RIBO: ENTRY LEVEL 1 (with Complete Solutions)

Risk correct answers Chance of a loss Which type of risk is insured and why? correct answers Pure risk, because speculative risk is comparable to gambling. 3 Ways risk (management) is dealt with? correct answers REDUCE: preventative measures ASSUME/RETAIN: Self-insure TRANSFER: purchase insurance Which of the following is not a risk? A) Assume or retain risk B) Reduce the risk C) Doing nothing / avoiding the risk D) Transfer the risk correct answers C) Doing nothing / avoiding the risk Insurer correct answers Insurance company Stock Insurance company correct answers Owned by shareholders Mutual insurance company correct answers Owned by policyholders - Usually smaller, for Ex., One big claim can flux the premium. Once these companies become big they are titled stockholders. Co-operative associations correct answers Not looking to consume profits, these policies are expected to be cheaper. Lloyd's of London correct answers Not an insurance company but rather an insurance market. Ex. Syndicates are investors for things such as athletes legs, voices etc. High risk Vs. High reward. Insured correct answers Who is covered. Named insured = policy holder (owner) What is not included in the general types of insurance? correct answers Life and Health Application of insurance includes: correct answers Bonds, Liability, Accident / sickness, Valued items, personal articles coverage/floater Declaration correct answers Signed approving information provided is the upmost truth Statutory conditions correct answers Provincial laws protecting both parties being the insured and the insurer