Davidson; Management - 3rd Australasian Edition



1.
Life insurance companies provide protection against death.
A. True
B. False


2.
The assets of life insurance companies are not as marketable as those of casualty/property insurance companies because life companies have greater certainty of claims.
A. True
B. False


3.
An annuity provides both insurance against premature death and savings features.
A. True
B. False


4.
Health insurance includes protection against the risk of large, unexpected medical expenses and/or the loss of income from illness or disability.
A. True
B. False


5.
Objective risk is the deviation of actual from expected.
A. True
B. False


6.
All insurers must deal with the problem of adverse selection.
A. True
B. False


7.
The sale of term life insurance was an important factor explaining the growth and large size of life insurance companies.
A. True
B. False


8.
Pure risk and objective risk are both assumed by life insurance companies.
A. True
B. False


9.
Insurance premiums are directly related to expected dollar losses.
A. True
B. False


10.
Term life policies provide maximum life insurance dollar protection for consumers for a given amount of premium.
A. True
B. False


11.
Life insurance and pension reserves are liquid asset balances held by life insurance companies to pay losses and pension benefits.
A. True
B. False


12.
Business interruption is an example of an indirect loss.
A. True
B. False


13.
Any risk is insurable for a high enough premium.
A. True
B. False


14.
Liability risk is much easier to gauge than property risk.
A. True
B. False


15.
The law of large numbers practically guarantees that an insurer will be profitable if it has enough policy holders.
A. True
B. False


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