Sample Questions and Answers
What is a “deductible” in an insurance policy?
A. The amount the policyholder must pay out of pocket before insurance coverage begins
B. The amount the insurance company will pay for a claim
C. A fee charged by the insurance company to process a claim
D. The total amount of premiums paid for a policy
Answer: A
What is “insurable interest” in an insurance contract?
A. The financial stake the policyholder has in the subject matter of the insurance
B. The risk that the insurer is willing to accept
C. The premium the policyholder is required to pay
D. The minimum amount of coverage the insurer will offer
Answer: A
What is the purpose of “reinsurance”?
A. To help insurance companies manage risk by transferring some of it to other insurers
B. To provide direct coverage to policyholders
C. To settle insurance claims faster
D. To monitor the underwriting process
Answer: A
What is “health maintenance organization (HMO)” insurance?
A. A type of managed care plan that requires policyholders to use a network of designated providers
B. A policy that covers all health-related expenses, including out-of-network care
C. A policy that only covers emergency medical expenses
D. A plan that offers a high deductible in exchange for low premiums
Answer: A
What is the “premium” in an insurance policy?
A. The amount of money the policyholder pays to the insurer for coverage
B. The amount the insurer will pay out in claims
C. The amount the policyholder will receive after filing a claim
D. The process by which claims are paid out
Answer: A
What is a “waiting period” in an insurance policy?
The time the policyholder must wait before benefits begin after a claim or loss
B. The time the insurer takes to process a claim
C. The period during which the policyholder can cancel a policy
D. The time required for policy renewal
Answer: A
What does “whole life insurance” provide?
Permanent coverage with a savings component
B. Coverage for a specific term, such as 10 or 20 years
C. Temporary protection for specific events, like accidents
D. A savings plan without death benefits
Answer: A
Which of the following best describes “term life insurance”?
Life insurance that provides coverage for a specified period and no cash value
B. Insurance that provides lifelong coverage with investment components
C. Insurance that pays benefits only if the policyholder dies by accident
D. Insurance that covers only illnesses and medical expenses
Answer: A
What is the “face value” of a life insurance policy?
The amount the insurer will pay to the beneficiary upon the policyholder’s death
B. The total premiums paid over the life of the policy
C. The cost of purchasing additional coverage
D. The amount of deductible required for claims
Answer: A
What is “liability insurance”?
Insurance that protects against legal claims for personal injury or property damage
B. Insurance that covers property loss caused by natural disasters
C. Insurance that covers medical expenses for the insured
D. Insurance for injuries that occur at the workplace
Answer: A
What does the term “moral hazard” refer to in insurance?
The increased risk of loss due to the behavior of the insured after obtaining insurance
B. The risk that arises from natural events like earthquakes or floods
C. A situation in which an insurer refuses to process a claim
D. The calculation of insurance premiums based on risk levels
Answer: A
What is “property insurance”?
Insurance that covers damage to or loss of property due to various causes
B. Insurance that covers health-related expenses
C. Insurance that covers income loss due to a disability
D. Insurance that covers legal costs associated with property disputes
Answer: A
What is the primary function of an “insurance adjuster”?
To assess and evaluate claims to determine the amount of compensation
B. To determine the premium rates for different policies
C. To market insurance policies to customers
D. To negotiate with third-party providers of reinsurance
Answer: A
What is the role of an “actuary” in the insurance industry?
To analyze data and calculate risk, premiums, and reserves for insurance policies
B. To manage claims processing and settlements
C. To handle legal matters related to insurance disputes
D. To inspect properties and assess their insurability
Answer: A
What is “accident insurance”?
Insurance that provides financial compensation for injuries or death resulting from accidents
B. Coverage that only applies to vehicle accidents
C. Insurance that covers lost wages during illness
D. Insurance that covers property damages caused by accidents
Answer: A
What is “business interruption insurance”?
Insurance that covers lost income and operating expenses if a business cannot operate due to a covered event
B. Insurance that protects against accidents at the workplace
C. Insurance that covers property damages caused by business activities
D. Insurance that covers only legal disputes in business operations
Answer: A
What is a “co-payment” in a health insurance plan?
A fixed amount the policyholder pays for medical services at the time of care
B. The percentage of the medical bill covered by the insurance provider
C. The total premium paid for the health insurance policy
D. The amount deducted from the policyholder’s pay to cover health insurance
Answer: A
What is “workers’ compensation insurance”?
Insurance that provides medical benefits and wage replacement for employees injured in the course of employment
B. Insurance that protects against workplace fraud and theft
C. Insurance that covers damage to property due to workplace accidents
D. Insurance that provides coverage for business operations outside normal hours
Answer: A
What is “underwriting” in the context of insurance?
The process of evaluating the risks of an insurance applicant
B. The process of paying claims to policyholders
C. The amount of premium charged for insurance coverage
D. The practice of setting insurance rates based on market trends
Answer: A
What does “term insurance” provide?
Coverage for a specified period of time
B. Permanent life coverage with an investment component
C. Coverage for accidents only
D. A policy that guarantees premiums will not increase
Answer: A
What is “exclusion” in an insurance policy?
