General Terms Flashcards
Agent/ Producer
Legal rep of an insurance company; the classification of producer usually includes agents & brokers; agents are the agents of the insurer
Applicant or Proposed Insured
Person applying for insurance
Beneficiary
Person who receives the benefits of an insurance policy
Broker
Insurance producer not appointed by an insurer and is deemed to represent the client
Indemnity
Main principle of insurance, meaning that the insured cannot recover more than their loss; the purpose of insurance is to restore the insured to the same position as before the loss
Insurance Policy
Contract between a policyowner (and/ or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by spefic events
Insured
The person covered by the policy. May or may not be the policyowner
Insurer (Principal)
The company who issues an insurance policy
Law of large numbers
The larger the # of people with a similar exposure to loss, the more predictable actual losses will be
Policyowner
Person entitled to excercise the rights and privileges in the policy
Premium
The money paid to the insurance company for the insurance policy
Reciprocity/ Reciprocal
Mutual interchange of rights & privelages
Insurance
Contract in which one party (______ company) agrees to indemnify (make whole) the insured party against loss, damage or liability arising from an unkown event. The policy protects survivors from losses suffered after an insured’s death.
KNOW THIS
Insurance is a transfer of risk of loss. The cost of an insured’s loss is transferred to the insurer and spread anong other insured’s
Exposure
Unit of measure used to determine rates charged for insurance coverage. In life insurance, all of the following factors are considered in determining rates
