New Mexico Health & Life Insurance Exam Study Guide with complete solutions (Latest 2025/2026 Update| 100% Correct Answers.

New Mexico Health & Life Insurance Exam
Study Guide with complete solutions (Latest
2025/2026 Update| 100% Correct Answers.

Question:

Elements of insurable risks? i,- i,- i,-




Answer:

1.Large numbers of homogeneous units, I large number of similar
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-


exposure units is necessary in order for the pooling in sharing
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-



mechanisms of insurance to function i,- i,- i,- i,-




2.Los must be measurable by being able to place a specific monetary
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-


value on exposures and losses in order to be able to calculate rates in
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-



premiums and reach settlements i,- i,- i,-




3. Lost must be uncertain, insurance covers purists which messed inns
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-


involve an uncertainty of loss
i,- i,- i,- i,- i,-




4.Economic hardship, there must be a significant potential for economic
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-


loss a.k.a. a higher dollar value
i,- i,- i,- i,- i,-




5.Exclusion of catastrophic perils, Mini policies exclude losses resulting
i,- i,- i,- i,- i,- i,- i,- i,- i,-


from war nuclear hazards flooded earthquake because the insurance
i,- i,- i,- i,- i,- i,- i,- i,- i,-



system would collapse if we covered events that caused widespread losses
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-


to large numbers at the same time
i,- i,- i,- i,- i,- i,-




Question:

,Adverse selection? i,-




Answer:

Those who are most likely to file claims are the ones most likely to
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-



purchase insurance i,-




Question:

Reinsurance?

Answer:

A form of insurance whereby one insurance company (the reinsurer) in
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-


consideration of a premium paid to it, agrees to indemnify another
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-


insurance company (the ceding company) for part or all of its liabilities
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-


from insurance policies it has issued.
i,- i,- i,- i,- i,-




Question:
Types of insurers?
i,- i,-




Answer:

Stock companies, mutual companies, fraternal benefit society's, risk
i,- i,- i,- i,- i,- i,- i,- i,-


retention group's i,-




Question:

Stock insurance companies?
i,- i,-

, Answer:
may issue non- participating policies, stockholder does not have to be
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-



policy owner.Stockholders/shareholders own shares in the company a
i,- i,- i,- i,- i,- i,- i,- i,-


stock company is referred to as non-participating company because they
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-



do not participate in dividends resulting from stock ownership.
i,- i,- i,- i,- i,- i,- i,- i,-




Question:
Mutual insurance companies?
i,- i,-




Answer:
owned by policyholdersFunds not paid out after paying claims and other
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-


operating costs are returned to the policy owners in the form of policy
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-


dividends. Mutual companies are referred to as participating companies
i,- i,- i,- i,- i,- i,- i,- i,- i,-


because the policy owner is participate in dividends.
i,- i,- i,- i,- i,- i,- i,-




Question:
Fraternal insurers? i,-




Answer:

Fraternal benefit societies are primarily life insurance carriers that exist as
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-



social organizations and usually engage in charitable and benevolent
i,- i,- i,- i,- i,- i,- i,- i,- i,-


activities. i,-




Fraternal insurers are distinguished by the fact that their membership is
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-


usually drawn from those who are also members of a lodge or fraternal
i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-


organization. i,-