The principle that requires both parties to act honestly in an insurance contract is
Utmost good faith (uberrimae fidei) is a fundamental principle in insurance requiring full and honest disclosure of all material facts by both parties to avoid misrepresentation or non-disclosure.
Double insurance occurs when
Double insurance arises when the same risk and subject matter are insured with two or more insurers, allowing contribution but not exceeding indemnity.
Consensus ad idem in insurance refers to
Consensus ad idem means 'meeting of minds,' ensuring both parties understand and agree to the same terms, forming a valid contract.
Which life assurance policy pays benefits only if death occurs within the term?
Level term assurance provides a fixed sum assured payable only if death occurs during the policy term; no maturity benefit if the insured survives.
A loss assessor is appointed to
A loss assessor represents the insured in negotiating and settling claims, quantifying losses and ensuring fair compensation from the insurer.
Non-disclosure of a material fact makes the insurance contract
Non-disclosure, if material, allows the insurer to avoid the contract (voidable), meaning they can elect to cancel it upon discovery.
The duty of the insured after a loss includes
The insured must mitigate loss by taking reasonable steps to prevent further damage, as per the principle of mitigation of loss.
In marine insurance, sue and labour charges are for
Sue and labour clause covers costs incurred to prevent or minimize loss to insured property, recoverable in addition to the claim.
The Insurance Act 2003 in Nigeria establishes
The Insurance Act 2003 established the National Insurance Commission (NAICOM) as the regulatory body for insurance in Nigeria.
A convertible term assurance can be changed to
Convertible term assurance allows conversion to permanent policies like whole life or endowment without new medical underwriting.
The proximate cause doctrine determines
Proximate cause is the effective or dominant cause that sets the chain of events leading to the loss, determining coverage.
Fidelity bond insurance covers
Fidelity bonds protect against financial losses from employee theft or dishonesty, common in commercial insurance.
The grace period for life assurance premiums is
A 30-day grace period allows policy continuation despite late premium payment, with coverage intact but possible lapse if unpaid.
Underwriting is the process of
Underwriting evaluates the risk, sets terms, and determines premium to ensure profitability and solvency.
A proposal form is completed by the
The proposer (prospective insured) completes the proposal form disclosing details for risk assessment.
In fire insurance, the insured must prove
Fire insurance requires insurable interest, utmost good faith (no hidden facts), and avoidance of over-insurance for valid claims.
Reinsurance treaty is
A treaty is an automatic agreement covering a class or portfolio of risks, unlike facultative for individual risks.
The sum insured in property policies should not exceed the
Under indemnity, sum insured should not exceed indemnity value (actual loss or replacement minus depreciation) to prevent over-insurance.
Public liability insurance covers
Public liability covers legal liability for injury or damage to third parties arising from business operations.
An endowment policy matures at
Endowment assurance pays the sum assured on maturity (specified age) if alive, or on death if earlier.
The principle of contribution requires
Contribution applies when multiple identical policies cover the same risk and interest, sharing loss proportionally.
Motor third-party insurance is compulsory under
The Road Traffic Act mandates third-party motor insurance to protect victims of road accidents.
A material fact in insurance is one that
A material fact significantly affects the insurer's acceptance of risk or premium setting; non-disclosure voids or avoids the policy.
Group life assurance is issued to
Group life covers a collective (e.g., employees) under one policy, often with employer contributions, at lower costs.
The cooling-off period allows cancellation without penalty within
The 14-day cooling-off period lets policyholders cancel life or investment policies for full refund if reconsidered.
Engineering insurance covers
Engineering insurance protects against breakdown, failure, or damage to machinery, boilers, and construction projects.
In life assurance, insurable interest must exist at
For life assurance, insurable interest is required only at the time of claim (death), unlike general insurance at inception.
A valued policy specifies
Valued policies pre-agree a fixed sum payable on total loss, simplifying claims for items like art or ships.
The ombudsman in insurance handles
The insurance ombudsman mediates disputes between policyholders and insurers, offering free, binding resolutions.
Burglary insurance requires proof of
Standard burglary policies cover theft with evidence of forcible entry (e.g., broken locks), excluding inside jobs.
Annuity provides
Annuities provide regular income payments post-retirement in exchange for a lump sum, ensuring financial security.
The excess in a policy is borne by
Excess (deductible) is the initial amount paid by the insured before the insurer covers the rest, reducing small claims.
Professional indemnity covers
Professional indemnity protects against claims of negligence, errors, or omissions in professional services (e.g., lawyers, doctors).
In marine insurance, total loss occurs when
Constructive total loss is declared when repair costs exceed the vessel/cargo's value, allowing abandonment and full claim.
A broker's duty includes
Insurance brokers advise clients on appropriate policies, negotiate terms, and act in the client's best interest.
Misrepresentation if fraudulent leads to
Fraudulent misrepresentation renders the contract void ab initio, as if it never existed, allowing no claims.
Crop insurance in Nigeria is promoted by
NAICOM regulates, CBN provides financial support, and NACRDB (now Bank of Agriculture) offers credit for agricultural insurance schemes like NAIS.
The waiting period in health insurance is to exclude
Waiting periods prevent immediate claims on pre-existing conditions, allowing time for risk equalization.
All risks policy covers
All risks (or open cover) insures against any accidental loss unless specifically excluded in the policy terms.
The revival of a lapsed policy requires
Revival involves paying arrears and possible health checks for life policies to restore coverage after lapse.
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