Insurance Awareness Questions – Set 18

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. A single Insurance company offers both life and non-life policies is known as _________
   A. Service Provider
   B. Composite Insurer
   C. Mutual Insurance Company
   D. None of the Above
   
   Answer & Explanation

   B. Composite Insurer
   Explanation:
   Composite Insurer refers to an insurance company which sells both casualty insurance and life insurance against damage to household contents, automobiles, and travel plans.
   
   
2. Peril specifically mentioned as covered in an insurance policy is called __________
   A. Service Provider
   B. Named Peril
   C. Un-named Peril
   D. None of the Above
   
   Answer & Explanation

   B. Named Peril
   Explanation:
   A named peril insurance policy covers only what is specifically noted in the policy. It is usually less expensive than an all-risk or open peril insurance policy. A typical broad form named peril policy would cover fire, wind-storm, hail, aircraft, riot, vandalism, explosion and smoke.
   
   
3. Auto insurance coverage that pays for each driver’s own injuries, regardless of who caused the accident is called __________
   A. No Fault
   B. No Pay
   C. Default
   D. None of the Above
   
   Answer & Explanation

   A. No Fault
   Explanation:
   A system of auto-mobile insurance where a party who is injured in an auto-mobile accident recovers damages up to a specific amount against his own insurance company regardless of who was responsible for the accident.
   
   
4. ________covers operators of nuclear reactors and other facilities for liability and property damage in the case of a nuclear accident and involves both private insurers and the federal government.
   A. Internet Liability Insurance
   B. Kidnap/Ransom Insurance
   C. Inland Marine Insurance
   D. Nuclear Insurance
   
   Answer & Explanation

   D. Nuclear Insurance
   Explanation:
   An insurance policy providing coverage to an individual or, more frequently, a company in the event of a lawsuit resulting from personal or property damage due to nuclear energy.
   
   
5. Insurance Policy which is provided as an additional layer of security to those who are at risk for being sued for damages to other people’s property or injuries caused to others in an accident is known as ______
   A. Internet Liability Insurance
   B. Kidnap/Ransom Insurance
   C. Inland Marine Insurance
   D. Umbrella Insurance
   
   Answer & Explanation

   D. Umbrella Insurance
   Explanation:
   Umbrella insurance is extra liability insurance. It is designed to help protect you from major claims and lawsuits and as a result it helps protect your assets and your future
   
   
6. A form of long-term care policy that covers a policyholder’s stay in a nursing facility is called _______
   A. Nursing Home Insurance
   B. Kidnap/Ransom Insurance
   C. Inland Marine Insurance
   D. Nuclear Insurance
   
   Answer & Explanation

   A. Nursing Home Insurance
   Explanation:
   The Long Term Care Benefit Plan will convert any form of life insurance to pay directly for the costs of long term care in a nursing home, assisted living and home healthcare.
   
   
7. Insurance that pays claims arising out of incidents that occur during the policy term, even if they are filed many years later is known as _____
   A. Nursing Home Insurance
   B. Kidnap/Ransom Insurance
   C. Inland Marine Insurance
   D. Occurrence Policy
   
   Answer & Explanation

   D. Occurrence Policy
   Explanation:
   An Occurrence policy protects you from any covered incident that “occurs” during the policy period, regardless of when a claim is filed. An occurrence policy will respond to claims that come in – even after the policy has been canceled – so long as the incident occurred during the period in which coverage was in force.
   
   
8. _______ is a life insurance policy that remains in force for the policyholder’s lifetime.
   A. Nursing Home Insurance
   B. Ordinary Life Insurance
   C. Inland Marine Insurance
   D. Occurrence Policy
   
   Answer & Explanation

   B. Ordinary Life Insurance
   Explanation:
   “ordinary life,” is a life insurance policy which is guaranteed to remain in force for the insured’s entire lifetime, provided required premiums are paid, or to the maturity date.
   
   
9. Risks that affect simultaneously a great number of policyholders is called ______
   A. Partial Risk
   B. Static Risk
   C. Covariant Risk
   D. Pure Risk
   
   Answer & Explanation

   C. Covariant Risk
   Explanation:
   A risk that affects all households in a locality and arises out of factors that prevail on all the households equally such as rainfall and market price conditions.
   
   
10. ________ is the total benefit an insured person will receive at the time of claim.
    A. Total Insured Benefit
    B. Fire Insurance
    C. Escrow Account
    D. Earned Premium
    
    Answer & Explanation

    A. Total Insured Benefit
    Explanation:
    Total Insured Benefit is the total benefit an insured person will receive at the time of claim.
    
    

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