Insurance Awareness Questions – Set 14

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 period during which the owner of a deferred annuity makes payments to build up assets is called _______
   A. Affinity sales
   B. Annuity Accumulation Phase
   C. Annuitization
   D. Proximate Clause
   
   Answer & Explanation

   B. Annuity Accumulation Phase
   Explanation:
   A period of time when an annuity investor is in the early stages of building up the cash value of the annuity. This is followed by the annuitization phase where payments are paid out to the annuitant.
   
   
2. A survey to determine a property’s insurable value, or the amount of a loss is termed as ______
   A. Affinity sales
   B. Pure Risk
   C. Annuitization
   D. Appraisal
   
   Answer & Explanation

   D. Appraisal
   Explanation:
   The act of estimating or judging the nature or value of something or someone.
   
   
3. In Insurance, CGL stands for__________
   A. Commercial General Liability
   B. Common General Liability
   C. Captive General Liability
   D. Control General Liability
   
   Answer & Explanation

   A. Commercial General Liability
   Explanation:
   A type of insurance policy that provides coverage to a business for bodily injury, personal injury, and property damage caused by the business’ operations, products, or injury that occurs on the business’ premises.
   
   
4. A person who holds something in trust for another is known as_________
   A. Affinity sales
   B. Pure Risk
   C. Annuitization
   D. Fiduciary
   
   Answer & Explanation

   D. Fiduciary
   Explanation:
   A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties.
   
   
5. A person who represents only one insurance company and is restricted by agreement from submitting business to any other company is termed as _______
   A. Seller
   B. Captive Agent
   C. Service Provider
   D. Aggregate
   
   Answer & Explanation

   B. Captive Agent
   Explanation:
   An insurance agent who only works for one insurance company. A captive agent is paid by that one company either with a combination of salary and commissions or with just commissions.
   
   
6. Which term referring to property coverages for the perils of burglary, theft and robbery?
   A. Personal Insurance
   B. Commercial Insurance
   C. Industrial Insurance
   D. Crime Insurance
   
   Answer & Explanation

   D. Crime Insurance
   Explanation:
   Crime insurance is insurance to manage the loss exposures resulting from criminal acts such as robbery, burglary and other forms of theft. It is also called fidelity insurance.
   
   
7. IDC stands for ______
   A. Insured Declared Value
   B. Insurer Declared Value
   C. Insurance Declared Value
   D. Interest Declared Value
   
   Answer & Explanation

   A. Insured Declared Value
   Explanation:
   Insured Declared Value is the maximum Sum Assured fixed by the insurer which is provided on theft or total loss of vehicle.
   
   
8. What is the Full form of GIVE?
   A. Gross Insured Value Element
   B. Gross Insurer Value Element
   C. Gross Insurance Value Element
   D. Gross Interest Value Element
   
   Answer & Explanation

   C. Gross Insurance Value Element
   Explanation:
   A lump sum amount known as the Gross Insurance Value Element (GIVE) is payable to the nominee/ heirs of the pensioner.
   
   
9. If the insurance policy is taken from more the one underwriter where period of insurance, subject matter of insurance and sum insured are same is termed as ________
   A. Double Insurance
   B. Commercial Insurance
   C. Industrial Insurance
   D. Liability Insurance
   
   Answer & Explanation

   A. Double Insurance
   Explanation:
   Double insurance is a situation in which a person, dependent, or property is insured by two or more companies.
   
   
10. The conversion of insurance companies from mutual companies owned by their policyholders into publicly traded stock companies is termed as _____
    A. Affinity sales
    B. Demutualization
    C. Annuitization
    D. Fiduciary
    
    Answer & Explanation

    B. Demutualization
    Explanation:
    Demutualization is the process through which a member-owned company becomes shareholder-owned; frequently this is a step toward the initial public offering (IPO) of a company.
    
    

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