CA Life and Health Exam Questions and Answers Solved 100% Correct!!

What is insurance? - Answer-Insurance is the legal contract where two parties agree that if something will happen, a value will be exchanged. What's the difference between pure risk and speculative risk? - Answer-Pure risk is when you'll lose it all or there will be no change. Speculative risk you can either win or lose. What is peril? - Answer-peril is the causes of loss insured against in an insurance policy What is hazard? - Answer-conditions that increase the probability of something bad happening What's the diff between moral, morale, and physical hazard? - Answer-physical is the hazard that results from physical body issues. Moral hazard is the evaluation of character (lying) morale hazard is an indifference which causes risk. What is the law of large numbers? - Answer-the larger the number of people more exposed to risk, the more predictable the risk outcome. What is an insurable event? - Answer-the more predictable an event, the more insurable it becomes What's the diff between contract and tort law - Answer-tort is non-contract and private Four major elements of a contract - Answer-agreement, consideration, competent parties, legal purpose contract of adhesion - Answer-prepared by insurer then accepted or rejected Conditional contract - Answer-conditions need to be met in order for contract to be executed aleatory contract - Answer-exchange of unequal amounts of value unilateral contract - Answer-only one party is forced to do somethingpersonal contract - Answer-can't be transferred w/out notifying insurer When can you rescind a contract - Answer-intentional or unintentional concealment, violation of material warranty, false material representation six specifications for insurance policies - Answer-parties contracted person insured statement of insurable interest risks insured against time period stated premium 4 categories of info necessary for financial planning - Answer-debt income mortgage expenses key person insurance - Answer-losing someone key to a business buy-sell insurance (business continuation) - Answer-what will be done with a business if the owner dies Premiums - Answer-life insurance payment installments term life insurance - Answer-covered only for a specific term