#1
Which of the following best describes insurance?
A method of saving money for future expenses
A contract between an individual and an insurer to mitigate risk
A type of loan provided by financial institutions
A government subsidy program for low-income individuals
#2
What is the primary purpose of life insurance?
To protect against the financial loss resulting from premature death
To provide investment returns
To cover medical expenses
To purchase real estate
#3
What is a peril in insurance terminology?
The process of filing a claim
An event that causes financial loss and is covered by an insurance policy
The premium paid for insurance coverage
A type of insurance policy
#4
In liability insurance, what does 'bodily injury' typically refer to?
Damage to physical property
Mental distress caused by an accident
Physical harm or injury to a person
Damage to reputation
#5
Which type of insurance is designed to cover medical expenses resulting from accidents or illnesses?
Life insurance
Auto insurance
Health insurance
Property insurance
#6
What does 'premium' refer to in insurance?
The amount the insured must pay out-of-pocket before the insurer covers the rest
The total amount of coverage provided by the policy
The cost of purchasing an insurance policy
The maximum payout in case of a claim
#7
Which type of insurance typically covers damage to one's own vehicle in an accident?
Health insurance
Home insurance
Auto insurance
Life insurance
#8
What is a deductible in insurance?
The total amount of coverage provided by the policy
The maximum amount the insured must pay out-of-pocket before the insurer covers the rest
The premium paid to the insurance company
The period during which coverage is not provided after purchasing a policy
#9
What is underwriting in the insurance industry?
The process of evaluating and assessing risks before issuing insurance policies
The process of filing a claim with the insurance company
The process of renewing an insurance policy
The process of marketing insurance products to potential customers
#10
Which of the following is NOT a type of life insurance?
Term life insurance
Whole life insurance
Property insurance
Universal life insurance
#11
What does 'COBRA' stand for in the context of health insurance in the United States?
Consolidated Omnibus Budget Reconciliation Act
Comprehensive Options for Benefits and Retirement Allowance
Catastrophic Options for Beneficiary Reimbursement Agreement
Combined Options for Budget Restructuring Act
#12
In property insurance, what is 'actual cash value' (ACV)?
The cost to replace an item with a new one of similar quality, minus depreciation
The original purchase price of an item
The total amount of coverage provided by the policy
The amount the insurer is liable to pay in case of a claim
#13
What is reinsurance in the context of insurance?
Insurance purchased by an individual or company to cover risks
The process of transferring some of the risk assumed by an insurance company to another insurer
The process of cancelling an insurance policy
A type of insurance that covers damage to property
#14
What does the term 'exclusion' mean in insurance policies?
A provision that limits coverage under certain circumstances
A type of premium discount
The total amount of coverage provided by the policy
The maximum payout in case of a claim
#15
In insurance, what does the term 'actuary' refer to?
An individual who investigates insurance claims
A person who sells insurance policies
A professional who assesses and manages risks using mathematical and statistical methods
An insurer's representative who negotiates settlements
#16
Which of the following is NOT a factor typically considered by insurers when calculating premiums?
Age
Occupation
Marital status
Eye color
#17
What does 'subrogation' mean in insurance?
The process of transferring insurance coverage to another individual
The process of reclaiming money from a third party to cover a claim already paid
A type of insurance fraud
The process of evaluating an insurance claim
#18
Which type of insurance covers damage to property caused by fire, theft, or other perils?
Health insurance
Auto insurance
Property insurance
Liability insurance