Key Concepts Flashcards
1
Q
The transfer of PURE risk to the insurance company in consideration for a premium
A
Insurance
2
Q
Insurance is defined as the transfer of ____ to the insurance company in consideration for a premium
A
risk/pure risk
3
Q
The chance of loss without any chance of gain
A
pure risk
4
Q
The possibility for gain or loss and is not insurable
A
speculative risk
5
Q
the chance of loss
A
risk
6
Q
A condition that could result in a loss
A
exposure
7
Q
something that increases the
chance of loss.
A
hazard
8
Q
a cause of loss
A
peril
9
Q
To be insurable, losses must be ________
A
calculable
10
Q
The ___________ allows insurers to predict claims more accurately.
A
law of large numbers
11
Q
The law of large numbers applies to what kind of people?
A
Groups, not individuals
