Insurance and Risk Management Practice Exam Quiz

Insurance and Risk Management Practice Exam Quiz

 

1. Which type of insurance provides financial protection in the event of a medical emergency?
   A) Life Insurance
   B) Health Insurance
   C) Disability Insurance
   D) Auto Insurance

Answer: B) Health Insurance

2. What is typically the primary purpose of life insurance?
   A) To provide coverage for car accidents
   B) To pay for funeral expenses
   C) To offer financial security to dependents after the policyholder’s death
   D) To cover medical bills

Answer: C) To offer financial security to dependents after the policyholder’s death

3. Which of the following is true about auto insurance?
   A) It is only required by law for vehicles used for business purposes
   B) It covers damage caused by natural disasters only
   C) It can provide coverage for liability, theft, and collision damage
   D) It covers health-related expenses for the policyholder

Answer: C) It can provide coverage for liability, theft, and collision damage

4. What does a deductible represent in an insurance policy?
   A) The amount the insurer will pay for covered claims
   B) The annual premium amount paid by the insured
   C) The out-of-pocket amount the policyholder must pay before insurance kicks in
   D) The maximum amount an insurer will pay for claims in a year

Answer: C) The out-of-pocket amount the policyholder must pay before insurance kicks in

5. Renters insurance typically covers which of the following?
   A) Damage to the landlord’s property
   B) Personal property loss or damage inside the rented dwelling
   C) Home repairs
   D) Medical bills from injuries in a rented property

Answer: B) Personal property loss or damage inside the rented dwelling

6. Long-term care insurance provides coverage for what type of service?
   A) Emergency medical care
   B) Short-term hospitalization
   C) Nursing home or assisted living care
   D) Auto accident injuries

Answer: C) Nursing home or assisted living care

7. Which of the following is the main function of disability insurance?
   A) To replace income lost due to an illness or injury
   B) To pay for long-term care expenses
   C) To cover burial costs
   D) To protect against job loss due to downsizing

Answer: A) To replace income lost due to an illness or injury

8. Which insurance policy is best suited to protect a homeowner against fire and theft?
   A) Health insurance
   B) Life insurance
   C) Homeowners insurance
   D) Auto insurance

Answer: C) Homeowners insurance

9. Which type of insurance provides financial assistance for funeral expenses after the death of a policyholder?
   A) Life insurance
   B) Health insurance
   C) Disability insurance
   D) Long-term care insurance

Answer: A) Life insurance

10. What does the term “premium” refer to in an insurance policy?
    A) The payout made by the insurance company
    B) The policyholder’s monthly or yearly payment for coverage
    C) The deductible amount
    D) The policyholder’s coverage limits

Answer: B) The policyholder’s monthly or yearly payment for coverage

11. What is the primary reason for having health insurance?
    A) To protect against income loss due to illness
    B) To manage the costs of medical treatment
    C) To provide coverage for automobile accidents
    D) To offer burial assistance

Answer: B) To manage the costs of medical treatment

12. Which of the following types of insurance is designed to provide coverage for loss or damage to a vehicle?
    A) Homeowners insurance
    B) Auto insurance
    C) Life insurance
    D) Disability insurance

Answer: B) Auto insurance

13. What does an insurance policy’s “coverage limit” refer to?
    A) The minimum amount the policyholder must pay in premiums
    B) The maximum amount an insurance company will pay for a claim
    C) The deductible amount
    D) The time period the policyholder is covered

Answer: B) The maximum amount an insurance company will pay for a claim

14. Which of the following is typically covered by health insurance?
    A) Cosmetic surgery
    B) Preventive care and doctor visits
    C) Non-medical expenses
    D) Auto accidents

Answer: B) Preventive care and doctor visits

15. What is the role of life insurance in estate planning?
    A) To protect against health care costs
    B) To provide financial support to beneficiaries after the policyholder’s death
    C) To cover funeral expenses only
    D) To ensure that tax obligations are met

Answer: B) To provide financial support to beneficiaries after the policyholder’s death

16. Which of the following is most likely to be included in a disability insurance policy?
    A) Coverage for medical expenses
    B) Payouts for lost income due to illness or injury
    C) Coverage for auto accidents
    D) Protection against home damage

Answer: B) Payouts for lost income due to illness or injury

17. What is one advantage of purchasing renters insurance?
    A) It covers the landlord’s property
    B) It protects against personal liability and loss of personal belongings
    C) It provides coverage for the building structure
    D) It covers emergency medical bills

Answer: B) It protects against personal liability and loss of personal belongings

18. Health insurance typically does NOT cover which of the following?
    A) Prescription medication
    B) Emergency surgery
    C) Cosmetic procedures
    D) Routine physical exams

Answer: C) Cosmetic procedures

19. What is the purpose of life insurance in the event of a policyholder’s death?
    A) To provide income replacement for dependents and beneficiaries
    B) To cover medical bills only
    C) To pay off debts and funeral expenses only
    D) To pay for long-term care

Answer: A) To provide income replacement for dependents and beneficiaries

20. In which situation is auto insurance legally required?
    A) For all vehicle types
    B) Only for commercial vehicles
    C) For vehicles driven in public areas
    D) For vehicles involved in accidents

Answer: C) For vehicles driven in public areas

21. Which of the following is NOT typically covered by homeowners insurance?
    A) Fire damage
    B) Theft of personal property
    C) Flood damage
    D) Liability for accidents in the home

Answer: C) Flood damage

22. What does “whole life insurance” offer that term life insurance does not?
    A) A death benefit only
    B) Coverage that lasts for the policyholder’s entire life
    C) A lower premium
    D) No medical exam required

Answer: B) Coverage that lasts for the policyholder’s entire life

23. Which of the following describes the concept of “underinsurance”?
    A) When the policyholder fails to pay premiums
    B) When the insurance coverage is not enough to cover the actual loss
    C) When the insurance company cancels a policy
    D) When the deductible is too high

Answer: B) When the insurance coverage is not enough to cover the actual loss

24. Why might someone need long-term care insurance?
    A) To cover the cost of medical prescriptions
    B) To pay for nursing home or home care services
    C) To protect against job loss
    D) To cover funeral expenses

Answer: B) To pay for nursing home or home care services

25. Which type of insurance protects a homeowner from financial loss due to burglary or fire?
    A) Life insurance
    B) Health insurance
    C) Homeowners insurance
    D) Auto insurance

Answer: C) Homeowners insurance

26. A term life insurance policy typically provides coverage for how long?
    A) For the policyholder’s entire life
    B) For a specified period, such as 10, 20, or 30 years
    C) Until the policyholder reaches retirement age
    D) Until the policyholder turns 65

Answer: B) For a specified period, such as 10, 20, or 30 years

27. Which of the following best describes a “copayment” in health insurance?
    A) A type of premium
    B) A fixed amount paid by the insured for a covered service
    C) The total deductible amount for the year
    D) The total amount the insurer will pay for a claim

Answer: B) A fixed amount paid by the insured for a covered service

28. What is the key benefit of disability insurance?
    A) It covers the cost of long-term medical care
    B) It provides financial support in case of job loss
    C) It ensures income replacement if the policyholder becomes unable to work due to illness or injury
    D) It pays for funeral expenses

Answer: C) It ensures income replacement if the policyholder becomes unable to work due to illness or injury

29. Which of the following best describes the function of health insurance?
    A) To cover income loss
    B) To protect against potential medical expenses
    C) To provide car accident protection
    D) To pay for long-term care

Answer: B) To protect against potential medical expenses

30. What is the purpose of “umbrella insurance”?
    A) To provide additional coverage beyond a standard insurance policy
    B) To cover only car accidents
    C) To protect against natural disasters
    D) To cover lost wages

Answer: A) To provide additional coverage beyond a standard insurance policy

 

31. Which of the following is typically included in health insurance coverage?
    A) Cosmetic surgery
    B) Regular checkups
    C) Elective procedures
    D) Travel expenses

Answer: B) Regular checkups

32. Which type of insurance would be most appropriate to protect an individual from financial loss in the event of a car accident?
    A) Homeowners insurance
    B) Auto insurance
    C) Life insurance
    D) Disability insurance

Answer: B) Auto insurance

33. Which of the following would typically be excluded from homeowners insurance?
    A) Damage caused by fire
    B) Theft of personal property
    C) Earthquake damage
    D) Liability for accidents in the home

Answer: C) Earthquake damage

34. What type of insurance would provide coverage if an individual is unable to work due to an illness or injury?
    A) Health insurance
    B) Disability insurance
    C) Life insurance
    D) Long-term care insurance

Answer: B) Disability insurance

35. What does “underwriting” mean in the context of insurance?
    A) The process of designing a policy
    B) The process of setting insurance premiums
    C) The process of evaluating and assessing risk for an insurance policy
    D) The process of paying out claims

Answer: C) The process of evaluating and assessing risk for an insurance policy

36. What is typically a reason for purchasing renters insurance?
    A) To provide protection against medical emergencies
    B) To protect against personal property loss and liability
    C) To reduce auto insurance premiums
    D) To avoid paying taxes on property

Answer: B) To protect against personal property loss and liability

37. What does the term “co-insurance” refer to in a health insurance policy?
    A) The amount the insurance company will pay for a claim
    B) The percentage of the claim cost that the policyholder must pay after the deductible
    C) The amount the policyholder must pay before insurance applies
    D) The premium cost for insurance

Answer: B) The percentage of the claim cost that the policyholder must pay after the deductible

38. Which of the following is an example of a “peril” covered by homeowners insurance?
    A) The homeowner’s mortgage
    B) Loss of income due to job loss
    C) Fire or lightning
    D) Auto accidents

Answer: C) Fire or lightning

39. What does “exclusion” mean in an insurance policy?
    A) The amount the insurer will pay for a claim
    B) Coverage that is not included in the policy
    C) The amount of coverage provided
    D) The period of time the policyholder is covered

Answer: B) Coverage that is not included in the policy

40. What is “replacement cost” in insurance terms?
    A) The amount needed to repair damaged property
    B) The cost of replacing lost or damaged property with new, similar items
    C) The deductible paid by the policyholder
    D) The amount paid for premiums

Answer: B) The cost of replacing lost or damaged property with new, similar items

41. Which of the following types of insurance is designed to cover a person’s funeral expenses?
    A) Health insurance
    B) Life insurance
    C) Auto insurance
    D) Disability insurance

Answer: B) Life insurance

42. What is typically included in an auto insurance policy?
    A) Personal injury protection
    B) Home repairs
    C) Life coverage
    D) Burial expenses

Answer: A) Personal injury protection

43. What type of insurance would provide compensation for damages caused by an individual’s negligence in an accident?
    A) Liability insurance
    B) Life insurance
    C) Health insurance
    D) Property insurance

Answer: A) Liability insurance

44. Which of the following is NOT generally covered by auto insurance?
    A) Theft of the vehicle
    B) Collision damage
    C) Damage caused by an uninsured driver
    D) Health expenses after an accident

Answer: D) Health expenses after an accident

45. What type of insurance would provide financial protection against the risk of being sued for negligence?
    A) Life insurance
    B) Liability insurance
    C) Health insurance
    D) Auto insurance

Answer: B) Liability insurance

46. What is the purpose of a “beneficiary” in a life insurance policy?
    A) To pay the insurance premiums
    B) To receive the death benefit upon the policyholder’s death
    C) To choose the type of coverage
    D) To provide medical coverage for the policyholder

Answer: B) To receive the death benefit upon the policyholder’s death

47. What does “term life insurance” cover?
    A) Coverage for a specified period, such as 10, 20, or 30 years
    B) Lifetime coverage
    C) Coverage for long-term care
    D) Coverage for health-related expenses

Answer: A) Coverage for a specified period, such as 10, 20, or 30 years

48. What does an insurance “policyholder” refer to?
    A) The company that sells insurance
    B) The person or entity purchasing the insurance
    C) The beneficiaries of an insurance policy
    D) The claims adjuster

Answer: B) The person or entity purchasing the insurance

49. What is an “actuary” responsible for in the insurance industry?
    A) Adjusting claims after accidents
    B) Determining the premiums based on statistical data
    C) Selling insurance policies
    D) Writing insurance policies

Answer: B) Determining the premiums based on statistical data

50. Which of the following does not typically require health insurance coverage?
    A) Emergency surgery
    B) Prescription medication
    C) Eye exams for glasses
    D) Cosmetic dental work

Answer: D) Cosmetic dental work

51. What is a key characteristic of whole life insurance?
    A) It provides coverage for a set period of time only
    B) It accumulates cash value over time
    C) It has no premiums
    D) It is only available for people under 30 years old

Answer: B) It accumulates cash value over time

52. In which of the following situations would a person typically file a claim with disability insurance?
    A) They need a new car
    B) They are hospitalized due to a long-term illness
    C) Their house was damaged in a storm
    D) They need surgery to correct vision problems

Answer: B) They are hospitalized due to a long-term illness

53. What does “premium payment frequency” refer to in insurance?
    A) The amount of coverage
    B) The frequency with which the insurance policyholder pays premiums
    C) The amount the insurance company will pay out in claims
    D) The frequency of policy renewals

Answer: B) The frequency with which the insurance policyholder pays premiums

54. What is the key difference between “accident insurance” and “health insurance”?
    A) Accident insurance covers only medical expenses for injuries, while health insurance covers broader medical costs
    B) Accident insurance covers all medical expenses
    C) Health insurance only applies to hospital stays
    D) There is no difference between the two types of insurance

Answer: A) Accident insurance covers only medical expenses for injuries, while health insurance covers broader medical costs

55. What does “underinsured motorist” coverage do in auto insurance?
    A) Covers repairs to your vehicle
    B) Covers damage caused by a driver with insufficient insurance
    C) Covers the cost of medical treatment for the driver
    D) Covers injuries caused by uninsured drivers

Answer: B) Covers damage caused by a driver with insufficient insurance

56. Which of the following is typically covered under long-term care insurance?
    A) Emergency surgery
    B) Custodial care or nursing home care
    C) Dental procedures
    D) Car accident injuries

Answer: B) Custodial care or nursing home care

57. How does “term life insurance” differ from whole life insurance?
    A) Term life insurance offers permanent coverage, while whole life is temporary
    B) Term life insurance accumulates cash value, while whole life does not
    C) Term life insurance provides coverage for a fixed period of time, while whole life provides lifelong coverage
    D) There is no difference between the two

Answer: C) Term life insurance provides coverage for a fixed period of time, while whole life provides lifelong coverage

58. What is a “health maintenance organization” (HMO)?
    A) A type of insurance that offers coverage for long-term care
    B) A type of health insurance plan that requires policyholders to use a network of doctors and hospitals
    C) A type of life insurance plan
    D) A government-sponsored insurance plan

Answer: B) A type of health insurance plan that requires policyholders to use a network of doctors and hospitals

59. Which of the following describes the benefit of having “personal liability” coverage in a homeowners policy?
    A) It covers damages caused by a fire
    B) It protects the homeowner from financial loss due to accidental injury or damage to others
    C) It covers medical expenses for the homeowner
    D) It provides a death benefit to the policyholder

Answer: B) It protects the homeowner from financial loss due to accidental injury or damage to others

60. What is the main goal of “insurance risk management”?
    A) To determine how much coverage a policyholder needs
    B) To analyze and minimize potential losses faced by individuals or organizations
    C) To increase the policyholder’s premiums
    D) To sell more insurance policies

Answer: B) To analyze and minimize potential losses faced by individuals or organizations

 

61. Which of the following is a common type of health insurance plan?
    A) Auto insurance
    B) Preferred Provider Organization (PPO)
    C) Property insurance
    D) Life insurance

Answer: B) Preferred Provider Organization (PPO)

62. What does the “deductible” in a health insurance policy refer to?
    A) The amount the insurance company will pay for claims
    B) The amount the policyholder must pay before insurance coverage begins
    C) The monthly premium for the policy
    D) The amount paid by the beneficiary

Answer: B) The amount the policyholder must pay before insurance coverage begins

63. Which of the following types of life insurance provides a death benefit but does not accumulate cash value?
    A) Whole life insurance
    B) Universal life insurance
    C) Term life insurance
    D) Variable life insurance

Answer: C) Term life insurance

64. What type of insurance would you need if you want to protect your home against damage caused by fire, flood, and earthquakes?
    A) Life insurance
    B) Homeowners insurance
    C) Flood insurance
    D) Renter’s insurance

Answer: B) Homeowners insurance

65. What is “underinsurance” in the context of insurance coverage?
    A) Having too much coverage
    B) Having coverage that exceeds the value of the property
    C) Not having enough insurance to fully cover a loss
    D) Not renewing the policy in time

Answer: C) Not having enough insurance to fully cover a loss

66. Which of the following is true about term life insurance?
    A) It accumulates cash value
    B) It offers lifetime coverage
    C) It provides coverage for a specific period, such as 10, 20, or 30 years
    D) It is generally more expensive than whole life insurance

Answer: C) It provides coverage for a specific period, such as 10, 20, or 30 years

67. What is “long-term care insurance” primarily designed to cover?
    A) Homeowners’ damages
    B) Expenses for custodial care or nursing home care
    C) Funeral costs
    D) College tuition

Answer: B) Expenses for custodial care or nursing home care

68. What is the purpose of “life insurance”?
    A) To protect against damage to property
    B) To cover medical expenses
    C) To provide financial support to dependents after the policyholder’s death
    D) To cover auto accidents

Answer: C) To provide financial support to dependents after the policyholder’s death

69. What is “claims-made” coverage in liability insurance?
    A) The policyholder is covered for claims filed during the policy period, regardless of when the incident occurred
    B) The policyholder is covered only if the incident occurs during the policy period and the claim is filed within the same period
    C) The insurer automatically pays claims above the deductible amount
    D) The policyholder is not covered for claims filed during the policy period

