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Insurance Awareness Questions – Set 6

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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. An individual receiving benefits under an annuity is called ________
    A. Insured or Policyholder
    B. Nominee or Beneficiary
    C. Insurer
    D. Annuitant
    D. Annuitant
    Explanation:
    An annuitant is a person who receives the benefits of an annuity or pension.

  2. To use life insurance policy benefits as collateral for a loan is called ______
    A. Surrender Value
    B. Paid-up value
    C. Collateral Assignment
    D. Maturity Claim
    C. Collateral Assignment
    Explanation:
    A collateral assignment of life insurance is a conditional assignment appointing a lender as the primary beneficiary of a death benefit to use as collateral for a loan.

  3. Insurance coverage for more than one item of property at a single location, or two or more items of property in different locations is known as _________
    A. Blanket Coverage
    B. Blanket Value
    C. Blanket Assign
    D. Blanket Bond
    A. Blanket Coverage
    Explanation:
    Blanket coverage refers to a category of business insurance policies covering multiple properties that are similar in nature but not at the same location.

  4. ________ is a fidelity bond that covers all employees of a given class and may also cover perils other than infidelity.
    A. Blanket Coverage
    B. Blanket Value
    C. Blanket Assign
    D. Blanket Bond
    D. Blanket Bond
    Explanation:
    Blanket bond refers to insurance coverage carried by banks and brokerage houses that protects against any losses incurred by unlawful or dishonest activity on the part of employees. It is also called a blanket fidelity bond or a fidelity bond.

  5. __________ in insurance, is the splitting or spreading of risk among multiple parties.
    A. Reinsurance
    B. Coinsurance
    C. Blanket Assign
    D. Blanket Bond
    B. Coinsurance
    Explanation:
    splitting or spreading of risk among multiple parties.

  6. _______ is the age at which the receipt of pension starts in an insurance-cum-pension plan.
    A. Surrender age
    B. Starting age
    C. Vesting age
    D. Maturity age
    C. Vesting age
    Explanation:
    The age at which you start receiving pension in an insurance-cum-pension plan is known as vesting age.

  7. The ratio of losses incurred to premiums earned actually experienced in a given line of insurance activity in a previous time period is called ______
    A. Actual Loss Ratio
    B. Acts Of God
    C. Actuarial Cost Assumptions
    D. Combined Ratio
    A. Actual Loss Ratio
    Explanation:
    Loss Ratio in insurance is the ratio of total amount paid out in claims plus adjustment expenses divided by the total earned premiums.

  8. Percentage of each premium rupee a property/casualty insurer spends on claims and expenses is called _______
    A. Actual Loss Ratio
    B. Acts of God
    C. Actuarial Cost Assumptions
    D. Combined Ratio
    D. Combined Ratio
    Explanation:
    The combined ratio is defined as the sum of incurred losses and operating expenses measured as a percentage of earned premium.

  9. Perils that cannot reasonably be guarded against, such as floods and earthquakes is known as ________
    A. Actual Loss Ratio
    B. Acts of God
    C. Actuarial Cost Assumptions
    D. Combined Ratio
    B. Acts of God
    Explanation:
    An act of God is a legal term for events outside human control, such as sudden natural disasters, for which no one can be held responsible.

  10. _________are assumptions about rates of investment earnings, mortality, turnover and distribution or actual ages at which employees are likely to retire.
    A. Actual Loss Ratio
    B. Acts of God
    C. Actuarial Cost Assumptions
    D. Combined Ratio
    C. Actuarial Cost Assumptions
    Explanation:
    A method used by actuaries to calculate the amount a company must pay periodically to cover its pension expenses.

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