©SOPHIABENNET@2024-2025 Friday, August 23, 2024 10:49 AM
Washington Life/Health Insurance Exam
Study Guide with Complete Solutions
policy owner - Answer✔️✔️-usually, but not always the person covered by
the policy
beneficiary - Answer✔️✔️-the person who is paid when a claim
is submitted
agent/producer - Answer✔️✔️-acts as a legal representative
of the insurance company
broker - Answer✔️✔️-representative of the Insured, not the insurance
company
risk - Answer✔️✔️-The chance or uncertainty of loss
Pure risk - Answer✔️✔️-the chance of experiencing a loss (without the
possibility of gain). Only downside, no upside.
Speculative risk - Answer✔️✔️-s the chance of loss one accepts in the hope of
realizing a gain
Risk avoidance - Answer✔️✔️-staying away from risky activities altogether
Risk reduction - Answer✔️✔️-reduce the chance of something bad
happening
1
, ©SOPHIABENNET@2024-2025 Friday, August 23, 2024 10:49 AM
Risk shifting - Answer✔️✔️-Get someone else to accept the risk
Buying insurance - Answer✔️✔️-transfer a portion of your risk to the Insurer
Risk Retention - Answer✔️✔️-the individual or business that opts not to buy
insurance retains the entire risk
Indemnification - Answer✔️✔️-an insurance concept that states that some
portions of the insurance industry prefer that we be made only whole after
a loss rather than coming out ahead (Only getting back what you are owed,
not getting more than what you had to start with)
Subrogation - Answer✔️✔️-the transfer to the Insurer of the Insured's rights
to recover damages from a responsible third party
Peril - Answer✔️✔️-the cause of loss
Law of Large numbers - Answer✔️✔️-the mathematical concept that makes
it easier to predict losses if we have a large number of Insureds
Insurable losses are... - Answer✔️✔️-Economic, Predictable, Accidental,
Measurable, Non-Catastrophic
non-participating companies - Answer✔️✔️-Stock companies that exist for
the sole purpose of generating profits
for their stockholders
participating companies - Answer✔️✔️-A company owned by its policy
holders where the profits are distributed among policy holders
2
, ©SOPHIABENNET@2024-2025 Friday, August 23, 2024 10:49 AM
Social Security act - Answer✔️✔️-a guarantee that government
would never again allow workers (and their families) to become
destitute
OASDI (Social Security) - Answer✔️✔️-Old Age, Survivors, and Disability
Insurance...Federal Government law
FICA - Answer✔️✔️-Federal Insurance Contributions Act
or FICA, payroll taxes levied on employees, employers, and the self-
employed.
Not covered by social security - Answer✔️✔️-payroll taxes levied on
employees, employers,
and the self-employed.
FICA Fully Insured - Answer✔️✔️-(Worked for 10 years) payroll taxes levied
on employees, employers,
and the self-employed.
Retirement Benefits;
Disability Income Benefits; and
Survivor Benefits.
3
, ©SOPHIABENNET@2024-2025 Friday, August 23, 2024 10:49 AM
Currently Insured - Answer✔️✔️-Worked less than ten years. Only eligeable
for Survivor Benefits
Average Indexed Monthly
Earnings - Answer✔️✔️-Averages earnings over time period. Either way, the
more a worker
has paid into Social Security, the more the worker (or dependents)
will get out of it. (What you get at age 65)
Primary Insurance Amount (PIA). - Answer✔️✔️-Full retirement benefit
someone is entitled to at age 65 (some cases, 66-67)
elimination period (Disability) - Answer✔️✔️-the person must be
disabled for 5 months before starting to receive Disability
Benefits
underwriting - Answer✔️✔️-the selection and classification of risks.
