MI LIFE PRODUCER LICENSING REVIEW SOLVED QUESTIONS WITH COMPLETE SOLUTION

MI LIFE PRODUCER LICENSING REVIEW
SOLVED QUESTIONS WITH COMPLETE
SOLUTION

●● Insurer
Answer: A company that sells insurance policies (contracts); also called
an insurance company


●● Insured
Answer: Person covered (protected) by insurance company


●● Policyowner
Answer: has all rights and privileges to the policy; may or may not be
the insured


●● Applicant
Answer: Person completing the application and usually the insured.
Applicant becomes the policyowner upon approval


●● beneficiary
Answer: a person who receiving the face amount of the policy upon the
insured's death

,●● Policy
Answer: A contract between a policyowner (and/or insured) and an
insurance company which agrees to pay the face value to the beneficiary
when the insured dies


●● Premium
Answer: Money paid to the insurer (company) for the policy


●● Death Benefit (face amount)
Answer: Amount received upon the death of the insured


●● Pure Risk
Answer: A chance of loss- Insurable


●● Speculative Risk
Answer: chance of loss or gain; not insurable


●● Loss
Answer: A reduction in the quantity, quality or value of something


●● Exposure
Answer: Amount of potential monetary losses from a particular event
(fire, accident)

, ●● Peril (Perils are in the past)
Answer: The cause of loss


●● Hazards (Future)
Answer: Increase the likelihood of a peril (Physical, Moral, Morale,
Legal)


●● Sharing
Answer: Pools of insureds with a common risk (Tavern owners)


●● Transfer
Answer: Insurance is the transfer of risk to an insurance company
(insurance policy)


●● Avoidance
Answer: Not doing (Not flying)


●● Reduction
Answer: Reducing risk (Wearing a seat belt)


●● Retention