Choose the CORRECT answer for the following MCQs: Choose the correct statements
ID: 2815713 • Letter: C
Question
Choose the CORRECT answer for the following MCQs: Choose the correct statements with regard to insurance. 1. Regarding the characteristics of insurance, which of the following is/are fundamentals'? I. Probability (possibility and predictability of a loss) II. Law of large numbers III. Transfer of risk from individual to group IV. Insurance is a form of speculation a. I and II only. b. I, II and IV only. c. I, II and III only. d. IV only. 2. Adherence to the principle of indemnity means that: a. The insurer will pay the face amount of a life insurance policy, regardless of the cause of death b. The insured can profit from his or her insurance coverage if he or she has two identical fire insurance policies c. The insurer will reimburse the insured only to the extent of the insured's financial oss d. The insurer does not have to rely on the insured's representations contained in the application for insurance Mark and Madeline own a house valued at approximately $450,000 and an automobile valued at S65,000. The most practical method for this family to handle these exposures would be a. Avoidance of the exposures b. Hazard reduction and loss reduction c. Risk shifting or transfer d Risk reduction 3. 4. Which of the following statements concerning individual disability income policies is NOT correct? a. They usually contain a waiting or elimination period b. They usually cover both accidents and sickness c. They usually replace all of the disabled insured's lost earnings. d. They have more than one definition of disabilityExplanation / Answer
1.Regarding the characteristics of insurance which of the following is fundamentals
Answer:- C
2.Adherence to the principle of indemnity means that
Answer:-C
3.Mark and medeline own a house valued at approximately $450000 and an automobile valued at $65000 the most practical method for this family to handle these exposures would be
Answer:-B
4.Which of the following statement concerning individual disability income policies is not correct?
Answer:-A
5.Mark and madeline are considering buying a long term care policy on madeline’s mother in case they need to place her in a long term care facility. Which of the following step can mark and madeline take to hold down the annual premium cost of coverage?
Answer:-A
6.Madeline’s Cousin Theresa aged 63 has inherited $250000 from her mother and wants to use the money as a retirement fund. Since her family has long life expectation she is concerned about running out of money in her old age. What kind of annuity is most appropriate for Theresa
Answer:-C
7.You have just sold mark a whole life policy and pointed out to him that, in addition to providing death benefit protection, the policy builds up a cash value. Mark asks you where the cash value comes from. Which statement reflects accurately what you will tell him
Answer:-D
8.For which of the following needs is term life insurance best suited?
Answer:-C