Mass State Life Insurance Exam Questions
With Correct Answers
Which |of |the |following |describes |a |participating |life |insurance |policy? |- |CORRECT |
ANSWER✔✔-A |participating |life |policy |is |one |in |which |the |policyowner |receives |dividends |
deriving |from |the |company's |divisible |surplus
Which |of |the |following |describes |a |participating |life |insurance |policy? |- |CORRECT |
ANSWER✔✔-A |participating |life |policy |is |one |in |which |the |policyowner |receives |dividends |
deriving |from |the |company's |divisible |surplus
What |type |of |reinsurance |contract |between |two |insurers |involves |an |automatic |sharing |of |the |
risks |assumed? |- |CORRECT |ANSWER✔✔-Under |treaty |reinsurance, |each |party |automatically |
accepts |specific |percentages |of |the |insurer's |business.
What |type |of |reinsurance |contract |between |two |insurers |involves |an |automatic |sharing |of |the |
risks |assumed? |- |CORRECT |ANSWER✔✔-Under |treaty |reinsurance, |each |party |automatically |
accepts |specific |percentages |of |the |insurer's |business.
At |what |point |must |a |life |insurance |applicant |be |informed |of |their |rights |that |fall |under |the |
Fair |Credit |Reporting |Act? |- |CORRECT |ANSWER✔✔-Upon |completion |of |the |application
At |what |point |must |a |life |insurance |applicant |be |informed |of |their |rights |that |fall |under |the |
Fair |Credit |Reporting |Act? |- |CORRECT |ANSWER✔✔-Upon |completion |of |the |application
The |State |Guaranty |Association |guarantees |- |CORRECT |ANSWER✔✔-that |a |claim |will |be |paid |if
|an |admitted |insurer |becomes |insolvent
The |State |Guaranty |Association |guarantees |- |CORRECT |ANSWER✔✔-that |a |claim |will |be |paid |if
|an |admitted |insurer |becomes |insolvent
,Dividends |from |a |mutual |insurance |company |are |paid |to |whom? |- |CORRECT |ANSWER✔✔-
Policyholders
Dividends |from |a |mutual |insurance |company |are |paid |to |whom? |- |CORRECT |ANSWER✔✔-
Policyholders
What |is |considered |the |accounting |measurement |of |an |insurance |company's |future |obligations
|to |its |policyowners? |- |CORRECT |ANSWER✔✔-reserves
What |is |considered |the |accounting |measurement |of |an |insurance |company's |future |obligations
|to |its |policyowners? |- |CORRECT |ANSWER✔✔-reserves
A |group-owned |insurance |company |that |is |formed |to |assume |and |spread |the |liability |risks |of |
its |members |is |known |as |a |- |CORRECT |ANSWER✔✔-risk |retention |group
A |group-owned |insurance |company |that |is |formed |to |assume |and |spread |the |liability |risks |of |
its |members |is |known |as |a |- |CORRECT |ANSWER✔✔-risk |retention |group
Which |of |the |following |is |a |syndicate |established |by |a |group |of |insurers |to |share |underwriting |
duties? |- |CORRECT |ANSWER✔✔-Lloyd's |organization
Which |of |the |following |is |a |syndicate |established |by |a |group |of |insurers |to |share |underwriting |
duties? |- |CORRECT |ANSWER✔✔-Lloyd's |organization
An |agent's |authority |to |bind |an |insurer |to |an |insurance |contract |may |be |granted |in |the |- |
CORRECT |ANSWER✔✔-agent's |contract |and |the |insurance |company's |appointment
,An |agent's |authority |to |bind |an |insurer |to |an |insurance |contract |may |be |granted |in |the |- |
CORRECT |ANSWER✔✔-agent's |contract |and |the |insurance |company's |appointment
Dividends |from |a |stock |insurance |company |are |normally |sent |to |- |CORRECT |ANSWER✔✔-
shareholders
Dividends |from |a |stock |insurance |company |are |normally |sent |to |- |CORRECT |ANSWER✔✔-
