#1
Which of the following is a characteristic of term life insurance?
Covers the insured for a specific period
ExplanationProvides coverage for a defined time frame.
#2
What does 'co-insurance' mean in an insurance policy?
The percentage of covered expenses the insured must pay
ExplanationPercentage of medical costs paid by the insured.
#3
What is 'policyholder' in the context of insurance?
The person who holds an insurance policy
ExplanationIndividual who owns and is covered by an insurance policy.
#4
Which of the following is a characteristic of disability insurance?
Replaces lost income due to illness or injury
ExplanationProvides income replacement during inability to work due to illness or injury.
#5
Which type of insurance typically covers damage to a vehicle caused by a collision?
Auto insurance
ExplanationProvides coverage for damage resulting from collisions involving the insured vehicle.
#6
Which of the following is a benefit of having a higher deductible in an insurance policy?
Lower out-of-pocket expenses
ExplanationReduced immediate expenses for the insured.
#7
What does 'deductible' refer to in an insurance policy?
The amount the insured pays out-of-pocket before the insurer pays a claim
ExplanationInitial amount paid by the insured before insurance coverage kicks in.
#8
In property insurance, 'actual cash value' refers to:
The replacement cost minus depreciation
ExplanationValue of property considering depreciation.
#9
Which of the following types of life insurance offers a cash value component?
Whole life insurance
ExplanationAccrues cash value over time in addition to providing coverage.
#10
Which of the following is a benefit of having an insurance policy with a higher premium?
More comprehensive coverage
ExplanationGreater extent of coverage provided.
#11
What does 'rider' mean in the context of insurance?
An amendment or addition to an insurance policy
ExplanationAdditional coverage added to a policy.
#12
In health insurance, what does 'out-of-pocket maximum' refer to?
The highest amount the insured has to pay for covered services in a year
ExplanationMaximum limit of expenses borne by the insured in a year.
#13
What is 'underwriting' in the context of insurance?
The process of assessing risk and determining premiums
ExplanationEvaluation process to assess risks and set premiums.