Florida 2-40 health license chapters
Review Exam And Complete Answers.
Loss Sharing - Answer The spreading or pooling of risks over a large group of individuals
Risk pooling - Answer Same as loss sharing
Law of large numbers - Answer Science of probability and experience of mortality (death) & morbidity
(sickness). The larger and more homogenous the group the more certain the predictions
Risk - Answer Is defined as uncertainty regarding loss
Speculative risk - Answer The chance of both loss and gain
Pure risk - Answer Involve only the chance of loss. Only Pure risk is insurable
Peril - Answer Is an immediate specific event causing loss and giving rise to risk
Hazard - Answer Any factor that increases the chance of a peril happening
Physical hazards - Answer Individual characteristics that increase chance of peril.blindness and
deafness as well as racing a motorcycle around on a track are all physical hazards
Moral hazards - Answer Bad behavioral choices like alcoholism drug addiction. These are moral hazards
that increase risk and loss
Morale hazards - Answer Attitude or state of mind causing indifference to loss. Example driving
recklessly intentionally ie selfishness
Risk avoidance - Answer You NEVER EVER do that. Example fly drive invest in stocks
, Risk reduction - Answer Lessen possibility of loss by being cautious and taking action to reduce risk
example installing fire alarm
Risk Retention - Answer You did not purchase insurance and plan to cover loss on your own called self-
insuring
Risk Transference - Answer Transferring your risk to an insurer (insurance company)
Elements of Insurance risk - Answer Definate and measurable 2. Predictable 3.cannot be catastrophic
to insurance company 4.loss exposure to insured must be large 5. Loss exposures must be randomly
selected
Human life value - Answer Value today of an individual's future earnings that are devoted to that
individuals dependents
Insurance is based on these principles - Answer Risk pooling and the law of large numbers
Insurance - Answer This transfers risk
Adverse selection - Answer The tendency of those in dangerous jobs or high risk lifestyles to get life
insurance
Stock insurers - Answer All profits go to owners, dividends are taxable Participating and Non
participating. Sole purpose is making money for owners or holders
Mutual insurers - Answer Policy owners own company so dividends go to them. Dividends are tax fee
because they are a refund to owners, Participating only . Purpose same products at lower cost
Assessment mutual insurers - Answer Operates on basis of loss sharing. No premium upfront each
member is assessed a premium when loss of one of group occurs. This type of insurer is never allowed in
Florida
Review Exam And Complete Answers.
Loss Sharing - Answer The spreading or pooling of risks over a large group of individuals
Risk pooling - Answer Same as loss sharing
Law of large numbers - Answer Science of probability and experience of mortality (death) & morbidity
(sickness). The larger and more homogenous the group the more certain the predictions
Risk - Answer Is defined as uncertainty regarding loss
Speculative risk - Answer The chance of both loss and gain
Pure risk - Answer Involve only the chance of loss. Only Pure risk is insurable
Peril - Answer Is an immediate specific event causing loss and giving rise to risk
Hazard - Answer Any factor that increases the chance of a peril happening
Physical hazards - Answer Individual characteristics that increase chance of peril.blindness and
deafness as well as racing a motorcycle around on a track are all physical hazards
Moral hazards - Answer Bad behavioral choices like alcoholism drug addiction. These are moral hazards
that increase risk and loss
Morale hazards - Answer Attitude or state of mind causing indifference to loss. Example driving
recklessly intentionally ie selfishness
Risk avoidance - Answer You NEVER EVER do that. Example fly drive invest in stocks
, Risk reduction - Answer Lessen possibility of loss by being cautious and taking action to reduce risk
example installing fire alarm
Risk Retention - Answer You did not purchase insurance and plan to cover loss on your own called self-
insuring
Risk Transference - Answer Transferring your risk to an insurer (insurance company)
Elements of Insurance risk - Answer Definate and measurable 2. Predictable 3.cannot be catastrophic
to insurance company 4.loss exposure to insured must be large 5. Loss exposures must be randomly
selected
Human life value - Answer Value today of an individual's future earnings that are devoted to that
individuals dependents
Insurance is based on these principles - Answer Risk pooling and the law of large numbers
Insurance - Answer This transfers risk
Adverse selection - Answer The tendency of those in dangerous jobs or high risk lifestyles to get life
insurance
Stock insurers - Answer All profits go to owners, dividends are taxable Participating and Non
participating. Sole purpose is making money for owners or holders
Mutual insurers - Answer Policy owners own company so dividends go to them. Dividends are tax fee
because they are a refund to owners, Participating only . Purpose same products at lower cost
Assessment mutual insurers - Answer Operates on basis of loss sharing. No premium upfront each
member is assessed a premium when loss of one of group occurs. This type of insurer is never allowed in
Florida
