#1
What does the term 'premium' refer to in insurance?
The amount paid by the insured to the insurer for coverage
ExplanationCost of insurance coverage.
#2
What is 'deductible' in insurance terminology?
The portion of a claim that the insured must pay before the insurer covers the rest
ExplanationInitial out-of-pocket expense by the insured.
#3
Which of the following is an example of a 'rider' in insurance?
Additional coverage added to a standard policy
ExplanationExtra provision enhancing a policy's coverage.
#4
In insurance, what is 'underwriting'?
The process of evaluating risk and determining coverage terms
ExplanationRisk assessment and policy pricing.
#5
What is 'coinsurance' in insurance?
A percentage of the covered expenses that the insured must pay after the deductible
ExplanationShared costs between insurer and insured.
#6
What does 'exclusion' mean in insurance policies?
Specific risks or conditions not covered by the policy
ExplanationItems or situations not protected.
#7
What is 'policy limit' in insurance terminology?
The maximum amount an insurer will pay for a covered loss
ExplanationCap on insurer's liability.
#8
What is 'endorsement' in insurance terminology?
A modification or addition to an insurance policy
ExplanationPolicy amendment or addition.
#9
What does 'underinsured' mean in insurance?
Having inadequate insurance coverage to fully cover a loss
ExplanationInsufficient coverage for a loss.
#10
What is 'no-fault insurance'?
A type of insurance where fault is not determined in an accident
ExplanationFault-independent coverage.
#11
What is 'actual cash value' in insurance?
The current market value of an insured item at the time of loss
ExplanationItem's value at loss time.
#12
What does 'term life insurance' refer to?
Life insurance that provides coverage for a specific period of time
ExplanationCoverage for a limited duration.
#13
What is 'cancellation' in insurance?
The termination of an insurance policy before its expiration date
ExplanationPolicy termination prior to expiry.
#14
What is 'umbrella insurance'?
Insurance that provides additional liability coverage beyond the limits of other policies
ExplanationAdditional liability protection.
#15
What is 'sublimit' in insurance terminology?
A specific limit on coverage within a policy
ExplanationLimitation within overall coverage.
#16
What does 'waiting period' mean in insurance?
The time period before coverage begins for certain benefits
ExplanationDelay before benefit availability.
#17
What does 'subrogation' mean in insurance?
The right of the insurer to pursue legal action against a third party responsible for a loss
ExplanationInsurer's pursuit of reimbursement.
#18
What does 'endorsement' mean in insurance?
A modification or addition to an insurance policy
ExplanationChange or addition to policy terms.
#19
What is 'reinsurance' in the insurance industry?
Insurance purchased by insurers to protect against large losses
ExplanationInsurer's insurance.
#20
What is 'risk management' in insurance?
The process of identifying, assessing, and mitigating risks
ExplanationHandling potential losses.
#21
What does 'adverse selection' mean in insurance?
The tendency for high-risk individuals to seek insurance
ExplanationHigher-risk individuals obtaining coverage.
#22
What is 'whole life insurance'?
Life insurance that provides coverage for the entire life of the insured
ExplanationCoverage for life duration.
#23
What does 'indemnity' mean in insurance?
Compensation for a loss, damage, or injury
ExplanationFinancial compensation for harm.
#24
What is 'fiduciary responsibility' in insurance?
The obligation to act in the best interest of the insured
ExplanationDuty to prioritize client's interests.
#25
What does 'moral hazard' mean in insurance?
The tendency for insured individuals to take more risks because they are protected by insurance
ExplanationIncreased risk-taking due to protection.