PA Life, Accident and Health Exam Prep Questions And Answers
(202472025)
From an Insurance Perspective, the term "loss exposure" means: - ✔✔The extent to
which an insurer is subject to a possible loss
Buying life or health insurance is an example of which risk management technique?
- ✔✔Risk Transfer
As a risk management technique, which of the following best illustrates risk transfer:
- John refuses to buy life insurance because he figures he has enough money in his
savings to pay for his burial when he dies.
- Carol eats a healthy diet and exercises regularly, hoping that doing so will keep her
healthy.
- Robert purchases life insurance because he figures doing so is far less expensive
than trying to save all the money his survivors would need upon his death.
- Sheila refuses to drink alcoholic beverages if she expects to drive a car afterward.
- ✔✔Robert purchases life insurance because he figures doing so is far less
expensive than trying to save all the money his survivors would need upon his death
The tendency of a person diagnosed with a serious illness to try and buy life or health
insurance is known as? - ✔✔Adverse Selection
All of the following statements regarding reinsurance are correct EXCEPT:
a. Reinsurance is a risk-sharing process used by insurance companies.
b. The insurer accepting some of the risk being transferred from another insurer is
known as the reinsuring company.
c. The insurer seeking to transfer some of its risk to another insurer is known as the
ceding company.
d. Claims are paid to the policyowner separately by each insurer participating in the
reinsurance agreement. - ✔✔D. Claims are paid to the policy owner separately by
each insurer participating in the reinsurance agreement
, The insurance company function responsible for evaluating the insurable risks and
assigning appropriate premium rates, is the: - ✔✔underwriting division
All of the following statements regarding the career agency distribution system are
correct EXCEPT:
a. The managerial form of career agency system uses company employees as the
agency managers.
b. Personal producing general agents (PPGAs) are commonly hired to manage career
agencies.
c. It uses agents who primarily if not exclusively represent one insurer.
d. There are two types, the general agency system and the managerial system. -
✔✔B: Personal producing general agents (PPGAs) are commonly hired to manage
career agencies
Which insurance company function calculates company mortality and morbidity
rates as well as the dividends on participating life insurance policies? - ✔✔Actuarial
Division
Which of the following best describes an agent's responsibilities?
a. An agent has to act in the best interests of insureds, applicants, and insurers.
b. An agent only has to act in the best interests of the insurer he or she represents.
c. An agent has no fiduciary duty toward insurers, applicants, or insureds.
d. An agent only has to act in the best interests of the insured or applicant, but not
the insurer. - ✔✔A. An agent has to act in the best interests of insureds, applicants,
and insurers
A producer owes a fiduciary duty to: - ✔✔both the insurer and the customer
All of the following part of a producer's responsibilities to an applicant EXCEPT:
(202472025)
From an Insurance Perspective, the term "loss exposure" means: - ✔✔The extent to
which an insurer is subject to a possible loss
Buying life or health insurance is an example of which risk management technique?
- ✔✔Risk Transfer
As a risk management technique, which of the following best illustrates risk transfer:
- John refuses to buy life insurance because he figures he has enough money in his
savings to pay for his burial when he dies.
- Carol eats a healthy diet and exercises regularly, hoping that doing so will keep her
healthy.
- Robert purchases life insurance because he figures doing so is far less expensive
than trying to save all the money his survivors would need upon his death.
- Sheila refuses to drink alcoholic beverages if she expects to drive a car afterward.
- ✔✔Robert purchases life insurance because he figures doing so is far less
expensive than trying to save all the money his survivors would need upon his death
The tendency of a person diagnosed with a serious illness to try and buy life or health
insurance is known as? - ✔✔Adverse Selection
All of the following statements regarding reinsurance are correct EXCEPT:
a. Reinsurance is a risk-sharing process used by insurance companies.
b. The insurer accepting some of the risk being transferred from another insurer is
known as the reinsuring company.
c. The insurer seeking to transfer some of its risk to another insurer is known as the
ceding company.
d. Claims are paid to the policyowner separately by each insurer participating in the
reinsurance agreement. - ✔✔D. Claims are paid to the policy owner separately by
each insurer participating in the reinsurance agreement
, The insurance company function responsible for evaluating the insurable risks and
assigning appropriate premium rates, is the: - ✔✔underwriting division
All of the following statements regarding the career agency distribution system are
correct EXCEPT:
a. The managerial form of career agency system uses company employees as the
agency managers.
b. Personal producing general agents (PPGAs) are commonly hired to manage career
agencies.
c. It uses agents who primarily if not exclusively represent one insurer.
d. There are two types, the general agency system and the managerial system. -
✔✔B: Personal producing general agents (PPGAs) are commonly hired to manage
career agencies
Which insurance company function calculates company mortality and morbidity
rates as well as the dividends on participating life insurance policies? - ✔✔Actuarial
Division
Which of the following best describes an agent's responsibilities?
a. An agent has to act in the best interests of insureds, applicants, and insurers.
b. An agent only has to act in the best interests of the insurer he or she represents.
c. An agent has no fiduciary duty toward insurers, applicants, or insureds.
d. An agent only has to act in the best interests of the insured or applicant, but not
the insurer. - ✔✔A. An agent has to act in the best interests of insureds, applicants,
and insurers
A producer owes a fiduciary duty to: - ✔✔both the insurer and the customer
All of the following part of a producer's responsibilities to an applicant EXCEPT:
