Life and Health Insurance Exam 1 with precise detailed answers

Life and Health Insurance Exam 1 with precise detailed
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answers


UNIT |1: |The |term |used |to |describe |the |individual |who |is |covered |by |the |insurance |is

A. |insurer

B. |insured

C. |policyowner

D. |risk |- |correct |answer |B



Which |of |the |following |is |a |risk?

A. |A |car |may |need |to |have |new |brakes |installed |after |several |years |of |regular |driving.

B. |An |individual |may |need |medical |attention |after |slipping |on |the |ice |and |falling.

C. |Both |are |examples |of |risk.

D. |Neither |is |an |example |of |risk. |- |correct |answer |B



The |estimation |of |future |losses |is |more |accurate |when |information |is |from

A. |a |small |select |group

B. |a |large |group

C. |a |medium-sized |group

D. |any |size |group; |group |size |does |not |matter |- |correct |answer |A



The |application |of |the |law |of |large |numbers |enables |insurers |to

A. |estimate |the |future |losses |of |a |class |or |group |of |people

B. |predict |the |future |losses |of |speci |c |individuals

C. |charge |higher |premiums |for |insurance

D. |calculate |mortality |charges |- |correct |answer |B

,Which |type |of |policy |is |designed |to |protect |against |the |risk |of |living |too |long?

A. |Casualty

B. |Life

C. |Annuity

D. |Medical |expense |- |correct |answer |C



Which |of |the |following |is |a |type |of |insurance |company |owned |by |its |shareholders?

A. |Mutual |B. |Stock

C. |Lloyd's |D. |Reinsurer |- |correct |answer |B



The |ZYX |Insurance |Company |is |incorporated |in |Alabama. |While |doing |business |in |Texas, |it |is

A. |adomesticinsurer |B. |a |foreign |insurer |C. |an |alien |insurer |D. |an |export |insurer |- |correct |
answer |B



The |ZYX |Insurance |Company |is |incorporated |in |Mexico. |While |doing |business |in |Texas, |it |is

A. |adomesticinsurer |B. |a |foreign |insurer |C. |an |alien |insurer |D. |an |export |insurer |- |correct |
answer |C



Self-insurance |is |an |example |of |which |method |of |handling |risk?

A. |Acceptance |B. |Transference |C. |Avoidance |D. |Reduction |- |correct |answer |A



Which |of |the |following |terms |is |used |to |denote |insurance |companies?

A. |Broker

B. |Exchange |C. |Corporation |D. |Insurer |- |correct |answer |D



A |social |device |for |spreading |the |chance |of |financial |loss |among |a |large |number |of |people |is |
the |definition |of

A. |hazard

B. |risk

, C. |insurance

| D. |peril |- |correct |answer |C



Which |of |the |following |risks |is |most |likely |to |be

insurable?

A. |George |is |concerned |about |the |financial |impact |his |premature |death |would |have |on |his |
family.

B. |Talyn |is |concerned |about |the |financial |impact |large |betting |losses |at |the |horse |track |will |
have |on |his |retirement |savings.

C. |John |is |concerned |about |the |financial |impact |on |his |savings |when |his |car |eventually |
becomes |worn |enough |to |need |to |be |replaced.

D. |Jewel |is |concerned |about |the |nancial |effect |losing |her |hat |would |have |on |her |weekly |
spending |money. |- |correct |answer |A



Roger |refuses |to |travel |by |airplane. |Roger |is |managing |the |risk |of |being |in |a |plane |crash |by

A. |reduction |B. |avoidance |C. |transference |D. |retention |- |correct |answer |B



Chianna |becomes |injured |in |a |car |accident |caused |when |she |took |her |eyes |off |the |road |to |
answer |her |cell |phone. |This |is |an |example |of

A. |a |physical |hazard

B. |a |moral |hazard

C. |a |morale |hazard

D. |a |legal |hazard |- |correct |answer |C



An |arrangement |in |which |an |insurer |transfers |part |of |the |insurance |risk |to |another |insurance |
company |is |known |as

A. |avoidance

B. |fraud

C. |Lloyd's |associations

D. |reinsurance |- |correct |answer |D