Pre-Contract Examination for Insurance Agents Sample Question
Pre-Contract Examination for Insurance Agents: Sample Questions
The pre-contract examination for insurance agents is an important part of the licensing process. It ensures that agents have the necessary knowledge and skills to provide professional and ethical services to their clients. As an aspiring insurance agent, you need to prepare for this exam to increase your chances of passing it. In this article, we`ll review some sample questions that you may encounter during the pre-contract examination.
1. What is the definition of „insurance“?
a. The transfer of risk from one person to another.
b. The compensation for financial loss due to unexpected events.
c. The protection against the uncertain occurrence of a particular event.
2. Which of the following is NOT a factor that affects insurance premiums?
a. Age of the insured.
b. Credit score of the insured.
c. Gender of the insured.
d. Marital status of the insured.
3. What is the difference between a deductible and a premium?
a. A deductible is the amount the policyholder pays before the insurance coverage starts, while a premium is the amount paid to maintain the coverage.
b. A deductible is the amount paid to maintain the coverage, while a premium is the amount the policyholder pays before the insurance coverage starts.
c. A deductible is the optional amount paid to increase the coverage, while a premium is the mandatory amount paid to maintain the coverage.
4. Which of the following is NOT a type of life insurance?
a. Term life insurance.
b. Whole life insurance.
c. Variable life insurance.
d. Liability insurance.
5. What is the primary purpose of property and casualty insurance?
a. To protect assets against natural disasters.
b. To compensate for financial loss due to liability claims.
c. To cover medical expenses for accidents.
6. What is the meaning of „underwriting“ in insurance?
a. The process of assessing risks and determining the premium.
b. The process of investigating fraudulent claims.
c. The process of renewing insurance policies.
7. Which of the following is NOT a type of health insurance?
a. Preferred provider organization (PPO).
b. Health maintenance organization (HMO).
c. Indemnity insurance.
d. Collision insurance.
8. What does „COBRA“ stand for in health insurance?
a. Consolidated Omnibus Budget Reconciliation Act.
b. Comprehensive Optional Benefits for Retirees Act.
c. Cooperative Organization for Back-up Retirement Accounts.
9. What is the difference between primary and secondary beneficiaries in life insurance?
a. Primary beneficiaries receive the death benefit first, while secondary beneficiaries receive the remainder.
b. Primary beneficiaries receive a higher death benefit than secondary beneficiaries.
c. Secondary beneficiaries only receive the death benefit if the primary beneficiaries die before the insured.
10. What is the purpose of an insurance policy`s „exclusion clause“?
a. To limit the insurance company`s liability for specific risks.
b. To increase the premium for high-risk activities.
c. To grant additional coverage for pre-existing conditions.
In conclusion, the pre-contract examination for insurance agents requires a thorough understanding of insurance concepts and practices. By reviewing these sample questions, you can assess your knowledge and identify areas that require further study. With adequate preparation, you can increase your chances of passing the exam and becoming a licensed insurance agent.