AINS Course 21 Exam Questions with Correct Answers
Question 1:
Loss Exposure
Answer:
Any condition or situation that presents a possibility of loss, whether or not an actual loss
occurs.
Question 2:
Risk management
Answer:
The process of making and implementing decisions that will minimize the adverse effects of
accidental losses on an organization.
Question 3:
Loss prevention
Answer:
A risk control technique that reduces the frequency of a particular loss.
Question 4:
Loss reduction
Answer:
A risk control technique that reduces the severity of a particular loss.
Question 5:
Exposure unit
Answer:
A fundamental measure of the loss exposure assumed by an insurer.
Question 6:
Property-casualty insurance
Answer:
One of the two main sectors of the insurance industry, encompassing numerous types of
insurance, most of which cover the financial consequences of damage to one's own property or
legal liability to others.
,Question 7:
Life-health insurance
Answer:
One of the two main sectors of the insurance industry, encompassing numerous types of
insurance that cover the financial consequences of death, injury, or sickness.
Question 8:
Utmost good faith
Answer:
An obligation to act in complete honesty and to disclose all relevant facts.
Question 9:
Contract of adhesion
Answer:
A contract in which the insurer agrees, in the event of a covered loss, to pay an amount directly
related to the amount of the loss.
Question 10:
Self-contained policy
Answer:
A single document that contains all the agreements between the insured and the insurer and
that forms a complete insurance policy.
Question 11:
Modular policy
Answer:
An insurance policy that consists of several different documents, none of which by itself forms a
complete policy.
Question 12:
Property insurance
Answer:
Any type of insurance that indemnifies an insured who suffers a financial loss because property
has been lost, stolen, damaged, or destroyed.
,Question 13:
Liability insurance
Answer:
Insurance that covers losses resulting from the insured's liability to others.
Question 14:
Homeowners policy
Answer:
Policy that covers most of the property and liability loss exposures that arise out of residential
property ownership and occupancy, as well as property and liability loss exposures that
individuals and families may have while they are away from their residences.
Question 15:
Personal liability coverage
Answer:
Coverage for damages, plus costs of any defense, related to a claim or suit brought against the
insured that resulted from bodily injury or property damage caused by an occurrence covered
under the policy.
Question 16:
Personal auto policy (PAP)
Answer:
An insurance policy that covers an individual or a family against loss exposures arising out of
the ownership, maintenance, or use of automobiles.
Question 17:
Comprehensive coverage
Answer:
Coverage for direct and accidental loss or damage to a covered auto by any peril except
collision or overturn or a peril specifically excluded.
Question 18:
Personal watercraft policy
Answer:
An insurance policy that covers an individual's or a family's loss exposures arising out of the
ownership, maintenance, or use of watercraft used principally for recreational or personal
transportation purposes.
, Question 19:
Umbrella liability policy
Answer:
A liability policy that provides excess coverage above underlying policies and may also provide
coverage not available in the underlying policies, subject to a self-insured retention.
Question 20:
Liability coverage
Answer:
Coverage that protects the insured from damages owed because of legal liability to another
party. For auto policies, it protects insureds against liability arising out of the ownership or
operation of automobiles.
Question 21:
Term life insurance
Answer:
Life insurance that provides coverage for a specified period, such as ten or twenty years, with
no cash value.
Question 22:
Permanent life insurance
Answer:
Life insurance designed to remain in force for an insured's entire life and provide a death
benefit at death, characterized by the presence of a cash value.
Question 23:
Long-term care insurance
Answer:
Insurance that pays for extended medical care or custodial care received in a nursing home,
hospital, or home.
Question 24:
Annuity
Answer:
A type of life insurance policy or contract that makes periodic payments to the recipient for a
fixed period or for life in exchange for a specified premium.
Question 1:
Loss Exposure
Answer:
Any condition or situation that presents a possibility of loss, whether or not an actual loss
occurs.
Question 2:
Risk management
Answer:
The process of making and implementing decisions that will minimize the adverse effects of
accidental losses on an organization.
Question 3:
Loss prevention
Answer:
A risk control technique that reduces the frequency of a particular loss.
Question 4:
Loss reduction
Answer:
A risk control technique that reduces the severity of a particular loss.
Question 5:
Exposure unit
Answer:
A fundamental measure of the loss exposure assumed by an insurer.
Question 6:
Property-casualty insurance
Answer:
One of the two main sectors of the insurance industry, encompassing numerous types of
insurance, most of which cover the financial consequences of damage to one's own property or
legal liability to others.
,Question 7:
Life-health insurance
Answer:
One of the two main sectors of the insurance industry, encompassing numerous types of
insurance that cover the financial consequences of death, injury, or sickness.
Question 8:
Utmost good faith
Answer:
An obligation to act in complete honesty and to disclose all relevant facts.
Question 9:
Contract of adhesion
Answer:
A contract in which the insurer agrees, in the event of a covered loss, to pay an amount directly
related to the amount of the loss.
Question 10:
Self-contained policy
Answer:
A single document that contains all the agreements between the insured and the insurer and
that forms a complete insurance policy.
Question 11:
Modular policy
Answer:
An insurance policy that consists of several different documents, none of which by itself forms a
complete policy.
Question 12:
Property insurance
Answer:
Any type of insurance that indemnifies an insured who suffers a financial loss because property
has been lost, stolen, damaged, or destroyed.
,Question 13:
Liability insurance
Answer:
Insurance that covers losses resulting from the insured's liability to others.
Question 14:
Homeowners policy
Answer:
Policy that covers most of the property and liability loss exposures that arise out of residential
property ownership and occupancy, as well as property and liability loss exposures that
individuals and families may have while they are away from their residences.
Question 15:
Personal liability coverage
Answer:
Coverage for damages, plus costs of any defense, related to a claim or suit brought against the
insured that resulted from bodily injury or property damage caused by an occurrence covered
under the policy.
Question 16:
Personal auto policy (PAP)
Answer:
An insurance policy that covers an individual or a family against loss exposures arising out of
the ownership, maintenance, or use of automobiles.
Question 17:
Comprehensive coverage
Answer:
Coverage for direct and accidental loss or damage to a covered auto by any peril except
collision or overturn or a peril specifically excluded.
Question 18:
Personal watercraft policy
Answer:
An insurance policy that covers an individual's or a family's loss exposures arising out of the
ownership, maintenance, or use of watercraft used principally for recreational or personal
transportation purposes.
, Question 19:
Umbrella liability policy
Answer:
A liability policy that provides excess coverage above underlying policies and may also provide
coverage not available in the underlying policies, subject to a self-insured retention.
Question 20:
Liability coverage
Answer:
Coverage that protects the insured from damages owed because of legal liability to another
party. For auto policies, it protects insureds against liability arising out of the ownership or
operation of automobiles.
Question 21:
Term life insurance
Answer:
Life insurance that provides coverage for a specified period, such as ten or twenty years, with
no cash value.
Question 22:
Permanent life insurance
Answer:
Life insurance designed to remain in force for an insured's entire life and provide a death
benefit at death, characterized by the presence of a cash value.
Question 23:
Long-term care insurance
Answer:
Insurance that pays for extended medical care or custodial care received in a nursing home,
hospital, or home.
Question 24:
Annuity
Answer:
A type of life insurance policy or contract that makes periodic payments to the recipient for a
fixed period or for life in exchange for a specified premium.
