Monday Class Flashcards
Insurance
Contract whereby one party agrees to indemnify another party
Face Amount
the death benefit, how much the insured is covered for
Premium
a payment
Insurer
agent/company that is offering coverage
Insured
employee/person who is covered
Risk
the uncertainty of a loss
Pure Risk
means chance of ONLY loss; is insurable
Speculative Risk
involves a chance of loss or gain, not insurable
i.e; Gambling
Hazards
events or conditions that increase the chance of a loss
Physical Hazard
a physical condition, medical history
i.e; blindness, deafness, diabetes
Moral Hazard
a lie
Morale Hazard
doing really unsafe things
i.e; speeding, driving reckless
Risk Management Techniques
S.T.A.R.R
S: Sharing
for a group of individuals or businesses with the same or similar interests to share the losses that occur within that group.
ex: pension plans
T: Transfer
most effective way to handle risk, transfer to another party
ex: car insurance
A: Avoidance
eliminating exposure to loss
R: Retention
self-insured, able to cover cost of the loss yourself
R: Reduction
to lessen the possibility or severity of a loss
ex: installing smoke detectors
Exposure
is a unit of measure used to determine rates charged for insurance coverage
Tort
a wrong, can have legal consequences
Unintentional Tort
deliberate act that causes harm to another person (not considered breach of contract)
Intentional Tort
negligence
Peril
causes of a loss
Law of Large Numbers
predicts number of deaths that will happen in a similar group of people. The larger the number the more accurate the prediction
Agent/Producer
anyone who sells or ids in the selling of insurance, legally represents the company
Captive Agent
Career Agent
Exclusive Agent
works for one company and only sells their products
Independent Agent
works for self and sells products for many companies
Domestic Agent
licensed in state where they are doing business
Foreign Agent
licensed out of the state their doing business
Alien Agent
licensed in another country but conducts business in the US
Fiduciary
a person of financial trust
Appointment
an agent that represents the company
Authorized/Admitted
require a license to sell insurance in state they’re in, require certificate of authority
Certificate of Authority
license granted by the state insurance authority allowing an insurer the right to conduct business in the state
Expressed
powers specifically stated and written
Implied
not specifically stated and written in the contract but assumed authority that is needed to conduct business
Commissioner
a public official in charge of the states department of insurance, responsible for regulating the insurance industry by enforcing insurance laws
elected every four years by the people, no more than 2 terms
Conditional Receipt
type of premium receipt stating after approval of coverage, it will be effective either the date of application (with premium), or the date of medical exam; whichever is later
