Chapter 1- Intro To Life Ins

Question 1

Mortality rate

Answer 1

Probability of dying at specific age

Question 2

2 ways of looking at risk of death

Answer 2

1. Life expectancy

2. Probability of death

Question 3

Life expectancy

Answer 3

Avg number of years that you can expect to live from that age forward

Question 4

Probability of death

Answer 4

STATISTICAL probability that you will die before reaching next birthday.

Question 5

Lifetable/mortality table

Answer 5

Table used to present life expectancy and probability of death stats

Question 6

Financial impact of death (6)

Answer 6

• loss of income
• loss of caregiver
• debt repayment
• income taxes
• Estate creation
• Business impacts

Question 7

Risk management strategies (ARRT)

Answer 7

1. risk avoidance
2. Risk reduction
3. Risk retention
4. risk transfer

Question 8

Risk avoidance

Answer 8

Not exposing yourself to the risk

Question 9

Risk reduction

Answer 9

Take action to reduce the probability of the risk

Question 10

Risk retention

Answer 10

Accept the fact that you are exposed to the risk, accept the consequences of risk happens.
- appropriate for low severity risks

Question 11

Risk transfer

Answer 11

Find someone willing to assume consequences if the risk happens.
- insurance is risk transfer strategy

Question 12

Factors that influence risk of death (6 AGFSJI))

Answer 12

• age
• gender
• family history of health
• smoking status
• job
• income leveL