Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Unit 1 Life and health > unit 1 life and health > Flashcards

unit 1 life and health Flashcards

1
Q

Insurance

A

is a contract that indemnifies another against loss, damage, or
liability arising from an unknown even

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Indemnify

A

means to make a person whole by restoring that person to the same financial position that existed before the loss.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Policyowner

A

The insured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Premium

A

pays a set amount of money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Insurer

A

the insurance company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Insured

A

the person who is
covered by the insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

policy

A

is established in a legal document referred to as a contract of insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Loss

A

reduction in the value of an asset.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

claim

A

is a demand for payment of the insurance benefit to the person named in the policy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What must a person do in order to be paid for a loss?

A

They must make a claim.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Risk involves two things what are they?

A

a possibility of loss and
an uncertainty about whether the loss will occur.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Risk

A

means uncertainty of financial loss, or the chance of loss,
when more than one outcome is possible

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are the two types of risk?

A

Pure and Speculative

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Pure risk

A

means that there is only a chance of loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Speculative risk

A

involves both an uncertainty of loss and of gain

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

peril

A

is the immediate specific event causing loss and giving rise to risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

hazard

A

is any factor that gives rise to a peril.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Three types of hazards

A

physical, moral, and morale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Physical hazards

A

arise from material, structural, or operational features
of a risk situation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Moral hazards

A

arise from people’s habits and values

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Morale hazards

A

arise out of human carelessness or irresponsibility

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

STARR.

A

Sharing, Transfer, Avoidance, Reduction, Retention

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Sharing

A

when a risk cannot be avoided and retention would involve too much exposure to loss, we may choose risk sharing as a
means of handling the risk.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Transfer

A

Risk transfer means transferring the risk of loss to another party, usually an insurance company, that is more willing or able to bear the risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Avoidance

A

avoiding the risk in the first place

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Retention

A

simply means doing nothing about the risk. In other words, people assume or retain the risk and, in effect, become self-insurers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Reduction

A

Sometimes, when risks cannot be avoided, they can be reduced. Risk reduction can work in one of two ways: it can reduce the chance that a particular loss will occur, or it can reduce the amount of a potential loss
if it occurs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Law Of Large Numbers

A

Insurers are able to predict how many losses will occur in a group.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Insurable Interest

A

A basic rule governing insurance states that before an individual can benefit from insurance, that individual must have a legitimate interest in the
preservation of the life or property insured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What are the 5 types of Insurable risk?

A
  1. Large numbers of homogeneous(alike) units
  2. Loss must be measurable
  3. Loss must be uncertain
  4. Economic Hardship
  5. Exclusion of Catastrophic Perils
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Large Numbers of Homogeneous Units

A

A large number of similar exposure units is necessary in order for the pooling and sharing mechanisms of insurance to function

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Loss Must Be Measurable

A

The insurer must be able to place a specific (cash) value on exposures and losses in order to be able to calculate rates and premiums and reach settlements.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Loss Must Be Uncertain

A

Insurance covers pure risks, which must involve an uncertainty of loss.

33
Q

Economic Hardship

A

There must be a significant potential for economic loss.

34
Q

Exclusion of Catastrophic Perils

A

The insurance system would collapse if it covered events that caused
widespread losses to large numbers of insureds at the same time. Such as earthquakes, nuclear wars, floods.

35
Q

Indemnity

A

states that insurance should restore the insured,
in whole or in part, to the condition the insured enjoyed before the loss

36
Q

What’s the concept of indemnity for life and health insurance?

A

Life insurance-replace present and future income. Health Insurance- pays the medical bills and cover wage lost as result of injury

37
Q

Subrogation

A

a right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured. This is done in order to recover the amount of the claim paid by the insurance carrier to the insured for the loss.

37
Q

Limit of Liability

A

the maximum amount the insurer will pay for a specified insured contingency.

38
Q

What insurance uses “face amount”?

A

Life insurance, refer to the maximum liability of the insurer for a death claim.

39
Q

What do health and disability policies specify?

A

Health and disability policies are more likely to specify a maximum benefit amount or period instead

40
Q

Deductible

A

is simply the initial amount of a covered loss (or losses) that the insured must absorb before the insurer begins to pay for additional loss amounts

41
Q

elimination period

A

is simply the number of days an insured must be disabled before disability income benefits become payable.

42
Q

Coinsurance

A

generally expressed as a fixed percentage, an insured must pay toward a covered claim after the deductible is satisfied

43
Q

Property insurance

A

protects the insured against the financial consequences of the direct or consequential loss or damage to property of every
kind

44
Q

Casualty insurance

A

protects the insured against the financial consequences of legal liability, including that for death, injury, disability, or damage
to real or personal property.