Answer: B) The policyholder is covered only if the incident occurs during the policy period and the claim is filed within the same period

70. What is a common feature of a “universal life” insurance policy?
    A) It provides only term coverage
    B) It has flexible premiums and death benefits
    C) It does not have a cash value
    D) It is the cheapest life insurance option available

Answer: B) It has flexible premiums and death benefits

71. Which of the following best describes “personal liability” coverage in a homeowner’s insurance policy?
    A) Covers damages caused by fire
    B) Covers damages to personal property
    C) Covers legal expenses if someone is injured on the policyholder’s property
    D) Covers the cost of repairs to a home

Answer: C) Covers legal expenses if someone is injured on the policyholder’s property

72. Which of the following is most likely to be covered by auto insurance?
    A) Damage to personal property not involved in an accident
    B) Medical expenses for the driver’s family
    C) Damage caused by natural disasters
    D) Collision damage to the vehicle in an accident

Answer: D) Collision damage to the vehicle in an accident

73. Which of the following types of life insurance allows the policyholder to adjust the death benefit and premium?
    A) Term life insurance
    B) Whole life insurance
    C) Universal life insurance
    D) Variable life insurance

Answer: C) Universal life insurance

74. In which scenario would someone most likely use their disability insurance?
    A) To recover funeral expenses
    B) To cover income loss while they recover from an illness or injury
    C) To replace a stolen car
    D) To pay for medical treatments for family members

Answer: B) To cover income loss while they recover from an illness or injury

75. What is typically the purpose of purchasing “renter’s insurance”?
    A) To cover the property for the owner of the building
    B) To protect personal belongings from theft, fire, and other risks
    C) To cover the cost of damages to a car
    D) To pay for medical expenses after an accident

Answer: B) To protect personal belongings from theft, fire, and other risks

76. What is the main difference between “whole life insurance” and “term life insurance”?
    A) Whole life insurance is cheaper than term life insurance
    B) Whole life insurance has cash value, while term life does not
    C) Whole life insurance provides temporary coverage, while term life provides lifelong coverage
    D) Whole life insurance is only available to individuals over 50

Answer: B) Whole life insurance has cash value, while term life does not

77. What is the purpose of “health insurance” premiums?
    A) To cover the cost of doctor visits only
    B) To pay for the medical bills of policyholders
    C) To provide financial protection against medical costs and healthcare services
    D) To pay for funeral expenses

Answer: C) To provide financial protection against medical costs and healthcare services

78. Which of the following is true about “disability insurance”?
    A) It covers auto accidents only
    B) It covers income loss due to illness or injury that prevents the policyholder from working
    C) It is designed for people over the age of 65
    D) It replaces life insurance

Answer: B) It covers income loss due to illness or injury that prevents the policyholder from working

79. In auto insurance, what does “comprehensive coverage” typically include?
    A) Damage caused by accidents
    B) Theft of the vehicle
    C) Liability for accidents
    D) Coverage for medical expenses

Answer: B) Theft of the vehicle

80. Which of the following is a characteristic of a “high-deductible health plan” (HDHP)?
    A) Low monthly premiums
    B) High premiums and low deductibles
    C) High deductible before the insurance starts to pay
    D) Does not cover emergency care

Answer: C) High deductible before the insurance starts to pay

81. What is “term” in the context of life insurance?
    A) The length of time a life insurance policyholder has to wait before claiming benefits
    B) The amount of cash value the policyholder accumulates
    C) The period of time the life insurance policy is active
    D) The policyholder’s monthly premium

Answer: C) The period of time the life insurance policy is active

82. Which of the following best describes “auto liability insurance”?
    A) Coverage for vehicle repairs
    B) Coverage for damages caused to others by the insured driver
    C) Coverage for personal injuries
    D) Coverage for medical bills after an accident

Answer: B) Coverage for damages caused to others by the insured driver

83. What does “premium” refer to in an insurance policy?
    A) The amount the policyholder must pay for their insurance coverage
    B) The amount the insurance company pays out in a claim
    C) The number of claims made during the year
    D) The maximum coverage limit

Answer: A) The amount the policyholder must pay for their insurance coverage

84. Which of the following is NOT typically covered under a standard homeowners insurance policy?
    A) Personal property theft
    B) Liability for injuries on the property
    C) Flood damage
    D) Damage from fire

Answer: C) Flood damage

85. What is “co-payment” in health insurance?
    A) The full amount the insurer will pay for medical expenses
    B) A fixed amount paid by the insured at the time of receiving a medical service
    C) The deductible amount that the insured must pay before insurance covers the costs
    D) The premium paid for coverage

Answer: B) A fixed amount paid by the insured at the time of receiving a medical service

86. What does “no-fault” insurance typically refer to in auto insurance?
    A) Insurance where the driver is not responsible for the accident
    B) A policy where no insurance coverage is required
    C) A policy where both parties share the costs of an accident
    D) Insurance that covers only theft or vandalism

Answer: A) Insurance where the driver is not responsible for the accident

87. What is the primary reason to purchase life insurance?
    A) To protect against theft
    B) To cover medical expenses
    C) To ensure financial support for dependents after the policyholder’s death
    D) To avoid paying taxes on inheritance

Answer: C) To ensure financial support for dependents after the policyholder’s death

88. What does “insurance policy” refer to?
    A) The deductible amount
    B) A legal contract between the insurer and the insured
    C) The amount paid for claims
    D) The insurer’s profit margin

Answer: B) A legal contract between the insurer and the insured

89. What is a typical benefit of purchasing renters insurance?
    A) It covers the cost of buying a new home
    B) It protects against personal property loss and liability for injury on rented property
    C) It reduces auto insurance premiums
    D) It provides health coverage for renters

Answer: B) It protects against personal property loss and liability for injury on rented property

90. What does “medical payments coverage” in auto insurance typically cover?
    A) Damage to your car
    B) Medical bills for injuries to the policyholder or passengers in the car
    C) Liability for damage to another vehicle
    D) Theft of personal property

Answer: B) Medical bills for injuries to the policyholder or passengers in the car

 

91. Which of the following best describes “auto collision insurance”?
    A) It covers damage caused by natural disasters
    B) It covers medical expenses after an accident
    C) It covers damages to the insured’s vehicle after a collision with another vehicle or object
    D) It covers theft of the vehicle

Answer: C) It covers damages to the insured’s vehicle after a collision with another vehicle or object

92. What does the “beneficiary” refer to in a life insurance policy?
    A) The insurance company that provides the policy
    B) The person or entity who will receive the death benefit from the policy
    C) The individual paying the premiums
    D) The person who determines the policy terms

Answer: B) The person or entity who will receive the death benefit from the policy

93. Which type of insurance would you most likely use to cover expenses for a car accident?
    A) Health insurance
    B) Auto insurance
    C) Disability insurance
    D) Life insurance

Answer: B) Auto insurance

94. Which of the following insurance policies is specifically designed to provide income replacement for an individual who is unable to work due to a disability?
    A) Life insurance
    B) Disability insurance
    C) Homeowners insurance
    D) Auto insurance

Answer: B) Disability insurance

95. What is an example of “third-party liability insurance”?
    A) Insurance that covers injuries to the insured
    B) Insurance that covers damage caused to others by the insured
    C) Insurance that covers damage to the insured’s property
    D) Insurance that only covers medical expenses

Answer: B) Insurance that covers damage caused to others by the insured

96. Which of the following does “homeowners insurance” generally NOT cover?
    A) Personal property loss due to theft
    B) Liability for injuries on the property
    C) Flood damage
    D) Damage from fire or storm

Answer: C) Flood damage

97. Which of the following is the primary purpose of “umbrella insurance”?
    A) To cover the medical bills of family members
    B) To extend liability coverage beyond the limits of other policies like auto or homeowners
    C) To cover theft of personal property
    D) To provide life insurance

Answer: B) To extend liability coverage beyond the limits of other policies like auto or homeowners

98. What does “premium” refer to in an insurance policy?
    A) The amount the policyholder must pay for the coverage
    B) The payout amount from the insurer
    C) The deductible amount
    D) The coverage limits

Answer: A) The amount the policyholder must pay for the coverage

99. Which of the following would be considered a “risk” in risk management?
    A) An opportunity to increase profits
    B) A hazard that could cause harm or loss
    C) A reward for good decision-making
    D) A predictable outcome from an investment

Answer: B) A hazard that could cause harm or loss

100. What is the primary benefit of purchasing long-term care insurance?
     A) It covers the cost of housing
     B) It covers medical expenses for illnesses
     C) It covers the cost of custodial or nursing home care
     D) It covers funeral expenses

Answer: C) It covers the cost of custodial or nursing home care

101. Which type of life insurance is the most affordable in the short term?
     A) Whole life insurance
     B) Term life insurance
     C) Universal life insurance
     D) Variable life insurance

Answer: B) Term life insurance

102. What is the purpose of a “deductible” in an insurance policy?
     A) To lower the monthly premium
     B) To limit the payout from the insurance company
     C) To require the insured to pay a portion of the loss before the insurer pays
     D) To eliminate out-of-pocket expenses for the policyholder

