CFP Insurance Review

4 Types of Risk- CORRECT ANSWER "POSS: 1. Pure Risk: change of loss or no loss (no chance of gain) 2. Objective Risk: measurable and quantifiable risk based on stats 3. Speculative Risk: chance of profit, loss or no loss. 4. Subjecive Risk: Risk that is based upon perception of individual " Perils/Hazards- CORRECT ANSWER "Perils are the acutal cause of the loss (i.e. tornado, fire, earthquake). There are 3 types of Hazards: 1. Moral Hazard: a hazard of character (someone making a false claim) 2. Morale Hazard: hazard of complacency since person knows they are insured. 3. Physical Hazard: banana peel on the stairs. " Insurable Risks are- CORRECT ANSWER "CHAD 1. not CATOSTROPHIC to insurer 2. Homogenous exposure units 3. Accidental 4. measurable and Determinable " Elements of Legal Contract- CORRECT ANSWER "COALL: 1. Competent Parties 2. Offer and Acceptance