OHIO Life Insurance Exam Questions and
Answers
Insurance: - ANSWER-A contract in which the insurance company agrees to indemnify the insured
party against loss, damage or liability arising from an unknown event.
Insurance Transfers: - ANSWER-The risk of loss from an individual or business entit...
Loss: - ANSWER✔✔-The reduction, decrease, or disappearance of the value of the person or property
insured in a policy, caused by a named peril.
Look at transfer stuff pg 7
Avoidance: (Method of handling risk) - ANSWER✔✔-Eliminating exposure to a loss. Ex: If a person
wanted to avoid the risk of being killed in an airplane crash, he/she might choose never to fly in an
airplane. It is effective but not practical.
Risk Retention: (Method of handling risk) - ANSWER✔✔-The planned assumption of risk by an insured
through the use of deductibles, copayments, or self-insurance.
Purpose of retention: (3 things) - ANSWER✔✔-1) Reduce expenses and improve cashflow
2) Increase control of claim reserving and claims settlements
3)To fund for losses that cannot be insured
Sharing: (Method of handling risk) - ANSWER✔✔-Method of dealing with risk for a group of individuals
or businesses with the same or similar exposure to loss to share the losses that occur within that group.
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