Assume you are 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 risk...
LOMA 281 Module 1
Lesson 1 CORRECT
100%
Assume you are 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 amount of
the benefit payable when the insured person dies.
D. Most life insurance policies are issued at substandard premium rates. - ANSWER A and C
Risk - ANSWER The possibility of an unexpected result; this could be a gain or a loss.
Speculative Risk - ANSWER Can result in a loss, gain, or no change.
Pure Risk - ANSWER Involve either a loss or no loss. There is no possibility of a gain.
Insurance companies won't insure all types of risks. Which risks do you think are insurable?
A. Only pure risks
B. Only speculative risks
C. Both pure and speculative risks
, D. Neither pure or speculative risks - ANSWER A.
Select the management technique that matches the example.
Steve is nervous about losing money in the stock market, so he doesn't invest in stocks.
A. Avoiding risk
B. Controlling risk
C. Accepting risk
D. Transferring risk - ANSWER A.
Premium - ANSWER A specified amount of money an insurer charges in exchange for agreeing to pay a
policy benefit when a specific loss occurs.
Life Insurance - ANSWER Insurance that pays a benefit upon death of a named person.
Minh wants to provide her family with a source of income that they can use if she dies. Which policy
should she purchase?
A. Annuity
B. Life Insurance - ANSWER B.
Isaiah wants to make sure that he has a monthly income once he retires. Which policy should he
purchase?
A. Annuity
B. Life Insurance - ANSWER A.
The person or entity that applies for an insurance policy is:
A. Applicant
B. Beneficiary
C. Insured
D. Policy Owner
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