AINS PRACTICE EXAM WITH CORRECT
ANSWERS 2025
As a single mother on a very tight budget, Ciara is tempted to skimp on her
insurance. However, her friend Mehmet tells her not to skimp on insurance,
because it will help manage her cash flows. Which one of the following
examples best illustrates Mehmet's point?
A.
When her car's transmission goes out a month after the warranty expires,
Ciara is faced with a $1,100 repair bill.
B.
Ciara finds it difficult to come up with a $787 auto insurance premium every
six months. C.
When her car's windshield breaks, Ciara has to pay only $100 of the
$600 cost of replacing it.
D.
Ciara needs her car to get to her job, and she needs her job to make car
payments and pay for her car insurance. Ciara finds it difficult to come up
with a $787 auto insurance premium every six months. ( correct
answers ) When her car's windshield breaks, Ciara has to
pay only $100 of the $600 cost of replacing it.
Though premiums are an obvious cost of insurance, many insureds believe
they are too high because
A.
Insurers only use eighty cents from every premium dollar to
pay losses. B.
Insureds do not deliberately cause losses.
C.
Premiums are not a regular cost of
living. D.
Benefits are intangible until a loss
occurs.
( correct answers )
D.
Benefits are intangible until a loss
occurs.
One of the costs of insurance is said to be opportunity costs. This means that
if capital and labor were not being used in the insurance business, they could
be used elsewhere and making other productive contributions to
A.
Society
.
B.
The insurance
industry. C.
, Governmen
t. D.
The agency ( correct answers )
system. society
Which one of the following statements is
correct? A.
Insurers' investment income helps keep premiums at a
reasonable level. B.
Insurers are prohibited from investing in social
projects. C.
Insurance provides a source of investment funds for insurers but not for
policyholders. D.
Insurers cannot invest premium income because it must be available to pay
claims. ( correct answers )
A.
Insurers' investment income helps keep premiums at a reasonable level.
A small business owner concerned about something happening and not
being able to work or earn a living for an extended period of time due to an
accident should purchase A.
Universal life
insurance. B.
Personal liability
insurance.
C.
Medical
insurance. D.
Disability
insurance.
( correct
answers )
D.
Disability
insurance.
Insurance is not the only risk management transfer technique. When
circumstances are appropriate, transfer can be accomplished through
A.
Loss
prevention. B.
Noninsurance
transfer
techniques.
C.
Avoidanc
e. D.
Retention
.
( correct
answers )
B.
Noninsur
ANSWERS 2025
As a single mother on a very tight budget, Ciara is tempted to skimp on her
insurance. However, her friend Mehmet tells her not to skimp on insurance,
because it will help manage her cash flows. Which one of the following
examples best illustrates Mehmet's point?
A.
When her car's transmission goes out a month after the warranty expires,
Ciara is faced with a $1,100 repair bill.
B.
Ciara finds it difficult to come up with a $787 auto insurance premium every
six months. C.
When her car's windshield breaks, Ciara has to pay only $100 of the
$600 cost of replacing it.
D.
Ciara needs her car to get to her job, and she needs her job to make car
payments and pay for her car insurance. Ciara finds it difficult to come up
with a $787 auto insurance premium every six months. ( correct
answers ) When her car's windshield breaks, Ciara has to
pay only $100 of the $600 cost of replacing it.
Though premiums are an obvious cost of insurance, many insureds believe
they are too high because
A.
Insurers only use eighty cents from every premium dollar to
pay losses. B.
Insureds do not deliberately cause losses.
C.
Premiums are not a regular cost of
living. D.
Benefits are intangible until a loss
occurs.
( correct answers )
D.
Benefits are intangible until a loss
occurs.
One of the costs of insurance is said to be opportunity costs. This means that
if capital and labor were not being used in the insurance business, they could
be used elsewhere and making other productive contributions to
A.
Society
.
B.
The insurance
industry. C.
, Governmen
t. D.
The agency ( correct answers )
system. society
Which one of the following statements is
correct? A.
Insurers' investment income helps keep premiums at a
reasonable level. B.
Insurers are prohibited from investing in social
projects. C.
Insurance provides a source of investment funds for insurers but not for
policyholders. D.
Insurers cannot invest premium income because it must be available to pay
claims. ( correct answers )
A.
Insurers' investment income helps keep premiums at a reasonable level.
A small business owner concerned about something happening and not
being able to work or earn a living for an extended period of time due to an
accident should purchase A.
Universal life
insurance. B.
Personal liability
insurance.
C.
Medical
insurance. D.
Disability
insurance.
( correct
answers )
D.
Disability
insurance.
Insurance is not the only risk management transfer technique. When
circumstances are appropriate, transfer can be accomplished through
A.
Loss
prevention. B.
Noninsurance
transfer
techniques.
C.
Avoidanc
e. D.
Retention
.
( correct
answers )
B.
Noninsur