Answer: C) To require the insured to pay a portion of the loss before the insurer pays

103. What is typically covered by an “auto liability insurance” policy?
     A) Damage to the insured vehicle
     B) Injuries to passengers in the insured vehicle
     C) Damages or injuries caused to others by the insured driver
     D) Theft of the insured vehicle

Answer: C) Damages or injuries caused to others by the insured driver

104. What type of insurance would a business owner purchase to protect against claims made by third parties for bodily injury or property damage?
     A) Professional liability insurance
     B) Property insurance
     C) General liability insurance
     D) Workers’ compensation insurance

Answer: C) General liability insurance

105. In the context of health insurance, what is a “network”?
     A) The number of medical treatments covered by the plan
     B) The group of healthcare providers that have agreed to offer services at discounted rates
     C) The monthly premium for the policy
     D) The policyholder’s medical history

Answer: B) The group of healthcare providers that have agreed to offer services at discounted rates

106. What does “medical underwriting” refer to in the context of insurance?
     A) A process where the insurer examines the medical history of the applicant to determine the premium
     B) A policy that covers only emergency medical services
     C) A list of covered medical conditions
     D) A discount for policyholders with healthy lifestyles

Answer: A) A process where the insurer examines the medical history of the applicant to determine the premium

107. What type of insurance would provide coverage if you were to injure someone while operating your personal vehicle?
     A) Health insurance
     B) Auto liability insurance
     C) Property insurance
     D) Disability insurance

Answer: B) Auto liability insurance

108. What is “life insurance underwriting”?
     A) The process by which the policyholder selects their beneficiaries
     B) The evaluation process by the insurer to determine risk and appropriate premium
     C) The insurance company’s approval of health insurance claims
     D) The process of reviewing the policyholder’s medical claims after death

Answer: B) The evaluation process by the insurer to determine risk and appropriate premium

109. What is typically excluded from a standard auto insurance policy?
     A) Collisions
     B) Personal injury protection
     C) Flood damage
     D) Liability for injuries to other drivers

Answer: C) Flood damage

110. Which of the following types of insurance coverage provides financial protection in the event that a person becomes temporarily or permanently unable to work due to a medical condition?
     A) Disability insurance
     B) Life insurance
     C) Health insurance
     D) Homeowners insurance

Answer: A) Disability insurance

111. What does a “whole life insurance” policy provide?
     A) Coverage for a set number of years
     B) A permanent death benefit and an accumulation of cash value
     C) Coverage only for accidental death
     D) Coverage for medical expenses

Answer: B) A permanent death benefit and an accumulation of cash value

112. What is an example of an insurance rider?
     A) A special provision added to a policy to customize it according to the policyholder’s needs
     B) The policyholder’s name on the policy document
     C) The basic coverage included in the policy
     D) The insurance company’s list of available discounts

Answer: A) A special provision added to a policy to customize it according to the policyholder’s needs

113. In terms of health insurance, what is a “co-insurance”?
     A) A fixed amount the insured must pay for each medical service
     B) A portion of the medical cost that the insured shares with the insurer after the deductible is paid
     C) The amount the insured pays as their monthly premium
     D) The total cost of the health insurance policy

Answer: B) A portion of the medical cost that the insured shares with the insurer after the deductible is paid

114. What does “flood insurance” typically cover?
     A) Fire damage to property
     B) Medical expenses for injuries caused by natural disasters
     C) Damages caused by flooding to a home or business
     D) Liability for damages to another person’s property

Answer: C) Damages caused by flooding to a home or business

115. Which of the following is NOT a feature of a typical “health maintenance organization” (HMO) insurance plan?
     A) Limited choice of healthcare providers
     B) Lower premiums
     C) No requirement for referrals to see specialists
     D) Focus on preventive care

Answer: C) No requirement for referrals to see specialists

116. Which type of insurance protects against the financial risk associated with medical expenses due to an injury or illness?
     A) Health insurance
     B) Disability insurance
     C) Life insurance
     D) Property insurance

Answer: A) Health insurance

117. What is “claims-made” coverage in a professional liability policy?
     A) Coverage that is effective for a specific period, as long as the claim is made during that time
     B) Coverage that applies to claims made only after a policyholder has paid their deductible
     C) Coverage for claims that occurred before the policy was purchased
     D) Coverage for all claims made regardless of when they occurred

Answer: A) Coverage that is effective for a specific period, as long as the claim is made during that time

 

118. Which type of insurance typically covers damage caused by fire, theft, or vandalism to your home?
     A) Homeowners insurance
     B) Health insurance
     C) Auto insurance
     D) Life insurance

Answer: A) Homeowners insurance

119. What is a key feature of term life insurance?
     A) It provides coverage for a lifetime
     B) It builds cash value over time
     C) It provides coverage for a specific period, such as 10, 20, or 30 years
     D) It only covers accidental death

Answer: C) It provides coverage for a specific period, such as 10, 20, or 30 years

120. What is the main advantage of purchasing disability insurance?
     A) It provides coverage for medical bills
     B) It replaces lost income if you are unable to work due to illness or injury
     C) It covers expenses related to home maintenance
     D) It provides death benefits

Answer: B) It replaces lost income if you are unable to work due to illness or injury

121. What does “auto comprehensive coverage” typically cover?
     A) Injury to others in an accident
     B) Damage to your vehicle caused by incidents other than a collision (e.g., theft, vandalism, or natural disasters)
     C) Medical expenses for your injuries
     D) Liability for accidents caused by other drivers

Answer: B) Damage to your vehicle caused by incidents other than a collision (e.g., theft, vandalism, or natural disasters)

122. What is typically excluded from most health insurance policies?
     A) Routine checkups
     B) Emergency services
     C) Cosmetic surgery
     D) Preventive care

Answer: C) Cosmetic surgery

123. What does “renter’s insurance” typically cover?
     A) Structural damage to the building
     B) Liability for injuries on the property
     C) Damage or loss of personal property in a rented apartment or house
     D) Only fire damage to personal property

Answer: C) Damage or loss of personal property in a rented apartment or house

124. What type of insurance would most likely cover your medical bills if you are injured in an accident that occurs on someone else’s property?
     A) Auto insurance
     B) Health insurance
     C) Liability insurance
     D) Renters insurance

Answer: B) Health insurance

125. Which of the following is a characteristic of a “preferred provider organization” (PPO) health insurance plan?
     A) Requires you to get a referral from a primary care doctor to see a specialist
     B) Offers more flexibility in choosing healthcare providers than an HMO
     C) Only covers emergency care
     D) Requires that you use in-network providers

Answer: B) Offers more flexibility in choosing healthcare providers than an HMO

126. What does “liability insurance” cover?
     A) Injury to the insured
     B) Damages to another person or their property caused by the insured
     C) Theft of the insured’s property
     D) Medical expenses for the insured

Answer: B) Damages to another person or their property caused by the insured

127. Which of the following is NOT typically a benefit of life insurance?
     A) Financial support for dependents in the event of the insured’s death
     B) Coverage for funeral expenses
     C) Investment opportunities for retirement
     D) Protection against medical expenses

Answer: D) Protection against medical expenses

128. What is a “waiting period” in a disability insurance policy?
     A) The time an individual must wait before receiving their first payment after becoming disabled
     B) The time before a policyholder can cancel their policy
     C) The time it takes to receive an approval for health insurance coverage
     D) The time an insurer has to pay out a claim

Answer: A) The time an individual must wait before receiving their first payment after becoming disabled

129. Which of the following types of insurance would most likely cover medical expenses incurred while traveling abroad?
     A) Auto insurance
     B) Travel insurance
     C) Homeowners insurance
     D) Renters insurance

Answer: B) Travel insurance

130. What does a “coverage limit” refer to in an insurance policy?
     A) The maximum amount the insurance company will pay for a covered loss
     B) The maximum amount the insured must pay in premiums
     C) The deductible amount the insured must pay
     D) The minimum amount the insured must pay to remain covered

Answer: A) The maximum amount the insurance company will pay for a covered loss

131. What type of insurance provides benefits for long-term medical care that is not covered by regular health insurance?
     A) Life insurance
     B) Disability insurance
     C) Long-term care insurance
     D) Homeowners insurance

Answer: C) Long-term care insurance

132. What is the primary difference between “whole life” and “term life” insurance?
     A) Whole life insurance lasts a lifetime, while term life insurance is only valid for a specified period
     B) Whole life insurance is less expensive than term life insurance
     C) Term life insurance has no death benefits
     D) Whole life insurance covers medical expenses

Answer: A) Whole life insurance lasts a lifetime, while term life insurance is only valid for a specified period

133. Which of the following is a typical exclusion in most homeowners insurance policies?
     A) Fire damage
     B) Theft of personal property
     C) Earthquake damage
     D) Liability for injuries on the property

Answer: C) Earthquake damage

134. Which of the following is an example of “peril” that is typically covered by most homeowners insurance policies?
     A) General wear and tear
     B) Fire damage
     C) Damage caused by neglect
     D) Flood damage

