New Mexico health and life
insurance exam questions and
answers 2025(graded A+)
risk - answer Risk
Uncertainty of financial loss or a chance of loss - answer
hazard - answer A hazard is a condition that makes a peril more
likely to happen or that increases the seriousness of a loss
hazard - answer Any factor that gives rise to peril
peril - answer cause of loss
Peril - answer And immediate specific event causing loss in giving
rise to risk
Physical Hazard - answer Arises from material structural for
operational features such as a slippery floor or unsanitary
conditions
Moral hazard - answer Arises from people's habits and values such
as filing a false claim
Morale Hazard - answer Arises from human carelessness or a
responsibility such as bailing to take safety precaution
, exposure - answer
loss - answer Last must be measurable, the insurer must be able to
place a specific monetary value
Methods of Handling Risk - answer Avoidance
Retention
Sharing
Reduction
TransferAvoidance
Elements of insurable risks - answer 1.Large numbers of
homogeneous units, I large number of similar exposure units is
necessary in order for the pooling in sharing mechanisms of
insurance to function
2.Los must be measurable by being able to place a specific
monetary value on exposures and losses in order to be able to
calculate rates in premiums and reach settlements
3. Lost must be uncertain, insurance covers purists which messed
inns involve an uncertainty of loss
4.Economic hardship, there must be a significant potential for
economic loss a.k.a. a higher dollar value
5.Exclusion of catastrophic perils, Mini policies exclude losses
resulting from war nuclear hazards flooded earthquake because the
insurance system would collapse if we covered events that caused
widespread losses to large numbers at the same time
Adverse selection - answer Those who are most likely to file claims
are the ones most likely to purchase insurance
Reinsurance - answer A form of insurance whereby one insurance
company (the reinsurer) in consideration of a premium paid to it,
agrees to indemnify another insurance company (the ceding
insurance exam questions and
answers 2025(graded A+)
risk - answer Risk
Uncertainty of financial loss or a chance of loss - answer
hazard - answer A hazard is a condition that makes a peril more
likely to happen or that increases the seriousness of a loss
hazard - answer Any factor that gives rise to peril
peril - answer cause of loss
Peril - answer And immediate specific event causing loss in giving
rise to risk
Physical Hazard - answer Arises from material structural for
operational features such as a slippery floor or unsanitary
conditions
Moral hazard - answer Arises from people's habits and values such
as filing a false claim
Morale Hazard - answer Arises from human carelessness or a
responsibility such as bailing to take safety precaution
, exposure - answer
loss - answer Last must be measurable, the insurer must be able to
place a specific monetary value
Methods of Handling Risk - answer Avoidance
Retention
Sharing
Reduction
TransferAvoidance
Elements of insurable risks - answer 1.Large numbers of
homogeneous units, I large number of similar exposure units is
necessary in order for the pooling in sharing mechanisms of
insurance to function
2.Los must be measurable by being able to place a specific
monetary value on exposures and losses in order to be able to
calculate rates in premiums and reach settlements
3. Lost must be uncertain, insurance covers purists which messed
inns involve an uncertainty of loss
4.Economic hardship, there must be a significant potential for
economic loss a.k.a. a higher dollar value
5.Exclusion of catastrophic perils, Mini policies exclude losses
resulting from war nuclear hazards flooded earthquake because the
insurance system would collapse if we covered events that caused
widespread losses to large numbers at the same time
Adverse selection - answer Those who are most likely to file claims
are the ones most likely to purchase insurance
Reinsurance - answer A form of insurance whereby one insurance
company (the reinsurer) in consideration of a premium paid to it,
agrees to indemnify another insurance company (the ceding
