#1
What does the term 'premium' refer to in insurance?
The amount paid by the insured to the insurer for coverage
ExplanationPayment for insurance coverage
#2
What is 'policyholder' in insurance?
The person or entity that owns the insurance policy
ExplanationOwner of the insurance policy
#3
What is 'risk pooling' in insurance?
The process of spreading risk among multiple policyholders
ExplanationSpreading risk among policyholders
#4
What is 'renewal' in insurance?
The process of extending an existing insurance policy for another term
ExplanationExtending existing policy
#5
Which of the following best describes 'underwriting' in insurance?
Assessing risk and determining premiums
ExplanationRisk assessment and premium calculation
#6
What is 'coinsurance' in insurance policies?
A policy provision that requires the insured to share a percentage of covered losses
ExplanationShared responsibility for losses
#7
In insurance, what does 'deductible' refer to?
The amount the insured must pay out of pocket before the insurance coverage kicks in
ExplanationInitial out-of-pocket expense before coverage
#8
Which of the following best defines 'risk management' in insurance?
The practice of identifying and reducing potential risks
ExplanationIdentifying and mitigating risks
#9
What does 'endorsement' mean in insurance?
An amendment or addition to an insurance policy
ExplanationPolicy modification or addition
#10
What is 'reinsurance' in the insurance industry?
Insurance purchased by an insurance company to mitigate its own risks
ExplanationInsurance for insurers
#11
What is 'actuarial science' in the context of insurance?
The study of risk and uncertainty in insurance and finance
ExplanationStudy of risk and finance
#12
What is the purpose of 'subrogation' in insurance?
To transfer the rights of the insured to the insurer after a claim is paid
ExplanationTransferring claim rights to insurer
#13
What is 'loss ratio' in insurance?
The percentage of premiums earned that are paid out as claims
ExplanationPercentage of premiums paid as claims
#14
What is the 'combined ratio' in insurance financial analysis?
The sum of the loss ratio and the expense ratio
ExplanationSum of loss and expense ratios
#15
What does 'loss adjuster' do in the insurance industry?
Assesses and investigates insurance claims
ExplanationEvaluates and investigates claims
#16
What is 'umbrella insurance'?
A type of insurance that covers losses not covered by other policies
ExplanationCoverage for additional losses