Loma 281 correct stuvia - Study guides, Class notes & Summaries

waiver of premium for payor benefit - ANSWER insurer waives renewal premiums if the policy owner, rather than the insured, dies or becomes totally disabled (must provide evidence of insurability) Contracts of Indemnity - ANSWER base benefits on the actual amount of the financial loss that results from a covered event when it occurs, subject to maximum limits (other than life insurance) Valued Contract - ANSWER life insurance policies which state the benefit payable at the time of the polic...

waiver of premium for payor benefit - ANSWER insurer waives renewal premiums if the policy owner, rather than the insured, dies or becomes totally disabled (must provide evidence of insurability) Contracts of Indemnity - ANSWER base benefits on the actual amount of the financial loss that results from a covered event when it occurs, subject to maximum limits (other than life insurance) Valued Contract - ANSWER life insurance policies which state the benefit payable at the time of the polic...

What are speculative risks? - ANSWER Risks that involve three outcomes: loss, gain, or no change What are pure risks? - ANSWER Risks that involve no possibility of gain What risks are insurable? - ANSWER Only pure risks Speculative risks involve the possibility of gain so they cannot be insured Is a life insurance policy a commutative or aleatory contract? - ANSWER Aleatory Are life insurance contracts bargaining contracts? - ANSWER No, they are contracts of adhesion. The insuranc...

What are speculative risks? - ANSWER Risks that involve three outcomes: loss, gain, or no change What are pure risks? - ANSWER Risks that involve no possibility of gain What risks are insurable? - ANSWER Only pure risks Speculative risks involve the possibility of gain so they cannot be insured Is a life insurance policy a commutative or aleatory contract? - ANSWER Aleatory Are life insurance contracts bargaining contracts? - ANSWER No, they are contracts of adhesion. The insuranc...

Insurance policy - ANSWER A legally enforceable contract between a policyowner who applies for and owns the policy and the insurer that issues the policy Unilateral contract - ANSWER A contract in which only one of the parties makes a legally enforceable promise when entering into the contract. (life insurance) Bilateral contract - ANSWER A contract in which both parties make legally enforceable promises when they enter into the contract

Risk - ANSWER the possibility of an unexpected loss speculative risk - ANSWER can result in a gain, a loss four risk management techniques - ANSWER avoid the risk control the risk

Risk - ANSWER the possibility of an unexpected loss speculative risk - ANSWER can result in a gain, a loss four risk management techniques - ANSWER avoid the risk control the risk accept the risk transfer the risk Parties involved in insurance transaction - ANSWER applicant policyowner insured beneficiary characteristics of an insurable risk - ANSWER the risk must be a pure risk loss must occur by chance loss must be definite in time and amount the loss must be significant th...

Insurance policy - ANSWER A legally enforceable contract between a policyowner who applies for and owns the policy and the insurer that issues the policy Unilateral contract - ANSWER A contract in which only one of the parties makes a legally enforceable promise when entering into the contract. (life insurance) Bilateral contract - ANSWER A contract in which both parties make legally enforceable promises when they enter into the contract Bargaining contract - ANSWER A contract in whic...