#1
Which of the following is a type of life insurance that provides coverage for a specific period?
Term life insurance
ExplanationCoverage for a specific duration.
#2
What does the term 'premium' refer to in insurance?
The amount paid by the insured for coverage
ExplanationThe cost paid by the insured for insurance.
#3
What does the term 'annuity' refer to in the context of financial services?
A series of regular payments made to the annuitant
ExplanationRegular payments over a defined period.
#4
What is the purpose of a beneficiary designation in an insurance policy?
To designate who receives the policy benefits
ExplanationSpecifies recipient of insurance proceeds.
#5
Which of the following is a characteristic of term life insurance?
Provides coverage for a specific period
ExplanationCoverage for a set duration, not lifetime.
#6
Which of the following is a characteristic of universal life insurance?
Flexible death benefit
ExplanationDeath benefit adjustments over time.
#7
Which of the following is NOT a type of property insurance?
Disability insurance
ExplanationCoverage for loss of income due to disability, not property protection.
#8
What is the purpose of a deductible in insurance policies?
To reduce the premium cost
ExplanationDecreases premium by sharing risk.
#9
What is the primary function of an insurance underwriter?
To assess risk and determine premium rates
ExplanationEvaluates risk for setting insurance rates.
#10
Which of the following is NOT typically covered by a standard homeowners insurance policy?
Flood damage
ExplanationOften excluded, requires separate coverage.
#11
What is the primary function of a financial advisor?
To help clients plan their financial goals and investments
ExplanationAssists in financial planning and investment strategy.
#12
Which of the following insurance policies typically offers cash value accumulation?
Whole life insurance
ExplanationBuilds cash value over time.
#13
Which financial service involves pooling funds from many clients to invest in a diversified portfolio of securities?
Mutual funds
ExplanationCollective investment vehicle for diverse portfolios.
#14
What is the purpose of reinsurance in the insurance industry?
To transfer risk from primary insurers to other insurers
ExplanationShifts risk burden from primary insurers.
#15
Which of the following is NOT a characteristic of a traditional whole life insurance policy?
Coverage for a specific term
ExplanationProvides coverage for entire life, not a specific term.
#16
What is the primary function of a deductible in an insurance policy?
To limit the coverage amount
ExplanationCaps coverage amount shared by insurer.
#17
Which of the following is a type of disability insurance that covers a portion of the insured's income if they become unable to work due to a disability?
Long-term disability insurance
ExplanationIncome protection for extended disability.
#18
Which of the following is a type of insurance that provides coverage for damage to a rented property?
Renters insurance
ExplanationProtects tenant's belongings and liability.