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Health and Life Insurance > general insurance > Flashcards

general insurance Flashcards

1
Q

Transfer of Risk

A

Insurance

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2
Q

Loss

A

reduction, decrease or disappearance of value

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3
Q

pure risk

A

situations that can only result in a loss or no change and insurable

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4
Q

risk

A

uncertainty or chance of a loss occurring

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5
Q

speculative risk

A

involves the opportunity for either loss or gain

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6
Q

hazards

A

conditions or situations that increase the chance of loss

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7
Q

physical hazard

A

individual characteristics that in crease the chance of the cause of loss
(physical conditions are past medical history, condition at birth)

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8
Q

moral hazard

A

tendencies towards risk (applicants that lie on application of insurance)

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9
Q

morale hazards

A

similar to moral they arise from a state of mind (carelessness)

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10
Q

peril

A

causes of loss

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11
Q

exposure

A

a unit of measure used to determine rates charged for insurance coverage (age, medical history, occupation and sex)

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12
Q

Homogeneous

A

a large number of units having the same or similar exposure to loss

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13
Q

avoidance

A

eliminated exposure to a loss (avoid being killed in airplane crash by never choosing to fly)

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14
Q

retention

A

planned assumption of risk by the insured through deductibles, com payments or self insurance to reduce expenses and improve clash flow, increase control of claim reservations and settlements, and to fund losses that cannot be insured

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15
Q

reduction

A

to lessen the possibility or severity of loss (installing smoke detectors, having an annual physicals to detect health issues early and making lifestyle changes

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16
Q

elements of insurable risks

A

due to chance, definite and measurable, statistically predictable, mot catastrophic, randomly selected and large exposure

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17
Q

adverse selectioj

A

insuring of risks that are more prone to losses than average risk

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18
Q

reinsurance

A

contract under which one insurance company reimburses another insurance company for all or part of its liabilities

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19
Q

stock companies

A

owned by stockholders - non participating - doesn’t pay dividends to policyowners but does pay dividends to stockholders

20
Q

mutual companies

A

owned by policyholders - participating- policyholders are intitles to dividend( return of excess premiums) non taxable

21
Q

express

A

powers specifically stated in the contract

22
Q

implied

A

not specially stated in the contract but is assumed necessary to conduct insurance business

23
Q

apparent

A

appearance of a relationship between the agent and the principal (insurer) based on words or actions (also know as perceived)

24
Q

elements of a contract

A

agreement -offer and acceptance
consideration
competent parties
legal purposes

25
Q

acceptance

A

when the underwriter approved application and issues policy

26
Q

consideration

A

something of value each party gives to the other
insured–pay premiums–insurer is pay in the event of loss

27
Q

competent parties

A

legal age
mentally competent
and not under drugs or alcohol

28
Q

aleatory

A

unequal values

29
Q

adhesion

A

only one party (insurer) prepares a contract and the other part (insured) accepts or rejects it

30
Q

unilateral

A

one sided (only one party makes a promise)

31
Q

contract of adhesion

A

in favor of insured

32
Q

indemnity / reimbursement

A

a provision in an insurance policy that states the event of a loss an insured or beneficiary is permitted to collect to the extent of the financial loss (not gain any extra)

33
Q

utmost good faith

A

implies that there is no fraud, misrepresentations, or concealment between the parties

34
Q

representations

A

statements believed to be true to the best of ones knowledge

35
Q

misrepresentations

A

untrue statements

36
Q

warranty

A

is an absolutely true statement

37
Q

concealment

A

legal term for the intention withholding of information of material that is a crucial fact in making a decision.

38
Q

waiver

A

voluntary act of relinquishing a legal right, claim or privileges

39
Q

estoppel

A

legal consequence of a waiver

40
Q

fraud

A

intentional representations or intentional concealment of a material fact

41
Q

domestic

A

incorporated in this state

42
Q

foreign

A

incorporated in another state

43
Q

alien

A

incorporated in another country

44
Q

agent/producer

A

a legal representative of an insurance company

45
Q

broker

A

an insurance producer not appointed by an insurance company so represents the client

46
Q

reciprocity/reciprocal

A

a mutual exchange of rights and privileges

Health and Life Insurance (2 decks)

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