Life Insurance Study CEU Test Questions with
Verified Answers Rated A. Updated 2027
Adverse selection occurs when _____. - ANSWER -an uninsurable or high-risk
applicant seeks a life insurance policy at a standard premium rate
The most important factor considered within the underwriting process is _____. -
ANSWER -the applicant's physical condition
If the applicant discloses that they are a frequent skydiver, the insurance company
will _____. - ANSWER -add a flat extra premium or rarely decline coverage
altogether
Periodically, the federal government exercises its authority over the insurance
industry via _____. - ANSWER -congressional hearings regarding the industry
The principal purpose of state regulation in the insurance industry is to _____. -
ANSWER -help ensure the solvency of insurance companies
Life insurance premiums are _____. - ANSWER -not regulated
Which of the following is NOT one of the tax categories of a life insurance
company's gross income? - ANSWER -Agent commission allocation.
Which of the following accurately compares risk control and risk financing? -
ANSWER -The primary difference between the two is that risk control may be
focused on harm, while risk financing is focused on financial losses.
The effectiveness of a given risk control technique can be measured by which of
the following individuals? - ANSWER -The perspective of a specific entity
undergoing a specific risk for which the technique was designed.
, Much of the fraud currently being experienced by the insurance industry can be
attributed to which common practice? - ANSWER -Handling claims over the
phone, rather than in person.
Recent court decisions have established that AIDS/HIV limitations must be which
of the following? - ANSWER -Emphasized, highlighted, or set apart in some way.
The term "sick building" syndrome refers to which of the following? - ANSWER
-A claim built around an illness acquired in a shared building or from the building
itself.
Which of the following is not an advantage to using standard policies? -
ANSWER -They increase litigation and negotiation costs.
Which of the following is the correct orientation of a claims department from most
authority to least authority? - ANSWER -Corporate office, regional office, branch
office, line supervisor
Which of the following is not a party in an insurance policy? - ANSWER -The
adjuster
Which of the following has the final say as to the interpretation of an insurance
policy? - ANSWER -The courts and an extensive record of case laws
Which of the following is NOT an element of a valid claim? - ANSWER -A loss
is not sustained
Which individual, assigned by the insurer, is in charge of investigation,
evaluating, negotiating, and settling a claim? - ANSWER -An adjuster
What is an adjuster hoping to uncover through their investigation of a claim? -
ANSWER -Evidence and valid facts
Which of these are examples of moral hazards? - ANSWER -Police record
Philandering
Verified Answers Rated A. Updated 2027
Adverse selection occurs when _____. - ANSWER -an uninsurable or high-risk
applicant seeks a life insurance policy at a standard premium rate
The most important factor considered within the underwriting process is _____. -
ANSWER -the applicant's physical condition
If the applicant discloses that they are a frequent skydiver, the insurance company
will _____. - ANSWER -add a flat extra premium or rarely decline coverage
altogether
Periodically, the federal government exercises its authority over the insurance
industry via _____. - ANSWER -congressional hearings regarding the industry
The principal purpose of state regulation in the insurance industry is to _____. -
ANSWER -help ensure the solvency of insurance companies
Life insurance premiums are _____. - ANSWER -not regulated
Which of the following is NOT one of the tax categories of a life insurance
company's gross income? - ANSWER -Agent commission allocation.
Which of the following accurately compares risk control and risk financing? -
ANSWER -The primary difference between the two is that risk control may be
focused on harm, while risk financing is focused on financial losses.
The effectiveness of a given risk control technique can be measured by which of
the following individuals? - ANSWER -The perspective of a specific entity
undergoing a specific risk for which the technique was designed.
, Much of the fraud currently being experienced by the insurance industry can be
attributed to which common practice? - ANSWER -Handling claims over the
phone, rather than in person.
Recent court decisions have established that AIDS/HIV limitations must be which
of the following? - ANSWER -Emphasized, highlighted, or set apart in some way.
The term "sick building" syndrome refers to which of the following? - ANSWER
-A claim built around an illness acquired in a shared building or from the building
itself.
Which of the following is not an advantage to using standard policies? -
ANSWER -They increase litigation and negotiation costs.
Which of the following is the correct orientation of a claims department from most
authority to least authority? - ANSWER -Corporate office, regional office, branch
office, line supervisor
Which of the following is not a party in an insurance policy? - ANSWER -The
adjuster
Which of the following has the final say as to the interpretation of an insurance
policy? - ANSWER -The courts and an extensive record of case laws
Which of the following is NOT an element of a valid claim? - ANSWER -A loss
is not sustained
Which individual, assigned by the insurer, is in charge of investigation,
evaluating, negotiating, and settling a claim? - ANSWER -An adjuster
What is an adjuster hoping to uncover through their investigation of a claim? -
ANSWER -Evidence and valid facts
Which of these are examples of moral hazards? - ANSWER -Police record
Philandering
