Life and Health Insurance Exam 1 Questions Answered

Life and Health Insurance Exam 1 Questions Answered Correctly 100% Verified 2023/2024 UNIT 1: The term used to describe the individual who is covered by the insurance is

• insurer
• insured
• policyowner
• risk - Correct Answer B

Which of the following is a risk?

• A car may need to have new brakes installed after several years of regular driving.
• An individual may need medical attention after slipping on the ice and falling.
• Both are examples of risk.
• Neither is an example of risk. - Correct Answer B

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

• a small select group
• a large group
• a medium-sized group
• any size group; group size does not matter - Correct Answer A

The application of the law of large numbers enables insurers to

• estimate the future losses of a class or group of people
• predict the future losses of speci c individuals
• charge higher premiums for insurance
• calculate mortality charges - Correct Answer B

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

• Casualty
• Life
• Annuity
• Medical expense - Correct Answer C

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

• Mutual B. Stock
• Lloyd's D. Reinsurer - Correct Answer B

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

• 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

• adomesticinsurer B. a foreign insurer C. an alien insurer D. an export insurer -

Correct Answer C 1 / 3

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

• Acceptance B. Transference C. Avoidance D. Reduction - Correct Answer A

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

• Broker
• 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

• hazard
• risk
• insurance
• peril - Correct Answer C

Which of the following risks is most likely to be insurable?

• George is concerned about the financial impact his premature death would have on

his family.

• Talyn is concerned about the financial impact large betting losses at the horse track

will have on his retirement savings.

• John is concerned about the financial impact on his savings when his car eventually

becomes worn enough to need to be replaced.

• 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

• 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 physical hazard
• a moral hazard
• a morale hazard
• 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

• avoidance
• fraud
• Lloyd's associations
• reinsurance - Correct Answer D

Which of the following is NOT an example of insurable interest?

• Jose wishes to take out a life insurance policy on his own life to provide for his family

in the event of his death. 2 / 3

• Ana wishes to take out a life insurance policy on her mother to ensure that funeral

costs will be covered when the time comes.

• Juan wishes to take out a life insurance policy on his neighbor because his neighbor

is a careless driver and Juan thinks his neighbor is likely to die in a car accident.

• Carla wishes to take out a life insurance policy on her best salesperson to protect the

business from lost sales in the event of the salesperson's death. - Correct Answer C Kim is injured in a house fire. When the bills come, the insurance company pays 80% of the cost, and Kim pays the rest. This is an example of

• coinsurance
• a deductible
• extraneous insurance D. policy limits - Correct Answer A

Hoosier Insurance Company is owned by the policyholders. Hoosier Insurance is

• a stock insurer
• a mutual insurer C. a nonpro t insurer D. a fraternal insurer - Correct Answer B

Which of the following people represents several insurance companies but owns the policy expirations?

• Independent agent
• Exclusive agent
• Direct writing agent
• General agent - Correct Answer A

Which of the following can bind an insurance company by oral or written agreement?

• Property and casualty producer
• Life producer
• Broker
• Solicitor - Correct Answer A

lloyds - Correct Answer are association, not an insurance company captiv - Correct Answer wholly-own subsidiary through the parent company re-insurers - Correct Answer insurance company who insure other insurance company (reciprocal=provide insurance to each other) Agent - Correct Answer represents the company broker - Correct Answer represents the client commission - Correct Answer =service fee

UNIT 2:Pretext interviews are

• alwaysillegal
• not permitted without a warrant sworn by a
• / 3