Everything About Insurance In This Quiz!
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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!
- 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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