Life Angent pt 2 Flashcards
Insurance is defined as the transfer of ___
risk
transfer of PURE risk to the insurance company in consideration for a premium.
Insurance
What kind of risk is the chance of loss without any chance of gain
Pure
What kind of risk is the possibility for gain or loss and is not insurable.
Speculative
the chance of loss
Risk
A condition that could result in a loss
Exposure
Leaving matches within reach of a child is a ______
hazard
something that increases the
chance of loss
Hazard
a cause of loss, such as fire.
Peril
Losses must be ______ to be insurable
calculable
The _________ allows insurers to predict claims more accurately.
law of large numbers
The _________ applies to groups of people, not to individuals. The more people in the
group, the more accurate the predictions are.
law of large numbers
What makes the law of large numbers more accurate in the predictions?
more people in a group
Why do most insurers buy reinsurance?
to protect themselves in the event of a catastrophic loss
True/False: Insurance laws are not required to be uniform from one state to another
True
True/False: Insurance laws are required to be uniform from one state to another
False
Can a minor enforce the contract against the insurer?
Yes
Can insurers enforce a contract that they enter into with a minor?
No
Is it guaranteeed if a stock insurer may pay dividends to its shareholders (stockholders)?
No
The government does not offer insurance for the purpose of preventing ______.
fraud
The government offers insurance primarily based upon what needs?
social needs, such as flood insurance and workers compensation
What company has their home office in another state?
Foreign