Oklahoma Insurance Exam Question With Verified Answers.

Oklahoma Insurance Exam Question With Verified Answers. Life Insurance - answerTransfers to a life insurance company the risk of financial loss to an insurance company. Health Insurance - answertransfers to a health insurance policy the risk of financial loss resulting from illness, injury, disability of an insured person. Risk - answerChance of loss: only pure risk is insurable. Loss - answerUnplanned reduction in economic value. hazard - answera condition that increases the chance of a peril/setback/danger. Risk Transfer - answerRisk management role played by insurance. Underwriting - answerAssessing an applicant to determine insurability. Law of Large Numbers - answerMathematical principle of probability underlying insurance. Mutual Companies - answerowned by policy owners participating policies which pay policy dividends to their policy owners may sell life/health insurance Stock Companies - answerDO NOT issue participating policies Pay stock dividends to stockholders Sell health/life Home Service Companies - answerissues industrial life insurance in small amounts Ordinary Life Insurance - answerLife insurance issued in face amounts of greater than 25k Medical Care Service Providers - answerblend features of insurance companies and medical care providers. Federal and State Government Insurance Programs - answerMedicare Social Security Medicaid Admitted vs. Non-admitted - answerRefers to whether or not an insurer is approved or authorized to write business in this State. Certificate of Authority Insurance Providers - answerMutual Companies Stock Companies Home Service Companies Ordinary Life Insurance Medical Care Service Providers Federal and State Government Programs Admitted vs Non-Admitted Insurance Producers - answerProducers Producers Authority Cost Indexes Required Disclosures Producers 1 - answerMust act in Good Faith and integrity in their dealings with both customers and Insurers. Producers Authority - answer1. Express Authority: Defined in contract with insurer 2. Implied Authority: Understood to be a part of the job 3. Apparent Authority: Producer allows to exist, but not approved by insurer Cost Indexes - answer1. L ins surrender cost index (future cash value withdrawal) 2. L ins Net Payment Cost Index (no cash value withdrawal) Required Disclosures - answerBuyers Guide explains the general features, benefits and conditions of the type of ins being considered. Loss Must be: - answer1. Defineable: time, place, location 2. Measurable: financial setback of the loss 3. Results from a peril: our of the insured's control 4. Part of a large group: Risk Management involves: - answer1. Risk 2. Loss 3. Peril 4. Hazard 5. Exposure Two Types of Risk - answer1. Pure Risk 2. Speculative Risk Pure Risk - answerinsurable no chance of gain untimely death serious illness/disability ( definable, measurable, accidental,Large group, catastrophic). Speculative Risk - answerResults in loss or gain. NOT insurable Two Kinds of Speculative Risk - answer1. Direct: immediate result of a loss or insured peril 2. Indirect: loss that results from a direct loss Loss Exposure - answerSubject to a possible loss: measured by EXPOSURE UNITS (the basis for a premium). Exposure Units - answerInsurance policies based on a number of Exposure Units: Basis for premiums Peril - answerA direct cause of a loss Life Insurance Perils - answer1. death 2. disability 3. sickness Hazard - answerA condition that increases the chance./frequency of loss due to peril. Three Types of Hazards - answer1. Moral: character weaknesses 2. Morale: State on mind indifference/ Disregarding ones health... not caring. 3. Physical Hazards: a. consuming excessive alcohol b. smoking