Arizona Health Insurance Exam | Questions and answers with 100% correct solutions | Graded A+

Insurance a contract in which one party (the insurance company) agrees to "make whole" the insured party against loss, damage or liability arising from an unlikely event In ___________ insurance, the policy protects survivors from losses suffered after the insured's death Life Insurance __________ the risk of loss from an individual or business to an insurance company Transfers Risk the uncertainty or chance of a loss occurring Pure Risk situations that can only result in a loss or no change In __________ risk, there is no opportunity for financial gain Pure __________ risk is the only type of risk that insurance companies are willing to accept Pure Speculative Risk involves the opportunity for loss or gain __________ risk is not insurable SpeculativeExposure unit of measurement used to determine rates charged for insurance coverage 4 Determining Factors in Life Insurance - Age of insured - Medical history - Occupation - Sex of insured Homogeneous a large number of units having the same or similar exposure to loss What is the basis of insurance? Sharing the risk among members of a large homogeneous group with similar exposure to loss Hazards conditions or situations that increase the probability of an insured loss occurring Physical Hazards individual characteristics that increase the chances of the cause of loss __________ hazards exist because of physical condition, past medical history, or a condition at birth. Physical Moral Hazards tendencies towards increased risk__________ hazards involve evaluationg the character and reputation of the proposed insured. Moral __________ refer to those applicants who may life on an application for insurance, or in the past, have submitted fraudulent claims against an insurer. Moral Morale Hazards arise from a state of mind that causes indifference to loss, such as carelessness and result from actions taken without forethought. Peril the causes of loss insured against an insurance policy. __________ insures against the financial loss caused by premature death of the insured. Life __________ insures against the medical expenses and/or loss of income caused by the insured's sickness or accidental injury. Health __________ insurance insures against the loss of physical property of the loss of income producing abilities. Property __________ insurance insures against the loss and/or damage of property resulting in liabilities. Casualty Loss the reduction, decrease, or disappearance of value of the person or property insured in a policy, caused by a named peril.Risk Avoidance eliminating exposure to a loss Risk avoidance is __________ but seldom __________. Effective/Practical