actuary - Answer✔️✔️-A person who tracks the lifespan and chance of
illness or accident based on specific factors
Mortality table - Answer✔️✔️-predict the age at which
people in a given group are likely to die (Used by life insurers)
Morbidity table - Answer✔️✔️-predict how often
people in a given group are likely to get sick or have an
4
Washington Life/Health Insurance Exam
Study Guide with Complete Solutions
policy owner - Answer✔️✔️-usually, but not always the person covered by
the policy
beneficiary - Answer✔️✔️-the person who is paid when a claim
is submitted
agent/producer - Answer✔️✔️-acts as a legal representative
of the insurance company
broker - Answer✔️✔️-representative of the Insured, not the insurance
company
risk - Answer✔️✔️-The chance or uncertainty of loss
Pure risk - Answer✔️✔️-the chance of experiencing a loss (without the
possibility of gain). Only downside, no upside.
Speculative risk - Answer✔️✔️-s the chance of loss one accepts in the hope of
realizing a gain
Risk avoidance - Answer✔️✔️-staying away from risky activities altogether
Risk reduction - Answer✔️✔️-reduce the chance of something bad
happening
1
, ©SOPHIABENNET@2024-2025 Friday, August 23, 2024 10:49 AM
Risk shifting - Answer✔️✔️-Get someone else to accept the risk
Buying insurance - Answer✔️✔️-transfer a portion of your risk to the Insurer
Risk Retention - Answer✔️✔️-the individual or business that opts not to buy
insurance retains the entire risk
Indemnification - Answer✔️✔️-an insurance concept that states that some
portions of the insurance industry prefer that we be made only whole after
a loss rather than coming out ahead (Only getting back what you are owed,
not getting more than what you had to start with)
Subrogation - Answer✔️✔️-the transfer to the Insurer of the Insured's rights
to recover damages from a responsible third party
Peril - Answer✔️✔️-the cause of loss
Law of Large numbers - Answer✔️✔️-the mathematical concept that makes
it easier to predict losses if we have a large number of Insureds
Insurable losses are... - Answer✔️✔️-Economic, Predictable, Accidental,
Measurable, Non-Catastrophic
non-participating companies - Answer✔️✔️-Stock companies that exist for
the sole purpose of generating profits
for their stockholders
participating companies - Answer✔️✔️-A company owned by its policy
holders where the profits are distributed among policy holders
2
, ©SOPHIABENNET@2024-2025 Friday, August 23, 2024 10:49 AM
Social Security act - Answer✔️✔️-a guarantee that government
would never again allow workers (and their families) to become
destitute
OASDI (Social Security) - Answer✔️✔️-Old Age, Survivors, and Disability
Insurance...Federal Government law
FICA - Answer✔️✔️-Federal Insurance Contributions Act
or FICA, payroll taxes levied on employees, employers, and the self-
employed.
Not covered by social security - Answer✔️✔️-payroll taxes levied on
employees, employers,
and the self-employed.
FICA Fully Insured - Answer✔️✔️-(Worked for 10 years) payroll taxes levied
on employees, employers,
and the self-employed.
Retirement Benefits;
Disability Income Benefits; and
Survivor Benefits.
3
, ©SOPHIABENNET@2024-2025 Friday, August 23, 2024 10:49 AM
Currently Insured - Answer✔️✔️-Worked less than ten years. Only eligeable
for Survivor Benefits
Average Indexed Monthly
Earnings - Answer✔️✔️-Averages earnings over time period. Either way, the
more a worker
has paid into Social Security, the more the worker (or dependents)
will get out of it. (What you get at age 65)
Primary Insurance Amount (PIA). - Answer✔️✔️-Full retirement benefit
someone is entitled to at age 65 (some cases, 66-67)
elimination period (Disability) - Answer✔️✔️-the person must be
disabled for 5 months before starting to receive Disability
Benefits
underwriting - Answer✔️✔️-the selection and classification of risks.
actuary - Answer✔️✔️-A person who tracks the lifespan and chance of
illness or accident based on specific factors
Mortality table - Answer✔️✔️-predict the age at which
people in a given group are likely to die (Used by life insurers)
Morbidity table - Answer✔️✔️-predict how often
people in a given group are likely to get sick or have an
4
