OHIO LIFE INSURANCE EXAM 4 COMPLETE
PREPARATION GUIDE WITH ANNUITIES,
BENEFITS, AND UNDERWRITING BASICS
◉ Sharing: (Method of handling risk)
Answer: Method of dealing with risk for a group of individuals or
businesses with the same or similar exposure to loss to share the
losses that occur within that group.
◉ Reduction: (Method of handling risk)
Answer: Includes actions such as installing smoke detectors in our
homes, having an annual physical to detect health problems early, or
perhaps making a change in our lifestyles.
◉ Transfer:
Answer: The most effective way to handle risk. Transfer it to another
party.
◉ Reinsurance:
Answer: Is a contract which one insurance company indemnifies
another insurance company for part or all of its liabilities.
◉ Nonparticipating policies:
,Answer: Does not pay dividends to policyowners, but taxable
dividends are paid to stock holders. Usually issued by stock
companies
◉ Participating policies:
Answer: Pay dividends to policy owners based upon actual mortality
cost, interest earned and costs.
◉ Risk Retention Group:
Answer: A liability insurance company owned by its members.
◉ Lloyd's Association:
Answer: Provides support facilities for underwriters or groups of
individuals that accept insurance risk.
◉ Surplus lines:
Answer: Insurance for which there is no readily available admitted
market. They do not have a certificate of authority to transact
business in the state, but are on the Commissioner's approved list to
transact business under the state's surplus lines laws.
◉ Offer:
Answer: This is made when submitting the application
,◉ Acceptance:
Answer: Takes place when an insurer's underwriter approves the
application and issues a policy.
◉ Consideration:
Answer: The binding force in any contract.
◉ Competent Parties:
Answer: The parties to a contract must be capable of entering into a
contract in the eyes of the law.
◉ Legal Purpose:
Answer: The purpose of the contract must be legal and not against
public policy.
◉ Contract of adhesion:
Answer: Is prepared by one of the parties and accepted or rejected
by the other party. Known as a take it or leave it contract
◉ Aleatory Contract:
Answer: There is an exchange of unequal amounts or values.
◉ Personal Contract:
, Answer: A contract is personal because it is between the insurance
company and an individual.
◉ Unilateral Contract:
Answer: Only one of the parties to the contract is legally bound to do
anything.
◉ Conditional Contract:
Answer: Requires that certain conditions must be met by the policy
owners and the company in order for the contract to be executed.
◉ Utmost of Good Faith:
Answer: Implies that there will be no fraud, misrepresentation or
concealment between the parties.
◉ Reciprocal:
Answer: When insurance is obtained through a reciprocal insurer,
the insureds are sharing the risk of loss with other subscribers of
that reciprocal.
◉ Adverse Selection:
Answer: There are more risks with higher probability of loss seeking
to purchase and maintain insurance than the risks who present
lower probability. Underwriters must guard against this.
PREPARATION GUIDE WITH ANNUITIES,
BENEFITS, AND UNDERWRITING BASICS
◉ Sharing: (Method of handling risk)
Answer: Method of dealing with risk for a group of individuals or
businesses with the same or similar exposure to loss to share the
losses that occur within that group.
◉ Reduction: (Method of handling risk)
Answer: Includes actions such as installing smoke detectors in our
homes, having an annual physical to detect health problems early, or
perhaps making a change in our lifestyles.
◉ Transfer:
Answer: The most effective way to handle risk. Transfer it to another
party.
◉ Reinsurance:
Answer: Is a contract which one insurance company indemnifies
another insurance company for part or all of its liabilities.
◉ Nonparticipating policies:
,Answer: Does not pay dividends to policyowners, but taxable
dividends are paid to stock holders. Usually issued by stock
companies
◉ Participating policies:
Answer: Pay dividends to policy owners based upon actual mortality
cost, interest earned and costs.
◉ Risk Retention Group:
Answer: A liability insurance company owned by its members.
◉ Lloyd's Association:
Answer: Provides support facilities for underwriters or groups of
individuals that accept insurance risk.
◉ Surplus lines:
Answer: Insurance for which there is no readily available admitted
market. They do not have a certificate of authority to transact
business in the state, but are on the Commissioner's approved list to
transact business under the state's surplus lines laws.
◉ Offer:
Answer: This is made when submitting the application
,◉ Acceptance:
Answer: Takes place when an insurer's underwriter approves the
application and issues a policy.
◉ Consideration:
Answer: The binding force in any contract.
◉ Competent Parties:
Answer: The parties to a contract must be capable of entering into a
contract in the eyes of the law.
◉ Legal Purpose:
Answer: The purpose of the contract must be legal and not against
public policy.
◉ Contract of adhesion:
Answer: Is prepared by one of the parties and accepted or rejected
by the other party. Known as a take it or leave it contract
◉ Aleatory Contract:
Answer: There is an exchange of unequal amounts or values.
◉ Personal Contract:
, Answer: A contract is personal because it is between the insurance
company and an individual.
◉ Unilateral Contract:
Answer: Only one of the parties to the contract is legally bound to do
anything.
◉ Conditional Contract:
Answer: Requires that certain conditions must be met by the policy
owners and the company in order for the contract to be executed.
◉ Utmost of Good Faith:
Answer: Implies that there will be no fraud, misrepresentation or
concealment between the parties.
◉ Reciprocal:
Answer: When insurance is obtained through a reciprocal insurer,
the insureds are sharing the risk of loss with other subscribers of
that reciprocal.
◉ Adverse Selection:
Answer: There are more risks with higher probability of loss seeking
to purchase and maintain insurance than the risks who present
lower probability. Underwriters must guard against this.