shareholders
Law |of |Large |numbers |- |CORRECT |ANSWER✔✔--insurance |is |based |on |the |sharing |of |risks |
among |a |large |group |of |people
-states |that |the |larger |the |number |of |people, |the |more |predictable |the |actual |losses |will |be |
-companies |use |this |data |to |calculate |rates
Law |of |Large |numbers |- |CORRECT |ANSWER✔✔--insurance |is |based |on |the |sharing |of |risks |
among |a |large |group |of |people
-states |that |the |larger |the |number |of |people, |the |more |predictable |the |actual |losses |will |be |
-companies |use |this |data |to |calculate |rates
Speculative |risk |- |CORRECT |ANSWER✔✔--involves |opportunity |for |either |loss |or |gain
-not |covered |by |insurance |companies
Speculative |risk |- |CORRECT |ANSWER✔✔--involves |opportunity |for |either |loss |or |gain
-not |covered |by |insurance |companies
pure |risk |- |CORRECT |ANSWER✔✔--a |situation |that |can |only |result |in |a |loss, |there |is |no |
opportunity |for |financial |gain |
-only |type |of |risk |that |is |insurable
, pure |risk |- |CORRECT |ANSWER✔✔--a |situation |that |can |only |result |in |a |loss, |there |is |no |
opportunity |for |financial |gain |
-only |type |of |risk |that |is |insurable
treatment |of |risk |through: |avoidance |- |CORRECT |ANSWER✔✔-simply |avoiding |as |many |risks |as
|possible
-effective |but |not |always |practical
treatment |of |risk |through: |avoidance |- |CORRECT |ANSWER✔✔-simply |avoiding |as |many |risks |as
|possible
-effective |but |not |always |practical
treatment |of |risk |through- |reduction |- |CORRECT |ANSWER✔✔-since |we |cannot |avoid |risk |
entirely |we |often |attempt |to |lessen |the |possibility |of |a |loss |by |taking |acting |to |reduce |the |risk
-
treatment |of |risk |through- |reduction |- |CORRECT |ANSWER✔✔-since |we |cannot |avoid |risk |
entirely |we |often |attempt |to |lessen |the |possibility |of |a |loss |by |taking |acting |to |reduce |the |risk
-
treatment |of |risk |through- |sharing |- |CORRECT |ANSWER✔✔-when |a |group |of |individuals |or |
businesses |with |similar |exposures |share |the |losses |that |occur |within |that |group |
-reciprocal |insurance |exchange |is |a |formal |risk |sharing |arrangement
treatment |of |risk |through- |sharing |- |CORRECT |ANSWER✔✔-when |a |group |of |individuals |or |
businesses |with |similar |exposures |share |the |losses |that |occur |within |that |group |
-reciprocal |insurance |exchange |is |a |formal |risk |sharing |arrangement
With Correct Answers
Which |of |the |following |describes |a |participating |life |insurance |policy? |- |CORRECT |
ANSWER✔✔-A |participating |life |policy |is |one |in |which |the |policyowner |receives |dividends |
deriving |from |the |company's |divisible |surplus
Which |of |the |following |describes |a |participating |life |insurance |policy? |- |CORRECT |
ANSWER✔✔-A |participating |life |policy |is |one |in |which |the |policyowner |receives |dividends |
deriving |from |the |company's |divisible |surplus
What |type |of |reinsurance |contract |between |two |insurers |involves |an |automatic |sharing |of |the |
risks |assumed? |- |CORRECT |ANSWER✔✔-Under |treaty |reinsurance, |each |party |automatically |
accepts |specific |percentages |of |the |insurer's |business.
What |type |of |reinsurance |contract |between |two |insurers |involves |an |automatic |sharing |of |the |
risks |assumed? |- |CORRECT |ANSWER✔✔-Under |treaty |reinsurance, |each |party |automatically |
accepts |specific |percentages |of |the |insurer's |business.
