Insurance Terminology in Writing

What is a 'premium' in the insurance industry?

• The amount an insurer pays for a policy.

• The amount a policyholder pays for an insurance policy.

• The total coverage amount of an insurance policy.

• The maximum amount an insurer will pay for a claim.

What is a 'deductible' in an insurance policy?

• The amount the insurer pays before the policyholder covers the rest.

• The monthly payment for an insurance policy.

• The total cost of the insurance policy.

• The amount the policyholder must pay out of pocket before the insurance company pays a claim.

What is the main difference between 'coverage' and 'policy limit'?

• Coverage is the total cost of the policy; policy limit is the monthly payment.

• Coverage is the policyholder's out-of-pocket expense; policy limit is the insurer's profit margin.

• Coverage is the insurer's fee; policy limit is the policyholder's deductible.

• Coverage refers to what is protected under the policy; policy limit is the maximum amount the insurer will pay for a claim.

What is 'underwriting' in the insurance industry?

• The process of filing a claim.

• The process of selling insurance policies.

• The process of assessing risk and determining the terms and cost of an insurance policy.

• The process of renewing an insurance policy.

What is an 'exclusion' in an insurance policy?

• An additional benefit provided by the insurer.

• A discount on the premium.

• A clause that specifies what is not covered by the insurance policy.

• A type of policy coverage.

What is the main difference between a 'claim' and a 'benefit'?

• A claim is the insurer's fee; a benefit is the policyholder's out-of-pocket expense.

• A claim is a request for payment by the policyholder; a benefit is the payment made by the insurer.

• A claim is the amount paid by the insurer; a benefit is the total policy coverage.

• A claim is the policyholder's monthly payment; a benefit is the policy's deductible.

What does 'liability' mean in an insurance context?

• The total cost of the insurance policy.

• The legal responsibility to pay for damages or losses.

• The monthly premium payment.

• The policyholder's out-of-pocket expense.

What is an 'actuary' and what is their role in an insurance agency?

• A person who processes insurance claims.

• A customer service representative.

• A person who sells insurance policies.

• A professional who calculates risks and premiums for insurance policies.

What is 'reinsurance' and why is it used?

• Insurance that protects the insurer from large claims by sharing the risk with another insurance company.

• Insurance that provides additional benefits to the policyholder.

• • Insurance that covers the policyholder's deductible.

• • Insurance that covers the policyholder's monthly premium.

What is the main difference between an 'insurance broker' and an 'insurance agent'?

• A broker processes claims; an agent calculates premiums.

• A broker sets insurance rates; an agent sells policies.

• A broker represents the policyholder and can offer policies from multiple insurers; an agent represents an insurance company and offers its policies.

• A broker works for a specific insurance company; an agent works for multiple companies.