#1
What is the primary purpose of insurance?
To protect against financial loss
ExplanationInsurance aims to shield against monetary setbacks.
#2
Which of the following is NOT a common type of insurance coverage?
Vacation insurance
ExplanationVacation insurance isn't a typical coverage option.
#3
In life insurance, what does 'premium' refer to?
The amount paid by the insured to the insurance company
ExplanationPremium is the sum paid by the insured to the insurer for coverage.
#4
What does 'exclusion' mean in an insurance policy?
The circumstances or perils not covered by the policy
ExplanationExclusion pertains to situations or risks not covered by the insurance policy.
#5
What is the purpose of an 'insurance claim'?
To request compensation for a covered loss or damage
ExplanationInsurance claims seek compensation for covered losses or damages.
#6
What is the 'deductible' in an insurance policy?
The amount the insured person pays before the insurance company pays
ExplanationDeductible is the initial payment by the insured before insurer coverage kicks in.
#7
Which type of insurance is designed to cover damage or loss to property?
Homeowners insurance
ExplanationHomeowners insurance is tailored for property damage or loss.
#8
What does 'COBRA' stand for in the context of health insurance?
Consolidated Omnibus Budget Reconciliation Act
ExplanationCOBRA refers to a legislative act governing health insurance.
#9
Which type of insurance provides coverage for injuries and damages to others in an auto accident?
Liability insurance
ExplanationLiability insurance offers protection against injury or damage claims from others in auto accidents.
#10
What is 'term life insurance'?
Life insurance that covers a specific period of time
ExplanationTerm life insurance provides coverage for a predetermined duration.
#11
What is 'underwriting' in the context of insurance?
The process of evaluating and determining the risk of insuring a person or property
ExplanationUnderwriting involves assessing the risk associated with insuring individuals or assets.
#12
What does 'subrogation' mean in the insurance industry?
The transfer of rights and recovery from one party to another
ExplanationSubrogation involves shifting rights and recovery responsibilities between parties.
#13
What is 'coinsurance' in health insurance?
The percentage of costs the insured pays after reaching the deductible
ExplanationCoinsurance refers to the portion of expenses covered by the insured after meeting the deductible.
#14
What is 'risk pooling' in insurance?
The process of dividing risk among policyholders
ExplanationRisk pooling involves distributing risk across a pool of policyholders.