Michigan Life and Health Examination Accurate 100%!!

Risk - ANSWER The uncertainty or chance of a loss occurring. The two types are pure and speculative. Pure Risk - ANSWER Refers to a situation that can only result in a loss or no change. There is no opportunity for financial gain. Speculative Risk - ANSWER Involves the opportunity for either loss or gain. Hazards - ANSWER Conditions or situations that increase the probability of an insured loss occurring. Hazards and classified as physical hazards, moral hazards, or morale hazards. Perils - ANSWER The causes of loss insured against in an insurance policy. Life Insurance - ANSWER Insures against the financial loss caused by the premature death of the insured. Health Insurance - ANSWER Insures against medical expenses Property Insurance - ANSWER Insures against the loss of physical property or the loss of its income producing abilities Casualty Insurance - ANSWER Insures against the loss and/or damage of property and resulting liabilities Loss - ANSWER the reduction, decrease, or disappearance of value of the person or property insured in a policy, caused by a named peril. Avoidance - ANSWER eliminating exposure to a loss Risk Retention - ANSWER Planned assumption of risk by an insured through the use of deductibles, so-payments, or self-insurance. It is also known as self-insurance when the insured accepts the responsibility for the loss before the insurance pays. The purpose of retention is: 1) To reduce expenses and improve cash flow 2) To increase control of claim reserving and claims settlements