CIP C120 UNDERWRITING ESSENTIALS
ACTUAL SCRIPT 2026 COMPLETE QUESTIONS
AND CORRECT ANSWERS GRADED A+
◉ Broker.
Answer: An insurance producer not appointed by an insurer and
whom represents the client
◉ Insured.
Answer: A person covered by an insurance policy
◉ Insurance policy.
Answer: A legal contract between a policyowner (and/or insured)
and an insurance company which agrees to pay the
insured/beneficiary for losses caused by specific events
◉ Principal.
Answer: Insurer, company who issues insurance policies
◉ Policyowner.
Answer: The person entitled to exercise the rights and privileges in a
policy
,◉ Premium.
Answer: The money paid to the insurance company for the
insurance policy
◉ Reciprocal.
Answer: A mutual interchange of rights and privileges
◉ Risk.
Answer: Chance of a loss occurring
◉ Pure Risk.
Answer: Situations that can only result in a loss
◉ Speculative Risk.
Answer: Situations that can result in either a loss or gain
◉ Hazard.
Answer: Conditions or situations that increase the chance of a loss
occurring
◉ Physical Hazard.
, Answer: Individual characteristics that increase the chance of a loss
(i.e. past medical history, blindness)
◉ Moral Hazard.
Answer: Tendencies towards increasing risk such as lying on
applications or submitting fraudulent claims
◉ Morale Hazard.
Answer: Arise from a state of mind that causes indifference to loss
such as carelessness
◉ Peril.
Answer: Specific cause of a loss such as death, sickness or accidents
◉ Loss.
Answer: Reduction, decrease, or disappearance of value of the
person or property caused by a named peril
◉ Sharing.
Answer: Method of dealing with risk where a group with the same or
similar exposure to loss divvy up the losses that occur within that
group; reciprocal insurance exchange is a formal risk-[ ? ]
arrangement
ACTUAL SCRIPT 2026 COMPLETE QUESTIONS
AND CORRECT ANSWERS GRADED A+
◉ Broker.
Answer: An insurance producer not appointed by an insurer and
whom represents the client
◉ Insured.
Answer: A person covered by an insurance policy
◉ Insurance policy.
Answer: A legal contract between a policyowner (and/or insured)
and an insurance company which agrees to pay the
insured/beneficiary for losses caused by specific events
◉ Principal.
Answer: Insurer, company who issues insurance policies
◉ Policyowner.
Answer: The person entitled to exercise the rights and privileges in a
policy
,◉ Premium.
Answer: The money paid to the insurance company for the
insurance policy
◉ Reciprocal.
Answer: A mutual interchange of rights and privileges
◉ Risk.
Answer: Chance of a loss occurring
◉ Pure Risk.
Answer: Situations that can only result in a loss
◉ Speculative Risk.
Answer: Situations that can result in either a loss or gain
◉ Hazard.
Answer: Conditions or situations that increase the chance of a loss
occurring
◉ Physical Hazard.
, Answer: Individual characteristics that increase the chance of a loss
(i.e. past medical history, blindness)
◉ Moral Hazard.
Answer: Tendencies towards increasing risk such as lying on
applications or submitting fraudulent claims
◉ Morale Hazard.
Answer: Arise from a state of mind that causes indifference to loss
such as carelessness
◉ Peril.
Answer: Specific cause of a loss such as death, sickness or accidents
◉ Loss.
Answer: Reduction, decrease, or disappearance of value of the
person or property caused by a named peril
◉ Sharing.
Answer: Method of dealing with risk where a group with the same or
similar exposure to loss divvy up the losses that occur within that
group; reciprocal insurance exchange is a formal risk-[ ? ]
arrangement
