Life Insurance Basics Flashcards
1
Q
Adverse selection
A
tendency of individuals with higher probability of loss to purchase insurance more often than those who present a lower risk
2
Q
Cash value
A
equity amount accumulated in permanent life insurance
3
Q
Estate
A
a person’s net worth
4
Q
Illustrations
A
presentation or depiction of nonguaranteed elements of a life insurance policy
5
Q
Solvency
A
ability to meet financial obligations (e.g., an insurance company maintains enough assets to pay claims)
