LOMA 281 Module 1 Exam Questions And Answers Module 1 Exam Questions And Answers
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LOMA 281 Module 1
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LOMA 281 Module 1
LOMA 281 Module 1 Exam Questions And Answers
Actuaries - Answer-A financial professional with expertise in the mathematics of finance, risk, and insurance.
/.Aleatory contract - Answer-A contract for which one party provides something of value to another party in exchange for a conditional...
Actuaries - Answer-A financial professional with expertise in the mathematics of finance,
risk, and insurance.
/.Aleatory contract - Answer-A contract for which one party provides something of value
to another party in exchange for a conditional promise.
/.Annuity - Answer-A financial product by which an insurer, in return for receiving a
premium, promises to make periodic payments to a named person or entity.
/.Antiselection - Answer-AKA adverse selection; The tendency of individuals who
believe they have a greater-than-average likelihood of loss to seek insurance protection
to a greater extent than those who believe they have an average or less-than-average
likelihood of loss.
/.Applicant - Answer-The person or entity that applies for an insurance policy.
/.Bargaining contract - Answer-A contract in which both parties, as equals, set the terms
and conditions of the contract.
/.Beneficiary - Answer-The person named to receive the policy benefit if the insured
event occurs.
/.Bilateral contract - Answer-A contract for which both parties make legally enforceable
promises when they enter into the contract.
/.Block of policies - Answer-A group of policies issued to insured who are all the same
age, the same sex, and in the same risk classification.
/.Certificate of authority - Answer-A license that grants an insurer the right to conduct
insurance business in a given state.
/.Commutative contract - Answer-An agreement under which the parties specify in
advance the values that they will exchange; moreover, the parties generally exchange
items or services that they think are of relatively equal value.
/.Conditional promise - Answer-A promise to perform a stated act if a specified,
uncertain event occurs.
/.consideration - Answer-A requirement for the formation of a valid contract that is met
when each party gives or promises to give something of value to the other party.
, /.Consolidation - Answer-In the context of the financial services industry, the
combination of financial services institutions within or across sectors.
/.Contract - Answer-A legally enforceable agreement between two or more parties.
/.Contract of adhesion - Answer-A contract that one party prepares and the other party
must accept or reject as a whole, generally without any bargaining between the parties
to the agreement.
/.Contracts of indemnity - Answer-Health insurance; An insurance policy under which
the amount of the policy benefit payable for a covered loss is based on the actual
amount of financial loss that results from the loss, as determined at the time of the loss.
/.Convergence - Answer-The movement toward financial institutions that can serve a
customer's banking, insurance, and securities needs.
/.Corporation - Answer-A legal entity created by the authority of a government that is
separate and distinct from people who own it. This characteristic provides an element of
stability and permanence that makes it an ideal structure for insurers, whose contractual
obligations extend many years into the future.
/.Cost of Benefits - Answer-The value of the benefits guaranteed under in-force policies.
For purposes of pricing an insurance product, the cost of benefits equals all of the
insurer's potential payments of benefit obligations to customers multiplied by the
expected probability that each benefit will be payable.
/.Death benefit - Answer-The insurance benefit paid when the insured person dies.
/.Declined risk - Answer-A proposed insured who is considered to present a risk too
great for an insurer to cover.
/.Depository institution - Answer-A financial institution that accepts deposits from
people, businesses, and government agencies and uses these deposits to make loans
to people, businesses, and government agencies.
/.Direct writer - Answer-AKA ceding company; In a reinsurance transaction, the
insurance company that purchases reinsurance.
/.Face amount - Answer-the amount of the policy benefit listed on the first page of a life
insurance policy.
/.Finance company - Answer-A financial institution that specializes in making short- and
medium-term loans to businesses and people.
/.Financial institutions - Answer-A business that owns primarily financial assets, such as
stocks and bonds, rather than fixed assets, such as equipment and raw materials.
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