Insurance licensing exam
Study online at https://quizlet.com/_h9nvgg
1. adverse selection nsuring of risks that are more prone to losses than the average risk
2. agent/producer a legal representative of an insurance company; the classification of producer
usually includes agents and brokers; agents are the agents of the insurer
3. applicant of pro- a person applying for insurance
posed insured
4. beneficiary a person who receives the benefits of an insurance policy
5. broker an insurance producer not appointed by an insurer and is deemed to represent
the client
6. indemnity main principle of insurance, meaning that the insured cannot recover more than
their loss; the purpose of insurance is to restore the insured to the same position
as before the loss
7. Insurance policy a contract between a policyowner (and/or insured) and an insurance company
which agrees to pay the insured or the beneficiary for loss caused by specific
events
8. insured the person covered by the insurance policy. This person may or may not be the
policyowner
9. Insurer (princi- the company who issues an insurance policy
pal)
10. Law of large the larger the number of people with a similar exposure to loss, the more
numbers predictable actual losses will be
11. policy owner the person entitled to exercise the rights and privileges in the policy
12. premium the money paid to the insurance company for the insurance policy
13. a mutual interchange of rights and privileges
, Insurance licensing exam
Study online at https://quizlet.com/_h9nvgg
Reciprocity/Reci-
procal
14. Insurance is the transfer
----- of risk of loss.
The cost of an
insured's loss is
transferred over
to the insur-
er and spread
among other in-
sureds.
15. The term insur- -Solicitation;
ance transaction Negotiations;
includes any of -Sale (effectuation of a contract of insurance);
the following (by Advising an individual concerning coverage or claims.
mail or any other
means):
16. the uncertainty risk
or chance of
a loss occurring.
The two types
of risks are pure
and speculative,
only one of which
is insurable.
17. Pure risk situations that can only result in a loss or no change. There is no opportunity for
financial gain. Pure risk is the only type of risk that insurance companies are willing
to accept.
, Insurance licensing exam
Study online at https://quizlet.com/_h9nvgg
18. Speculative risk involves the opportunity for either loss or gain. An example of speculative risk is
gambling. These types of risks are not insurable.
19. Exposure a unit of measurement used to determine rates charged for insurance coverage.
20. A large number homogeneous
of units having
the same or sim-
ilar exposure to
loss are referred
to as
21. hazards Conditions or situations that increase the probability of an insured loss occurring.
-physical
-moral
-morale
22. physical hazards individual characteristics that increase the chances of the cause of loss. Physical
hazards exist because of a physical condition, past medical history, or a condition
at birth, such as blindness.
23. moral hazards refer to those applicants that may lie on an application for insurance, or in the
past, have submitted fraudulent claims against an insurer
24. morale hazards Arise from a state of mind that causes indifference to loss, such as carelessness
25. perils are the causes of loss insured against in an insurance policy.
26. loss defined as the reduction, decrease, or disappearance of value of the person or
property insured in a policy, caused by a named peril. Insurance provides a means
to transfer loss.
27. A ---- is a chance risk, hazard, peril
that a loss will oc-
Study online at https://quizlet.com/_h9nvgg
1. adverse selection nsuring of risks that are more prone to losses than the average risk
2. agent/producer a legal representative of an insurance company; the classification of producer
usually includes agents and brokers; agents are the agents of the insurer
3. applicant of pro- a person applying for insurance
posed insured
4. beneficiary a person who receives the benefits of an insurance policy
5. broker an insurance producer not appointed by an insurer and is deemed to represent
the client
6. indemnity main principle of insurance, meaning that the insured cannot recover more than
their loss; the purpose of insurance is to restore the insured to the same position
as before the loss
7. Insurance policy a contract between a policyowner (and/or insured) and an insurance company
which agrees to pay the insured or the beneficiary for loss caused by specific
events
8. insured the person covered by the insurance policy. This person may or may not be the
policyowner
9. Insurer (princi- the company who issues an insurance policy
pal)
10. Law of large the larger the number of people with a similar exposure to loss, the more
numbers predictable actual losses will be
11. policy owner the person entitled to exercise the rights and privileges in the policy
12. premium the money paid to the insurance company for the insurance policy
13. a mutual interchange of rights and privileges
, Insurance licensing exam
Study online at https://quizlet.com/_h9nvgg
Reciprocity/Reci-
procal
14. Insurance is the transfer
----- of risk of loss.
The cost of an
insured's loss is
transferred over
to the insur-
er and spread
among other in-
sureds.
15. The term insur- -Solicitation;
ance transaction Negotiations;
includes any of -Sale (effectuation of a contract of insurance);
the following (by Advising an individual concerning coverage or claims.
mail or any other
means):
16. the uncertainty risk
or chance of
a loss occurring.
The two types
of risks are pure
and speculative,
only one of which
is insurable.
17. Pure risk situations that can only result in a loss or no change. There is no opportunity for
financial gain. Pure risk is the only type of risk that insurance companies are willing
to accept.
, Insurance licensing exam
Study online at https://quizlet.com/_h9nvgg
18. Speculative risk involves the opportunity for either loss or gain. An example of speculative risk is
gambling. These types of risks are not insurable.
19. Exposure a unit of measurement used to determine rates charged for insurance coverage.
20. A large number homogeneous
of units having
the same or sim-
ilar exposure to
loss are referred
to as
21. hazards Conditions or situations that increase the probability of an insured loss occurring.
-physical
-moral
-morale
22. physical hazards individual characteristics that increase the chances of the cause of loss. Physical
hazards exist because of a physical condition, past medical history, or a condition
at birth, such as blindness.
23. moral hazards refer to those applicants that may lie on an application for insurance, or in the
past, have submitted fraudulent claims against an insurer
24. morale hazards Arise from a state of mind that causes indifference to loss, such as carelessness
25. perils are the causes of loss insured against in an insurance policy.
26. loss defined as the reduction, decrease, or disappearance of value of the person or
property insured in a policy, caused by a named peril. Insurance provides a means
to transfer loss.
27. A ---- is a chance risk, hazard, peril
that a loss will oc-
