Primerica - Life Insurance Exam

Primerica - Life Insurance Exam What is insurance? Transfer of the possibility of loss (risk) to an insurance company. What is a risk? The uncertainty of financial loss There are two types of loss Pure and Speculative Which type of loss is insurable? Pure Why is Pure loss insurable? Loss must be financial and uncertain. No financial gain can occur. What causes loss? Peril; such as fire, accident or flood What causes a peril? A hazard What is a hazard? Increases the likelihood of a loss; such as smoking What is the concept called, that predicts the appropriate number of deaths that should occur within a similar group of people (exposure) within a given period of time? Law of Large Numbers What is adverse selection? People in bad health keep their policy in force longer than people in good health As an agent, you are a legal representative of the ______________. company The person who pays for the policy of insurance is the policy owner The _____________ is the person who receives the benefits from the insurance policy beneficiary The person covered by the insurance policy is the ____________. insured The insurance company is the ___________. insurer To buy insurance, the policyowner must have ______________ in the insured at the _________________________________________________. insurable interest; time of purchase but not at time of insured's death. The 5 recognizable areas of insurable interest are ___________. 1. your own life 2. family members 3. business partners 4. key employee cial obligation. What is person called who holds a position of special trust and confidence?