RIBO INSURANCE COURSE PRACTICE
QUESTIONS WEEK 1 WITH CORRECT
ANSWERS
What differentiates speculative risk from pure risk?
Select one:
a. The chance of loss
b. The chance of profit
c. The presence of a hazard
d. The presence of a peril - Correct Answers -b. Only speculative risk has both a chance
of loss and a chance of profit.
What type of insurable risk is the loss or damage to items owned by the insured?
Select one:
a. Insurable risk
b. Liability risk
c. Personal risk
d. Property risk - Correct Answers -d. Property risk is the chance of loss arising from the
destruction of or damage to property. Losses can be direct or indirect.
What is an example of an indirect loss?
Select one:
a. A set of golf clubs is stolen from a car
b. The loss of rental income from a basement apartment after a fire
c. A home is damaged as a result of a fire
d. A car is destroyed after its engine catches on fire - Correct Answers -b. Indirect loss
is one that occurs because there has been a direct loss to the property insured, by a
stated peril.
What happens if a loss occurs before a policy is issued but after it has been bound by
the agent/broker?
Select one:
,a. Half of the claim will be paid immediately, and fifty percent when the policy is issued
b. The insured will be required to pay a deductible of twenty percent of the loss as
stated on the binder
c. The loss is covered in the same manner as if the actual policy had already been
issued
d. The claim will be denied because the policy was not valid at the time of the loss -
Correct Answers -c. The loss is covered in the same manner as if the actual policy had
already been issued. When cover notes or binders are issued it confirms to both parties
that a policy has been issued. This temporary measure confirms the policy before the
formal documents can be prepared. However, legally it is as if the policy has been
issued and any loss would be treated as though the actual policy were in effect.
What relationship do agents and brokers have with the premiums they collect?
Select one:
a. They hold the funds in trust on behalf of themselves
b. They hold the funds in trust on behalf of the provincial superintendent of insurance
c. They hold the funds in trust on behalf of the insurers
d. They hold the funds in trust on behalf of third parties who may submit future claims -
Correct Answers -c. They hold the funds in trust on behalf of the insurers. The
premiums collected by agents/brokers belong to the insurer and are merely held in trust
by the broker/agent (intermediary).
What is the role of the insurance intermediary?
Select one:
a. Identify the customer's needs, match those needs with products available, and pay
claims
b. Identify insurance needs, sell policies that will give the highest commission, and set
insurance rates
c. Identify insurance needs, issue insurance policies, and facilitate insurance contracts
d. Identify the customers exposures, assist with selecting appropriate insurance
coverage, and facilitate insurance contracts - Correct Answers -d. Identify the
customers exposures, assist with selecting appropriate insurance coverage, and
facilitate insurance contracts. Intermediaries help in identifying and matching client's
insurance needs with insurance products and facilitating insurance contracts to the
satisfaction of all parties concerned. They do not pay claims or set insurance rates.
Within which parameters must an intermediary operate while facilitating a contract
between the insured and an insurer?
Select one:
a. Within the scope of the contract with the insurer; and within the terms of the
insurance policy they issue
b. Within the scope of the contract with the insurer; and within the authority of the
intermediary's licence
, c. Only within the scope of the contract with the insurer
d. Only within the authority of the intermediary's licence - Correct Answers -b. Within the
scope of the contract with the insurer; and within the authority of the intermediary's
licence. Intermediaries must always work within the scope of the contract with the
insurer and within the authority of their licence.
What are the advantages of video conferencing calls for use in sales?
Select one:
a. Expands the benefits of the in-person meeting that takes place after hours
b. Expands the benefits of the in-person meeting to include reading body language
c. Expands the benefits of a phone call with some of the benefits of reading the client's
body language
d. Expands the benefits of a phone call through turn taking and conversation pacing -
Correct Answers -c. Expands the benefits of a phone call with some of the benefits of
reading the client's body language. Video calls offer some of the benefits of in-person
meetings and expand the benefits of a telephone call, such as the ability to see the
other person and read his or her body language.
What type of risk is Mary facing if she is injured and unable to work?
Select one:
a. Moral risk
b. Business risk
c. Personal risk
d. Property risk - Correct Answers -c. Personal risk includes death, physical disability,
old age, and unemployment.
Which type of risk can be insured?
Select one:
a. Moral risk
b. Pure risk
c. Speculative risk
d. Assumed risk - Correct Answers -b. Only pure risk is insurable. Speculative risk is
uninsurable because of the inherent chance of profit.
Paul buys a pair of sneakers online, hoping to resell them for a profit. Which type of risk
is this an example of?
