LOMA 281: Meeting Customer Needs
with Insurance Annuities Exams 2026
Questions and Answers
Assume you're applying for a life insurance policy. During his presentation, the
insurance agent makes the following statements. Are they all true? (Select all that
apply.)
a. People buy insurance to reduce the financial risk they face but not every type of
risk is insurable.
b. both pure risks and speculative risks are insurable.
c. most life insurance policies are valued contracts, which state at the time of
policy issue the time amount of the benefit payable when the insured person dies.
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,d. most life insurance policies are issued at substandard premium rates - Answer -A
&C
Risk - Answer -The possibility of an unexpected result. This could be a gain or a
loss.
Speculative Risk - Answer -A risk that involves three possible outcomes: loss,
gain, or no change.
Pure Risk - Answer -A risk that involves no possibility of gain; either a loss occurs
or no loss occurs.
Insurance companies won't insure all types of risks. Which risks do you think are
insurable? Choose the correct answer.
a. only pure risks
b. only speculative risks
c. both pure risks and speculative risks
d. Neither pure risk nor speculative risk - Answer -A.
Steve is nervous about losing money in the stock market, so he doesn't invest in
stocks.
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,a. Avoiding Risk
b. Controlling Risk
c. Accpeting Risk
d. Transferring Risk - Answer -A.
Mark uses a laptop computer in his business. If he loses the laptop or accidentally
damages it, Mark will have to purchase another laptop or pay to have it repaired.
a. avoiding risk
b. controlling risk
c. accepting risk
d. transferring risk - Answer -C.
To reduce the likelihood of fire destroying her convenience store, Rebecca installed
smoke detectors and a sprinkler system.
a. avoiding risk
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, b. controlling risk
c. accepting risk
d. transferring risk - Answer -B.
Conrad purchased a disability income insurance policy to provide for his family in
case he becomes sick or injured and can't work.
a. avoiding risk
b. controlling risk
c. accepting risk
d. transferring risk - Answer -D.
insurance company - Answer -A company that accepts risk and makes a promise to
pay a policy benefit if the covered loss does occur.
policy benefit - Answer -The amount of money an insurer promises to pay if a
covered loss occurs.
premium - Answer -A specified amount of money an insurer charges in exchange
for agreeing to pay a policy benefit when a specific loss occurs.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
with Insurance Annuities Exams 2026
Questions and Answers
Assume you're applying for a life insurance policy. During his presentation, the
insurance agent makes the following statements. Are they all true? (Select all that
apply.)
a. People buy insurance to reduce the financial risk they face but not every type of
risk is insurable.
b. both pure risks and speculative risks are insurable.
c. most life insurance policies are valued contracts, which state at the time of
policy issue the time amount of the benefit payable when the insured person dies.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,d. most life insurance policies are issued at substandard premium rates - Answer -A
&C
Risk - Answer -The possibility of an unexpected result. This could be a gain or a
loss.
Speculative Risk - Answer -A risk that involves three possible outcomes: loss,
gain, or no change.
Pure Risk - Answer -A risk that involves no possibility of gain; either a loss occurs
or no loss occurs.
Insurance companies won't insure all types of risks. Which risks do you think are
insurable? Choose the correct answer.
a. only pure risks
b. only speculative risks
c. both pure risks and speculative risks
d. Neither pure risk nor speculative risk - Answer -A.
Steve is nervous about losing money in the stock market, so he doesn't invest in
stocks.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,a. Avoiding Risk
b. Controlling Risk
c. Accpeting Risk
d. Transferring Risk - Answer -A.
Mark uses a laptop computer in his business. If he loses the laptop or accidentally
damages it, Mark will have to purchase another laptop or pay to have it repaired.
a. avoiding risk
b. controlling risk
c. accepting risk
d. transferring risk - Answer -C.
To reduce the likelihood of fire destroying her convenience store, Rebecca installed
smoke detectors and a sprinkler system.
a. avoiding risk
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, b. controlling risk
c. accepting risk
d. transferring risk - Answer -B.
Conrad purchased a disability income insurance policy to provide for his family in
case he becomes sick or injured and can't work.
a. avoiding risk
b. controlling risk
c. accepting risk
d. transferring risk - Answer -D.
insurance company - Answer -A company that accepts risk and makes a promise to
pay a policy benefit if the covered loss does occur.
policy benefit - Answer -The amount of money an insurer promises to pay if a
covered loss occurs.
premium - Answer -A specified amount of money an insurer charges in exchange
for agreeing to pay a policy benefit when a specific loss occurs.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
