Health Insurance (Exam FX) Questions And Answers Rated A+ New Update Assured Satisfaction

Agent/Producer - Answer-A legal representative of an insurance company Broker - Answer-An insurance producer not appointed by an insurer and whom represents the client Insured - Answer-A person covered by an insurance policy Insurance policy - Answer-A legal contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured/beneficiary for losses caused by specific events Principal - Answer-Insurer, company who issues insurance policies Policyowner - Answer-The person entitled to exercise the rights and privileges in a policy Premium - Answer-The money paid to the insurance company for the insurance policy Reciprocal - Answer-A mutual interchange of rights and privileges Risk - Answer-Chance of a loss occurring Pure Risk - Answer-Situations that can only result in a loss Speculative Risk - Answer-Situations that can result in either a loss or gain Hazard - Answer-Conditions or situations that increase the chance of a loss occurring Physical Hazard - Answer-Individual characteristics that increase the chance of a loss (i.e. past medical history, blindness) Moral Hazard - Answer-Tendencies towards increasing risk such as lying on applications or submitting fraudulent claimsMorale Hazard - Answer-Arise from a state of mind that causes indifference to loss such as carelessness Peril - Answer-Specific cause of a loss such as death, sickness or accidents Loss - Answer-Reduction, decrease, or disappearance of value of the person or property caused by a named peril Sharing - Answer-Method of dealing with risk where a group with the same or similar exposure to loss divvy up the losses that occur within that group; reciprocal insurance exchange is a formal risk-[ ? ] arrangement Transfer - Answer-Most effective way to handle risk; relieves the insured of the financial losses risks can bring Avoidance - Answer-Completely eliminating exposure to loss; effective but seldom practical Retention - Answer-AKA self-insurance; insured accepts responsiblity for the loss before the insurance company pays through use of deductibles and co-payments