Study Guide for OHIO Life Insurance Exam 2024 Final Q&A

Study Guide for OHIO Life Insurance Exam 2024 Final Q&A Insurance: - CORRECT ANSWER-A contract in which the insurance company agrees to indemnify the insured party against loss, damage or liability arising from an unknown event. Insurance Transfers: - CORRECT ANSWER-The risk of loss from an individual or business entity to an insurance company, which in turn spreads costs of unexpected losses to many individuals. Direct response marketing: - CORRECT ANSWER-A direct response marketing system effectively bypasses the insurance agent. Business is conducted over the phone, through the mail, or online. This is a perfectly legal approach to selling insurance. It is not mandatory in all situations for the insured to physically sign any documents in order for coverage to go into effect. Insurance Transaction: (4) - CORRECT ANSWER-Solicitation, Negotiations, Sale (effectuation of a contract of insurance, and Advising an individual concerning coverage of claims. Risk: (Two Types) - CORRECT ANSWER-The uncertainty or chance of a loss occurring. Pure Risk: -Situations that can only result in a loss or no change. There is no opportunity for financial gain. This is the only type that insurance companies will accept. Speculative Risk: -Involves the opportunity for either loss or gain. Ex: Risk of gambling. These are not insurable risks. Concealment: - CORRECT ANSWER-The withholding of information that will result in an imprecise underwriting decision. Exposure: - CORRECT ANSWER-A unit of measure used to determine rates charged for insurance coverage. EX of Life insurance factors: -Age, medical history, occupation, and sex. Homogenous: - CORRECT ANSWER-A large number of units having the same or similar exposure to loss. Hazards: (3 types) - CORRECT ANSWER-Conditions or situations that increase the probability of an insured loss occurring. Physical hazards: -Individual characteristics that increase the chances of the cause of loss. Ex: past medical history, condition at birth (blindness). Moral Hazards: