Deck 4: Understanding Insurance: Cover, Risk, and Reinsurance

Question 1

Insurance is a risk management technique involving____________

A)risk retention.
B)risk avoidance.
C)loss control.
D)risk transfer.

Answer 1

risk transfer.

Question 2

Risk management follows a systematic process which involves _______ steps.

A)two.
B)three.
C)four.
D)five.

Answer 2

five.

Question 3

Organizations are mainly concerned with managing

A)pure risks.
B)speculative risks.
C)personal risks.
D)other risks

Answer 3

pure risks.

Question 4

The first step in risk management process is

A)risk avoidance.
B)risk identification.
C)insurance.
D)risk evaluation.

Question 5

Which of the following steps in the risk management process helps in determining sum insured under policies?

A)risk identification.
B)risk retention.
C)risk transfer.
D)risk evaluation.

Question 6

Main emphasis of risk management is on

A)risk retention.
B)reduction of cost of handling risk.
C)risk transfer.
D)insurance.

Question 7

The Concept of Insurance is ___________

A)to share losses by many
B)to make money out of death
C)to earn interest
D)to earn a status

Question 8

Insurance covers the risk of most certain event _____

A)birth of a person
B)protection of the childhood
C)Protection in old age
D)death of a person

Question 9

Insurance cover _______

A)protects assets
B)prevents loss
C)reduces the impact of loss
D)insurances immorality

Question 10

The proportion of the risk which the direct insurer holds on his own account refers to _______

A)Line
B)Retention
C)Retrocession
D)Ceding insurer

Question 11

The business of insurance is related to protection of ________

A)status
B)savings
C)economic value of assets
D)profits

Question 12

Who are the beneficiaries of Insurance?

A)Society
B)Individual
C)Business
D)All of these

Question 13

In insurance contracts, the insurance company is also known as ________

A)Insured
B)Beneficiary
C)Insurer
D)policy holder

Question 14

For introduction of a group scheme, we need a ______

A)Large group of persons
B)Small group of persons
C)Homogeneous group
D)Insured group

Question 15

When choosing group life insurance, most groups buy _______

A)whole life insurance
B)one year renewable group term assurance
C)variable life insurance
D)universal life insurance

Question 16

On the death of the bread-earner, two losses occur in the family-one is loss of human life and the other _____

A)Loss of insurance
B)Loss of investment
C)Loss of bank deposits
D)Earning power of family