FBN INSURANCE BROKER Aptitude Test Questions and Answers
What is the minimum age requirement to apply for an insurance broker license in most jurisdictions?
a) 18 years
b) 21 years
c) 25 years
d) 30 years
Correct answer: a) 18 years
Which of the following is an example of a personal lines insurance?
a) Commercial property insurance
b) Workers' compensation insurance
c) Health insurance
d) Professional liability insurance
Correct answer: c) Health insurance
What does E&O insurance stand for?
a) Errors & Omissions insurance
b) Employment & Occupational insurance
c) Endorsements & Obligations insurance
d) Exclusions & Overages insurance
Correct answer: a) Errors & Omissions insurance
Which type of insurance policy covers damage to property caused by fire?
a) Comprehensive insurance
b) Liability insurance
c) Fire insurance
d) Flood insurance
Correct answer: c) Fire insurance
What does the term "deductible" refer to in insurance?
a) The amount the insured pays before the insurance company covers the rest
b) The amount the insurance company pays before the insured must contribute
c) The total premium paid annually
d) The amount paid by the insurance company in case of a claim
Correct answer: a) The amount the insured pays before the insurance company covers the rest
Which of the following is not a factor considered in determining insurance premiums?
a) Age of the insured
b) Type of occupation
c) Gender of the insured
d) Previous insurance claims history
Correct answer: c) Gender of the insured
What is the purpose of a certificate of insurance?
a) To provide proof of insurance coverage
b) To initiate an insurance claim
c) To cancel an insurance policy
d) To increase the coverage limits
Correct answer: a) To provide proof of insurance coverage
What does the term "risk pooling" mean in insurance?
a) Combining multiple risks into a single policy
b) Calculating the likelihood of a risk occurring
c) Determining the total value of an insurance policy
d) Analyzing the potential impact of a risk
Correct answer: a) Combining multiple risks into a single policy
Which type of insurance provides coverage for damage to a vehicle caused by collisions with other vehicles or objects?
a) Comprehensive insurance
b) Liability insurance
c) Collision insurance
d) Personal injury protection
Correct answer: c) Collision insurance
What is the purpose of underwriting in insurance?
a) Assessing and evaluating risks
b) Investigating insurance fraud
c) Determining the market value of assets
d) Managing insurance claims
Correct answer: a) Assessing and evaluating risks
Which of the following is an example of a peril in insurance terminology?
a) Earthquake
b) Policyholder
c) Premium
d) Broker
Correct answer: a) Earthquake
What does the term "subrogation" mean in insurance?
a) The transfer of policy ownership to another party
b) The process of filing an insurance claim
c) The right of the insurance company to recover damages from a third party
d) The cancellation of an insurance policy
Correct answer: c) The right of the insurance company to recover damages from a third party
Which of the following is an example of a life insurance policy?
a) Homeowners insurance
b) Disability insurance
c) Auto insurance
d) Term life insurance
Correct answer: d) Term life insurance
What does the term "indemnity" mean in insurance?
a) The maximum coverage limit of an insurance policy
b) The compensation paid by the insured to the insurance company
c) The financial compensation for a loss or damage
d) The cancellation of an insurance policy
Correct answer: c) The financial compensation for a loss or damage
Which type of insurance provides coverage for medical expenses resulting from an accident or illness?
a) Property insurance
b) Health insurance
c) Disability insurance
d) Umbrella insurance
Correct answer: b) Health insurance
What is the purpose of a waiting period in insurance?
a) To determine the premium amount
b) To delay the payment of insurance claims
c) To assess the insurability of the applicant
d) To ensure coverage for pre-existing conditions
Correct answer: d) To ensure coverage for pre-existing conditions
Which of the following is an example of a liability insurance?
a) Homeowners insurance
b) Auto insurance
c) Disability insurance
d) Pet insurance
Correct answer: b) Auto insurance
What does the term "policy limit" refer to in insurance?
a) The maximum age at which a policy can be renewed
b) The maximum number of claims allowed per year
c) The maximum coverage amount provided by the insurance policy
d) The minimum waiting period for claims processing
Correct answer: c) The maximum coverage amount provided by the insurance policy
Which type of insurance provides coverage for damage to property caused by natural disasters such as hurricanes or floods?
a) Homeowners insurance
b) Renters insurance
c) Flood insurance
d) Umbrella insurance
Correct answer: c) Flood insurance
What does the term "loss ratio" represent in insurance?
a) The total number of claims filed by policyholders
b) The percentage of premiums paid out as claims by the insurance company
c) The overall profitability of the insurance company
d) The average premium amount charged by the insurance company
Correct answer: b) The percentage of premiums paid out as claims by the insurance company
Which of the following is an example of a property insurance?
a) Disability insurance
b) Umbrella insurance
c) Homeowners insurance
d) Travel insurance
Correct answer: c) Homeowners insurance
What does the term "cash value" refer to in life insurance?
a) The amount of money paid to the beneficiary upon the death of the insured
b) The total premium paid over the lifetime of the policy
c) The accumulated savings component of a permanent life insurance policy
d) The maximum coverage amount provided by the policy
Correct answer: c) The accumulated savings component of a permanent life insurance policy
Which type of insurance provides coverage for professional errors or negligence?
a) General liability insurance
b) Business interruption insurance
c) Professional liability insurance
d) Directors and officers liability insurance
Correct answer: c) Professional liability insurance
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