Assume you're applying for a life insurance policy. During his presentation, the insurance agent makes the following statements. Are they all true? (Select all that apply.)
a. People buy insurance to reduce the financial risk they face but not every type of risk is insurable.
b. both pure ris...
, Annuities
Correct 100%
Assume you're applying for a life insurance policy. During his presentation, the insurance agent makes
the following statements. Are they all true? (Select all that apply.)
a. People buy insurance to reduce the financial risk they face but not every type of risk is insurable.
b. both pure risks and speculative risks are insurable.
c. most life insurance policies are valued contracts, which state at the time of policy issue the time
amount of the benefit payable when the insured person dies.
d. most life insurance policies are issued at substandard premium rates - ANSWER A & C
Risk - ANSWER The possibility of an unexpected result. This could be a gain or a loss.
Speculative Risk - ANSWER A risk that involves three possible outcomes: loss, gain, or no change.
Pure Risk - ANSWER A risk that involves no possibility of gain; either a loss occurs or no loss occurs.
Insurance companies won't insure all types of risks. Which risks do you think are insurable? Choose the
correct answer.
, a. only pure risks
b. only speculative risks
c. both pure risks and speculative risks
d. Neither pure risk nor speculative risk - ANSWER A.
Steve is nervous about losing money in the stock market, so he doesn't invest in stocks.
a. Avoiding Risk
b. Controlling Risk
c. Accpeting Risk
d. Transferring Risk - ANSWER A.
Minh wants to provide her family with a source of income that they can use if she dies.
a. annuity
b. life insurance - ANSWER A. life insurance
Isaiah wants to make sure that he has a monthly income once he retires.
a. annuity
b. life insurance - ANSWER B. Annuity
The person or entity that applies for an insurance policy.
a. applicant
b. beneficiary
c. insured
, d. policyowner
e. third-party policy - ANSWER A. applicant
the person or entity that owns the insurance policy.
a. applicant
b. beneficiary
c. insured
d. policy owner
e. third-party policy - ANSWER D. policy owner
The person whose life, health, or property is insured under the policy.
a. applicant
b. beneficiary
c. insured
d. policy owner
e. third-party policy - ANSWER c. insured
The person or party the policy owner names to receive the life insurance policy benefit.
a. applicant
b. beneficiary
c. insured
d. policy owner
e. third-party policy - ANSWER B. beneficiary
A policy purchased by one person or entity on the life of another person.
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