Exam FX Chapter 1: General Insurance questions with correct answers
Agent/Producer CORRECT ANSWER a legal representative of an insurance company; the classification of producer usually includes agents and brokers; agents
are the agents of the insurer
Applicants (or proposed insured) CORRECT ANSWER a person applying for insurance
Broker CORRECT ANSWER an insurance producer not appointed by an insurer and is deemed to represent the client
Insurance Policy CORRECT ANSWER 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
Insured CORRECT ANSWER the person covered by the insurance policy. This person may or may not be the policyowner
Insurer (principal) CORRECT ANSWER the company who issues an insurance policy
Policyowner CORRECT ANSWER the person entitled to exercise the rights and privileges in the policy
Premium CORRECT ANSWER the money paid to the insurance company for the insurance policy Reciprocity/Reciprocal CORRECT ANSWER a mutual interchange of rights and privileges
Insurance CORRECT ANSWER transfers the risk of loss from an individual or business entity to an insurance company, which in turn spreads the costs of unexpected losses to many individuals.
4 types of insurance transactions CORRECT ANSWER Solicitation
Negotiations Sale (effectuation of a contract of insurance) Advising an individual concerning coverage of claims
Risk CORRECT ANSWER the uncertainty or change of a loss occurring.
Pure Risk CORRECT ANSWER 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
Speculative Risk CORRECT ANSWER involves the opportunity for either loss or gain. An example would be gambling. These types of risks are not insurable.
Hazards CORRECT ANSWER conditions or situations that increase the probability of an insured loss occurring.
Agent/Producer CORRECT ANSWER a legal representative of an insurance company; the classification of producer usually includes agents and brokers; agents
are the agents of the insurer
Applicants (or proposed insured) CORRECT ANSWER a person applying for insurance
Broker CORRECT ANSWER an insurance producer not appointed by an insurer and is deemed to represent the client
Insurance Policy CORRECT ANSWER 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
Insured CORRECT ANSWER the person covered by the insurance policy. This person may or may not be the policyowner
Insurer (principal) CORRECT ANSWER the company who issues an insurance policy
Policyowner CORRECT ANSWER the person entitled to exercise the rights and privileges in the policy
Premium CORRECT ANSWER the money paid to the insurance company for the insurance policy Reciprocity/Reciprocal CORRECT ANSWER a mutual interchange of rights and privileges
Insurance CORRECT ANSWER transfers the risk of loss from an individual or business entity to an insurance company, which in turn spreads the costs of unexpected losses to many individuals.
4 types of insurance transactions CORRECT ANSWER Solicitation
Negotiations Sale (effectuation of a contract of insurance) Advising an individual concerning coverage of claims
Risk CORRECT ANSWER the uncertainty or change of a loss occurring.
Pure Risk CORRECT ANSWER 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
Speculative Risk CORRECT ANSWER involves the opportunity for either loss or gain. An example would be gambling. These types of risks are not insurable.
Hazards CORRECT ANSWER conditions or situations that increase the probability of an insured loss occurring.
