Everything About Insurance In This Quiz!

105 Questions | Total Attempts: 18

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Everything About Insurance In This Quiz!

Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. If you wanna know more in detail or test your knowledge about insurance, take this quiz!


Questions and Answers
  • 1. 
    Which services are associated with standard & poors and AM best?
    • A. 

      Investigating violation of the fair credit reporting act

    • B. 

      Providing employmetn histories for investigative consumer reports

    • C. 

      Storing medical information collected by insurance companies

    • D. 

      Rating the financial strength of the insurance companies

  • 2. 
    Pertaining to insurance, what is the definition of a fiduciary responsibility?
    • A. 

      Helping insured to file claims

    • B. 

      Performing reviews of insured coverage

    • C. 

      Offering additional coverage to clients

    • D. 

      Promptly forwarding premiums to the insurance company

  • 3. 
    What term best describes the act of withholding material information that would be crucial to an underwriting decision?
    • A. 

      Concealment

    • B. 

      Withholding 

    • C. 

      Leading 

    • D. 

      Breach of warranty

  • 4. 
    The requirement that agents not commingle insurance monies with their own funds is known as 
    • A. 

      Premium accountability

    • B. 

      Express authority

    • C. 

      Accepted accounting principal

    • D. 

      Fiduciary responsiblity

  • 5. 
    Which of the following would qualify as a competent party in an insurance contract
    • A. 

      The applicant is under the influence of a mind-impairing medication at the time of application 

    • B. 

      The applicant has a prior felony conviction 

    • C. 

      The applicant is intoxicated at the time of application 

    • D. 

      The applicant is 12 year old student

  • 6. 
    Not all losses are insurable and there are certain requirement that must be met before a risk is a proper subject for insurance. these requirements include all of the following except
    • A. 

      The loss produced by the risk must be definite

    • B. 

      The lost may be intentional

    • C. 

      The loss must not be catastrophic

    • D. 

      There must be sufficient number of homogeneous exposure units to make losses reasonably predictable

  • 7. 
    For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become
    • A. 

      More active

    • B. 

      Larger

    • C. 

      Smaller 

    • D. 

      Older

  • 8. 
    What method do insurers use to protect themselves against catastrophic losses?
    • A. 

      Pro rata liability 

    • B. 

      Risk management

    • C. 

      Reinsurance

    • D. 

      Indemnity

  • 9. 
    Courts will interpret any ambiguity in an insurance contract
    • A. 

      Based on the prudent person rule

    • B. 

      In favor of the insured

    • C. 

      In favor of the insurer

    • D. 

      Through arbitration

  • 10. 
    What insurance concept is associated with the names Weiss and Fitch
    • A. 

      Guides describing company financial integrity

    • B. 

      Policy dividends

    • C. 

      Types of mutual companies

    • D. 

      Index used by stock companies

  • 11. 
    Which of the following types of agent authority is also called "perceived authority"
    • A. 

      Fiduciary

    • B. 

      Apparent

    • C. 

      Express 

    • D. 

      Implied

  • 12. 
    What do individuals use to transfer their risk of loss to larger group?
    • A. 

      Insurable interest

    • B. 

      Exposure

    • C. 

      Indemnity

    • D. 

      Insurance

  • 13. 
    An insurance company sells an insurance policy over the phone in response to a TV ad 
    • A. 

      Independent agency marketing 

    • B. 

      Illegal 

    • C. 

      Insurance telemarketing

    • D. 

      Direct response marketing

  • 14. 
    Which of the following is true regarding a risk retention group?
    • A. 

      It is a benefit society formed to provied insurance for members of an affiliated lodge

    • B. 

      It is a company owned by the stockholders that provides nonparticipating policies

    • C. 

      It is a liability insurance company owned by it members

    • D. 

      It provides support for underwriters and is not an insurance company

  • 15. 
    Insurance is the transfer of
    • A. 

      Peril

    • B. 

      Risk

    • C. 

      Loss

    • D. 

      Hazard

  • 16. 
    Which of the following terms is used to describe a person, other than a viator, that enters into or effectuates a viatical settlemet contract?
    • A. 

      Viatical settlement broker

    • B. 

      Viatical settlement effectuator

    • C. 

      Viatical settlement provider

    • D. 

      Viatical settlement purchaser

  • 17. 
    Which of the following statement is not true concerning insurable interest as it applies to life insurance?
    • A. 

      Business partners have an insurable interest in each other

    • B. 

      A husband or wife has an insurable interest in their spouse 

    • C. 

      An individual has an insurable interest in his or her own life

    • D. 

      A debtor has an insurable interest in the life of a lender

  • 18. 
    If an agent fails to obtain an applicant signature on the application, the agent must
    • A. 

      Sign the application for the applicant

    • B. 

      Sign the application, stating it was by agent

    • C. 

      Send the application to the insurer with a note explaining the absence of signature

    • D. 

      Return the application to the applicant for a signature

  • 19. 
    An insured has a life insurance policy with a face amount of 500. he pay a premium each week to the agent who sold him policy. what kind of policy does insured have?
    • A. 

      Industrial life

    • B. 

      Credit life 

    • C. 

      Ordinary life 

    • D. 

      Franchise life

  • 20. 
    Which of the following best describes gross annual premium
    • A. 

      Basic insurance rate plus commissions

    • B. 

      Expense premium

    • C. 

      Net premium

    • D. 

      Annual loading

    • E. 

      Option 5

  • 21. 
    Which of the following statement concerning buy-sell agreements is ture?
    • A. 

      Benefits received are considered income taxable

    • B. 

      Buy-sell agreements pay in the event of a medical emergency

    • C. 

      Buy-sell agreement are normally funded with a life insurance policy

    • D. 

      Premiums paid are deductible as a business expense

  • 22. 
    Which of the following applicants could the insurer charge a higher rate of premium and not violate reugulations regarding unfair discrimination
    • A. 

      An applicant who is a smoker

    • B. 

      An applicant who was born in another country

    • C. 

      An applicant who is legally blind

    • D. 

      An applicant who has been a victim of domestic abuse

  • 23. 
    Which of the following may not be included in an insurance company advertisement
    • A. 

      That it policies are covered by a state guaranty association

    • B. 

      The policies limitation or exclusion

    • C. 

      The name of a specific agent 

    • D. 

      An identification of a limited policy as limit policy

  • 24. 
    What does "liquidty" refer to in a life insurance policy
    • A. 

      The policyowner recieves dividend check each year

    • B. 

      The insured recieves payment each month in retirement

    • C. 

      Cash values can be borrowed at any time

    • D. 

      The death benefit replaces the assets that would have accumulated if the insured had not died

  • 25. 
    Which of the following types of insurance policies would perform the function of cash accumulation
    • A. 

      Credit life

    • B. 

      Increasing term

    • C. 

      Whole life

    • D. 

      Term life

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