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AINS 21 - Segment A | 137 Questions with 100 % correct answers Verified& Updated 2024 Grade A
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AINS 21 - Segment A | 137 Questions with 100 % correct answers Verified& Updated 2024 Grade A
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AINS 21 - Segment A | 137 Questions with 100 %correct answers Verified& Updated 2024 Grade A
From a risk management viewpoint, insurance is used to A. Prevent the cost of losses
B. Reduce the cost of losses
C. Transfer the cost of losses
D. Isolate the cost of losses. - ✔✔C. Transfer the cost of losses.
A loss exposure is:
A. Any condition that presents the possibility of a loss.
B. Any condition that precludes the chance of loss.
C. The same thing as a peril.
D. The same thing as a hazard. - ✔✔A. Any condition that present the possibility of a loss.
Some loss exposures are not easy to retain, avoid, or control. What risk management technique is
frequently used to treat such exposures?
A. Reinsurance
B. Prevention
C. Transfer
D. Reunderwriting - ✔✔C. Transfer
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, Insurance is not the only risk management transfer technique. When circumstances
are appropriate, transfer can be accomplished through
A. Retention
B. Noninsurance transfer techniques
C. Avoidance
D. Loss prevention - ✔✔B. Noninsurance transfer techniques
Another name for liability insurance is
A. First-party insurance
B. Second-party insurance
C. Third-party insurance
D. Multiple-party insurance - ✔✔C. Third party insurance
Sally is a recent college graduate who lives in the suburbs and drives to work daily in the city.
She recognizes that owning a car creates both property damage and liability exposures for her
and at the same time she has the burden of student loans. For someone in Sally's circumstances
the most practical risk management technique for dealing with her auto-related loss exposures is
A. Risk transfer
B. Retention
C. Loss control
D. Avoidance - ✔✔A. Risk transfer
Retention is often used in combination with insurance as a way of treating loss exposures. One of
the major downsides of individuals using retention alone is
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, A. The record keeping associated with the retained losses.
B. Availability of insurer loss settlement services.
C. The potential for financial ruin.
D. The unavailability of insurer loss control services. - ✔✔C. The potential for financial ruin.
Life insurance that provides coverage for a specified period with no cash value is called
A. Universal life
B. Long-term care insurance
C. Term life insurance
D. Whole life - ✔✔C. Term life insurance
A small business owner concerned about something happening and not being able to work
or earn a living for an extended period of time due to an accident should purchase
A. Disability insurance
B. Personal liability of insurance
C. Universal life insurance
D. Medical insurance - ✔✔A. Disability insurance
A policy that combines property, crime and liability coverage into one policy is referred to as:
A. Commercial umbrella policy
B. Commercial package policy
C. Workers compensation policy
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, D. Employee dishonesty policy - ✔✔B. Commercial package policy
Coverage for money, securities, and other property from various causes of loss such as burglary,
robbery, theft, and employee dishonesty typically is provided by
A. Professional liability insurance.
B. Inland marine insurance.
C. Commercial crime insurance.
D. Ocean marine insurance. - ✔✔C. Commercial crime insurance.
Term life insurance
A. Allows the policyholder to borrow against policy savings.
B. Provides protection for a specified period with no cash value.
C. Accrues a cash value.
D. Provides lifetime protection - ✔✔B. Provides protection for a specified period with no
cash value.
The process of restoring an individual or organization to a pre-loss financial condition is the
process of
A. Subrogation.
B. Indemnification.
C. Loss mitigation.
D. Premium rebating. - ✔✔B. Indemnification.
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