Primerica Insurance Exam: General
Insurance (Latest); Questions and Answers
Insurance ✔✔A contract in which one party agrees to indemnify the insured
party against loss,
damage or liability from an unknown event.
Insurance transfers ✔✔The reduction, decrease, or disappearance of value of
the person or
property insured in a policy, caused by a named peril.
Risk ✔✔The uncertainty or chance of a loss occurring.
Pure risk ✔✔Situations that can only result in a loss or no change
Speculative risk ✔✔The opportunity for either loss loss or gain.
Hazards ✔✔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.
Moral hazards ✔✔Tendencies towards increased risk.
, Primerica Insurance Exam: General
Insurance (Latest); Questions and Answers
Morale hazards ✔✔Arises from a state of mind that causes indifference to loss,
such as
carlessness
Perils ✔✔The causes of loss against in an insurance policy
Exposure ✔✔The unit of measure used to determine rates charged for insurance
coverage.
Factors: The age of the insured, insured medical history, occupation, and sex
Avoidance ✔✔Eliminating exposure to a loss.
Retention ✔✔The planned assumption of risk by an insured through the use of
deductibles, co-
payments, or self-insurance.
Purpose: To reduce expenses and improve cash flow, to increase control of claim
reserving and
claims settlement, to fund for losses that cannot be insured.
Insurance (Latest); Questions and Answers
Insurance ✔✔A contract in which one party agrees to indemnify the insured
party against loss,
damage or liability from an unknown event.
Insurance transfers ✔✔The reduction, decrease, or disappearance of value of
the person or
property insured in a policy, caused by a named peril.
Risk ✔✔The uncertainty or chance of a loss occurring.
Pure risk ✔✔Situations that can only result in a loss or no change
Speculative risk ✔✔The opportunity for either loss loss or gain.
Hazards ✔✔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.
Moral hazards ✔✔Tendencies towards increased risk.
, Primerica Insurance Exam: General
Insurance (Latest); Questions and Answers
Morale hazards ✔✔Arises from a state of mind that causes indifference to loss,
such as
carlessness
Perils ✔✔The causes of loss against in an insurance policy
Exposure ✔✔The unit of measure used to determine rates charged for insurance
coverage.
Factors: The age of the insured, insured medical history, occupation, and sex
Avoidance ✔✔Eliminating exposure to a loss.
Retention ✔✔The planned assumption of risk by an insured through the use of
deductibles, co-
payments, or self-insurance.
Purpose: To reduce expenses and improve cash flow, to increase control of claim
reserving and
claims settlement, to fund for losses that cannot be insured.