Answer: B) Fire damage

135. In an insurance policy, what is an “endorsement”?
     A) A type of claim
     B) An additional provision added to the policy to modify coverage
     C) A deductible amount that applies to claims
     D) The amount of insurance purchased

Answer: B) An additional provision added to the policy to modify coverage

136. What is “reinsurance”?
     A) Insurance purchased by a policyholder to cover losses
     B) Insurance purchased by an insurance company to protect itself from large losses
     C) A type of liability coverage
     D) A type of coverage for international risks

Answer: B) Insurance purchased by an insurance company to protect itself from large losses

137. Which of the following is typically covered by workers’ compensation insurance?
     A) Injuries sustained by employees while performing work-related duties
     B) Injuries sustained by employees while commuting to work
     C) Injuries sustained by employees during personal activities
     D) Injuries sustained by employees outside of working hours

Answer: A) Injuries sustained by employees while performing work-related duties

138. What does a “deductible” refer to in an insurance policy?
     A) The amount the insured must pay out-of-pocket before the insurance company starts paying
     B) The amount of premium the insured has to pay
     C) The total amount of coverage provided by the policy
     D) The policyholder’s medical expenses after the insurance pays

Answer: A) The amount the insured must pay out-of-pocket before the insurance company starts paying

139. Which type of life insurance offers flexible premiums and a death benefit that can change based on the policyholder’s needs?
     A) Term life insurance
     B) Whole life insurance
     C) Universal life insurance
     D) Variable life insurance

Answer: C) Universal life insurance

140. What is “flood insurance” designed to cover?
     A) Fire damage
     B) Theft of personal property
     C) Damage caused by floodwaters
     D) Injuries sustained during a flood

Answer: C) Damage caused by floodwaters

 

141. Which of the following is covered under most basic auto insurance policies?
     A) Collision damage
     B) Theft of the vehicle
     C) Injury to passengers in your car
     D) Damage to someone else’s property

Answer: D) Damage to someone else’s property

142. What does “underinsured motorist coverage” protect against?
     A) Damage to your vehicle caused by an uninsured driver
     B) Medical expenses for injuries caused by your own vehicle
     C) Damages from a driver who does not have enough insurance to cover your losses
     D) Vandalism to your car

Answer: C) Damages from a driver who does not have enough insurance to cover your losses

143. Which type of insurance would you most likely need if you want to ensure that your family is financially supported in the event of your death?
     A) Health insurance
     B) Life insurance
     C) Disability insurance
     D) Homeowners insurance

Answer: B) Life insurance

144. Which of the following is a potential benefit of long-term care insurance?
     A) Coverage for medical expenses incurred in hospitals
     B) Coverage for nursing home care or home health care
     C) Coverage for short-term medical procedures
     D) Coverage for funeral costs

Answer: B) Coverage for nursing home care or home health care

145. Which of the following is considered a “permanent” type of life insurance?
     A) Term life insurance
     B) Universal life insurance
     C) Health insurance
     D) Renters insurance

Answer: B) Universal life insurance

146. How does an insurance deductible work?
     A) It is a fee paid by the insurer before coverage begins
     B) It is an amount the insured must pay out-of-pocket before the insurance company pays
     C) It is a fixed amount that the insurance company will always pay
     D) It is the amount paid to insurance agents for policy sales

Answer: B) It is an amount the insured must pay out-of-pocket before the insurance company pays

147. What is the primary difference between a PPO and an HMO health insurance plan?
     A) PPO plans require referrals for specialist visits, while HMO plans do not
     B) PPO plans offer more freedom to choose providers, while HMO plans require you to use a network of doctors
     C) HMO plans are more expensive than PPO plans
     D) PPO plans provide coverage for out-of-network services, while HMO plans do not

Answer: B) PPO plans offer more freedom to choose providers, while HMO plans require you to use a network of doctors

148. Which of the following is covered by most health insurance policies in the U.S.?
     A) Experimental treatments
     B) Routine dental care
     C) Preventive care
     D) Cosmetic surgery

Answer: C) Preventive care

149. What is an “exclusion” in an insurance policy?
     A) A provision that reduces the cost of the insurance
     B) A condition or circumstance that is not covered by the policy
     C) The amount of money paid by the insured before the insurer pays
     D) A guarantee that the insurer will cover all potential risks

Answer: B) A condition or circumstance that is not covered by the policy

150. What is “liability insurance” primarily designed to protect against?
     A) Theft of property
     B) Personal injury and property damage caused to others
     C) Lost wages due to illness
     D) Damages caused by natural disasters

Answer: B) Personal injury and property damage caused to others

151. What is the function of “umbrella insurance”?
     A) To cover your property from all types of damage
     B) To increase your liability coverage above the limits of your home or auto insurance policies
     C) To cover medical expenses not included in regular health insurance
     D) To cover workers’ compensation for employees

Answer: B) To increase your liability coverage above the limits of your home or auto insurance policies

152. What does “health savings account” (HSA) allow you to do?
     A) Invest money for long-term retirement
     B) Set aside pre-tax dollars to pay for qualified medical expenses
     C) Pay for home-related health expenses
     D) Purchase additional health insurance

Answer: B) Set aside pre-tax dollars to pay for qualified medical expenses

153. Which of the following is a feature of auto insurance “collision coverage”?
     A) It covers the cost of repairs if you hit another vehicle
     B) It covers injuries to your passengers
     C) It covers damage to your car from a natural disaster
     D) It covers repairs if someone else hits your car

Answer: A) It covers the cost of repairs if you hit another vehicle

154. Which type of life insurance allows the policyholder to invest the cash value in separate accounts, such as stocks and bonds?
     A) Whole life insurance
     B) Universal life insurance
     C) Variable life insurance
     D) Term life insurance

Answer: C) Variable life insurance

155. What does “uninsured motorist coverage” cover?
     A) Medical bills from injuries caused by an uninsured driver
     B) Damage to your car caused by a storm
     C) Theft of your car
     D) Liability for injuries caused to others while driving

Answer: A) Medical bills from injuries caused by an uninsured driver

156. What is a “co-payment” in a health insurance plan?
     A) The amount paid to the doctor for services provided
     B) The percentage of the claim that the insured must pay
     C) A fixed amount the insured pays for specific medical services
     D) A fee for filing a claim

Answer: C) A fixed amount the insured pays for specific medical services

157. Which type of insurance would you need to protect yourself from the financial impact of a car accident if you are at fault?
     A) Collision insurance
     B) Comprehensive insurance
     C) Liability insurance
     D) Personal injury protection

Answer: C) Liability insurance

158. Which of the following does “property insurance” typically cover?
     A) Medical expenses
     B) Damage or loss of property due to various risks such as fire or theft
     C) Car accidents
     D) Personal injury claims

Answer: B) Damage or loss of property due to various risks such as fire or theft

159. Which of the following is NOT typically a benefit of life insurance?
     A) Paying for funeral expenses
     B) Providing financial support to dependents
     C) Paying off outstanding debts
     D) Providing an income during retirement

Answer: D) Providing an income during retirement

160. What is “auto liability insurance” designed to cover?
     A) Damage to your vehicle
     B) Injury to yourself and your passengers
     C) Damage to someone else’s property and injuries to others
     D) Medical expenses for your injuries

Answer: C) Damage to someone else’s property and injuries to others

 

161. What is the main advantage of having “disability insurance”?
     A) It covers funeral expenses
     B) It provides income replacement in case you are unable to work due to illness or injury
     C) It covers the cost of medical bills
     D) It provides coverage for auto accidents

Answer: B) It provides income replacement in case you are unable to work due to illness or injury

162. Which type of health insurance plan requires you to choose a primary care physician (PCP) and get referrals for specialists?
     A) PPO
     B) HMO
     C) POS
     D) EPO

Answer: B) HMO

163. Which type of life insurance policy is designed to cover the policyholder for a specified period of time, such as 10 or 20 years?
     A) Whole life insurance
     B) Universal life insurance
     C) Term life insurance
     D) Variable life insurance

Answer: C) Term life insurance

164. Which of the following is a typical exclusion in most homeowners’ insurance policies?
     A) Fire damage
     B) Theft
     C) Flood damage
     D) Vandalism

Answer: C) Flood damage

165. What is “renters insurance” primarily designed to cover?
     A) Personal property loss or damage in a rental unit
     B) Structural damage to a rental unit
     C) Injuries caused by the landlord
     D) Repairs to the rental unit’s plumbing

Answer: A) Personal property loss or damage in a rental unit

166. What type of insurance is typically needed to cover a person’s home in case of damage from storms, fire, or theft?
     A) Health insurance
     B) Renters insurance
     C) Homeowners insurance
     D) Disability insurance

Answer: C) Homeowners insurance

167. Which of the following would most likely be covered by a “comprehensive” auto insurance policy?
     A) Medical expenses for injuries
     B) Damage to your car from a falling tree
     C) Damage to another person’s car
     D) Damage caused by an at-fault accident

