PA Life Insurance Latest 2024 Graded A+

PA Life Insurance Latest 2024 Graded A+ Insurance Policy A contract between an insured and an insurance company which agrees to pay the insured for loss caused by specific events Insurer (Principal) The company who issues a policy of insurance Insured The person covered by the policy of insurance Policyowner The person who pays for the policy of insurance Beneficiary The person who receives the benefits from the policy of insurance Premium The money paid to the insurance company for the policy of insurance Death Benefit (face amount/face value/coverage) The amount paid when a claim is issued against a policy of insurance Risk The uncertainty or chance of a loss occurring. Two types of risk are PURE and SPECULATIVE Pure Risk Situations that can only result in a loss or no change. There is no opportunity for financial gain. Pure risk is the only type insurance companies are willing to accept. Speculative Risk Involves the opportunity for either loss or gain. These types of risks are not insurable. EXAMPLE: Gambling Exposure Unit of measure used to determine rates charged for insurance coverage. Factors that are considered in determining rates 1. Age 2. Medical History 3. Occupation 4. Sex Hazards Conditions that increase the probability of a loss occurring. Types of Hazards 1. Physical 2. Moral 3. Morale Physical Hazard Individual characteristics