Insurance Awareness Quiz – Set 47

insurance awareness quiz

Insurance Awareness Quiz: We have created quiz questions on Insurance Awareness which are most important for insurance exams. These questions and answers will guide you in all insurance exams like LIC (AAO/ADO), NIACL assistant and AO, UIIC, IRDA and other Bank PO exams and all competitive exams. So attempt these multiple choice questions now based on the exam pattern syllabus.

  1. Inadequate insurance coverage held by a policy holder where the limits may not be high enough to cover the full expenses of a claim is known as__________
    A) Low-insurance
    B) Under-insurance
    C) Doubtful-insurance
    D) Cheap-insurance
    View answer
    Option B
    Explanation:
    Underinsurance refers to inadequate insurance coverage held by a policyholder. In the event of a claim, underinsurance may result in economic losses to the policyholder, since the claim would exceed the maximum amount that can be paid out by the insurance policy.
  2. ____________ is where an insurer deposits premiums from policies it underwrites and from which it funds day-to-day operations of the business.
    A) General Account
    B) Insurance Account
    C) Savings Account
    D) Business Account
    View answer
    Option A
  3. Which of these best defines the “maximum you have to pay for covered services in a plan year”?
    A) actual cash value
    B) up-to-date maximum
    C) Gross premiums written
    D) out-of-pocket maximum
    View answer
    Option D
    Explanation:
    Your out-of-pocket maximum is the most you have to pay each year toward your medical services or prescription drugs before your insurance pays for all your care. This amount does not include what you pay in premiums.
  4. What does EOB stands for in insurance?
    A) Extra offer Benefits
    B) Existence of Beneficiary
    C) Explanation of Benefits
    D) Emergence of Bancassurance
    View answer
    Option C
    Explanation:
    An explanation of benefits (EOB) is a statement sent by a health insurance company to covered individuals explaining what medical treatments and/or services were paid for on their behalf.
  5. The period during which claim is not admitted in a health insurance is known as________
    A) Waiting Period
    B) Turning Period
    C) Halt Period
    D) Grace Period
    View answer
    Option A
    Explanation:
    The concept of waiting period in a health insurance policy is defined as the period of time specified which must pass before some or all of your health care coverage can begin.
  6. An insurance policy issued at a higher premium rate than standard because of less than average health conditions or undesirable lifestyles is known as____________.
    A) Loss policy
    B) Rated policy
    C) With-Profit policy
    D) Systematic policy
    View answer
    Option B
  7. The duration of period during which an insurer has the right to investigate the policy and decide upon the claim is called as _______
    A) Waiting period
    B) Finite period
    C) Recoupment
    D) Contestable period
    View answer
    Option D
    Explanation:
    The life insurance contestability period is a short window in which insurance companies can investigate and deny claims. The period is two years in most states and one year in others. It begins as soon as a policy goes into effect.
  8. Which class of policy holders pay generally higher insurance premiums
    A) Female
    B) Male
    C) Children
    D) There is no such distribution
    View answer
    Option B
  9. Suppose an individual purchase mortgage life insurance and is paying down the principal, what will happen to his coverage?
    A) Decrease
    B) No change
    C) Increase
    D) Cannot be determined
    View answer
    Option A
    Explanation:
    The coverage decreases at the same rate as the party pay off the principal of the mortgage
  10. HMOs are a type of health insurance plan. Here HMO stands for_______
    A) Health Management Obligation
    B) Health Medicare Office
    C) Health Maintenance Organization
    D) Health Monitoring Ombudsman
    View answer
    Option C

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