Insurance Questions & Answers

31.

The type of life insurance policy where the premium goes towards the policy with no interest element is

endowment policy

whole life insurance

annuity policy

term insurance

Correct answer is A

Endowment life insurance policies do not have investment risk or interest rate risk. an endowment policy does not earn any interest throughout the term.

32.

The part of a policy that describes the event that led to a loss is

operative clause

recital clause

heading

schedule

View answer & explanation

Correct answer is A

The Operative clause in an insurance policy sets outs the circumstances that must be present before an insurance company will pay out any claims to insured parties.

33.

which of the following professionals is an operator in the reinsurance market?

agent

consultant

broker

adjuster

View answer & explanation

Correct answer is C

An insurance broker is a specialist in insurance and risk management. Brokers act on behalf of their clients and provide advice in the interests of their clients.

34.

A policy that covers a trader against the risk of payment default by customer is

stock insurance

trade insurance

fidelity insurance

credit insurance

View answer & explanation

Correct answer is C

Fidelity Guarantee Insurance provides insurance against direct financial loss to companies arising out of the dishonesty of their employees.

35.

A life policy that pays the sum assured if the policy holder dies anytime within the policy period is

term assurance

pure endowment

whole life insurance

personal accident insurance

View answer & explanation

Correct answer is A

A term assurance policy will be set up to last for a certain period of time (usually a specific number of years or until you reach a certain age): this is known as the term of the policy. A payment will only be made in the event of your death during that period.

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