LLQP | Exam With Complete Solutions.

Ratings are based on a scale that begins with a top rating and ends with a lowest rating. What are the Top and Lowest Ratings? - AAA = strong ability to meet financial commitments / CC = likely to not meet commitments What is Insurance? - Insurance is based on the concept of an insurance company issuing a contract of insurance to a policy owner that promises certain benefits should the risk that is being covered manifest itself, and charging a fee in the form of policy premiums to cover the payment of those benefits. The policy premiums paid to the insurer are cautiously invested so that the promise of the contract will be honoured when a claim is made. Insurance contract - An insurance contract is a contract that obliges the insurer to fulfil the terms of the contract as long as premiums are paid. Policy owner - The policy owner applies for the policy and makes the premium payments. The policy owner is also called the insured. He or she may also be the life insured. Policy premiums - The premium is the periodic payment made by the policyholder or his or her legal representative that is required to keep an insurance policy in force. Claim - When the beneficiary of a life policy or insured of an insurance policy seeks the benefit from the policy Face amount - The basic amount of insurance payable on the event covered in the contract. This is the amount stated on the Face page of the policy. Life insured - The life insured is the person on whose health, gender, and age the premiums are based. Beneficiary - This is the person or people to whom the proceeds of a life policy are paid when the insured dies.Disability income insurance - Disability income insurance pays a monthly benefit to the insured who is sick or injured and unable to work. Health insurance - Health insurance is the broad term used to describe a number of policies that provide health coverage such as dental insurance or prescription drugs. Coverage - Coverage in an insurance contract is the face amount of a life insurance contract or the benefit received from a disability income insurance contract or the reimbursement amount of a health insurance contract. Agency contract - The agency contract is the contract between the agent and the insurer or insurers whose policies the agent will sell. Underwriting - Underwriting is the process by which the insurer assesses the risk posed by the life insured (if a life insurance policy) or policy owner (if a disability or health insurance policy) when an application has been made for insurance. The agent provides information that assists correct underwriting.