Specific situations or risks that are not covered by the policy
B. The amount of coverage provided for a specific loss
C. A clause that guarantees a claim will be paid out
D. The process by which an insurance company analyzes a claim
Answer: A
What is “premium financing” in insurance?
A loan taken to pay for insurance premiums
B. The interest rate applied to insurance premiums
C. A payment plan that allows premiums to be paid in installments
D. A policy that offers lower premiums for high-risk individuals
Answer: A
What is a “beneficiary” in a life insurance policy?
The person who receives the policy’s death benefit upon the insured’s death
B. The insurance company that issues the policy
C. The individual who processes claims for the insured
D. The person who selects the coverage limits for the insured
Answer: A
What is a “captive insurance company”?
An insurance company that is wholly owned by the entity it insures
B. A company that sells insurance to the general public
C. An insurance company that specializes in high-risk coverage
D. An insurance company that only covers natural disasters
Answer: A
What is the difference between “actual cash value” and “replacement cost” in insurance?
Actual cash value is the cost to replace an item minus depreciation, while replacement cost is the cost to replace it without considering depreciation
B. Replacement cost is the cost to replace an item minus depreciation, while actual cash value is the cost to replace it with depreciation
C. Actual cash value and replacement cost are the same
D. Actual cash value is only used for life insurance, while replacement cost is used for property insurance
Answer: A
Which type of insurance is intended to protect against “cybersecurity” risks?
Cyber liability insurance
B. Life insurance
C. Health insurance
D. General liability insurance
Answer: A
What is the “insurer” in an insurance contract?
The company or entity that provides insurance coverage
B. The person who buys insurance
C. The individual or organization covered by an insurance policy
D. The agent responsible for selling the insurance policy
Answer: A
What is “deductible” in a health insurance policy?
The amount the insured must pay before insurance starts covering expenses
B. The total premium paid for the insurance policy
C. The payment made by the insurer to a hospital
D. The payment made by the insured for each medical visit
Answer: A
What is “life insurance”?
Insurance that provides a payout to beneficiaries when the insured dies
B. Insurance that covers medical expenses during life
C. Insurance that covers property damage
D. Insurance that protects against identity theft
Answer: A
What is the “subrogation” process in insurance?
The process by which an insurer seeks reimbursement from the at-fault party for a claim paid to the insured
B. The process of determining the policyholder’s premiums based on risk
C. The process of transferring the risk to another insurer
D. The process of determining coverage limits for a claim
Answer: A
Which type of insurance provides coverage for “professional services”?
Professional liability insurance
B. General liability insurance
C. Automobile insurance
D. Property insurance
Answer: A
What is “homeowners insurance”?
Insurance that covers a home and its contents against damage or loss
B. Insurance that provides liability coverage for business owners
C. Insurance that provides coverage for automobiles
D. Insurance that covers travel-related losses
Answer: A
What is “umbrella insurance”?
Insurance that provides additional coverage beyond other policies
B. Insurance that protects against liability claims arising from a vehicle
C. Insurance for personal property loss
D. Insurance that covers the cost of injuries in a workplace
Answer: A
What is the “insuring agreement” in an insurance contract?
The section of the policy that outlines the specific coverage provided
B. The amount the policyholder must pay for coverage
C. The process by which a claim is submitted
D. The rights and obligations of the insurance company only
Answer: A
What is “flood insurance”?
Insurance that covers damage caused by flooding events
B. Insurance that protects against damage from high winds
C. Insurance that covers damage caused by earthquakes
D. Insurance that provides coverage for automobile accidents
Answer: A
What does “auto liability insurance” cover?
Damage to other vehicles or injuries caused by the insured in an accident
B. Repairs to the insured’s own vehicle after an accident
C. Coverage for medical bills of the insured in case of an accident
D. Coverage for damage caused to the insured’s home in an accident
Answer: A
What is “health savings account” (HSA) in relation to insurance?
A tax-advantaged savings account for medical expenses
B. A type of life insurance policy that provides health coverage
C. A specific policy that pays for health-related insurance premiums
D. A tax-exempt fund for retirement purposes
Answer: A
What does “personal liability” insurance cover?
Protection against claims of bodily injury or property damage caused by the insured
B. Medical coverage for injuries in an accident
C. Property damage coverage for automobiles
D. Coverage for business-related losses
Answer: A
What is the “cost of insurance” in a policy?
The premium paid by the policyholder for coverage
B. The amount paid for claims after a loss occurs
C. The deductible amount for a policy
D. The value of the policyholder’s assets covered by insurance
Answer: A
What is a “co-insurance” clause in an insurance policy?
A provision that requires the insured to pay a percentage of covered expenses
B. A provision that eliminates all out-of-pocket expenses for the insured
C. A provision that increases the premiums based on the insured’s age
D. A provision that sets a fixed rate for insurance premiums
Answer: A
What is “catastrophic insurance”?
Insurance designed to cover high-cost medical expenses following a catastrophic event
B. A type of life insurance policy with low premiums
C. Insurance that covers damages from minor accidents or injuries
D. A type of homeowners insurance that covers flooding events
Answer: A
Reviews
There are no reviews yet.