#1
What does the term 'premium' refer to in an insurance policy?
The amount paid by the policyholder to the insurer
ExplanationPremium is what the policyholder pays to the insurer.
#2
Which type of insurance provides coverage for damage to the insured's own vehicle?
Collision insurance
ExplanationCollision insurance covers damage to the insured's vehicle.
#3
What is the 'grace period' in an insurance policy?
The period during which the policyholder can renew the policy without a lapse in coverage
ExplanationGrace period allows policy renewal without coverage lapse.
#4
In health insurance, what does 'co-payment' refer to?
A fixed amount the insured pays for each healthcare service or prescription
ExplanationCo-payment is fixed amount for each healthcare service or prescription.
#5
What does the term 'renewal premium' mean in insurance?
The premium paid to extend or continue coverage for another policy period
ExplanationRenewal premium extends or continues coverage for another period.
#6
Which of the following is a characteristic of a term life insurance policy?
Covers specific periods, such as 10, 20, or 30 years
ExplanationTerm life insurance covers specific time periods.
#7
What is the 'deductible' in an insurance policy?
The initial amount the policyholder must pay before the insurer covers the rest
ExplanationDeductible is what the policyholder pays before insurance kicks in.
#8
What is 'coinsurance' in the context of health insurance?
A percentage of covered expenses shared by the insured and the insurer
ExplanationCoinsurance is shared expenses between insured and insurer.
#9
What does 'waiting period' mean in disability insurance?
The time a policyholder must wait before receiving benefits after a covered event occurs
ExplanationWaiting period is the time before receiving benefits after a covered event.
#10
What is 'exclusion' in insurance policy language?
A provision that limits coverage for certain risks or conditions
ExplanationExclusion limits coverage for specific risks or conditions.
#11
In property insurance, what does 'actual cash value' represent?
The property's value at the time of loss, considering depreciation
ExplanationActual cash value is property value at loss time, with depreciation.
#12
What is the purpose of the 'elimination period' in disability insurance?
The time a policyholder must wait before disability benefits begin
ExplanationElimination period is the wait time before disability benefits start.
#13
In insurance, what does 'underwriting' involve?
Assessing risk and determining premium rates
ExplanationUnderwriting is assessing risk and setting premium rates.
#14
What is the purpose of an 'endorsement' in an insurance policy?
Adding or modifying coverage
ExplanationEndorsement adds or changes coverage.
#15
What is the purpose of 'reinsurance' in the insurance industry?
Transferring a portion of risk to another insurer
ExplanationReinsurance shifts risk to another insurer.
#16
In life insurance, what does 'cash surrender value' represent?
The amount the policyholder receives if they surrender the policy before maturity
ExplanationCash surrender value is what policyholder gets if they surrender early.
#17
What is 'moral hazard' in the context of insurance?
The intentional causing of a loss to claim insurance benefits
ExplanationMoral hazard is causing loss to gain insurance benefits.
#18
What is 'umbrella insurance' designed to cover?
Catastrophic events that exceed the limits of other policies
ExplanationUmbrella insurance covers catastrophic events beyond policy limits.
#19
What is the 'war clause' in insurance policies?
Exclusion of coverage for losses related to war or warlike actions
ExplanationWar clause excludes coverage for war-related losses.