PA Life, Accident, & Health Insurance Exam
Questions With Correct Answers
Insurance - CORRECT ANSWER✔✔-defined as the transfer of PURE risk to the
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insurance company in consideration for a premium.
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The chance of loss without any chance of gain is called - CORRECT ANSWER✔✔-
| | | | | | | | | | | | |
pure risk |
Speculative risk - CORRECT ANSWER✔✔-has the possibility for gain or loss and is
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not insurable.
|
Risk is defined as the - CORRECT ANSWER✔✔-chance of loss.
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A condition that could result in a loss is known as an - CORRECT ANSWER✔✔-
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exposure
A hazard is something that increases - CORRECT ANSWER✔✔-the chance of loss.
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The presence of a physical hazard - CORRECT ANSWER✔✔-increases the chance
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of a loss occurring.
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A peril is - CORRECT ANSWER✔✔-defined as a cause of loss, such as fire.
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,To be insurable, - CORRECT ANSWER✔✔-losses must be calculable.
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The law of large numbers - CORRECT ANSWER✔✔-allows insurers to predict
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claims more accurately. | |
The law of large numbers applies to - CORRECT ANSWER✔✔-groups of people,
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not to individuals.
| |
The more people in the group, - CORRECT ANSWER✔✔-the more accurate the
| | | | | | | | | | | |
predictions are. |
Most insurers buy reinsurance - CORRECT ANSWER✔✔-to protect themselves in
| | | | | | | | | |
the event of a catastrophic loss.
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Insurance laws are not required - CORRECT ANSWER✔✔-to be uniform from one
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state to another.| |
A stock insurer - CORRECT ANSWER✔✔-may pay dividends to its shareholders
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(stockholders), but they may not be guaranteed. | | | | | |
A reciprocal insurance company is managed by an - CORRECT ANSWER✔✔-
| | | | | | | | | |
attorney-in-fact.
An unincorporated association of individuals who insure each other is known as -
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CORRECT ANSWER✔✔-a reciprocal insurer.
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, The government offers insurance primarily based upon - CORRECT ANSWER✔✔-
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social needs, such as flood insurance and workers compensation, but does not
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offer insurance for the purpose of preventing fraud.
| | | | | | |
A foreign company - CORRECT ANSWER✔✔-has their home office in another
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state.
An insurer incorporated outside of the U.S. who sells in the U.S. is - CORRECT
| | | | | | | | | | | | | | |
ANSWER✔✔-an alien company. | |
A producer may be personally liable when - CORRECT ANSWER✔✔-violating the
| | | | | | | | | | |
producer's contract. |
Producers represent - CORRECT ANSWER✔✔-the insurance company, not the
| | | | | | | | |
insured.
Independent producers - CORRECT ANSWER✔✔-own their own accounts and are
| | | | | | | | | |
not insurance company employees.
| | |
Producers have - CORRECT ANSWER✔✔-express, implied and apparent authority.
| | | | | | | |
The authority a producer - CORRECT ANSWER✔✔-has that is written in his or her
| | | | | | | | | | | | | |
contract is known as express authority.
| | | | |
Questions With Correct Answers
Insurance - CORRECT ANSWER✔✔-defined as the transfer of PURE risk to the
| | | | | | | | | | | |
insurance company in consideration for a premium.
| | | | | |
The chance of loss without any chance of gain is called - CORRECT ANSWER✔✔-
| | | | | | | | | | | | |
pure risk |
Speculative risk - CORRECT ANSWER✔✔-has the possibility for gain or loss and is
| | | | | | | | | | | | |
not insurable.
|
Risk is defined as the - CORRECT ANSWER✔✔-chance of loss.
| | | | | | | | |
A condition that could result in a loss is known as an - CORRECT ANSWER✔✔-
| | | | | | | | | | | | | |
exposure
A hazard is something that increases - CORRECT ANSWER✔✔-the chance of loss.
| | | | | | | | | | |
The presence of a physical hazard - CORRECT ANSWER✔✔-increases the chance
| | | | | | | | | | |
of a loss occurring.
| | |
A peril is - CORRECT ANSWER✔✔-defined as a cause of loss, such as fire.
| | | | | | | | | | | | |
,To be insurable, - CORRECT ANSWER✔✔-losses must be calculable.
| | | | | | | |
The law of large numbers - CORRECT ANSWER✔✔-allows insurers to predict
| | | | | | | | | | |
claims more accurately. | |
The law of large numbers applies to - CORRECT ANSWER✔✔-groups of people,
| | | | | | | | | | | |
not to individuals.
| |
The more people in the group, - CORRECT ANSWER✔✔-the more accurate the
| | | | | | | | | | | |
predictions are. |
Most insurers buy reinsurance - CORRECT ANSWER✔✔-to protect themselves in
| | | | | | | | | |
the event of a catastrophic loss.
| | | | |
Insurance laws are not required - CORRECT ANSWER✔✔-to be uniform from one
| | | | | | | | | | | |
state to another.| |
A stock insurer - CORRECT ANSWER✔✔-may pay dividends to its shareholders
| | | | | | | | | | |
(stockholders), but they may not be guaranteed. | | | | | |
A reciprocal insurance company is managed by an - CORRECT ANSWER✔✔-
| | | | | | | | | |
attorney-in-fact.
An unincorporated association of individuals who insure each other is known as -
| | | | | | | | | | | | |
CORRECT ANSWER✔✔-a reciprocal insurer.
| | |
, The government offers insurance primarily based upon - CORRECT ANSWER✔✔-
| | | | | | | | |
social needs, such as flood insurance and workers compensation, but does not
| | | | | | | | | | | |
offer insurance for the purpose of preventing fraud.
| | | | | | |
A foreign company - CORRECT ANSWER✔✔-has their home office in another
| | | | | | | | | | |
state.
An insurer incorporated outside of the U.S. who sells in the U.S. is - CORRECT
| | | | | | | | | | | | | | |
ANSWER✔✔-an alien company. | |
A producer may be personally liable when - CORRECT ANSWER✔✔-violating the
| | | | | | | | | | |
producer's contract. |
Producers represent - CORRECT ANSWER✔✔-the insurance company, not the
| | | | | | | | |
insured.
Independent producers - CORRECT ANSWER✔✔-own their own accounts and are
| | | | | | | | | |
not insurance company employees.
| | |
Producers have - CORRECT ANSWER✔✔-express, implied and apparent authority.
| | | | | | | |
The authority a producer - CORRECT ANSWER✔✔-has that is written in his or her
| | | | | | | | | | | | | |
contract is known as express authority.
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