Module One

Question 1

Any type of plan that provides benefits to plan members as one group, independent of government sponsored benefits program

Answer 1

Group benefits plan

Question 2

A type of risk that is assumed as a conscious choice, with three possible outcomes. Loss gain or no change

Answer 2

Speculative risk

Question 3

Risk related to events outside the risk takers control with loss as the only possible outcome

Answer 3

Pure risk

Question 4

Risk arrising from the possibility of death poor health or outliving ones savings

Answer 4

Personal risk

Question 5

For a given group of insureds, the number and timing of covered losses that will occur in that group

Answer 5

Loss rate

Question 6

A non insurance tranfer of risk arrangement that includes a hold harmless agreement exempting a party from liability it would otherwise be responsible for

Answer 6

Contract of indemnity

Question 7

A type of insurance contract where the amount payable when a loss occurred is specified in advance

Answer 7

Valued contract

Question 8

The tendency of individuals with a greater than average likelyhood of loss to seek insurance protection to a greater extent than those with an average or less than average likelyhood of loss

Answer 8

Adverse selection

Question 9

The process of measuring risk exposure, deciding weather to accept and insure the applicant, and determining how much coverage to provide and the premium to charge

Answer 9

Underwriting

Question 10

Individuals with similar risk characteristics grouped to determine average expierience for the purpose of setting prices

Answer 10

Risk classes

Question 11

A physical characteristic or condition of the proposed insured that may increase the possibility of a loss

Answer 11

Physical hazard

Question 12

When the reputation, financial position, or criminal record of a proposed insured indicates that dishonest action in the insurance transaction increases the possibility of a loss.

Answer 12

Moral hazard

Question 13

The organization that provides a plan to a group

Answer 13

Plan sponsor

Question 14

Individuals or companies that provide advice to group benefits plan sponsor

Answer 14

Advisor

Question 15

A person or organization that processes claims and preforms other administrative services in accordance with a service contract m, usually in the field of employee benefits

Answer 15

TPA

Question 16

An individual who is eligible to be insured under the master contract

Answer 16

Plan member

Question 17

The spouse or children of a plan member

Answer 17

Dependent

Question 18

The amount payable by the insurer to a claimant, assigned, or beneficiary when the insured suffers a loss covered by the policy

Answer 18

Benefit

Question 19

The amount a policyholder must pay for a certain amount of insurance coverage

Answer 19

Premium

Question 20

A request for group insurance coverage by a prospective contract holder

Answer 20

Master application

Question 21

A legally binding document outlining the insurance agreement between an insurer and the group contract holder

Answer 21

Group contract. Master contract. Policy.

Question 22

A type of contract in which the insurer continues to pay claims as long as the plan sponsor makes premium payments according to the terms of the group contract

Answer 22

Unilateral contract

Question 23

The plan sponsor organization that enters into the group contract.

Answer 23

Group policyholder