Exam Fx Ca life and Health (Exam Fx Key Facts) Questions With Complete Solutions

Insurance correct answer: Contract whereby one undertakes to indemnify another against loss, damage, or liabilty arising from a unknown event. Insurer correct answer: Any person capable of making a contract; subject to restrictions imposed by the CA insurance code. Speculative risk correct answer: Chance of loss and potential for gain. This risk is not insurable. Hazard correct answer: Increase the risk. Law of Large numbers correct answer: The more similar risks the better they can guess approx. how many losses they have in a given time period. Loss exposure correct answer: Situation the presents the possibility of a loss Doctrine of upmost good faith states correct answer: That all parities to the contract can rely upon statements of other parties. Policy correct answer: Written instrument in witch a contract is set forth Premium correct answer: Amount insured paid to the insurer for coverage. Rate correct answer: Price of insurance for each exposure unit Rate correct answer: Cost per exposure unit How to determine the amount the insured will pay correct answer: Multiply the rate by the number of exposure units purchased. express warranty correct answer: Statement of fact in a policy of a matter relating to the person/thing insured Warranty correct answer: May be expressed or applied Implied warranty correct answer: Representation in an insurance contract Representation pt1 correct answer: May be oral /written may be made @ time of/before the insurance policy Representation is false when correct answer: Facts fail to correspond with its stipulations False representation on a signed claim correct answer: May subject the insured to perjury Concealment correct answer: Party fails to communicate that witch a party knows and ought to communicate so the other party can make a sound decision Concealment intentional / unintentional correct answer: Entitles the injured party to rescind the contract. Rescind a policy correct answer: Void or cancel policy flat by returning all premiums to the insured. It is as if the policy never existed no coverage applies. Insurance applicant correct answer: Individual who is applying to purchase insurance Life insurance creates a correct answer: Immediate estate upon death of insured in that the death benefit will be paid to the beneficiary Insurable Interest correct answer: Must exist @ time if application Key person life insurance correct answer: Is used by a business