Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Insurance License Exam > General Section: Cram Course # 1 > Flashcards

General Section: Cram Course # 1 Flashcards

1
Q

In health insurance, the rate at which accident, sickness or disability will occur.

A

Morbidity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

The rate at which people die.

A

Mortality

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

The unintentional decrease in value of an asset due to a peril.

A

Loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Spreading a risk over a large group of people, by substituting a small cost for a large unknown risk (economic risk of dying).

A

Risk Pooling or Loss Sharing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What do we call the predicting of the approximate number of deaths or the likelihood of disability that will occur among a certain group during a certain period?

A

Law of large numbers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

The item insured in the policy.

A

Exposure unit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

The uncertainty regarding financial loss.

A

Risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What type of risk involves both the chance of loss or gain? (Ex. Gambling)

A

Speculative Risk- NOT Insurable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What type of risk has only the chance of loss? (Ex. injury, illness, and death)

A

Pure Risk- Insurable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

The condition of being prone to loss due to a hazard or uncertain event.

A

Exposure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Three basic types of Hazards

1) _________- blind, family traits
2) _________- stealing, smoking, habits that increase the probability of loss
3) _________- jay walking, careless, the attitude, state of mind (It’s insured so why worry, whatever)

A

Physical
Moral
Morale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Six elements of Insurable Risk that make Pure Risks Insurable:

1) LOSS must be due to ___________
2) LOSS must be definite and __________
3) LOSS exposure to be insured must be __________
4) LOSS exposure must be __________ __________
5) LOSS must be ___________
6) LOSS cannot be __________

A

1) Chance
2) Measurable
3) Large
4) Randomly Selected
5) Predictable
6) Catastrophic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

The immediate specific event that causes a loss.

A

Peril

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What gives rise to a peril?

A

A Hazard

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What kind of hazard is it when an employee takes merchandise without paying for it?

A

Moral

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What kind of hazard is it when you are late for an appointment?

A

Morale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

The application of laws, regulations, and legal court rulings which increase the chance or amount of loss.

A

Legal Hazard

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

The total amount the insurer will pay for an insured risk.

A

Limit of liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Five options to handle risk (ARRTS)

1) A- _________ (don’t fly)
2) R- _________ (smoke alarm)
3) R- _________ (self insured)
4) T- _________ (buys insurance)
5) S- _________ (Copayment/Coinsurance)

A

1) Avoidance
2) Reduction
3) Retention
4) Transference
5) Sharing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is a company called that helps an insurance company transfer a portion of its risk?

A

Reinsurer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What type of company has the purpose to make a profit for the stockholder?

  • Structured the same as any corporation
  • Pays NO dividends to policyholders
A

Stock Company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What type of company is owned by its Policy holders?

  • Issues participating and non participating policies
  • Pays its policyholders dividends
A

Mutual Company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

A refund of Over Payment (partial over payment being returned to policy owner)

A

Dividends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

____________ is also known as Debit Insurer/Industrial Insurance (small face amounts, cash accepted as premiums, more expensive)

A

Home Service Insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Insurance which offers coverage to people through the individual market.

A

Private Insurers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

The entity that assumes the insured’s risk. Synonymous with insurance company.

A

Insurer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

The person who is covered under the insurance policy.

A

Insured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

The person who has all the ownership rights under the policy, pays premiums, and accepts the policy when delivered.

A

Policy Holder or Policy Owner

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

A Company doing business in the state in which it is incorporated.

A

Domestic Insurer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

A Company licensed to do business in a state in which it is not incorporated.

A

Foreign Insurer

31
Q

A Company licensed to do business in a country outside the U.S.

A

Alien Insurer

32
Q

Yes or No

If a company is licensed in the state where it is incorporated, does it need to be licensed in the states where it does business?

A

YES

33
Q

People who sell, solicit and negotiate insurance. It is an all-encompassing term which includes agents and brokers.

A

Producers

34
Q

Illegally converting another person’s funds for your own use.

A

Embezzlement

35
Q

Who regulates the insurance industry?

A

The States

36
Q

An international misrepresentation or concealment of material fact made by one party in order to cheat another party out of something that has economic value.