Answer: B) Damage to your car from a falling tree

168. Which of the following factors does NOT typically affect your auto insurance premium?
     A) Your driving history
     B) The model and make of your vehicle
     C) Your age and gender
     D) The weather conditions in your area

Answer: D) The weather conditions in your area

169. Which of the following is most likely to increase your health insurance premiums?
     A) Living in a rural area
     B) Having a pre-existing medical condition
     C) Choosing a high-deductible plan
     D) Avoiding tobacco products

Answer: B) Having a pre-existing medical condition

170. What is the “waiting period” in disability insurance?
     A) The amount of time before the insurance policy is active
     B) The amount of time you must wait before your claim is approved
     C) The amount of time you must be unable to work before benefits begin
     D) The amount of time you have to wait to renew your policy

Answer: C) The amount of time you must be unable to work before benefits begin

171. What is “personal injury protection” (PIP) in auto insurance?
     A) Coverage for medical expenses and lost wages for injuries to you and your passengers, regardless of fault
     B) Coverage for repairs to your vehicle after an accident
     C) Coverage for property damage caused to others
     D) Coverage for injuries to other drivers

Answer: A) Coverage for medical expenses and lost wages for injuries to you and your passengers, regardless of fault

172. What does “term life insurance” provide?
     A) Coverage for a specific term, such as 10, 20, or 30 years
     B) Permanent life coverage with investment options
     C) Coverage that includes both health and life benefits
     D) A cash value that can be borrowed against

Answer: A) Coverage for a specific term, such as 10, 20, or 30 years

173. Which type of insurance protects against the cost of damages to a business caused by a natural disaster?
     A) Business interruption insurance
     B) Commercial property insurance
     C) General liability insurance
     D) Workers’ compensation insurance

Answer: B) Commercial property insurance

174. Which of the following is a typical benefit of “critical illness insurance”?
     A) Covers basic medical expenses
     B) Provides a lump sum payment if diagnosed with a covered critical illness
     C) Covers dental and vision expenses
     D) Provides funding for funeral costs

Answer: B) Provides a lump sum payment if diagnosed with a covered critical illness

175. How does an “act of God” typically affect insurance claims?
     A) It increases the policyholder’s premiums
     B) It may limit or exclude coverage for damage caused by natural events like floods or earthquakes
     C) It covers damage caused by natural disasters without limitation
     D) It requires the policyholder to file a lawsuit

Answer: B) It may limit or exclude coverage for damage caused by natural events like floods or earthquakes

176. Which of the following is the primary purpose of “liability insurance”?
     A) To cover personal injuries
     B) To cover damage to another person’s property or injuries caused by you
     C) To cover medical bills
     D) To cover your personal assets in case of a lawsuit

Answer: B) To cover damage to another person’s property or injuries caused by you

177. What is the “cash value” of a permanent life insurance policy?
     A) The amount the insurance company will pay out to beneficiaries after the policyholder’s death
     B) The accumulated savings component that can be borrowed against or cashed out
     C) The cost of the premium paid by the policyholder
     D) The amount of death benefit coverage provided to the policyholder

Answer: B) The accumulated savings component that can be borrowed against or cashed out

178. Which of the following types of insurance would cover a person who is injured while traveling overseas?
     A) Travel insurance
     B) Health insurance
     C) Auto insurance
     D) Life insurance

Answer: A) Travel insurance

179. What is the primary purpose of “auto liability insurance”?
     A) To pay for damages to your car
     B) To cover injuries to your passengers
     C) To pay for injuries or damages you cause to others
     D) To provide health benefits to the driver

Answer: C) To pay for injuries or damages you cause to others

180. How can a person reduce their auto insurance premium?
     A) Increase the coverage limit
     B) Choose a higher deductible
     C) Purchase liability coverage only
     D) Add more drivers to the policy

Answer: B) Choose a higher deductible

 

181. What is the main benefit of “long-term care insurance”?
     A) Covers medical bills for serious injuries
     B) Covers the cost of daily living assistance when a person is unable to care for themselves
     C) Pays for temporary medical treatment
     D) Covers funeral expenses

Answer: B) Covers the cost of daily living assistance when a person is unable to care for themselves

182. What does a “deductible” refer to in an insurance policy?
     A) The percentage of the claim that the insurer will pay
     B) The amount you pay for a policy each year
     C) The amount you must pay out of pocket before the insurer starts to pay
     D) The total amount of your coverage limit

Answer: C) The amount you must pay out of pocket before the insurer starts to pay

183. Which of the following is typically covered by “homeowners insurance”?
     A) Damage to your car in an accident
     B) Injuries sustained while driving
     C) Theft of personal property in your home
     D) Medical expenses for injuries at a business

Answer: C) Theft of personal property in your home

184. Which of the following types of insurance would typically cover the cost of a hospital stay after an accident?
     A) Life insurance
     B) Disability insurance
     C) Health insurance
     D) Homeowners insurance

Answer: C) Health insurance

185. What type of life insurance policy provides coverage for the policyholder’s entire life and includes a savings component that can be used for loans or withdrawals?
     A) Term life insurance
     B) Whole life insurance
     C) Universal life insurance
     D) Group life insurance

Answer: B) Whole life insurance

186. Which of the following is true about “auto liability insurance”?
     A) It covers damage to your own vehicle
     B) It covers injuries or damages to other people when you’re at fault
     C) It covers medical expenses for your passengers
     D) It is optional in most states

Answer: B) It covers injuries or damages to other people when you’re at fault

187. What is the “premium” in an insurance policy?
     A) The amount paid by the insurer to cover damages
     B) The amount the policyholder pays for the insurance coverage
     C) The amount of the deductible that must be met
     D) The policyholder’s out-of-pocket medical expenses

Answer: B) The amount the policyholder pays for the insurance coverage

188. What is a “co-payment” in health insurance?
     A) A fee paid for each insurance claim submitted
     B) A fixed amount paid by the insured for a covered healthcare service
     C) The amount the insurer pays for medical bills
     D) A type of deductible for prescription drugs

Answer: B) A fixed amount paid by the insured for a covered healthcare service

189. Which of the following is NOT typically covered by health insurance?
     A) Preventive care
     B) Emergency room visits
     C) Cosmetic surgery
     D) Prescription medications

Answer: C) Cosmetic surgery

190. Which type of insurance provides financial protection for drivers who are at fault in an accident and cause damage to another person’s vehicle or property?
     A) Collision insurance
     B) Liability insurance
     C) Personal injury protection
     D) Comprehensive insurance

Answer: B) Liability insurance

191. What does “underwriting” refer to in the insurance process?
     A) The process of paying claims
     B) The process of determining the risk and setting premiums
     C) The process of selling policies to clients
     D) The process of marketing insurance to new customers

Answer: B) The process of determining the risk and setting premiums

192. Which of the following best describes “umbrella insurance”?
     A) It only covers the home for damage
     B) It provides additional liability coverage beyond the limits of your other insurance policies
     C) It only covers vehicles
     D) It provides life insurance coverage for the policyholder

Answer: B) It provides additional liability coverage beyond the limits of your other insurance policies

193. Which of the following is a typical feature of “health maintenance organization” (HMO) plans?
     A) No requirement to choose a primary care physician
     B) More flexibility in choosing healthcare providers
     C) Lower premiums with less flexibility in choosing providers
     D) Coverage for out-of-network care

Answer: C) Lower premiums with less flexibility in choosing providers

194. What is the primary purpose of “flood insurance”?
     A) To cover damage caused by hurricanes
     B) To cover damage to your home caused by water overflow from a nearby river or rainstorm
     C) To cover medical expenses due to water-related injuries
     D) To cover the loss of personal property

Answer: B) To cover damage to your home caused by water overflow from a nearby river or rainstorm

195. Which of the following is true about “life insurance”?
     A) It provides coverage for injuries from accidents
     B) It provides a payout to beneficiaries after the policyholder’s death
     C) It covers only funeral expenses
     D) It is only available to people over the age of 65

Answer: B) It provides a payout to beneficiaries after the policyholder’s death

196. Which type of insurance is most likely to be required for homeowners with a mortgage?
     A) Life insurance
     B) Auto insurance
     C) Homeowners insurance
     D) Flood insurance

Answer: C) Homeowners insurance

197. Which of the following best describes a “high-deductible health plan” (HDHP)?
     A) A health plan with low monthly premiums and high deductibles
     B) A health plan that covers only major medical events
     C) A health plan that covers all medical expenses with no deductible
     D) A health plan that includes a cash value savings account

Answer: A) A health plan with low monthly premiums and high deductibles

198. What is the “exclusion” in an insurance policy?
     A) Coverage provided for damages
     B) Events or situations that are not covered by the policy
     C) The policyholder’s obligations under the policy
     D) The total limit of the policy

Answer: B) Events or situations that are not covered by the policy

199. Which type of life insurance policy combines both a death benefit and a savings or investment component?
     A) Term life insurance
     B) Whole life insurance
     C) Universal life insurance
     D) Variable life insurance

