Insurance Market Dynamics Quiz
Explore insurance economics with this quiz covering functions, types, terminology, and regulations in the insurance industry. Test your knowledge now!
#1
What is the primary function of insurance?
Generating profits for companies
Providing financial protection against risks
Marketing financial products
Investing in real estate
#2
Which type of insurance typically covers damage to your own vehicle in an accident?
Health Insurance
Life Insurance
Property Insurance
Auto Insurance
#3
What is reinsurance in the insurance industry?
Insurance for rare events
Insurance for insurers
Insurance for government agencies
Insurance for high-risk individuals
#4
What does the term 'underwriting' mean in insurance?
Writing policies in complex language
Assessing risk and setting premium rates
Providing customer support
Selling insurance policies door-to-door
#5
What is moral hazard in the context of insurance?
A hazard caused by unethical behavior
A hazard arising from information asymmetry
A hazard related to natural disasters
A hazard caused by policy exclusions
#6
Which insurance product provides coverage for a specified period and pays out a benefit only if the policyholder dies during that period?
Whole Life Insurance
Term Life Insurance
Universal Life Insurance
Variable Life Insurance
#7
What is a 'captive insurance company'?
An insurance company focused on insuring captives (prisoners)
An insurance company owned by the insured entities
An insurance company specializing in maritime risks
An insurance company providing coverage for wildlife captivity
#8
In the insurance market, what is a 'rider'?
A person who assesses risk
An additional provision to a policy
A type of insurance agent
A vehicle used by insurance inspectors
#9
What is a deductible in insurance?
The maximum coverage limit
The initial amount the insured must pay before the insurer covers the rest
The premium paid annually
The waiting period for a claim to be processed
#10
What is adverse selection in insurance?
The selection of high-risk policyholders
The selection of low-risk policyholders
The rejection of insurance applications
The exclusion of certain perils from coverage
#11
Which regulatory body oversees the insurance industry in the United States?
SEC (Securities and Exchange Commission)
FDIC (Federal Deposit Insurance Corporation)
NAIC (National Association of Insurance Commissioners)
FINRA (Financial Industry Regulatory Authority)
#12
In insurance terms, what is 'indemnity'?
Compensation for a loss
A type of insurance policy
An insurance agent's commission
A government insurance program
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