45
Q

Life insurance

A

It is designed to protect against the risk of premature death, which exposes a family or a business to certain financial risks, such as burial expenses, paying debts, loss of family income, and business profits.

46
Q

annuity

A

provides guaranteed income for the life of an annuitant.

47
Q

Accident and health or sickness

A

insurance protects the insured against financial loss caused by sickness, bodily injury, or accidental death and may include benefits for disability income

48
Q

Variable life and variable annuity products

A

include insurance coverage provided under variable life insurance contracts and variable annuities.

49
Q

Credit

A

is a limited line of insurance protecting the insured, who is usually a creditor, against the financial consequences should a debtor be unable to pay debts as a result of illness or death.

50
Q

What major three sources is insurance provided as?

A
  1. private commercial insurers (profit making)
    2.private noncommercial insurers (nonprofit
    service organizations) 3. the US government (special nonprofit).
51
Q

What kind of insurers are in commercial?

A

Private Life and Health

52
Q

What kind of insures are private?

A

Stock and Mutual

53
Q

What kind of insurers are private noncommercial?

A

Blue Cross and Blue Shield

54
Q

Stock Insurers

A

consists of stockholders, also known as shareholders, who own shares in the company

55
Q

Mutual Insurers

A

A mutual insurance company provides insurance coverage to its members and policyholders at or near cost.
Any profits from premiums and investments are distributed to its members via dividends or a reduction in premiums.

56
Q

Reciprocal Insurers

A

form of insurance organization in which individuals and businesses exchange insurance contracts and spread the risks associated with those contracts among themselves

57
Q

policy dividends

A

returns a portion of money back to you that you’ve already paid toward your insurance policy

58
Q

subscriber

A

Each individual who is a member of the reciprocal

59
Q

Fraternal benefit societies

A

primarily life insurance carriers that exist as social organizations and usually engage in charitable and benevolent activities

60
Q

Lloyd’s

A

a is an insurance and reinsurance marketplace. Its members operate as syndicates to provide insurance coverage for businesses, organizations, and individuals

61
Q

Reinsurers

A

handle risks that are too large for insurance companies to handle on their own and make it possible for insurers to obtain more business than they would otherwise be able to.

62
Q

Excess and Surplus Lines

A

specialty market that insures things standard carriers won’t cover.

63
Q

Risk Retention Groups

A

state-chartered insurance company that insures commercial businesses and government entities against liability risks.

64
Q

Self-Insurers

A

retaining risk. as well as setting aside your own money to pay for a possible loss instead of purchasing insurance and expecting an insurance company to reimburse you.

65
Q

Domestic insurers

A

A company is a domestic insurer in the state in which it is incorporated.

66
Q

Foreign insurers

A

A foreign insurer is licensed to conduct business in states (the District of Columbia or other US territories) other than the one in which it is incorporated.

67
Q

Alien insurers

A

Alien insurers are companies incorporated in a country other than the United States, the District of Columbia, or any US territorial possession.

68
Q

authorized (admitted) insurer

A

means an insurer that is entitled to transact insurance within the state, having complied with the law and satisfying
all conditions to transacting insurance

69
Q

unauthorized (nonadmitted)

A

means an insurer that is not entitled to transact insurance within the state.

70
Q

Independent insurance agents

A

sell the insurance products of several
companies and work for themselves or other agents.

71
Q

Exclusive or captive agents

A

represent only one company.

72
Q

General agents or managing general agents (MGAs)

A

hire, train, and
supervise other career agents within a specific geographical area

73
Q

Direct-writing companies

A

usually pay salaries to employees whose job function is to sell the company’s insurance products

74
Q

The United States Government as Insurer

A

These include Social Security benefits, military
life insurance benefits, federal employee compensation benefits, and various
retirement benefit programs. It also provides, supports, or subsidizes a number
of insurance programs designed to cover catastrophic risks, including insurance for war risks, nuclear energy liability, flood, and crop losses.

75
Q

Life and Health Agents

A

an individual licensed, as required by law, to sell life, health, disability or accident insurance including activities as a licensed life insurance consultant

76
Q

PRoperty and Casualty Agents

A

sell policies that help individuals and companies cover expenses and losses from such disasters as fires, burglaries, traffic accidents, and other emergencies

77
Q

Property and Casualty Agents

A

sell policies that help individuals and companies cover expenses and losses from such disasters as fires, burglaries, traffic accidents, and other emergencies.

78
Q

Brokers

A

Represents consumers in their search for coverage and can sell policies from several different insurance companies for a commission

79
Q

Solicitors

A

a salesperson who works for an agent or a broker

80
Q

Insurance Consultants

A

helps businesses identify the types of risk they may be exposed to and choose appropriate insurance policies to cover potential liabilities.

Unit 1 Life and health (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions