#1
Which of the following is a common type of insurance sales agent?
Insurance Broker
ExplanationInsurance brokers act as intermediaries, representing multiple insurance companies to help clients find the best coverage.
#2
Which of the following is NOT a common type of life insurance?
Accidental death insurance
ExplanationAccidental death insurance is a separate policy, distinct from common life insurance types like term or whole life.
#3
Which of the following is a factor considered by insurance companies when determining premiums for auto insurance?
The insured's age
ExplanationThe age of the insured is a key factor influencing auto insurance premiums, with younger and older drivers often facing higher rates.
#4
Which of the following is NOT a common type of health insurance plan?
Individual Retirement Account (IRA)
ExplanationAn Individual Retirement Account (IRA) is a retirement savings account and not a type of health insurance plan.
#5
Which of the following is a characteristic of 'term life insurance'?
It provides coverage for a specific period of time
ExplanationTerm life insurance offers coverage for a predetermined period, providing a death benefit if the insured passes away within that term.
#6
What is the primary role of an insurance underwriter?
Assessing risks and determining coverage
ExplanationInsurance underwriters evaluate risks associated with insurance applications and decide on coverage terms and premiums.
#7
Which government agency regulates insurance sales practices in the United States?
Insurance Regulatory Authority
ExplanationThe regulatory authority oversees and enforces insurance industry regulations, ensuring fair practices and consumer protection.
#8
What is a 'captive agent' in the insurance industry?
An agent who works exclusively for one insurance company
ExplanationCaptive agents are employed by a single insurance company, selling only that company's policies.
#9
What is the purpose of a 'free look period' in insurance?
To allow policyholders to cancel their policy within a certain timeframe and receive a full refund
ExplanationThe free look period grants policyholders the option to review and cancel a newly purchased insurance policy without financial penalty.
#10
In insurance terminology, what does 'indemnity' refer to?
The principle of restoring the insured to the same financial position as before the loss occurred
ExplanationIndemnity in insurance means compensating the insured to restore their financial position to what it was before the covered loss.
#11
Which of the following is NOT typically covered by a standard homeowner's insurance policy?
Flood damage
ExplanationStandard homeowner's insurance often excludes flood coverage, requiring a separate policy for protection against flood-related damages.
#12
What is the main function of a surplus lines insurance broker?
To place insurance coverage with non-admitted insurers for unique or hard-to-place risks
ExplanationSurplus lines brokers arrange coverage with non-admitted insurers for risks that standard insurers won't cover.
#13
Which of the following is a characteristic of a 'reinsurance' agreement?
It reduces the risk exposure of the original insured party
ExplanationReinsurance transfers part of the risk from the primary insurer to a reinsurer, reducing the overall risk exposure for the original insured party.
#14
Which of the following is NOT typically covered by a standard commercial property insurance policy?
Theft of company vehicles
ExplanationTheft of company vehicles is often excluded from standard commercial property insurance policies, requiring a separate policy for such coverage.