Principles and Structures of Insurance Quiz
Test your understanding of insurance principles and terminology with this quiz. Explore topics such as indemnity, underwriting, and policy types.
#1
What is the primary purpose of insurance?
To generate profit for insurance companies
To protect against financial losses
To provide investment opportunities
To promote government regulation
#2
Which type of insurance typically covers damage to physical property, such as homes or cars?
Life insurance
Health insurance
Property insurance
Liability insurance
#3
Which type of insurance provides coverage for legal liability arising from injuries or damage to other people or property?
Health insurance
Life insurance
Property insurance
Liability insurance
#4
Which of the following is a characteristic of term life insurance?
Builds cash value over time
Covers the insured for their entire life
Provides coverage for a specified period of time
Offers flexible premium payments
#5
What does 'exclusion' mean in insurance terms?
A provision that limits coverage for certain risks
A provision that guarantees coverage for all risks
A provision that extends coverage to additional risks
A provision that cancels the policy
#6
Which of the following is NOT a basic principle of insurance?
Utmost Good Faith
Indemnity
Subrogation
Speculation
#7
What does the 'principle of indemnity' in insurance refer to?
Insurers must disclose all relevant information truthfully
Insured parties should be compensated fairly for their losses
Insurers have the right to take legal action against third parties
Insurers have the right to recover payments from insured parties
#8
What is a 'rider' in insurance terminology?
A person who assesses risk for insurance companies
An additional provision added to an insurance policy
An actuary responsible for pricing insurance policies
A type of insurance agent
#9
What is the main purpose of underwriting in insurance?
To calculate premiums
To assess and manage risk
To process claims
To advertise insurance products
#10
What does 'underinsured' mean in insurance terms?
Having too much insurance coverage
Not having enough insurance coverage
Being uninsured
Being overcharged for insurance
#11
Which type of insurance policy provides coverage for a specified period and pays a death benefit if the insured dies during that period?
Term life insurance
Whole life insurance
Universal life insurance
Variable life insurance
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