Insurance Awareness Questions – Set 9

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. In a life insurance contract, the stated sum of money to be paid to the beneficiary upon the insured’s death is termed as _______
   A. Face Amount
   B. Expense Ratio
   C. Extended Coverage
   D. Extra Expense Insurance
   

   Answer & Explanation

   A. Face Amount
   Explanation:
   In life insurance, face amount is the sum paid on the policy’s maturity date, on the death of the insured.
   
   
2. A coverage that protects businesses engaged in electronic commerce from losses caused by hackers is termed as _______
   A. Hospital Insurance
   B. Hull Insurance
   C. Hacker Insurance
   D. Identity theft Insurance
   

   Answer & Explanation

   C. Hacker Insurance
   Explanation:
   A coverage that protects businesses engaged in electronic commerce from losses caused by hackers.
   
   
3. A single policy covering a group of individuals, usually employees of the same company or members of the same association and their dependants is called __________
   A. Hospital Insurance
   B. Hull Insurance
   C. Group Insurance
   D. Identity theft Insurance
   

   Answer & Explanation

   C. Group Insurance
   Explanation:
   A group insurance policy gives you advantages of standardised coverage and very competitive premium rates.
   
   
4. A seller’s market in which insurance is expensive and in short supply is termed as _______
   A. Hard Market
   B. Soft Market
   C. Alternative Market
   D. None of the Above
   

   Answer & Explanation

   C. Alternative Market
   Explanation:
   A term commonly used in risk financing to refer to one of a number of risk funding techniques is known as Alternative Market.
   
   
5. An environment where insurance is plentiful and sold at a lower cost, also known as a Buyers market is called ________
   A. Hard Market
   B. Soft Market
   C. Alternative Market
   D. None of the Above
   

   Answer & Explanation

   B. Soft Market
   Explanation:
   A period of time during which insurance companies assess low premiums and therefore achieve relatively low profits.
   
   
6. Coverage against loss through stealing by individuals not in a position of trust is called ________
   A. Hospital Insurance
   B. Hull Insurance
   C. Group Insurance
   D. Theft Insurance
   

   Answer & Explanation

   D. Theft Insurance
   Explanation:
   Insurance against loss or damage of property resulting from theft is called theft insurance.
   
   
7. Insurance that indemnifies the owner of real estate in the event that his or her clear ownership of property is challenged by the discovery of faults in the title is called _______
   A. Hospital Insurance
   B. Hull Insurance
   C. Group Insurance
   D. Title Insurance
   

   Answer & Explanation

   D. Title Insurance
   Explanation:
   Title insurance protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property.
   
   
8. The result of the policyholder’s failure to buy sufficient insurance is termed as ________
   A. Hospital Insurance
   B. Hull Insurance
   C. Under Insurance
   D. Title Insurance
   

   Answer & Explanation

   C. Under Insurance
   Explanation:
   Under insurance is the state of an individual having some form of health insurance that does not offer complete financial protection.
   
   
9. Term insurance that covers a specific period of time and which cannot be renewed is called ________
   A. Straight Life Annuity
   B. Straight term
   C. Structured Settlement
   D. Subjective Risk
   

   Answer & Explanation

   B. Straight term
   Explanation:
   Straight term insurance is a term insurance that covers a specific period of time and which cannot be renewed.
   
   
10. The legal process by which an insurance company, after paying a loss, seeks to recover the amount of the loss from another party who is legally liable for it is termed as _____
    A. Straight Life Annuity
    B. Subrogation
    C. Structured Settlement
    D. Subjective Risk
    

    Answer & Explanation

    B. Subrogation
    Explanation:
    Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured.
    
    

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