Life.. and.. Health.. Insurance.. Exam.. 1 – actual solution

Life and Health Insurance Exam 1 .. .. .. .. ..




– actual solution



UNIT 1: The term used to describe the individual who is covered
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by the insurance is
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A. insurer
l..




B. insured
l..




C. policyowner
l..




D. risk - ANS-B
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Which of the following is a risk? l.. l.. l.. l.. l.. l..




A. A car may need to have new brakes installed after several years
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of regular driving.
l.. l..




B. An individual may need medical attention after slipping on the
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ice and falling.l.. l..

,C. Both are examples of risk.
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D. Neither is an example of risk. - ANS-B
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The estimation of future losses is more accurate when
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information is from l.. l..




A. a small select group
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B. a large group
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C. a medium-sized group
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D. any size group; group size does not matter - ANS-A
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The application of the law of large numbers enables insurers to
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A. estimate the future losses of a class or group of people
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B. predict the future losses of speci c individuals
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C. charge higher premiums for insurance
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D. calculate mortality charges - ANS-B
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Which type of policy is designed to protect against the risk of
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living too long? l.. l..




A. Casualty
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B. Life
l..




C. Annuity
l..

,D. Medical expense - ANS-C
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Which of the following is a type of insurance company owned by
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its shareholders?
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A. Mutual B. Stock
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C. Lloyd's D. Reinsurer - ANS-B
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The ZYX Insurance Company is incorporated in Alabama. While
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doing business in Texas, it is
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A. adomesticinsurer B. a foreign insurer C. an alien insurer D. an
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export insurer - ANS-B l.. l.. l..




The ZYX Insurance Company is incorporated in Mexico. While
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doing business in Texas, it is
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A. adomesticinsurer B. a foreign insurer C. an alien insurer D. an
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export insurer - ANS-C l.. l.. l..




Self-insurance is an example of which method of handling risk? l.. l.. l.. l.. l.. l.. l.. l.. l..




A. Acceptance B. Transference C. Avoidance D. Reduction - ANS-A
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Which of the following terms is used to denote insurance
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companies?

, A. Broker l..




B. Exchange C. Corporation D. Insurer - ANS-D
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A social device for spreading the chance of financial loss among a
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large number of people is the definition of
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A. hazard l..




B. risk l..




C. insurance l..




l.. D. peril - ANS-C
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Which of the following risks is most likely to bel.. l.. l.. l.. l.. l.. l.. l.. l..




insurable?
A. George is concerned about the financial impact his premature
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death would have on his family. l.. l.. l.. l.. l..




B. Talyn is concerned about the financial impact large betting
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losses at the horse track will have on his retirement savings.
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C. John is concerned about the financial impact on his savings
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when his car eventually becomes worn enough to need to be
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replaced.
D. Jewel is concerned about the nancial effect losing her hat
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would have on her weekly spending money. - ANS-A
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