WASHINGTON LIFE/HEALTH INSURANCE EXAM REVIEW QUESTIONS AND ANSWERS, VERIFIED.

WASHINGTON LIFE/HEALTH INSURANCE EXAM REVIEW QUESTIONS AND ANSWERS, VERIFIED. policy owner - -usually, but not always the person covered by the policy beneficiary - -the person who is paid when a claim is submitted agent/producer - -acts as a legal representative of the insurance company broker - -representative of the Insured, not the insurance company risk - -The chance or uncertainty of loss Pure risk - -the chance of experiencing a loss (without the possibility of gain). Only downside, no upside. Speculative risk - -s the chance of loss one accepts in the hope of realizing a gain Risk avoidance - -staying away from risky activities altogether Risk reduction - -reduce the chance of something bad happening Risk shifting - -Get someone else to accept the risk Buying insurance - -transfer a portion of your risk to the Insurer Risk Retention - -the individual or business that opts not to buy insurance retains the entire risk Indemnification - -an insurance concept that states that some portions of the insurance industry prefer that we be made only whole after a loss rather than coming out ahead (Only getting back what you are owed, not getting more than what you had to start with) Subrogation - -the transfer to the Insurer of the Insured's rights to recover damages from a responsible third party Peril - -the cause of loss Law of Large numbers - -the mathematical concept that makes it easier to predict losses if we have a large number of Insureds Insurable losses are... - -Economic, Predictable, Accidental, Measurable, Non-Catastrophic non-participating companies - -Stock companies that exist for the sole purpose of generating profits for their stockholders participating companies - -A company owned by its policy holders where the profits are distributed among policy holders Social Security act - -a guarantee that go