Question 1

Insurance is a risk management technique involving____________&#10;A)risk retention.&#10;B)risk avoidance.&#10;C)loss control.&#10;D)risk transfer.

Accepted Answer

Insurance is a method of risk transfer, where the financial responsibility for losses is shifted from the insured to the insurer.

Question 2

Risk management follows a systematic process which involves _______ steps.&#10;A)two.&#10;B)three.&#10;C)four.&#10;D)five.

Accepted Answer

Risk management typically follows a systematic process that involves five key steps: identify the risks, analyze the risks, evaluate or rank the risks, treat the risks, and monitor and review the situation.

Question 3

Organizations are mainly concerned with managing&#10;A)pure risks.&#10;B)speculative risks.&#10;C)personal risks.&#10;D)other risks

Accepted Answer

Organizations are mainly concerned with managing pure risks, which are types of risks that involve only the possibility of loss or no loss, such as natural disasters or accidents. These risks can be insured against, unlike speculative risks which involve the possibility of gain as well as loss.

Question 4

The first step in risk management process is&#10;A)risk avoidance.&#10;B)risk identification.&#10;C)insurance.&#10;D)risk evaluation.

Accepted Answer

The first step in the risk management process is risk identification. This involves recognizing and documenting the potential risks that could affect a project, process, or endeavor. Only after risks are identified can they be analyzed, evaluated, and managed appropriately.

Question 5

Which of the following steps in the risk management process helps in determining sum insured under policies?&#10;A)risk identification.&#10;B)risk retention.&#10;C)risk transfer.&#10;D)risk evaluation.

Accepted Answer

Risk evaluation helps in determining the sum insured under policies by assessing the potential impact and likelihood of identified risks, thereby aiding in deciding the appropriate level of coverage needed.

Question 6

Main emphasis of risk management is on&#10;A)risk retention.&#10;B)reduction of cost of handling risk.&#10;C)risk transfer.&#10;D)insurance.

Accepted Answer

The main emphasis of risk management is on the reduction of the cost of handling risk, aiming to minimize the impact of risks on an organization's financial health and operational stability.

Question 7

The Concept of Insurance is ___________&#10;A)to share losses by many&#10;B)to make money out of death&#10;C)to earn interest&#10;D)to earn a status

Accepted Answer

The concept of insurance is fundamentally about distributing or sharing the financial risk of losses among many people or entities to protect against significant, individual losses.

Question 8

Insurance covers the risk of most certain event _____&#10;A)birth of a person&#10;B)protection of the childhood&#10;C)Protection in old age&#10;D)death of a person

Accepted Answer

Insurance primarily covers events that have a degree of uncertainty regarding their timing or occurrence. While death is a certain event for everyone, the timing of death is uncertain, making it insurable. Birth, childhood, and old age are stages of life that, while they can be associated with specific insurance products for protection, do not represent the same level of insurable risk as the uncertainty of the timing of death.

Question 9

Insurance cover _______&#10;A)protects assets&#10;B)prevents loss&#10;C)reduces the impact of loss&#10;D)insurances immorality

Accepted Answer

The answer of Insurance cover _______&#10;A)protects assets&#10;B)prevents loss&#10;C)reduces the impact...

Question 10

The proportion of the risk which the direct insurer holds on his own account refers to _______&#10;A)Line&#10;B)Retention&#10;C)Retrocession&#10;D)Ceding insurer

Accepted Answer

Retention refers to the portion of risk that an insurer keeps for itself instead of transferring it to a reinsurer or another party. It indicates the level of risk the insurer is willing to accept and manage on its own account.

Question 11

The business of insurance is related to protection of ________&#10;A)status&#10;B)savings&#10;C)economic value of assets&#10;D)profits

Accepted Answer

The answer of The business of insurance is related to...

Question 12

Who are the beneficiaries of Insurance?&#10;A)Society&#10;B)Individual&#10;C)Business&#10;D)All of these

Accepted Answer

The answer of Who are the beneficiaries of Insurance?&#10;A)Society&#10;B)Individual&#10;C)Business&#10;D)All of...

Question 13

In insurance contracts, the insurance company is also known as ________&#10;A)Insured&#10;B)Beneficiary&#10;C)Insurer&#10;D)policy holder

Accepted Answer

The answer of In insurance contracts, the insurance company is...

Question 14

For introduction of a group scheme, we need a ______&#10;A)Large group of persons&#10;B)Small group of persons&#10;C)Homogeneous group&#10;D)Insured group

Accepted Answer

The answer of For introduction of a group scheme, we...

Question 15

When choosing group life insurance, most groups buy _______&#10;A)whole life insurance&#10;B)one year renewable group term assurance&#10;C)variable life insurance&#10;D)universal life insurance

Accepted Answer

The answer of When choosing group life insurance, most groups...

Question 16

On the death of the bread-earner, two losses occur in the family-one is loss of human life and the other _____&#10;A)Loss of insurance&#10;B)Loss of investment&#10;C)Loss of bank deposits&#10;D)Earning power of family

Accepted Answer

The answer of On the death of the bread-earner, two...

Deck 4: Understanding Insurance: Cover, Risk, and Reinsurance