XCEL LIFE, HEALTH, & ACCIDENT INSURANCE: Chapter 1
Exam Questions with 100% Correct Answers Latest Graded A+
Question:
Role of Insurance
Answer:
To transfer the risk of financial loss from an individual or business to an insurance company
Question:
Life Insurance
Answer:
It is designed to protect against the risk of premature death.
Question:
Health Insurance
Answer:
It is designed to protect against the severity of financial loss due to illness, disease, short- or
long-term disability, wages lost while ill or disabled, and medical expenses.
Question:
Annuities
Answer:
A contract which protects against the risk or living longer than expected. Annuities provide a
guaranteed life income to protect against the risk of depleting retirement funds.
Question:
Private Insurance
Answer:
Insurance which offers coverage to people through the individual market.
Funded through premiums to sell insurance
Question:
, Commercial Insurer
Answer:
selling insurance for a profit.
Two main groups:
**stock insurers*
**mutual insurers (Multi-line insurers)*
Question:
Stock Companies - Nonparticipating
Answer:
organized and incorporated under state laws for purpose of making a profit for its stock holders and
is not ran by policyholders (no $).
Question:
Mutual Companies - Participating
Answer:
organized and incorporated under state laws and policyholders receive dividends ($), but they have
no stockholders. Anyone purchasing insurance is both a customer and an owner & has the right to
vote for members of the board of directors.
Question:
Mutualization
Answer:
Stock company converting to a mutual company
Question:
Demutualization
Answer:
Mutual company converting to a stock company
Question:
Lloyd's of London
Exam Questions with 100% Correct Answers Latest Graded A+
Question:
Role of Insurance
Answer:
To transfer the risk of financial loss from an individual or business to an insurance company
Question:
Life Insurance
Answer:
It is designed to protect against the risk of premature death.
Question:
Health Insurance
Answer:
It is designed to protect against the severity of financial loss due to illness, disease, short- or
long-term disability, wages lost while ill or disabled, and medical expenses.
Question:
Annuities
Answer:
A contract which protects against the risk or living longer than expected. Annuities provide a
guaranteed life income to protect against the risk of depleting retirement funds.
Question:
Private Insurance
Answer:
Insurance which offers coverage to people through the individual market.
Funded through premiums to sell insurance
Question:
, Commercial Insurer
Answer:
selling insurance for a profit.
Two main groups:
**stock insurers*
**mutual insurers (Multi-line insurers)*
Question:
Stock Companies - Nonparticipating
Answer:
organized and incorporated under state laws for purpose of making a profit for its stock holders and
is not ran by policyholders (no $).
Question:
Mutual Companies - Participating
Answer:
organized and incorporated under state laws and policyholders receive dividends ($), but they have
no stockholders. Anyone purchasing insurance is both a customer and an owner & has the right to
vote for members of the board of directors.
Question:
Mutualization
Answer:
Stock company converting to a mutual company
Question:
Demutualization
Answer:
Mutual company converting to a stock company
Question:
Lloyd's of London
