Insurance Fundamentals Quiz
Test your knowledge on insurance basics with questions on types, terms, and functions. Perfect for risk management enthusiasts!
#1
What is the primary function of insurance?
To predict future events
To prevent accidents
To transfer risk
To guarantee profits
#2
Which type of insurance typically covers damage to one's own vehicle?
Liability insurance
Collision insurance
Comprehensive insurance
Health insurance
#3
Which of the following is NOT a type of insurance?
Health insurance
Property insurance
Investment insurance
Travel insurance
#4
What is the purpose of an insurance policy's declaration page?
To provide a summary of coverage details and policyholder information
To outline the process for filing insurance claims
To define the terms and conditions of the insurance contract
To specify the premium payment schedule
#5
Which type of insurance typically covers damage to a rented apartment or house?
Homeowners insurance
Renters insurance
Property insurance
Landlord insurance
#6
What is a deductible in insurance?
The total amount insured
The amount the insured pays out of pocket before the insurance coverage kicks in
The premium paid monthly
The maximum limit of coverage
#7
Which type of life insurance provides coverage for a specific term?
Whole life insurance
Universal life insurance
Term life insurance
Variable life insurance
#8
What does the term 'actuary' refer to in the insurance industry?
A professional who assesses and manages risks using mathematical and statistical methods
A person who sells insurance policies
An insurance investigator
A government regulator overseeing insurance companies
#9
In insurance, what is underwriting?
The process of calculating insurance premiums
The process of investigating insurance claims
The process of evaluating and accepting risks for coverage
The process of marketing insurance policies
#10
What is the purpose of coinsurance in health insurance?
To reduce the overall cost of insurance premiums
To encourage insured individuals to use in-network healthcare providers
To share the cost of medical expenses between the insurer and the insured
To provide coverage for preventive care services
#11
Which of the following is NOT a factor considered in determining insurance premiums?
Age
Gender
Ethnicity
Occupation
#12
What is reinsurance?
Insurance purchased by individuals
Insurance purchased by insurance companies to limit their own risk exposure
Insurance that covers losses due to natural disasters
Insurance for high-risk individuals
#13
What does 'subrogation' mean in insurance terms?
The transfer of rights and claims from the insured to the insurer
The sharing of risk between multiple insurers
The process of calculating insurance payouts
The legal right of the insurer to pursue a third party responsible for causing a loss to the insured
#14
What is adverse selection in insurance?
The tendency for high-risk individuals to seek insurance more than low-risk individuals
The practice of denying coverage to individuals with pre-existing conditions
The process of setting insurance premiums based on individual risk factors
The process of selecting the most suitable insurance policy
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