LOMA 291 Module 1 Exam Questions with
100% Correct Answers
Risk
the possibility of an unexpected result.
Premium
A specified amount of money an insurer charges in exchange for its agreement to pay a
policy benefit when a specific loss occurs.
Insurance company
A company that provides protection against the risk of financial loss caused by specific
events.
Life insurance
A type of insurance under which the insurer promises to pay a death benefit upon the death of
a named person.
Annuity
A financial product by which an insurer, in return for receiving a premium, promises to make
periodic payments to a named person or entity.
Applicant
The person or entity that applies for an insurance policy.
Policyowner
The person or entity that owns the issued policy.
Insured
, The person whose life or health the policy insures.
Beneficiary
The person named to receive the policy benefit if the insured event occurs.
Third party policy
A policy one person purchases that insures the life of another person.
Speculative risks
A risk that involves three possible outcomes: loss, gain, or no change.
Pure risk
A risk that involves no possibility of gain; either a loss occurs or no loss occurs.
Contracts of indemnity
Health insurance; An insurance policy under which the amount of the policy benefit payable
for a covered loss is based on the actual amount of financial loss that results from the loss, as
determined at the time of the loss.
Valued contract
Life insurance; An insurance policy that specifies the amount of the policy benefit that will
be payable when a covered loss occurs, regardless of the actual amount of the loss the was
incurred.
Face amount
the amount of the policy benefit listed on the first page of a life insurance policy.
Law of large numbers
100% Correct Answers
Risk
the possibility of an unexpected result.
Premium
A specified amount of money an insurer charges in exchange for its agreement to pay a
policy benefit when a specific loss occurs.
Insurance company
A company that provides protection against the risk of financial loss caused by specific
events.
Life insurance
A type of insurance under which the insurer promises to pay a death benefit upon the death of
a named person.
Annuity
A financial product by which an insurer, in return for receiving a premium, promises to make
periodic payments to a named person or entity.
Applicant
The person or entity that applies for an insurance policy.
Policyowner
The person or entity that owns the issued policy.
Insured
, The person whose life or health the policy insures.
Beneficiary
The person named to receive the policy benefit if the insured event occurs.
Third party policy
A policy one person purchases that insures the life of another person.
Speculative risks
A risk that involves three possible outcomes: loss, gain, or no change.
Pure risk
A risk that involves no possibility of gain; either a loss occurs or no loss occurs.
Contracts of indemnity
Health insurance; An insurance policy under which the amount of the policy benefit payable
for a covered loss is based on the actual amount of financial loss that results from the loss, as
determined at the time of the loss.
Valued contract
Life insurance; An insurance policy that specifies the amount of the policy benefit that will
be payable when a covered loss occurs, regardless of the actual amount of the loss the was
incurred.
Face amount
the amount of the policy benefit listed on the first page of a life insurance policy.
Law of large numbers