Answer: D) Variable life insurance

200. Which of the following types of insurance would typically cover a person’s medical bills after a workplace injury?
     A) Workers’ compensation insurance
     B) Health insurance
     C) Disability insurance
     D) Life insurance

Answer: A) Workers’ compensation insurance

 

201. Which of the following is a typical characteristic of “term life insurance”?
     A) Coverage is permanent, lasting for the insured’s lifetime
     B) Provides a savings component that grows over time
     C) Only provides coverage for a specified period, like 10, 20, or 30 years
     D) Includes coverage for both medical and life benefits

Answer: C) Only provides coverage for a specified period, like 10, 20, or 30 years

202. What is the purpose of “disability insurance”?
     A) To cover the cost of funeral expenses
     B) To provide a monthly income if you become unable to work due to illness or injury
     C) To protect your car in case of an accident
     D) To cover medical bills for long-term health conditions

Answer: B) To provide a monthly income if you become unable to work due to illness or injury

203. Which of the following types of insurance would cover damage caused by a storm or natural disaster to your car?
     A) Collision insurance
     B) Comprehensive insurance
     C) Liability insurance
     D) Homeowners insurance

Answer: B) Comprehensive insurance

204. Which of the following is typically NOT covered by renters insurance?
     A) Theft of personal property
     B) Damage to personal property due to fire or water
     C) Injury to visitors in the renter’s home
     D) Damage to the renter’s car in an accident

Answer: D) Damage to the renter’s car in an accident

205. What does “medical payments coverage” in an auto insurance policy typically cover?
     A) Repairs to your vehicle after an accident
     B) Medical expenses for injuries sustained in a car accident, regardless of fault
     C) Property damage from accidents involving your car
     D) Injuries sustained while walking near a car

Answer: B) Medical expenses for injuries sustained in a car accident, regardless of fault

206. Which of the following is true about “uninsured motorist coverage”?
     A) It covers injuries caused by a driver who does not have insurance
     B) It covers medical bills for a driver’s own injuries
     C) It only covers damage to your vehicle
     D) It is included in all health insurance policies

Answer: A) It covers injuries caused by a driver who does not have insurance

207. What is the typical purpose of “life insurance”?
     A) To provide a lump sum payment to beneficiaries after the policyholder’s death
     B) To provide an income in case of long-term disability
     C) To pay for medical treatment after an accident
     D) To pay for property damage in case of natural disaster

Answer: A) To provide a lump sum payment to beneficiaries after the policyholder’s death

208. What is “personal injury protection” (PIP) in auto insurance?
     A) Coverage that helps pay for property damage
     B) Coverage that pays for medical expenses and lost wages after an accident
     C) Coverage that pays for damage to your car in an accident
     D) Coverage that protects against theft of personal items in the car

Answer: B) Coverage that pays for medical expenses and lost wages after an accident

209. What is the “coverage limit” in an insurance policy?
     A) The amount an insurer will pay for a covered loss
     B) The amount the policyholder must pay out of pocket
     C) The monthly premium paid by the policyholder
     D) The amount of deductible required to start coverage

Answer: A) The amount an insurer will pay for a covered loss

210. What is typically the main reason someone would purchase “disability insurance”?
     A) To cover medical bills in the event of an accident
     B) To receive financial support in the event of a prolonged illness or injury that prevents them from working
     C) To provide financial support for dependents after death
     D) To cover the cost of rehabilitation and physical therapy

Answer: B) To receive financial support in the event of a prolonged illness or injury that prevents them from working

211. Which of the following is typically covered by “comprehensive car insurance”?
     A) Accidents involving another vehicle
     B) Personal medical expenses
     C) Natural events like hail, floods, or fires that damage your car
     D) Theft of personal property from inside the car

Answer: C) Natural events like hail, floods, or fires that damage your car

212. What is the primary advantage of purchasing “long-term care insurance”?
     A) It provides coverage for accidents or injuries
     B) It helps cover expenses for nursing home care, home health care, and assisted living
     C) It provides coverage for health-related travel expenses
     D) It helps reduce life insurance premiums

Answer: B) It helps cover expenses for nursing home care, home health care, and assisted living

213. What type of insurance is designed to provide coverage for a business’s operations, property, and employees?
     A) Workers’ compensation insurance
     B) Commercial insurance
     C) Homeowners insurance
     D) Auto liability insurance

Answer: B) Commercial insurance

214. What does the term “insured event” refer to in an insurance policy?
     A) The amount of premium that must be paid for coverage
     B) A specific situation or occurrence covered by the policy
     C) The financial benefit paid to the insured
     D) The person or entity that receives the policy benefits

Answer: B) A specific situation or occurrence covered by the policy

215. Which of the following typically requires a “co-insurance” payment?
     A) Health insurance
     B) Homeowners insurance
     C) Life insurance
     D) Auto insurance

Answer: A) Health insurance

216. What is the primary function of “liability insurance”?
     A) To cover your medical expenses after an accident
     B) To protect against legal responsibility for injury or damage caused to another person
     C) To provide benefits after a policyholder’s death
     D) To cover the cost of repairing your own car

Answer: B) To protect against legal responsibility for injury or damage caused to another person

217. Which of the following is generally a benefit of “health insurance”?
     A) It covers funeral expenses
     B) It protects against financial loss in the event of a long-term disability
     C) It helps pay for medical expenses like doctor visits, hospital stays, and medications
     D) It covers losses due to theft or property damage

Answer: C) It helps pay for medical expenses like doctor visits, hospital stays, and medications

218. What is a “premium” in the context of health insurance?
     A) The maximum amount the insurer will pay for a medical procedure
     B) The total annual coverage limit
     C) The monthly or annual payment made to the insurer for coverage
     D) The percentage the insured is responsible for after meeting the deductible

Answer: C) The monthly or annual payment made to the insurer for coverage

219. Which of the following is NOT typically a characteristic of “auto insurance”?
     A) It covers only damage to your own vehicle
     B) It covers damage or injury caused to others in an accident
     C) It can include coverage for theft and vandalism
     D) It may provide liability coverage for injuries caused to others

Answer: A) It covers only damage to your own vehicle

220. Which of the following is a reason why someone might need “umbrella insurance”?
     A) To pay for property damage from natural disasters
     B) To provide extra coverage when the limits of regular policies (like auto or homeowners) are exhausted
     C) To cover the cost of funeral expenses
     D) To help cover the cost of long-term care

Answer: B) To provide extra coverage when the limits of regular policies (like auto or homeowners) are exhausted

 

221. Which of the following would likely be excluded from coverage under a typical home insurance policy?
     A) Fire damage
     B) Theft of personal property
     C) Flood damage
     D) Damage caused by a falling tree

Answer: C) Flood damage

222. What is “underinsurance”?
     A) Having too much coverage for a particular risk
     B) Having less coverage than needed to fully cover potential losses
     C) Having coverage that is not legally required
     D) Having a policy that covers risks not normally insured

Answer: B) Having less coverage than needed to fully cover potential losses

223. What is a “deductible” in an insurance policy?
     A) The amount the insurance company pays out for a claim
     B) The total amount of premiums paid annually
     C) The amount the policyholder must pay before the insurance company covers the claim
     D) The maximum coverage limit on a policy

Answer: C) The amount the policyholder must pay before the insurance company covers the claim

224. In which type of insurance is the concept of “moral hazard” most commonly discussed?
     A) Life insurance
     B) Health insurance
     C) Auto insurance
     D) Disability insurance

Answer: B) Health insurance

225. What does “liability insurance” protect against?
     A) Injuries to the policyholder
     B) Financial losses from damage to the policyholder’s property
     C) Legal responsibility for injuries or damage caused to another person or their property
     D) Damage caused by natural disasters

Answer: C) Legal responsibility for injuries or damage caused to another person or their property

226. Which of the following statements is true regarding “group life insurance”?
     A) It is typically more expensive than individual life insurance
     B) It is usually offered by employers to employees and their families
     C) It requires a health exam for coverage eligibility
     D) It covers only the employee, not their dependents

Answer: B) It is usually offered by employers to employees and their families

227. What is the main purpose of “workers’ compensation insurance”?
     A) To cover workers’ medical bills in case of an accident
     B) To cover losses due to theft at the workplace
     C) To provide life insurance to workers
     D) To cover business expenses during employee absences

Answer: A) To cover workers’ medical bills in case of an accident

228. Which of the following is true about “homeowners insurance”?
     A) It covers only damage to the structure of the home
     B) It covers damage caused by events like fires, but not theft or vandalism
     C) It provides liability protection in case someone is injured on the property
     D) It does not provide coverage for personal belongings

Answer: C) It provides liability protection in case someone is injured on the property

229. What does “health maintenance organization” (HMO) insurance typically require from its members?
     A) A large network of medical providers to choose from
     B) Higher out-of-pocket costs for medical services
     C) A primary care physician (PCP) referral before seeing specialists
     D) No copayments for medical services