At |what |point |must |a |life |insurance |applicant |be |informed |of |their |rights |that |fall |under |the |
Fair |Credit |Reporting |Act? |- |CORRECT |ANSWER✔✔-Upon |completion |of |the |application
At |what |point |must |a |life |insurance |applicant |be |informed |of |their |rights |that |fall |under |the |
Fair |Credit |Reporting |Act? |- |CORRECT |ANSWER✔✔-Upon |completion |of |the |application
The |State |Guaranty |Association |guarantees |- |CORRECT |ANSWER✔✔-that |a |claim |will |be |paid |if
|an |admitted |insurer |becomes |insolvent
The |State |Guaranty |Association |guarantees |- |CORRECT |ANSWER✔✔-that |a |claim |will |be |paid |if
|an |admitted |insurer |becomes |insolvent
,Dividends |from |a |mutual |insurance |company |are |paid |to |whom? |- |CORRECT |ANSWER✔✔-
Policyholders
Dividends |from |a |mutual |insurance |company |are |paid |to |whom? |- |CORRECT |ANSWER✔✔-
Policyholders
What |is |considered |the |accounting |measurement |of |an |insurance |company's |future |obligations
|to |its |policyowners? |- |CORRECT |ANSWER✔✔-reserves
What |is |considered |the |accounting |measurement |of |an |insurance |company's |future |obligations
|to |its |policyowners? |- |CORRECT |ANSWER✔✔-reserves
A |group-owned |insurance |company |that |is |formed |to |assume |and |spread |the |liability |risks |of |
its |members |is |known |as |a |- |CORRECT |ANSWER✔✔-risk |retention |group
A |group-owned |insurance |company |that |is |formed |to |assume |and |spread |the |liability |risks |of |
its |members |is |known |as |a |- |CORRECT |ANSWER✔✔-risk |retention |group
Which |of |the |following |is |a |syndicate |established |by |a |group |of |insurers |to |share |underwriting |
duties? |- |CORRECT |ANSWER✔✔-Lloyd's |organization
Which |of |the |following |is |a |syndicate |established |by |a |group |of |insurers |to |share |underwriting |
duties? |- |CORRECT |ANSWER✔✔-Lloyd's |organization
An |agent's |authority |to |bind |an |insurer |to |an |insurance |contract |may |be |granted |in |the |- |
CORRECT |ANSWER✔✔-agent's |contract |and |the |insurance |company's |appointment
,An |agent's |authority |to |bind |an |insurer |to |an |insurance |contract |may |be |granted |in |the |- |
CORRECT |ANSWER✔✔-agent's |contract |and |the |insurance |company's |appointment
Dividends |from |a |stock |insurance |company |are |normally |sent |to |- |CORRECT |ANSWER✔✔-
shareholders
Dividends |from |a |stock |insurance |company |are |normally |sent |to |- |CORRECT |ANSWER✔✔-
shareholders
Law |of |Large |numbers |- |CORRECT |ANSWER✔✔--insurance |is |based |on |the |sharing |of |risks |
among |a |large |group |of |people
-states |that |the |larger |the |number |of |people, |the |more |predictable |the |actual |losses |will |be |
-companies |use |this |data |to |calculate |rates
Law |of |Large |numbers |- |CORRECT |ANSWER✔✔--insurance |is |based |on |the |sharing |of |risks |
among |a |large |group |of |people
-states |that |the |larger |the |number |of |people, |the |more |predictable |the |actual |losses |will |be |
-companies |use |this |data |to |calculate |rates
Speculative |risk |- |CORRECT |ANSWER✔✔--involves |opportunity |for |either |loss |or |gain
-not |covered |by |insurance |companies
Speculative |risk |- |CORRECT |ANSWER✔✔--involves |opportunity |for |either |loss |or |gain
-not |covered |by |insurance |companies
pure |risk |- |CORRECT |ANSWER✔✔--a |situation |that |can |only |result |in |a |loss, |there |is |no |
opportunity |for |financial |gain |
-only |type |of |risk |that |is |insurable
, pure |risk |- |CORRECT |ANSWER✔✔--a |situation |that |can |only |result |in |a |loss, |there |is |no |
opportunity |for |financial |gain |
-only |type |of |risk |that |is |insurable
treatment |of |risk |through: |avoidance |- |CORRECT |ANSWER✔✔-simply |avoiding |as |many |risks |as
|possible
-effective |but |not |always |practical
treatment |of |risk |through: |avoidance |- |CORRECT |ANSWER✔✔-simply |avoiding |as |many |risks |as
|possible
-effective |but |not |always |practical
treatment |of |risk |through- |reduction |- |CORRECT |ANSWER✔✔-since |we |cannot |avoid |risk |
entirely |we |often |attempt |to |lessen |the |possibility |of |a |loss |by |taking |acting |to |reduce |the |risk
-
treatment |of |risk |through- |reduction |- |CORRECT |ANSWER✔✔-since |we |cannot |avoid |risk |
entirely |we |often |attempt |to |lessen |the |possibility |of |a |loss |by |taking |acting |to |reduce |the |risk
-
treatment |of |risk |through- |sharing |- |CORRECT |ANSWER✔✔-when |a |group |of |individuals |or |
businesses |with |similar |exposures |share |the |losses |that |occur |within |that |group |
-reciprocal |insurance |exchange |is |a |formal |risk |sharing |arrangement
treatment |of |risk |through- |sharing |- |CORRECT |ANSWER✔✔-when |a |group |of |individuals |or |
businesses |with |similar |exposures |share |the |losses |that |occur |within |that |group |
-reciprocal |insurance |exchange |is |a |formal |risk |sharing |arrangement
