#1
Which of the following factors is NOT typically considered in insurance premium calculation?
Age of the insured individual
Type of vehicle (for auto insurance)
Favorite color of the insured individual
Health condition of the insured individual
#2
What is the purpose of a deductible in insurance policies?
To increase the premium amount
To reduce the insured's out-of-pocket expenses
To limit the coverage provided by the insurance policy
To transfer the risk to the insured
#3
Which of the following is NOT typically considered when calculating auto insurance premiums?
Driving history
Occupation of the insured
Type of vehicle
Age of the insured
#4
What is the primary purpose of insurance?
To prevent accidents from happening
To transfer the risk of financial loss from an individual or entity to an insurance company
To generate profits for insurance companies
To eliminate the need for financial planning
#5
Which of the following factors affects homeowners insurance premiums?
The insured's marital status
The color of the insured's house
The proximity to fire hydrants
The insured's level of education
#6
What is the purpose of an insurance premium?
To compensate the insured for losses
To cover administrative costs of the insurance company
To transfer risk from the insured to the insurer
To generate profits for the insured
#7
Which of the following factors is typically considered in life insurance premium calculation?
Favorite food of the insured
Hobbies of the insured
Occupation of the insured
Preferred mode of transportation
#8
In insurance, what does the term 'underwriting' refer to?
Calculating insurance premiums
Assessing risk and determining coverage eligibility
Marketing insurance policies
Handling insurance claims
#9
Which formula is commonly used to calculate insurance premiums in life insurance?
Premium = (Sum assured × Risk factor) / Number of years
Premium = Sum assured / (Risk factor × Number of years)
Premium = Sum assured × Risk factor × Number of years
There's no fixed formula for life insurance premiums
#10
What role does the 'claims history' of an insured individual play in insurance premium calculation?
It doesn't affect premium calculation
It's used to determine the coverage amount
It helps assess the likelihood of future claims
It determines the deductible amount
#11
In health insurance, what does 'coinsurance' refer to?
The portion of medical expenses paid by the insured before the insurer starts paying
The fixed amount the insured must pay for each medical service
The percentage of medical expenses shared by the insured and the insurer
The maximum amount the insured can claim in a policy year
#12
What is 'moral hazard' in insurance?
The intentional misrepresentation of facts by the insured
The increased risk-taking behavior by the insured due to being insured
The risk associated with natural disasters
The risk of fraud by the insurance company
#13
What does 'reinsurance' refer to in the insurance industry?
Insurance for luxury items
Insurance purchased by insurers to protect themselves from large losses
Insurance for multiple properties under one policy
Insurance for high-risk individuals
#14
What is 'actuarial science' in the context of insurance?
The study of the statistical data related to insurance risks
The analysis of insurance policies
The marketing of insurance products
The negotiation of insurance premiums
#15
In property insurance, what does 'co-insurance' mean?
The insured and the insurer share the risk equally
The insured pays a fixed amount before the insurer covers the rest
The insured must maintain coverage for a certain percentage of the property's value
The insurer covers only a portion of the insured property
#16
Which of the following factors might lead to a higher health insurance premium?
Being a non-smoker
Having a high credit score
Having a pre-existing medical condition
Being under 30 years old
#17
What does 'exclusion' mean in insurance policies?
A circumstance that increases coverage limits
A specific risk or situation not covered by the policy
A discount offered by the insurer
A guarantee of coverage for certain events
#18
Which of the following is NOT typically covered by a standard homeowners insurance policy?
Damage from a burst pipe
Damage from earthquakes
Theft of personal belongings
Liability coverage for injuries on the insured property
#19
What is 'loss ratio' in insurance?
The ratio of premiums collected to claims paid out
The amount of premium paid in the event of a loss
The total number of insured losses in a given period
The ratio of insured losses to total population
#20
What is 'renewal premium' in insurance?
The initial premium paid for a new insurance policy
The premium paid to extend the duration of an existing policy
The premium paid by the insurer to the insured
The premium paid for an insurance policy after a claim is filed