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Primerica > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

Hazards

A

Conditions or situations that increase probability of an insured loss occuring.

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2
Q

Types of hazards

A

Physical: individual characteristics.
Moral: personal choices towards risk
Morale: moral choices changed by state of mind.

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3
Q

Perils

A

Causes of loss that is insured against in insurance policy.

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4
Q

Loss

A

Any decrease or loss of an asset protected by the insurance policy

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5
Q

Methods of handling risk:

Sharing

A

The act of splitting the risk of a loss exposed

Example: car accident exchange of information.

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6
Q

Methods of handling risk:

Transfer

A

Transfer loss to another party

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7
Q

Methods of handling risk:

Avoidance

A

Eliminating exposure of loss. Not practical all the time.

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8
Q

Methods of handling risk:

Retention:

A

Planned risk with insurance by means of deductables and copays.

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9
Q

Methods of handling risk:

Reduction

A

Redycing your exposure to severe losses

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10
Q

Elements of insurable risk:

Insurable risk chsracteristics.

A 
Due to chance
Definte and mesurable
Statistical predictability
Non catastrophic
Randomly selected and large loss exposure
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11
Q

Classification of insurers:

Private insurance classifications 5x

A 
Ownership
Authority to transact business
Location
Marketing and distribution systems
Ratings(financial strengrh)
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12
Q

Ownership:

What are the two types of onership

A

Stock and mutual companies

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13
Q

Ownership:

Stock companies

A

Companies bought and traded on the stock exchange.

Share is company profit and losses

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14
Q

Ownership

Mutual companies

A

Iwned by those it insures/policy holders.
Policy holders intitled to dividends.
Dividends are not guaranteed.

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15
Q

Ownership

Fraternal benefit society

A

Formed to provide insurance benefits for members of an affiliated lodge, religious organization, or fraternal organization.

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16
Q

Admitted vs non admitted.

What do u need to do legal business

A

Get certificate of authority and meet financial requirements

17
Q

What are the 3 locations of incorporation?

A

Domestic foreign and alien.

18
Q

Explain 3 types of locations of incorporation

A

Domestic: local in state insurer
Foreign: from another state.
Alien: from another company

19
Q

Authorities and powers of producers

What are the law of agencies

A

Agents represent insurance company and not the customers.
Any agent knowledge is presumed knowledge of insurance company.
If agent is working within contract the company is reaponsible for their actions
Paying the agent is the same as paying the company

20
Q

Authority:

What are the 3 types of authority?

A

Implied
Express
Apparent

21
Q

Authority:

Express

A

Tge authority granted to the agent via thr company contract

22
Q

Authority:

Implied

A

Authority that the agent has that is not directly stated in the contract that the agent needs to do to conduct business.

23
Q

Authority:

Apparent

A

The authority an agent appears to have based on the situation

24
Q

4 elements of a legal contract

A

Agreement
Consideration
Competent party
Legal purpose/reason

25
Q

Legal contract

Agreement

A

An offer put forth by one party member that the other accepts

26
Q

Legal contract

Consideration

A

Something of value each person gives the other.

27
Q

Contract characteristics

What are the 5 contra

A 
Adhesion
Aleatory
Conditional
Personal
Unilateral
28
Q

Contract characteristics

Adhesion

A

One party prepares the contract the other accepts it

29
Q

Contract characterizations:

Aleatory

A

Exchange of unequal amouts.

One pays premiums other incase of accident pays large sum money

30
Q

Legal interpretations affecting contract

Indennity

A

Policy that states in tge event of loss the beneficiary can only collect to the extent of financial loss and not to gain financially.

31
Q

Legal interpretations affecting contract

Utmost good fairy

A

Implies no fraud or misrepresentation between the parties

32
Q

Legal interpretations affecting contract

Representation

A

Statement beleived to be true to the vest knowledge but are not a guaranteed.

33
Q

Legal interpretations affecting contract

Missrepresentations.

A

Untrue statements on a application that could cause the application to be voided.

34
Q

Legal interpretations affecting contract

Material missrepresentation

A

A statement that if discovered would alter the inderwriting decision of the insurance company. If intentional could be considered fraud

35
Q

Legal interpretations affecting contract

Material missrepresentation

A

A statement that if discovered would alter the inderwriting decision of the insurance company. If intentional could be considered fraud

Primerica (1 decks)

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