XCEL LIFE, HEALTH, & ACCIDENT INSURANCE: Chapter 1 Questions and Answers Graded A+

XCEL LIFE, HEALTH, & ACCIDENT INSURANCE: Chapter 1 Questions and Answers Graded A+ Role of Insurance - Correct Answer ️️ -To transfer the risk of financial loss from an individual or business to an insurance company Life Insurance - Correct Answer ️️ -It is designed to protect against the risk of premature death. Health Insurance - Correct Answer ️️ -It is designed to protect against the severity of financial loss due to illness, disease, short- or long-term disability, wages lost while ill or disabled, and medical expenses. Annuities - Correct Answer ️️ -A contract which protects against the risk or living longer than expected. Annuities provide a guaranteed life income to protect against the risk of depleting retirement funds. Private Insurance - Correct Answer ️️ -Insurance which offers coverage to people through the individual market. Funded through premiums to sell insurance Commercial Insurer - Correct Answer ️️ -selling insurance for a profit. Two main groups: **stock insurers* **mutual insurers (Multi-line insurers)* Stock Companies - Nonparticipating - Correct Answer ️️ -organized and incorporated under state laws for purpose of making a profit for its stock holders and is not ran by policyholders (no $). Mutual Companies - Participating - Correct Answer ️️ -organized and incorporated under state laws and policyholders receive dividends ($), but they have no stockholders. Anyone purchasing insurance is both a customer and an owner & has the right to vote for members of the board of directors. Mutualization - Correct Answer ️️ -Stock company converting to a mutual company Demutualization - Correct Answer ️️ -Mutual company converting to a stock company Lloyd's of London - Correct Answer ️️ -Association formed to underwrite and issue insurance-like coverage on certain items and areas that might otherwise be uninsurable Mixed Insurer - Correct Answer ️️ -Insurance company that operates a