LOMA 280 TOP QUESTIONS AND
ANSWERS 2026 LATEST VERSION
EXAM PREP GUIDE
◉ Speculative risk.
Answer: 3 possible outcomes: gain, loss, or no change
◉ Pure risk.
Answer: No gain; either loss or no loss. Only type of risk than can be
insured
◉ 4 methods for managing financial risk.
Answer: Avoiding, controlling, transferring, accepting
◉ Personal Risk.
Answer: Risk of economic loss associated with death, poor health,
injury, and outliving economic resources
◉ Liability risk.
Answer: Risk of economic loss resulting from a person being held
legally responsible for harming others or their property
◉ 5 characteristics of insurable risks.
Answer: Loss must occur by chance
,Loss must be definite
Loss must be significant
Loss rate must be predictable
Loss must not be catastrophic to the insurer
◉ Contract of indemnity.
Answer: Policy in which the amount of benefit is based on actual
amount of financial loss that results from covered event
◉ Valued contract.
Answer: Specifies amount payable when loss occurs (face value)
◉ Loss rate.
Answer: Frequency of losses insureds are likely to experience
◉ Law of large numbers.
Answer: The more events that occur the more likely results will
approximate true probability p
◉ Mortality tables.
Answer: Number of people in a large group that are likely to die at a
given age
◉ Mortality rate.
, Answer: Rate at which death occurs among a group of people during a
specific time period
◉ Morbidity table.
Answer: Charts that display morbidity rates
◉ Morbidity rates.
Answer: Amount of incidents of sickness or accidents by age of people
over a given time period
◉ Reinsurance.
Answer: Insurance the direct writer purchases from the reinsurer to
transfer risk on policies that the direct writer issued
◉ Underwriting.
Answer: Process of identifying and classifying degree of risk by a
proposed insured
◉ Anti-selection.
Answer: Tendency to believe you have greater likelihood of loss than
others
◉ 2 stages of underwriting.
Answer: Identifying risk that an insured presents
ANSWERS 2026 LATEST VERSION
EXAM PREP GUIDE
◉ Speculative risk.
Answer: 3 possible outcomes: gain, loss, or no change
◉ Pure risk.
Answer: No gain; either loss or no loss. Only type of risk than can be
insured
◉ 4 methods for managing financial risk.
Answer: Avoiding, controlling, transferring, accepting
◉ Personal Risk.
Answer: Risk of economic loss associated with death, poor health,
injury, and outliving economic resources
◉ Liability risk.
Answer: Risk of economic loss resulting from a person being held
legally responsible for harming others or their property
◉ 5 characteristics of insurable risks.
Answer: Loss must occur by chance
,Loss must be definite
Loss must be significant
Loss rate must be predictable
Loss must not be catastrophic to the insurer
◉ Contract of indemnity.
Answer: Policy in which the amount of benefit is based on actual
amount of financial loss that results from covered event
◉ Valued contract.
Answer: Specifies amount payable when loss occurs (face value)
◉ Loss rate.
Answer: Frequency of losses insureds are likely to experience
◉ Law of large numbers.
Answer: The more events that occur the more likely results will
approximate true probability p
◉ Mortality tables.
Answer: Number of people in a large group that are likely to die at a
given age
◉ Mortality rate.
, Answer: Rate at which death occurs among a group of people during a
specific time period
◉ Morbidity table.
Answer: Charts that display morbidity rates
◉ Morbidity rates.
Answer: Amount of incidents of sickness or accidents by age of people
over a given time period
◉ Reinsurance.
Answer: Insurance the direct writer purchases from the reinsurer to
transfer risk on policies that the direct writer issued
◉ Underwriting.
Answer: Process of identifying and classifying degree of risk by a
proposed insured
◉ Anti-selection.
Answer: Tendency to believe you have greater likelihood of loss than
others
◉ 2 stages of underwriting.
Answer: Identifying risk that an insured presents
