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AINS 21 - Segment A Questions and Answers
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AINS 21 - Segment A Questions and Answers 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. - ANSWER-C. Transfer the cost of losses. A loss exposure is: A. Any condit...

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  • October 29, 2024
  • 57
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • ains 21 segment a questions and answers

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©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED

FIRST PUBLISH OCTOBER 2024




AINS 21 - Segment A Questions and

Answers


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. - ANSWER✔✔-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. - ANSWER✔✔-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?



Page 1/57

, ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED

FIRST PUBLISH OCTOBER 2024




A. Reinsurance


B. Prevention


C. Transfer


D. Reunderwriting - ANSWER✔✔-C. Transfer


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 - ANSWER✔✔-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 - ANSWER✔✔-C. Third party insurance

Page 2/57

, ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED

FIRST PUBLISH OCTOBER 2024




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 - ANSWER✔✔-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


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. - ANSWER✔✔-C. The potential for financial ruin.


Life insurance that provides coverage for a specified period with no cash value is called


A. Universal life

Page 3/57

, ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED

FIRST PUBLISH OCTOBER 2024




B. Long-term care insurance


C. Term life insurance


D. Whole life - ANSWER✔✔-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 - ANSWER✔✔-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


D. Employee dishonesty policy - ANSWER✔✔-B. Commercial package policy




Page 4/57

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