PA Life, Accident, & Health Insurance Exam Questions & Answers 100% verified

Insurance - ANSWER-defined as the transfer of PURE risk to the insurance company in consideration for a premium. The chance of loss without any chance of gain is called - ANSWER-pure risk Speculative risk - ANSWER-has the possibility for gain or loss and is not insurable. Risk is defined as the - ANSWER-chance of loss. A condition that could result in a loss is known as an - ANSWER-exposure A hazard is something that increases - ANSWER-the chance of loss. The presence of a physical hazard - ANSWER-increases the chance of a loss occurring. A peril is - ANSWER-defined as a cause of loss, such as fire. To be insurable, - ANSWER-losses must be calculable. The law of large numbers - ANSWER-allows insurers to predict claims more accurately. The law of large numbers applies to - ANSWER-groups of people, not to individuals. The more people in the group, - ANSWER-the more accurate the predictions are.