The policy issued by the insurer to the insured (an individual or a business enterprise) is referred to as ______________and gives rise to the insurer's "direct" written insurance premiums.

The correct answer is A. primary insurance. Primary insurance (A) is the correct term because it describes coverage issued directly from an insurer to the insured - whether a person or business - and the premiums collected from these policies are recorded as "direct" written premiums, distinguishing them from premiums…

Question

The policy issued by the insurer to the insured (an individual or a business enterprise) is referred to as ______________and gives rise to the insurer’s “direct” written insurance premiums.

Options

Aprimary insurance
Binsurance policy
Cinsurance protection
Daccounting insurance

How the community answered

(36 responses)

A
75% (27)
B
14% (5)
C
8% (3)
D
3% (1)

Explanation

Primary insurance (A) is the correct term because it describes coverage issued directly from an insurer to the insured - whether a person or business - and the premiums collected from these policies are recorded as "direct" written premiums, distinguishing them from premiums that come through reinsurance arrangements (where one insurer cedes risk to another).

Why the distractors are wrong:

B (insurance policy) is too broad - it simply describes any contract of insurance and carries no specific meaning tied to direct premium generation.
C (insurance protection) is a colloquial phrase describing the benefit of insurance, not a technical classification of the policy type.
D (accounting insurance) is not a recognized insurance industry term at all.

Memory tip: Link "primary" to "direct" - primary insurance is the first-hand deal between insurer and insured, generating direct written premiums. Everything else (like reinsurance) is one step removed, making those premiums "assumed," not "direct."

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