Select one:
a. Speculative risk
b. Moral risk
c. Illegal risk
QUESTIONS WEEK 1 WITH CORRECT
ANSWERS
What differentiates speculative risk from pure risk?
Select one:
a. The chance of loss
b. The chance of profit
c. The presence of a hazard
d. The presence of a peril - Correct Answers -b. Only speculative risk has both a chance
of loss and a chance of profit.
What type of insurable risk is the loss or damage to items owned by the insured?
Select one:
a. Insurable risk
b. Liability risk
c. Personal risk
d. Property risk - Correct Answers -d. Property risk is the chance of loss arising from the
destruction of or damage to property. Losses can be direct or indirect.
What is an example of an indirect loss?
Select one:
a. A set of golf clubs is stolen from a car
b. The loss of rental income from a basement apartment after a fire
c. A home is damaged as a result of a fire
d. A car is destroyed after its engine catches on fire - Correct Answers -b. Indirect loss
is one that occurs because there has been a direct loss to the property insured, by a
stated peril.
What happens if a loss occurs before a policy is issued but after it has been bound by
the agent/broker?
Select one:
,a. Half of the claim will be paid immediately, and fifty percent when the policy is issued
b. The insured will be required to pay a deductible of twenty percent of the loss as
stated on the binder
c. The loss is covered in the same manner as if the actual policy had already been
issued
d. The claim will be denied because the policy was not valid at the time of the loss -
Correct Answers -c. The loss is covered in the same manner as if the actual policy had
already been issued. When cover notes or binders are issued it confirms to both parties
that a policy has been issued. This temporary measure confirms the policy before the
formal documents can be prepared. However, legally it is as if the policy has been
issued and any loss would be treated as though the actual policy were in effect.
What relationship do agents and brokers have with the premiums they collect?
Select one:
a. They hold the funds in trust on behalf of themselves
b. They hold the funds in trust on behalf of the provincial superintendent of insurance
c. They hold the funds in trust on behalf of the insurers
d. They hold the funds in trust on behalf of third parties who may submit future claims -
Correct Answers -c. They hold the funds in trust on behalf of the insurers. The
premiums collected by agents/brokers belong to the insurer and are merely held in trust
by the broker/agent (intermediary).
What is the role of the insurance intermediary?
Select one:
a. Identify the customer's needs, match those needs with products available, and pay
claims
b. Identify insurance needs, sell policies that will give the highest commission, and set
insurance rates
c. Identify insurance needs, issue insurance policies, and facilitate insurance contracts
d. Identify the customers exposures, assist with selecting appropriate insurance
coverage, and facilitate insurance contracts - Correct Answers -d. Identify the
customers exposures, assist with selecting appropriate insurance coverage, and
facilitate insurance contracts. Intermediaries help in identifying and matching client's
insurance needs with insurance products and facilitating insurance contracts to the
satisfaction of all parties concerned. They do not pay claims or set insurance rates.
Within which parameters must an intermediary operate while facilitating a contract
between the insured and an insurer?
Select one:
a. Within the scope of the contract with the insurer; and within the terms of the
insurance policy they issue
b. Within the scope of the contract with the insurer; and within the authority of the
intermediary's licence
, c. Only within the scope of the contract with the insurer
d. Only within the authority of the intermediary's licence - Correct Answers -b. Within the
scope of the contract with the insurer; and within the authority of the intermediary's
licence. Intermediaries must always work within the scope of the contract with the
insurer and within the authority of their licence.
What are the advantages of video conferencing calls for use in sales?
Select one:
a. Expands the benefits of the in-person meeting that takes place after hours
b. Expands the benefits of the in-person meeting to include reading body language
c. Expands the benefits of a phone call with some of the benefits of reading the client's
body language
d. Expands the benefits of a phone call through turn taking and conversation pacing -
Correct Answers -c. Expands the benefits of a phone call with some of the benefits of
reading the client's body language. Video calls offer some of the benefits of in-person
meetings and expand the benefits of a telephone call, such as the ability to see the
other person and read his or her body language.
What type of risk is Mary facing if she is injured and unable to work?
Select one:
a. Moral risk
b. Business risk
c. Personal risk
d. Property risk - Correct Answers -c. Personal risk includes death, physical disability,
old age, and unemployment.
Which type of risk can be insured?
Select one:
a. Moral risk
b. Pure risk
c. Speculative risk
d. Assumed risk - Correct Answers -b. Only pure risk is insurable. Speculative risk is
uninsurable because of the inherent chance of profit.
Paul buys a pair of sneakers online, hoping to resell them for a profit. Which type of risk
is this an example of?
Select one:
a. Speculative risk
b. Moral risk
c. Illegal risk
