Delaware Life insurance exam questions
and answers graded A+
Speculative Risk
A chance of loss, no loss, or gain.
a risk that presents the chance of loss but no opportunity for gain
Pure Risk
risk sharing
Allocating ownership of a risk to another party
Risk Transfer
A pure risk is transferred from the insured to the insurer, who typically is in a stronger financial
position
insurable risk
a pure risk that is faced by a large number of people and for which the amount of the loss can
be predicted
,Morbidity
Refers to ill health in an individual and the levels of ill health in a population or group.
Those who are at risk the most to buy insurance
adverse selection
Law of Large Numbers
Based on the idea that predictions become more accurate as the number of measurable
exposures increase, the law of large numbers is a mathematical principle of probability that
underlies insurance premium rate calculations.
____ sold by home service insurance companies, is sold in small face amounts, usually less than
$10,000 (and frequently between $1,000 and $2,500).
Industrial life insurance
____ Are not taxable
Policy divdeneds
____ are owned by their policyowners
Mutual insurance companies
,Surplus Lines Insurance
An insurance co that is authorized to sell unauthorized insurance. You can only go to a surplus
lines co if you cant get it from a regular insurance company
Reinsurance
an arrangement by which the primary insurer that initially writes the insurance transfers to
another insurer part or all of the potential losses associated with such insurance
Domestic Insurer
An insurance company that conducts business in the state of incorporation.
Alien insurer
An insurance company that is incorporated outside the United States.
foreign insurer
An insurance company that is incorporated in another state.
What are the federal insurance programs?
Medicaid and Social Securities
, Express Authority
the authority of an agent, stated in the document or agreement creating the agency(agent and
insurer)
Implied Authority
insurers allow their producers to engage in many sales-related activities not expressly listed in
any agreement but that are recognized as essential to the job
Apparent Authority
Authority that:
1. the contract does not provide
2. the insurer does not intend
3. reasonably appears to the customer to be granted by the insurer based on the producer’s
statements and the actions (or inactions) of the insurer
Rebating
the practice of giving an individual a premium reduction or some other financial advantage not
stated in the policy as an inducement to purchase the policy
and answers graded A+
Speculative Risk
A chance of loss, no loss, or gain.
a risk that presents the chance of loss but no opportunity for gain
Pure Risk
risk sharing
Allocating ownership of a risk to another party
Risk Transfer
A pure risk is transferred from the insured to the insurer, who typically is in a stronger financial
position
insurable risk
a pure risk that is faced by a large number of people and for which the amount of the loss can
be predicted
,Morbidity
Refers to ill health in an individual and the levels of ill health in a population or group.
Those who are at risk the most to buy insurance
adverse selection
Law of Large Numbers
Based on the idea that predictions become more accurate as the number of measurable
exposures increase, the law of large numbers is a mathematical principle of probability that
underlies insurance premium rate calculations.
____ sold by home service insurance companies, is sold in small face amounts, usually less than
$10,000 (and frequently between $1,000 and $2,500).
Industrial life insurance
____ Are not taxable
Policy divdeneds
____ are owned by their policyowners
Mutual insurance companies
,Surplus Lines Insurance
An insurance co that is authorized to sell unauthorized insurance. You can only go to a surplus
lines co if you cant get it from a regular insurance company
Reinsurance
an arrangement by which the primary insurer that initially writes the insurance transfers to
another insurer part or all of the potential losses associated with such insurance
Domestic Insurer
An insurance company that conducts business in the state of incorporation.
Alien insurer
An insurance company that is incorporated outside the United States.
foreign insurer
An insurance company that is incorporated in another state.
What are the federal insurance programs?
Medicaid and Social Securities
, Express Authority
the authority of an agent, stated in the document or agreement creating the agency(agent and
insurer)
Implied Authority
insurers allow their producers to engage in many sales-related activities not expressly listed in
any agreement but that are recognized as essential to the job
Apparent Authority
Authority that:
1. the contract does not provide
2. the insurer does not intend
3. reasonably appears to the customer to be granted by the insurer based on the producer’s
statements and the actions (or inactions) of the insurer
Rebating
the practice of giving an individual a premium reduction or some other financial advantage not
stated in the policy as an inducement to purchase the policy
