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AINS 21 practice exam 2023/2024already graded A+
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AINS 21 practice exam 2023/2024already graded A+
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AINS 21 practice examwhen selecting a distribution channel, which one of the following is important consideration with
regard to customer needs and characteristics - ANS
Which of the following statements is correct regarding characteristics of ideally insurable loss
exposures - ANSideally, loss exposures should be spread across a large number of similar
exposure units within the same period
The type of insurance that provides periodic income payments to an insured who is unable to
work because of sickness or injury is - ANSDisability income insurance
Retention is often used in combination with insurance as a way of treating loss exposures. One
of the major downsides of individuals using retention alone is - ANSThe potential for financial
ruin
A loss exposure is - ANSAny condition that presents the possibility of a loss
Liability coverage for loss exposures arising from a business organizations premises and
operations, its products, or its completed work is typically provided by - ANSCommercial general
liability insurance
Though premiums are an obvious cost of insurance, many insureds believe that are too high
because - ANSBenefits are intangible until loss occurs
Insurance is not the only risk management transfer technique. When circumstances are
appropriate, transfer can be accomplished through - ANSnoninsurance transfer technique
Which one of the following is an example of a fortuitous loss - ANSAn unknown vandal
spray-paints graffiti on the insured's garage
Which one of the following statements is correct regarding the benefits that insurance provides -
ANSInvestment income helps keep insurance premiums at a reasonable level
Claim buildup is considered to be among which one of the following costs of insurance -
ANSincreased losses
The primary role of insurance is to - ANSindemnify individuals and organizations for covered
losses
,Coverage for money, securities, and other property from various causes of loss such as
burglary, robbery, theft, and employee dishonesty typically is provided by - ANScommercial
crime insurance
Which of the following is an opportunity cost of insurance - ANSAn insureds funds that could be
invested elsewhere if purchasing insurance were not necessary
Coverage for miscellaneous types of property such as movable property, goods in domestic
transit, and property use in transportation and communication, typically is provided by -
ANSinland marine insurance
For insurers to utilize pooling most effectively and prevent catastrophic losses, the insured
exposure units need to be - ANSindependent
Some loss exposures are not easy to retain, avoid, or control. What risk management
techniques is frequently used to treat such exposures - ANStransfer
Sometimes the existence of insurance encourages losses. the result of this phenomenon is that
in - ANSincreases the total cost of insurance
Pravalt Construction Company pays less than its competitors for workers compensation
insurance because Pravalt has had substantially fewer employee injuries than other firms in its
class. this illustrates which one of the following benefits of insurance - ANSpromote risk control
As a single mother on a very tight budget, Ciara is tempted to skimp on her insurance. However,
her friend Mehmet tells her not to skimp on insurance, because it will help manage her cash
flows. Which one of the following examples best illustrates Mehmet's point - ANSWhen her car's
windshield breaks, Ciara has to pay only $100 of the $600 cost of replacing it
A small business owner concerned about something happening and not being able to work or
earn a living for extended period of time due to an accident should purchase - ANSDisability
insurance
Adhering to the characteristics of an ideally insurable loss exposure in selling insurance help
assure that - ANSThe insurer is able to charge a premium that the insured can afford to pay
Which of the following statements is correct with regard to risk and ideally insurable
characteristics of loss exposures - ANSindemnification is the process of restoring an insured to
pre-loss financial condition
Which one of the following statements is correct - ANSinsurers investment income helps keep
premiums at reasonable level
, Which one of the following statements is correct regarding characteristics of ideally insurable los
exposures - ANSIdeally, loss exposures should be spread across a large number of similar
exposure units within the same period
Which one of the following is an operating cost of insurers - ANSProducers commissions
One of the costs of insurance is said to be opportunity costs. this means that if capital and labor
were not being used in the insurance business, they could be used elsewhere and making other
productive contributions to - ANSSociety
Private insurers are reluctant to provide windstorm insurance on coastal properties. This is
because the loss exposures fail to meet the criteria that ideally insurable exposures must be -
ANSIndependent and not catastrophic
Sally is a recent college graduate who lives in the suburbs and drives to work daily in the city.
she recognizes that owning a car creates both property damage and liability exposures for her
and at the same time she has the burden of student loans. For someone in Sally's
circumstances the most particular risk management technique for dealing with her auto related
loss exposures is - ANSRisk transfer
Another name for liability insurance is - ANSthird party insurance
A homeowners insurance policy typically includes - ANSboth property and liability coverage
which one of the following statements is true - ANSMutual insurance include some large
national insurers
An insurer that was formed for the purpose of earning a profit for its stockholders is a -
ANSStock insurer
which of the following is generally exempt from state insurance regulations pertaining to policy
forms and rates - ANSSurplus line insurers
Market conduct regulation focuses on insurers treatment of applicants for insurance insureds
and others who present claims for coverage. Market conduct regulation affects which one of the
following areas of operations? - ANSSales
Insurance company wrote a commercial liability policy for a manufacturer of off-road
motorcycles. The potential cost of the insureds loss exposure exceed insurance co capacity.
Insurance co could consider which type of contractual transferring agreement to meet its need -
ANSreinsurance
adhering to the characteristics of an ideally insurable loss exposure in selling insurance help
assure that - ANSThe insurer is able to change a premium that the insured can afford to pay
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