Insurance Questions and Answers updated daily – General Knowledge

Insurance Questions: Solved 237 Insurance Questions and answers section with explanation for various online exam preparation, various interviews, General Knowledge Category online test. Category Questions section with detailed description, explanation will help you to master the topic.

Insurance Questions

221. Peril specifically mentioned as covered in an insurance policy is called __________




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Correct Ans:Named Peril
Explanation:
A named peril insurance policy covers only what is specifically noted in the policy. It is usually less expensive than an all-risk or open peril insurance policy. A typical broad form named peril policy would cover fire, wind-storm, hail, aircraft, riot, vandalism, explosion and smoke.
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222. Which refers damaged property an insurer takes over to reduce its loss after paying a claim?




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Correct Ans:Salvage
Explanation:
Salvage refers Damaged property an insurer takes over to reduce its loss after paying a claim. Insurers receive salvage rights over property on which they have paid claims, such as badly-damaged cars.
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223. An insurance cover that is linked with credit activities and aims to protect the credit is called ______




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Correct Ans:credit life
Explanation:
Insurance that covers such a loan is known as credit life/credit disability.
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224. Insurance companies that band together as self-insurers and form an organization that is chartered and licensed as an insurer in at least one state to handle liability insurance is called_____




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Correct Ans:Retrospective Rating
Explanation:
A risk retention group (RRG) is an alternative risk transfer entity created by the federal Liability Risk Retention Act (LRRA). RRGs must form as liability insurance companies under the laws of at least one state.
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225. A method of permitting the final premium for a risk to be adjusted, subject to an agreed-upon maximum and minimum limit based on actual loss experience is called _________




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Correct Ans:Retrospective Rating
Explanation:
A type of plan sometimes used when the insured is a large entity. Under this type of plan, the final premium of a policy is not calculated until close to the end of the coverage period.
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226. The amount of risk retained by an insurance company that is not reinsured is termed as ______




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Correct Ans:  Retention
Explanation:
Assumption of risk of loss by means of non-insurance, self-insurance, or deductibles. Retention can be intentional or, when exposures are not identified, unintentional.
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227. The reinsurance bought by re-insurers to protect their financial stability is termed as ______




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Correct Ans:Retrocession
Explanation:
A transaction in which a reinsurer transfers risks it has reinsured to another reinsurer.
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228. A policy that is made mandatory for the customer to buy is called _______




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Correct Ans:Compulsory Cover
Explanation:
Any type of insurance an individual or business is legally required to buy. Compulsory insurance is mandatory for individuals and businesses that want to engage in certain financially risky activities, such as operating an auto-mobile or operating a business with employees.
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229. A form of annuity that ends payments when the annuitant dies is termed as ______




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Correct Ans:Pure Life Annuity
Explanation:
Annuity that pays periodic income over the life of an annuitant, and stops only with his or her death. Payments may be fixed or variable.
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230. National Insurance Academy located in ________




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Correct Ans:Pune
Explanation:
The National Insurance Academy (NIA) is situated in Pune, India. Founded in 1980 by the Finance Department of the Indian government with capital patronage from LIC and public sector general insurance industry.
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231. Which of the following is the first life insurance company in India?




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Correct Ans:Oriental Insurance
Explanation:
Oriental Life Insurance Company started by Europeans in Kolkata was the first life insurance company on Indian Soil.
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232. Which of the following insurance compensates for the cost of repairing or replacing defective products past the normal warranty period provided by manufacturers ?




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Correct Ans:Variable Life Insurance
Explanation:
A form of permanent life insurance, Variable life insurance provides permanent protection to the beneficiary upon the death of the policy holder.
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233. _______ is a policy contract that for some reason specified in the policy becomes free of all legal effect.




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Correct Ans:Void
Explanation:
A policy or other contract that has no legal validity is described as void. When an insurance company voids a life insurance policy, it is usually due to the discovery of misrepresentation of material facts by the person insured. It is as though the voided policy was never in effect since all premiums paid are usually returned to the policy owner.
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234. A policy that combines protection against premature death with a savings account that can be invested in stocks, bonds, and money market mutual funds at the policyholder's discretion is called _______




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Correct Ans:Variable Life Insurance
Explanation:
A form of permanent life insurance, Variable life insurance provides permanent protection to the beneficiary upon the death of the policy holder.
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235. Portion of an auto insurance policy that protects a policyholder from uninsured and hit-and-run drivers is known as _______




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Correct Ans:Uninsured Motorist Coverage
Explanation:
Uninsured motorist coverage is designed to provide the injured party with compensation above what is allotted by the at-fault party?s policy.
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236. Risks for which it is difficult for someone to get insurance is called ______




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Correct Ans: Uninsurable Risk
Explanation:
A situation that you cannot protect yourself against by buying insurance because it is impossible to calculate how likely it is to happen, or how much damage it will cause.
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237. A form of annuity contract that gives purchasers the freedom to choose among certain optional features in their contract is known as ______




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Correct Ans:Unbundled Contracts
Explanation:
By using unbundled contracts, we can choose optional features in the contract.
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