Life insurance exam Questions and Answers (2023 / 2024) (Verified Answers)
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Course
Life Insurance
Institution
Life Insurance
Life insurance exam Questions and Answers (2023 / 2024) (Verified Answers)
life insurance
insurance that pays to a named beneficiary or the deceased's estate upon the death of the insured,may b annuity or endowment, may incl benef for accident death/dismemberment, disability, protects against ris...
Life insurance exam Questions and Answers
() (Verified Answers)
life insurance
insurance that pays to a named beneficiary or the deceased's estate upon the death of the
insured,may b annuity or endowment, may incl benef for accident death/dismemberment, disability,
protects against risk pf premature death which exposes a finNcial riskto family or business. ie:burial
expenses, pay debts, loss of family inc/business profits
insurance
content that indemnifies another against loss, damage, liab arising from unknown event
indemnify
make a person whole by restoring that person to the same financial poistion that existed. 4 the loss
insured
policy owner
premium
set amount of money payable for policy/coverage
insurance company
insurer
policy
agreement insurer and insured, agreeement/contract
loss
reduction in value and asset
claim
demand for payment of insured benefit to person named in policy
risk
uncertainty of financial loss when one or more outcome is possible. must be element of doubt and
uncertainity
pure risk
only a chance of loss, only pure risk is insurable, risk associated with chance of loss
speculative risk
involves both uncertain of loss and gain ie betting at a race track/ investing in the stock market
peril
, immediate specific event causing loss and giving rise to risk. ie building burns as a result of "fire" or
person dies as a result of "death"
hazard
fsctor that gives rise to peril
three types of hazards
physical, moral, morale
physical hazard
arises from material, structural, or operational features ie: unsanitary conditions slippery floors
moral hazard
arise from peoples habits or values (lying, cheating)
morale hazard
arises out of human negligence ie: dont wear seatbelt
5 ways to manage risks
share transfer avoid reduction retention
sharing risk
when risk cannot be avoided& retention causes too much exposure
transfer risk
move risk to another insurance co
types of transfers
non insurance and contract
avoidance of risk
abstenance
reduction of risk
smoke alarm to reduce potential loss
retention of risk
do nothing, assume part of risk yourself ie: deductible
law of large numbers
ins co cannot predict loss expected for a given individual using this law, insurers can predict how
many losses will occur with this law
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