Fundamentals of Insurance - Licensing
Practice Exam 2 |Questions with 100%
Correct Answers | Verified | Latest Update
2024 Graded A+
1.
The following is the most practical way in which to deal with risk:
a. Transfer of risk
b. Retention of risk
c. Controlling of Risk
d. Avoidance of Risk - ✔✔a. Transfer of risk
If a policy has been cancelled by the insurance Company before the term has expired:
a. The commission is fully earned
b. The total premium is returned
c. Part of the commission, corresponding to the unearned portion of the premium must be
returned to the Insured
d. The policyholder will be charged an additional fee for the cancellation - ✔✔
Every policy of "fire" insurance:
,a. Usually covers fire, smoke and specified types of explosion
b. Is required by law to cover fire, windstorm and lightening
c. Covers fire, explosion and windstorm
d. Is required by law to cover at least fire, lightening and specified types of explosions - ✔✔d.
Is required by law to cover at least fire, lightening and specified types of explosions
Insurable Interest means:
a. Interest gains on money in the bank
b. Interest payable on loan
c. The personal interest a person has in something he expects to inherit
d. The financial interest a person has in something of value - ✔✔d. The financial interest
a person has in something of value
The major function of insurance is:
a. To reduce the cost of losses
b. To spread the losses of the few among the many
c. To safeguard mortgage investments
d. To serve as the basis of existing credit system - ✔✔b. To spread the losses of the few
among the many
,With respect to federally licensed insurance companies, the Federal Department of Insurance:
a. Controls the type of policies issued
b. Regulates the financial stability of Insurers
c. Stipulates the types of agents who may represent the company
d. Only supervises life insurance companies - ✔✔b. Regulates the financial stability of Insurers
A "peril" is best defined as:
a. The chance of a loss
b. The occurrence of a loss
c. The cause of a loss
d. The result of a loss - ✔✔c. The cause of a loss
Our Insured suffers the loss of a steak as a result of a fire, which, fortunately, was confined
in her barbeque. Such loss to the steak is a result of a:
a. Direct fire
b. Indirect fire
c. Hostile fire
, d. Friendly fire - ✔✔d. Friendly fire
Under a policy of "fire" insurance, which one of the following losses is covered:
a. Fire damage caused by a fire, which followed a short
circuit b. Loss caused by enemy attack by Armed Forces c.
Radioactive Contamination
d. Loss of property caused by a process involving the application of heat - ✔✔a. Fire
damage caused by a fire, which followed a short circuit
Statutory Conditions found in all policies of "fire" insurance:
a. Outline the rules of conduct between the Insured and the Insurer
b. Specify the coverage provided
c. State the rights of third parties
d. Are not expressly required by law - ✔✔a. Outline the rules of conduct between the
Insured and the Insurer
If an Insured knowingly fails to reveal all material information when applying for insurance, the
Insurer:
a. Must pay all claims of the insured
Practice Exam 2 |Questions with 100%
Correct Answers | Verified | Latest Update
2024 Graded A+
1.
The following is the most practical way in which to deal with risk:
a. Transfer of risk
b. Retention of risk
c. Controlling of Risk
d. Avoidance of Risk - ✔✔a. Transfer of risk
If a policy has been cancelled by the insurance Company before the term has expired:
a. The commission is fully earned
b. The total premium is returned
c. Part of the commission, corresponding to the unearned portion of the premium must be
returned to the Insured
d. The policyholder will be charged an additional fee for the cancellation - ✔✔
Every policy of "fire" insurance:
,a. Usually covers fire, smoke and specified types of explosion
b. Is required by law to cover fire, windstorm and lightening
c. Covers fire, explosion and windstorm
d. Is required by law to cover at least fire, lightening and specified types of explosions - ✔✔d.
Is required by law to cover at least fire, lightening and specified types of explosions
Insurable Interest means:
a. Interest gains on money in the bank
b. Interest payable on loan
c. The personal interest a person has in something he expects to inherit
d. The financial interest a person has in something of value - ✔✔d. The financial interest
a person has in something of value
The major function of insurance is:
a. To reduce the cost of losses
b. To spread the losses of the few among the many
c. To safeguard mortgage investments
d. To serve as the basis of existing credit system - ✔✔b. To spread the losses of the few
among the many
,With respect to federally licensed insurance companies, the Federal Department of Insurance:
a. Controls the type of policies issued
b. Regulates the financial stability of Insurers
c. Stipulates the types of agents who may represent the company
d. Only supervises life insurance companies - ✔✔b. Regulates the financial stability of Insurers
A "peril" is best defined as:
a. The chance of a loss
b. The occurrence of a loss
c. The cause of a loss
d. The result of a loss - ✔✔c. The cause of a loss
Our Insured suffers the loss of a steak as a result of a fire, which, fortunately, was confined
in her barbeque. Such loss to the steak is a result of a:
a. Direct fire
b. Indirect fire
c. Hostile fire
, d. Friendly fire - ✔✔d. Friendly fire
Under a policy of "fire" insurance, which one of the following losses is covered:
a. Fire damage caused by a fire, which followed a short
circuit b. Loss caused by enemy attack by Armed Forces c.
Radioactive Contamination
d. Loss of property caused by a process involving the application of heat - ✔✔a. Fire
damage caused by a fire, which followed a short circuit
Statutory Conditions found in all policies of "fire" insurance:
a. Outline the rules of conduct between the Insured and the Insurer
b. Specify the coverage provided
c. State the rights of third parties
d. Are not expressly required by law - ✔✔a. Outline the rules of conduct between the
Insured and the Insurer
If an Insured knowingly fails to reveal all material information when applying for insurance, the
Insurer:
a. Must pay all claims of the insured
