NEBRASKA LIFE AND HEALTH INSURANCE EXAM 2024 WITH 100% CORRECT ANSWERS

What is Insurance?Answer - a contract in which 1 party (insurance company) agrees to indemnify (make whole) the insured party against loss, damage, or a liability arising from an unknown event. What is life insurance?Answer - a policy that protects survivors from losses suffered after an insured's death What does insurance do?Answer - transfers the risk of loss from an individual or business entity to an insurance company which spreads out costs of unexpected losses to many individuals What is risk?Answer - uncertainty or chance of a loss occurring Pure riskAnswer - refers to sutuations that can only result in a loss or no change, no opportunity for financial gain What type of risk do insurance companies accept?Answer - pure risk Speculative riskAnswer - involves opportunity for loss or gain HazardAnswer - conditions or situation that increase probability of an insured loss occurring Physical hazardAnswer - individual characteristics that increase the chances of the cause of loss