A

Fraud

37
Q

What elements are needed for contracts to be legally valid and binding? (HINT: LOCCA)

A 
Legal purpose
Offer
Consideration- exchange of values
Competent parties
Acceptance
38
Q

Name three groups of people who are NOT competent to enter a legal contract.

A

1) Minors
2) Mentally impaired
3) Under influence of alcohol or drugs

39
Q

A medical condition, whether physical or mental, resulting from accident or sickness preventing a person from being able to work.

A

Disability

40
Q

The rights and responsibilities of all parties of the contract.

A

Conditions

41
Q

What is it called when values exchanged are not equal? (Ex. $50 premium/$100,000 Death Benefit)

A

Aleatory

42
Q

What is it called when only one party prepares the contract? (Basically policyowner is stuck with the contract as it is)

A

Adhesion

43
Q

_________ is the type of contract that only reimburses or pays the amount of loss.

A

Indemnity

44
Q

What is it called when information is believed to be true? (Ex. Statements made by the client on application in relation to thier health)

A

Representation

45
Q

What is it called when information is guaranteed to be true?

A

Warranty

46
Q

What is it called when both parties are trusted to reveal relevant facts?

A

Utmost Good Faith

47
Q

What kind of contract pays a stated amount in the event of loss?

A

Valued Contract

48
Q

_________ is when an applicant fails to disclose known material facts.

A

Concealment

49
Q

Who must sign an application?

A

Insured
Policy Owner
Agent

*All three must sign

50
Q

This form is filled out by the agent and includes information about the proposed insured’s health history, occupation, and background.

A

Application

51
Q

They select, classify, and rate risks.

A

Underwriters

52
Q

A _________ is considered a field underwriter.

A

Agent

53
Q

Name the 4 types of underwriting risks.

A

Preferred
Standard
Substandard
Declined

54
Q

What risk category is a person that has above agerage health, above average lifestyle, and habits?

A

Preferred Risk

55
Q

What risk category is a person that poses a higher risk to the insurer than standard risks.

A

Substandard Risk

56
Q

Underwriting classification in which individuals are in average physical condition with average lifestyles and habits for people of their respective sex and age group.

A

Standard Risk

57
Q

Underwriting classification in which risk is uninsurable because the applicant poses too great a risk for the insurer to provide coverage.

A

Declined Risk

58
Q

The process that insurers use to select, classify, and rate risks so that they accurately reflect the amount of risk undertaken.

A

Underwriting

59
Q

What are the five reports an underwriter could use in determining an applicants insurability?

A

Medical Report
MIB- Collection of complete medical history
Special Questionnaire- for dangerous activities
Inspection Report
Credit Report

60
Q

Who completes the medical report?

A

Physician or Paramedic (Either One)

61
Q

What is the purpose of the MIB?

A

Holds down insurance costs

62
Q

The MIB helps prevent ________.

A

Fraud

63
Q

The buyer’s guide and policy summary must be given to the insured __________ or at __________. No Exceptions.

A

prior to or at policy delivery

64
Q

The insurer’s costs which include: acquistion costs, staff salaries, retirement, contingency funds, and claims payments.

A

Expenses

65
Q

The person who is covered under the policy.

A

Insured

66
Q

The insured’s notification that a payment is requested for a covered loss.

A

Claim

67
Q

Less than favorable insurance risks (such as people in poor health) to seek or continue insurance to a greater extent than people in good health.

A

Adverse Selection

68
Q

Method used to establish premium rates for group health plan members, based on the claims experience of the group.

A

Experience Rating

69
Q

____________ insurance companies write more than one line of insurance.

A

Multi-line

70
Q

Most common type of group insurance:

* each year policy is renewed based on previous years claims.

A

Annuable Renewable Term Policy

71
Q

What is a policy called that is issued for Group Insurance?

A

Master Contract

72
Q

Employees/Members that are covered by Group Insurance receive a ____________.

A

Certificate of Insurance

73
Q

How many employees must participate in a non-contributory plan?

A

100% of eligible employees, they all must ne insured.

74
Q

How many employees must participate in a contributory plan?

A

at least 75% of eligible employees must participate.

Insurance License Exam (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions