#1
What is the primary purpose of insurance?
To transfer risk from individuals to the insurer
ExplanationRisk transfer mechanism
#2
Which of the following is NOT a type of insurance?
Investment insurance
ExplanationNot a conventional insurance type
#3
What is the purpose of an insurance claim?
To request compensation for a covered loss
ExplanationLoss compensation request
#4
Which type of insurance covers medical expenses resulting from an accident?
Health insurance
ExplanationMedical expense coverage
#5
Which of the following is a characteristic of term life insurance?
Provides coverage for a specific period of time
ExplanationTime-limited protection
#6
What is the purpose of an insurance binder?
To provide temporary insurance coverage until a policy is issued
ExplanationTemporary coverage provision
#7
What does 'premium' refer to in insurance?
The amount the policyholder pays for insurance coverage
ExplanationInsurance cost
#8
What is the concept of 'indemnity' in insurance?
The process of compensating for a loss by payment
ExplanationCompensation principle
#9
Which principle of insurance states that the insured should not profit from a loss?
Principle of indemnity
ExplanationPreventing unjust enrichment
#10
What is the purpose of the 'deductible' in insurance?
To share the risk between the insured and the insurer
ExplanationRisk sharing mechanism
#11
Which type of insurance provides coverage for damage to one's own vehicle in an accident?
Collision insurance
ExplanationVehicle damage coverage
#12
What is 'underwriting' in insurance?
The process of assessing and pricing risk for insurance policies
ExplanationRisk evaluation for pricing
#13
What is the purpose of reinsurance?
To transfer risk from the insurer to another insurer
ExplanationInsurer risk management
#14
What is 'subrogation' in insurance?
The right of the insurer to recover costs from a third party
ExplanationCost recovery mechanism
#15
What is the primary function of an insurance broker?
To represent the interests of the insured in finding suitable coverage
ExplanationIntermediary for insurance seekers
#16
What does 'actuary' refer to in the insurance industry?
A professional who assesses and manages risk using mathematical and statistical methods
ExplanationRisk assessment professional
#17
What is 'moral hazard' in insurance?
The increase in risk due to insured individuals behaving differently
ExplanationBehavioral risk factor
#18
What is 'policyholder surplus' in insurance?
The difference between an insurance company's assets and liabilities
ExplanationFinancial stability indicator