Texas Life and Health Insurance-Group 1 Questions with 100% Complete Answers| Rated A+

Insurance - Contractual coverage binding the insurer (insurance company) to indemnify (compensate for loss) the insured (people or businesses) against a specified loss in return for money (premiums). Law of Large Numbers - What insurance is based on. The bigger the observed sample, the more accurate the predicted results. Life insurance pools growth and distribution of money to satisfy two goals: - 1. Pay benefits to survivors of someone who dies while covered. 2. Providing distribution of benefits by lump sum or with guaranteed lifetime payments Indemnification - Concept of restoring individuals to the same financial position they were at before a loss occurred. Agent/Producer - Individual who is state-licensed to solicit and sell insurance for one or more insurance companies. He/She must be authorized by an insurer (principal) to act on its behalf. Insured - Individual who is insured or has insurance taken out on or for them for a specific interest. Named Insured - Person(s) listed as insured in the Declarations page. First Named Insured - first person listed who gets renewal/policy change notices Other Insured - 1. Any member of the insured household who is a relative or is under 21 2. A child or parent living with the insured is included, regardless of age 3. Other members of the insured household who are under 21 years of age Additional Insured - an individual or entity who, other than the named insured, qualifies as an insured person under the policy. Policyowner - Person who: 1. Applies for a policy 2. Takes responsibility for premium payment 3. Has the right to cash values, dividends, and policy proceeds 4. Has the ability to change beneficiaries and other policy particulars Accident - an undesirable, unforseen, and unintended event that is identifiable as to time and place Occurance - an event, including continuous and repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured Endowment - Cash from life insurance payable to the policyholder at policy maturity Final Expenses - the financial costs related to dying: funeral and medical expenses, debts, taxes and administrative expenses National Association of Insurance Commissioners (NAIC) - All state directors or commissioners are members of the NAIC, but the group has no official legislative powers. They try to standardize insurance laws throughout the country by recommending model legislation in each commissioners home state. Maslow's Hierarchy of Needs - 1. Physiological 2. Security 3. Affiliation 4. Esteem 5. Self-actualization Must be met before approaching someone about buying insurance.