 

      Fundamental

    • C. 

      Particular

    • D. 

      Speculative

  • 8. 
    You can make profit out of pure risk.
    • A. 

      True

    • B. 

      False

  • 9. 
    Peril can be:
    • A. 

      Fire

    • B. 

      Hazard

    • C. 

      Car accident

    • D. 

      Earthquake

  • 10. 
    We are covering risk against hazard. 
    • A. 

      True

    • B. 

      False

  • 11. 
    Physical hazard is:
    • A. 

      Behaving unethical after getting the insurance.

    • B. 

      Lying about the past.

    • C. 

      House made of wood.

  • 12. 
    Hazard is a condition that increases chance of loss.
    • A. 

      True

    • B. 

      False

  • 13. 
    Pooling is:
    • A. 

      Gahtering the heterogeneous risks.

    • B. 

      Gahtering homogeneous risks.

    • C. 

      Sharing risk for the common good

  • 14. 
    Underwriting is a process of making decision about risk in insurance company.
    • A. 

      True

    • B. 

      False

  • 15. 
    Underwriters are the people who are:
    • A. 

      Deciding about the risk in insurance company.

    • B. 

      Predicting probability of future loss.

    • C. 

      Defining prices of insurance coverages.

    • D. 

      Dealing with adverse selection (only those who are closely exposed to a risk, want insurance)

  • 16. 
    Actuaries are the people who are:
    • A. 

      Deciding about the risk in insurance company.

    • B. 

      Predicting probability of future loss.

    • C. 

      Defining prices of insurance coverages.

    • D. 

      Dealing with adverse selection (only those who are closely exposed to a risk, want insurance)

  • 17. 
    Time between premium payin and claims pauout is called 
    • A. 

      Buffer

    • B. 

      Profit

    • C. 

      Surcharge

    • D. 

      Discount

  • 18. 
    Underwriting premium is:
    • A. 

      Investment gain - Claim

    • B. 

      Premium - Claim

    • C. 

      Operational profit

    • D. 

      Premium - Operational profit

  • 19. 
    Fund management profit is profit insurers make by investing money collected from premiums.
    • A. 

      True

    • B. 

      False

  • 20. 
    Operational profit is equal:
    • A. 

      Premium + Investment gain

    • B. 

      Premium - Investment gain + Claim

    • C. 

      Premium - Claim

    • D. 

      Premium + Investment gain - Claim

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