Insurance Quiz

What is the definition of insurance?

• D. A contract between insured and insurer that outlines the terms and conditions of coverage

• B. A document of transitional nature which acts as a proof of insurance before insurance policy is issued

• A. A legal contract between an insurer and insured to provide financial protection and compensation in the event of a claim

• C. A cover note that provides temporary insurance cover while a policy is being prepared

Who is the beneficiary in an insurance policy?

• C. Somebody employed by an insurance company to assess risks and fix premiums

• B. The organisations who provide insurance cover

• D. The person or business who gets insurance

• A. The person who will get payment against insurance claim from insurance

What is the purpose of insurance?

• D. All of the above

• A. To provide employment for many people

• B. To reduce the risk of the business

• C. To provide compensation against losses

What is the importance of pooling of risk in insurance?

• D. It eliminates the need for insurance brokers

• A. It helps those who suffer from losses and make a claim

• B. It increases the profit for shareholders

• C. It reduces the need for insurance policies

What is the main function of an insurance broker?

• D. To assess risks and fix premiums

• C. To bring people and insurance companies together

• B. To accept insurance risks and decide premiums

• A. To provide financial protection to individuals

What is the principle of indemnity in insurance?

• C. The insured benefits from the loss

• A. The insurer compensates the loss

• D. The insured must pay for the loss

• B. The insurer makes a profit from the loss

What is insurable interest in insurance?

• A. A person should not make a profit from a loss

• B. A person should have a direct financial interest in what is insured

• C. Both insurer and insured should tell the truth

• D. The insurer will pay only if the loss is caused by a covered risk

What is the utmost good faith principle in insurance?

• C. A person should not make a profit from a loss

• D. A person should have a direct financial interest in what is insured

• B. The insurer will pay only if the loss is caused by a covered risk

• A. Both insurer and insured should tell the truth

What is the purpose of a cover note in insurance?

• B. To act as a proof of insurance before the insurance policy is issued

• D. To assess risks and calculate premiums

• A. To provide temporary insurance cover while a policy is being prepared

• C. To provide written evidence of the contract between insured and insurer

What is the main document used to request payment under an insurance policy?

• B. Cover note

• C. Claim form

• A. Proposal form

• D. Insurance policy