Answer: C) A primary care physician (PCP) referral before seeing specialists

230. Which of the following types of insurance is most often used to cover expenses for medical treatment in the event of a serious injury or illness?
     A) Life insurance
     B) Health insurance
     C) Disability insurance
     D) Auto insurance

Answer: B) Health insurance

231. What is the primary purpose of “auto liability insurance”?
     A) To cover damages to your own vehicle in an accident
     B) To protect against legal claims for injury or property damage caused by you in an accident
     C) To pay for medical expenses after an accident
     D) To provide coverage for vehicle theft

Answer: B) To protect against legal claims for injury or property damage caused by you in an accident

232. What is “umbrella insurance”?
     A) Coverage that extends the limits of existing policies, like auto or homeowners insurance
     B) Insurance that covers only floods and natural disasters
     C) A policy that provides health insurance for medical procedures abroad
     D) A policy for businesses to cover liability in case of employee injury

Answer: A) Coverage that extends the limits of existing policies, like auto or homeowners insurance

233. What type of insurance would likely cover the cost of a funeral for the policyholder’s beneficiaries?
     A) Health insurance
     B) Life insurance
     C) Disability insurance
     D) Property insurance

Answer: B) Life insurance

234. Which of the following is generally covered under “auto collision insurance”?
     A) Medical costs resulting from an accident
     B) Repairs to your car after an accident, regardless of fault
     C) Damage caused by natural disasters like floods or hail
     D) Injuries sustained by pedestrians

Answer: B) Repairs to your car after an accident, regardless of fault

235. What is the primary benefit of purchasing “long-term care insurance”?
     A) Coverage for lost income in case of disability
     B) Coverage for expenses related to extended nursing home care or in-home care
     C) Coverage for car accidents
     D) Coverage for health-related travel expenses

Answer: B) Coverage for expenses related to extended nursing home care or in-home care

236. Which of the following is typically covered under a “homeowner’s liability insurance” policy?
     A) Injury to someone who falls on your property
     B) Damage to the structure of your home due to a storm
     C) Loss of personal items due to theft
     D) Damage caused by a natural disaster like a flood

Answer: A) Injury to someone who falls on your property

237. What does “life insurance” primarily provide for beneficiaries?
     A) Financial compensation for funeral costs
     B) Monthly income for the insured person if they become ill or injured
     C) A lump sum payment upon the death of the insured person
     D) Financial assistance for medical bills

Answer: C) A lump sum payment upon the death of the insured person

238. What is the difference between “whole life insurance” and “term life insurance”?
     A) Whole life insurance is more affordable than term life insurance
     B) Whole life insurance provides coverage for a set term, while term life insurance is permanent
     C) Whole life insurance includes a savings component that grows over time, while term life insurance does not
     D) Term life insurance provides lifelong coverage, while whole life insurance expires after a set term

Answer: C) Whole life insurance includes a savings component that grows over time, while term life insurance does not

239. Which of the following is a typical exclusion under most health insurance policies?
     A) Routine checkups
     B) Emergency room visits
     C) Cosmetic surgery
     D) Prescription medications

Answer: C) Cosmetic surgery

240. Which of the following types of insurance would most likely cover a car accident involving a drunk driver?
     A) Health insurance
     B) Auto liability insurance
     C) Life insurance
     D) Renters insurance

Answer: B) Auto liability insurance

 

241. Which of the following is a typical characteristic of “disability insurance”?
     A) It provides a lump-sum payment upon death
     B) It covers medical expenses after an injury
     C) It replaces a portion of lost income due to injury or illness
     D) It covers funeral expenses

Answer: C) It replaces a portion of lost income due to injury or illness

242. What is typically the purpose of “renters insurance”?
     A) To cover the cost of replacing a tenant’s personal property after a fire or theft
     B) To provide liability protection for a landlord in case of injury
     C) To insure the structure of a rental property
     D) To cover medical expenses for tenants

Answer: A) To cover the cost of replacing a tenant’s personal property after a fire or theft

243. What is the main function of “health insurance” in terms of healthcare expenses?
     A) To cover the full cost of medical treatments
     B) To provide financial protection against large medical bills
     C) To pay for prescription medications only
     D) To prevent the need for medical care altogether

Answer: B) To provide financial protection against large medical bills

244. Which of the following would most likely be covered by “auto collision insurance”?
     A) Damage to your vehicle in a collision with another vehicle
     B) Injury to another driver involved in an accident
     C) Theft of your vehicle
     D) Damage caused by a flood

Answer: A) Damage to your vehicle in a collision with another vehicle

245. What type of insurance would typically cover long-term care for an elderly individual?
     A) Life insurance
     B) Disability insurance
     C) Long-term care insurance
     D) Health insurance

Answer: C) Long-term care insurance

246. What is an example of “excess liability insurance”?
     A) Insurance that covers injuries or damage beyond the coverage limits of standard auto or home insurance
     B) Insurance that only covers medical bills
     C) Insurance that helps cover the cost of prescription medications
     D) Insurance that provides coverage for workers’ compensation claims

Answer: A) Insurance that covers injuries or damage beyond the coverage limits of standard auto or home insurance

247. Which of the following would likely be excluded from a typical auto insurance policy?
     A) Damage caused by a covered accident
     B) Damage caused by driving under the influence of alcohol
     C) Theft of the vehicle
     D) Medical expenses for an injury in an accident

Answer: B) Damage caused by driving under the influence of alcohol

248. What does “premium” mean in the context of an insurance policy?
     A) The deductible amount that must be paid before coverage starts
     B) The maximum amount of coverage provided by the policy
     C) The monthly or annual amount paid by the policyholder for coverage
     D) The total amount paid for a claim

Answer: C) The monthly or annual amount paid by the policyholder for coverage

249. Which of the following is true about “term life insurance”?
     A) It provides coverage for a specified term and does not build cash value
     B) It provides permanent coverage and builds cash value over time
     C) It covers only accidental death and injury
     D) It is more expensive than whole life insurance due to the permanent coverage

Answer: A) It provides coverage for a specified term and does not build cash value

250. What is typically not covered under “auto insurance”?
     A) Damage from an accident
     B) Injury to passengers in the insured car
     C) Damage caused by flooding
     D) Liability for an accident

Answer: C) Damage caused by flooding

251. Which of the following is a common exclusion in most health insurance policies?
     A) Emergency medical services
     B) Routine preventative care
     C) Cosmetic procedures
     D) Treatment for chronic illnesses

Answer: C) Cosmetic procedures

252. In “homeowners insurance,” which of the following would typically be excluded from coverage?
     A) Fire damage
     B) Theft of personal property
     C) Vandalism of the property
     D) Flood damage

Answer: D) Flood damage

253. What is the purpose of “auto liability insurance”?
     A) To cover the cost of vehicle repairs after an accident
     B) To pay for medical expenses after an accident
     C) To provide protection against legal claims for injuries or damages caused to others in an accident
     D) To provide rental car coverage during repairs

Answer: C) To provide protection against legal claims for injuries or damages caused to others in an accident

254. What does “underwriting” refer to in the context of insurance?
     A) The process of collecting premiums from policyholders
     B) The evaluation process used by insurers to determine the risk of insuring a person or property
     C) The amount of claims paid out by the insurer
     D) The amount of coverage a policyholder receives

Answer: B) The evaluation process used by insurers to determine the risk of insuring a person or property

255. Which of the following best describes “life insurance”?
     A) Insurance that only covers funeral expenses
     B) Insurance that provides financial protection for a policyholder’s family after their death
     C) Insurance that only covers medical expenses for terminally ill individuals
     D) Insurance that provides temporary protection for medical bills

Answer: B) Insurance that provides financial protection for a policyholder’s family after their death

256. What type of insurance is specifically designed to help cover the costs of medical care and lost income due to injury or illness?
     A) Health insurance
     B) Life insurance
     C) Disability insurance
     D) Auto insurance

Answer: C) Disability insurance

257. In terms of health insurance, what does “copay” refer to?
     A) The maximum amount the insurer will pay for a claim
     B) The portion of the claim paid by the policyholder
     C) A percentage of medical expenses covered by the insurance policy
     D) The monthly premium paid to maintain coverage

Answer: B) The portion of the claim paid by the policyholder

258. What does “flood insurance” typically cover?
     A) Damage to property due to rising water levels and flooding
     B) Damage to personal belongings from theft
     C) Emergency medical expenses from water-related accidents
     D) Damage to homes from fire or windstorms

Answer: A) Damage to property due to rising water levels and flooding

259. Which type of insurance would be most suitable for someone who wants to ensure their dependents are financially protected in case of premature death?
     A) Health insurance
     B) Life insurance
     C) Disability insurance
     D) Homeowners insurance

Answer: B) Life insurance

260. What is the primary purpose of “auto comprehensive insurance”?
     A) To cover medical expenses in case of an accident
     B) To cover damages to your car from non-collision events such as theft, vandalism, or weather-related incidents
     C) To cover legal liability for accidents involving other drivers
     D) To cover damage to another person’s property in an accident

Answer: B) To cover damages to your car from non-collision events such as theft, vandalism, or weather-related incidents