WebCE Quizzes: General Insurance &
Life Insurance/438 Questions With
Verified Answers (A+) 2023 Update
Quiz :Buying life or health insurance is an example of which risk management
technique?
risk avoidance
risk reduction
risk retention
risk transfer - √Answer :risk transfer
Quiz :What is the mathematical concept of probability that helps insurers
estimate the statistical likelihood of mortality or morbidity losses at any given
age?
law of large numbers
underwriting principle
law of probability
actuarial principle - √Answer :law of large numbers
Quiz :A person who refuses to engage is risky activities like rock climbing for
fear of injury or death is demonstrating which risk management technique?
Quiz :Which of the following is an insurable risk?
the possibility of losing money in stock investments
the possibility of losing money gambling in Las Vegas
the possibility of becoming disabled and unable to earn an income
the possibility of one's home value decreasing due to a drop in market prices -
√Answer :the possibility of becoming disabled and unable to earn an income
Quiz :All the following statements regarding reinsurance are correct EXCEPT:
,Reinsurance is a risk-sharing process used by insurance companies.
Claims are paid to the policyowner separately by each insurer participating in
the reinsurance agreement.
The insurer accepting some of the risk being transferred from another insurer
is known as the reinsuring company.
The insurer seeking to transfer some of its risk to another insurer is known as
the ceding company. - √Answer :Claims are paid to the policyowner separately
by each insurer participating in the reinsurance agreement.
Quiz :All of the following are characteristics of a stock insurance company
EXCEPT:
They are governed by a board of directors.
They may issue dividends.
They have minimum financial capital requirements that must be met before
they can conduct business.
They are owned by policyowners. - √Answer :They are owned by policyowners.
Quiz :All of the following statements regarding the career agency distribution
system are correct EXCEPT:
The managerial form of career agency system uses company employees as the
agency managers.
There are two types, the general agency system and the managerial system.
It uses agents who primarily if not exclusively represent one insurer.
Personal producing general agents (PPGAs) are commonly hired to manage
career agencies. - √Answer :Personal producing general agents (PPGAs) are
commonly hired to manage career agencies.
Quiz :The federal Risk Retention Act of 1986 contains guidelines for which of
the following entities?
reinsurance companies
surplus lines insurance companies
Fraternal insurance companies
risk retention groups - √Answer :risk retention groups
Quiz :Which of the following best describes an agent's responsibilities?
An agent has no fiduciary duty toward insurers, applicants, or insureds.
,An agent has to act in the best interests of insureds, applicants, and insurers.
An agent only has to act in the best interests of the insured or applicant, but
not the insurer.
An agent only has to act in the best interests of the insurer he or she
represents. - √Answer :An agent has to act in the best interests of insureds,
applicants, and insurers.
Quiz :An insurance producer tells a life insurance applicant that he has the
authority to waive the medical exam that is normally required by the insurer
with every application. The insurer may be required to accept the application
without a medical exam due to the producer's:
Quiz :All of the following are part of a producer's responsibilities to an
applicant EXCEPT:
avoiding replacing an insurance policy unless doing so will clearly benefit the
applicant
research other insurance companies' insurance products if requested by the
applicant
disclose all important information about a proposed policy
recommend insurance products that are suitable for the customer's needs -
√Answer :research other insurance companies' insurance products if requested
by the applicant
Quiz :The purpose for the Policy Summary, which must be given to every
insurance applicant before an application is signed, is to:
explain the step-by-step process involved in purchasing the recommended
product
explain the general features, benefits, and conditions of the type of insurance
being considered
disclose all the hidden costs associated with the policy being applied for
provide buyers with details of the specific insurance contract they are
considering for purchase - √Answer :provide buyers with details of the specific
insurance contract they are considering for purchase
, Quiz :If an applicant for an insurance policy submits an application without the
first premium, which of the following is correct?
The insurer may not make a counteroffer to the applicant.
The applicant has invited the insurer to make an offer.
The insurer has made an offer to the applicant.
The applicant has made an offer to the insurer. - √Answer :The applicant has
invited the insurer to make an offer.
Quiz :How long from when an insurance contract is issued does an insurance
company have to void a life insurance policy on the basis of fraud?
Quiz :An applicant for a $500,000 whole life insurance policy pays the initial
premium along with his application. In this case, what has the applicant done?
accepted an offer from the insurer
accepted a counteroffer from the insurer
made a counteroffer to the insurer
made an offer to the insurer - √Answer :made an offer to the insurer
Quiz :All the following statements regarding perils and hazards are correct
EXCEPT:
A hazard is a condition that raises the chance of a peril occurring.
Smoking cigarettes is an example of a peril.
A peril is the immediate cause of a loss and is the event that insurance protects
against.
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