License Coach General Section Live Cram Course Handout. 10) The unintentional decrease in value of an asset due to a peril.

Transcription

1 License Coach General Section Live Cram Course Handout Slide #9) In health insurance, the rate at which accident, sickness or disability will occur. 10) The unintentional decrease in value of an asset due to a peril. 11) What Is Risk Pooling or Loss Sharing? Spreading a risk over a, by substituting a for a large unknown risk. (economic risk of dying) Question: 12 ) What do we call the predicting of the approximate number of deaths or the likelihood of disability that will occur among a certain group during a certain period? 13) The item insured in the policy. 14) What is the definition of RISK? Uncertainty regarding 15) What is Speculative Risk? Speculative Risk involves both the chance of or 16) What is Pure Risk? Pure Risk has only the of loss. (injury, illness, and death) Only Pure Risks are insurable 17) The condition of being prone to loss due to a hazard or uncertain event.

2 18) 3 basic types of Hazards 1. blind, family traits 2. stealing, smoking, habits that increase the probability of loss 3. jay walking, careless, the attitude state of mind (It s insured so why worry, whatever!) 19) 6 elements of Insurable Risk that make Pure Risks Insurable: LOSS MUST BE due to LOSS MUST BE definite and 20) 6 elements of insurable risk LOSS Exposure to be insured MUST BE LOSS exposure MUST BE 21) 6 elements of insurable risk LOSS MUST BE LOSS CANNOT be 22) What is a Peril? The immediate specific event that What gives rise to a Peril? 23) What kind of hazard is it when an employee takes merchandise without paying for it? 24) What kind of hazard is it when you are late for an appointment? 25) The application of laws, regulations, and legal court rulings which increase the chance or amount of loss. 26) The total amount the insurer will pay for an insured risk.

3 27) 4 options to handle Risk ARRT A - (don t fly) R (smoke alarm) R (self insured) T (buys insurance) 28) What is a company called that helps an insurance company transfer a portion of its risk? 29) Stock Company Purpose is to make a profit for the.. Structured the same as any corporation. Pays dividends to policyholders. 30) Mutual Company Owned By? Issue Participating or Non Participating Policies What is paid to the policyholders? 31) What is a dividend? Refund of (Partial overpayment being returned to policyowner) 32) is also known as Debit Insurer/Industrial Insurance (small face amounts, cash accepted as premiums, more expensive) 33) Insurance which offers coverage to people through the individual market. 34) The entity that assumes the insured s risk. Synonymous with insurance company. 35) Name 3 examples of Rating Services that demonstrate the financial strength and stability of insurance companies: Standard & Poor s 3.

4 36) A Company doing business in the state in which it is incorporated. A Company licensed to do business in a state in which it is not incorporated. 37) What does Alien Insurer mean? Companies incorporated in a country. 38) If a company is licensed in the state where it is incorporated, does it need to be licensed in the states where it does business? 39) People who sell, solicit and negotiate insurance. It is an all- encompassing term which includes agents and brokers. 40 Definition: Illegally converting another person s funds for your own use. 41) Who regulates the insurance industry? 42) An intentional misrepresentation or concealment of material fact made by one party in order to cheat another party out of something that has economic value.

5 43) 44) Name and Describe the elements needed for contracts to be legally valid and binding? L O - C - $ C A - 45) Name 3 groups of people who are Not competent to enter a legal contract: M M Under the influence of 46) A medical condition, whether physical or mental, resulting from accident or sickness preventing a person from being able to work. 47) This is the person who has all the ownership rights under the policy, pays premiums, and accepts the policy when delivered- synonymous with policyholder.

6 48) The rights and responsibilities of all parties of the contract. 49) What is it called when the values exchanged are not equal? Example= $50 prem./ $100,000 Death Benefit 50) When only one party prepares the contact it is called: =Basically policyower is stuck with the contract as it is. 51) is the type of contract that only reimburses or pays the amount of loss. 52) What is called when information is guaranteed to be true? 53) What is it called when information is believed to be true? (statements made by client on application in relation to their health) 54) What is it called when both parties are trusted to reveal relevant facts? 55) What kind of contract pays a stated amount in the event of loss? 56) is when an applicant fails to disclose known material facts. 57) Who must sign an application? Multiple Choice: Insured, Policyowner, or Agent 58) This form is filled out by the agent and includes information about the proposed insured s health history, occupation, and background. 59) They select, classify, and rate risks. 60) The process that insurers use to select, classify and rate risks so that they accurately reflect the amount of risk undertaken.

7 61) An is considered a field underwriter. 62) What type of Underwriting Risk is this? 63) Underwriting classification in which individuals are in average physical condition with average lifestyles and habits for people of their respective sex and age group. 64) This risk is also called a rated risk because they pose a higher risk to the insurer than standard risks. 65) Underwriting classification in which the risk is uninsurable because the applicant poses too great a risk for the insurer to provide coverage. 66) Defined as the possibility of a loss occurring. 67) What are the 5 other reports an underwriter could use in determining an applicants insurability? Medical Report Special Questionnaire Inspection Report

8 68) Who completes the medical report? Physician Or Paramedic 69) What is the purpose of the MIB? 70) The MIB helps to prevent 71) The buyer s guide and policy summary must be give to the insured or at. 72) The insurer s costs which include: acquisition costs, staff salaries, retirement, contingency funds, and claims payments. 73) The person who is covered under the policy 74) The insured s notification that a payment is requested for a covered loss. 75) What is adverse selection? (such as people in poor health) to seek or continue insurance to a greater extent than people in good health. 76) Method used to establish premium rates for group health plan members, based on the claims experience of the group. 77) insurance companies write more than one line of insurance. 78) Group Insurance Slide 79) What is a policy called that is issued for Group Insurance? 80) Employees/Members are covered by: and receive a. 81) Question: How many employees must participate in a non- contributory plan? Answer: if eligible employees, they all must be insured.