Insurance Awareness Questions – Set 11

Dear Aspirants,
Welcome to Insurance Awareness Questions in AffairsCloud.com. Here we are covering some important Insurance Awareness Questions & Answers with Explanations. Do study this questions thoroughly as it may prove to be helpful in upcoming exams and also in interviews.

1. The portion of an insurance premium that reflects the basic costs of loss, not including over-head or profit is called ______
   A. Mixed Premium
   B. Pure Premium
   C. Impure Premium
   D. None of the Above
   
   Answer & Explanation

   B. Pure Premium
   Explanation:
   Part of the premium which is sufficient to pay losses and loss adjustment expenses only, but not other expenses.
   
   
2. A type of insurance often used for high frequency low severity risks where risk is not transferred to an insurance company but retained and accounted for internally is known as ______
   A. Hospital Insurance
   B. Hull Insurance
   C. Group Insurance
   D. Self Insurance
   
   Answer & Explanation

   D. Self Insurance
   Explanation:
   insurance of oneself or one’s interests by maintaining a fund to cover possible losses rather than by purchasing an insurance policy.
   
   
3. Which Insurance is a compulsory insurance plan administered by a government agency with the primary emphasis on social adequacy?
   A. Hospital Insurance
   B. Hull Insurance
   C. Group Insurance
   D. Social Insurance
   
   Answer & Explanation

   D. Social Insurance
   Explanation:
   Form of compensation provided and controlled by a government for elderly, disable, or unemployed people.
   
   
4. Which is a liability coverage for contents within a renter’s residence?
   A. Renters Insurance
   B. Hull Insurance
   C. Group Insurance
   D. Social Insurance
   
   Answer & Explanation

   A. Renters Insurance
   Explanation:
   Renters’ insurance is an insurance policy which provides most of the benefits of homeowners’ insurance.
   
   
5. Insurance that is renewable for a limited number of successive terms by the policyholder and is not contingent upon medical examination is called ______
   A. Hospital Insurance
   B. Renewable Term Insurance
   C. Group Insurance
   D. Social Insurance
   
   Answer & Explanation

   B. Renewable Term Insurance
   Explanation:
   Renewable Term is a clause in a term insurance contract that allows the beneficiary to extend the coverage term for a set period of time without having to re qualify for coverage.
   
   
6. A form of life insurance coverage payable to a third party lender/mortgagee upon the death of the insured/mortgagor for loss of loan payments is termed as ______
   A. Hospital Insurance
   B. Renewable Term Insurance
   C. Mortgage Insurance
   D. Multi-Peril Insurance
   
   Answer & Explanation

   C. Mortgage Insurance
   Explanation:
   Mortgage Insurance also known as mortgage guarantee and home-loan insurance is an insurance policy which compensates lenders or investors for losses due to the default of a mortgage loan.
   
   
   
7. Personal and business property coverage combining several types of property insurance in one policy is called ______
   A. Hospital Insurance
   B. Renewable Term Insurance
   C. Mortgage Insurance
   D. Multi-Peril Insurance
   
   Answer & Explanation

   D. Multi-Peril Insurance
   Explanation:
   Multiple-peril insurance coverage is a kind of insurance that bundles together multiple coverages that typically would be needed with each other.
   
   
8. A policy purchased by, for the benefit of, a business insuring the life or lives of personnel integral to the business operations is called ______
   A. Hospital Insurance
   B. Renewable Term Insurance
   C. Key-Person Insurance
   D. Multi-Peril Insurance
   
   Answer & Explanation

   Key-Person Insurance
   Explanation:
   Key person insurance is simply life insurance on the key person in a business. In a small business, this is usually the owner, the founders or perhaps a key employee or two.
   
   
9. A generic term applying to all types of insurance indemnifying or reimbursing for losses caused by bodily injury or illness including related medical expenses is called _______
   A. Health Insurance
   B. Renewable Term Insurance
   C. Key-Person Insurance
   D. Multi-Peril Insurance
   
   Answer & Explanation

   A. Health Insurance
   Explanation:
   Health insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by the insured.
   
   
10. Which of the following insurance is a coverage for damage to a vessel or aircraft and affixed items?
    A. Renters Insurance
    B. Hull Insurance
    C. Group Insurance
    D. Social Insurance
    
    Answer & Explanation

    B. Hull Insurance
    Explanation:
    Generally Hull Insurance refers to an insurance policy that provides coverage for the physical integrity of a ship.
    
    

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