KENTUCKY LIFE AND HEALTH
INSURANCE
whats the difference between pure and speculative risk - Answer-speculative can result in loss or gain,
since there is a chance of gain its uninsurable
whats the difference between a peril and a hazard - Answer-peril is direct cause of a loss, hazard is a
condition that increases its chances. insurance protects against peril and hazards are taken into account
what are 3 hazards most related to life insurance - Answer-moral- smoking and willingness to defraud
morale- over weight or inactive
physical- where on works
what are the 5 basic risk management techniques - Answer-avoid the risk
reduce it
retain the risk
share the risk
transfer it
risk transfer is what insurance companies achieve today
,what are the basic elements of an insurable risk - Answer-criteria risk must meet to be insured
describe adverse selection - Answer-tendency of a person of greater risk to seek out and maintain
insurance
moral hazard
what is underwriting - Answer-process where companies determine if they will insure someone based
off risk factors
describe law of number - Answer-mathematical principle of probability that underlies insurance
premium rate calculations
what are actuaries - Answer-insurance mathematicians
what uses mortality tables and what uses morbidity tables - Answer-mortality tables are for life
insurance premiums
morbidity tables are for health insurance premiums
what is loss exposure - Answer-state of being subject to a passible loss
what does it mean to be defineable - Answer-definite as to time, cause and location
what does it mean to be measurable - Answer-companies will state how much they will pay for a
covered loss
is loss due to war covered - Answer-no
,can accidental be self inflicted - Answer-no
why do mutual companies, but not stock insurance companies, issue participating policies - Answer-
mutual companies-ownership is represented by the policy, stock is in the stock.
mutual companies issue "participating policies" which pay policy dividends to policy owners
mutual is tax free, stock is taxed
what are medical care service providers - Answer-blend characteristics of commercial insurance
companies and medical providers (HMO AND BLUE CROSS BLUE SHIELD)
WHAT ARE FRATERNAL BENEFIT SOCIEITIES - Answer-people who share common affiliation, no capital
stock, no profit just to benefit members, operate on a lodge system, representative form of government
what are industrial home insureres - Answer-stock or mutual, distribute a class of insurance called
"burial insurance" offers individual coverage at a small face amounts (>10,000), no medical exam
required just a questionnaire
what are self insurers - Answer-organization insures itself, pays for losses with own money
what are risk retention groups - Answer-self insurers who want to share the task of running a self
insurer group, gives companies infostructure support to self insure their risks
what are surplus line insureres - Answer-not an insurance company or product but a market for
insurance that is not available through any admitted companies in that state
what are reinsurance companies - Answer-formal agreement which both he risk and premium are
shared with one or more insurance companies
, whats the difference between and admitted and non-admitted insurer - Answer-admitted companies
hold a certificate of authority in the state is sells insurance
whats the difference between a domestic, foreign, and alien insurance company - Answer-domestic:
admitted company is a domestic state
foreign: is what is considered in other states
alien: insurance company out of the states
what is the difference between a career or captive agency distribution system and an independent
agency system - Answer-career or captive sell for one insurance exclusively, independent can sell for all
companies
what is the role of the insurance underwriting department - Answer-evaluate completed insurance
policies to determine the applicant level of risk and appropriate rates
what are the major federal and state social insurance programs, and what basic insurance-like
protection does each provide - Answer-federal- SSI and Medicare
state- worker comp and unemployment, and Medicaid
provides a limited amount of protection to those who qualify
describe insurer financial status - Answer-financial strength and claims paying ability graded from A-D
what does it mean by the statement a producer has a fiduciary responsibility to both the customer are
insurer - Answer-they have to look out for the financial interest of the insurer and memeber
what is the diference between express, implied, and apparent authority, and which is most likely to
cause problems for the insurer - Answer-apparent: breaking rules that you don't cover and is the most
likely to cause problems
implied: doing things implied to help the business
INSURANCE
whats the difference between pure and speculative risk - Answer-speculative can result in loss or gain,
since there is a chance of gain its uninsurable
whats the difference between a peril and a hazard - Answer-peril is direct cause of a loss, hazard is a
condition that increases its chances. insurance protects against peril and hazards are taken into account
what are 3 hazards most related to life insurance - Answer-moral- smoking and willingness to defraud
morale- over weight or inactive
physical- where on works
what are the 5 basic risk management techniques - Answer-avoid the risk
reduce it
retain the risk
share the risk
transfer it
risk transfer is what insurance companies achieve today
,what are the basic elements of an insurable risk - Answer-criteria risk must meet to be insured
describe adverse selection - Answer-tendency of a person of greater risk to seek out and maintain
insurance
moral hazard
what is underwriting - Answer-process where companies determine if they will insure someone based
off risk factors
describe law of number - Answer-mathematical principle of probability that underlies insurance
premium rate calculations
what are actuaries - Answer-insurance mathematicians
what uses mortality tables and what uses morbidity tables - Answer-mortality tables are for life
insurance premiums
morbidity tables are for health insurance premiums
what is loss exposure - Answer-state of being subject to a passible loss
what does it mean to be defineable - Answer-definite as to time, cause and location
what does it mean to be measurable - Answer-companies will state how much they will pay for a
covered loss
is loss due to war covered - Answer-no
,can accidental be self inflicted - Answer-no
why do mutual companies, but not stock insurance companies, issue participating policies - Answer-
mutual companies-ownership is represented by the policy, stock is in the stock.
mutual companies issue "participating policies" which pay policy dividends to policy owners
mutual is tax free, stock is taxed
what are medical care service providers - Answer-blend characteristics of commercial insurance
companies and medical providers (HMO AND BLUE CROSS BLUE SHIELD)
WHAT ARE FRATERNAL BENEFIT SOCIEITIES - Answer-people who share common affiliation, no capital
stock, no profit just to benefit members, operate on a lodge system, representative form of government
what are industrial home insureres - Answer-stock or mutual, distribute a class of insurance called
"burial insurance" offers individual coverage at a small face amounts (>10,000), no medical exam
required just a questionnaire
what are self insurers - Answer-organization insures itself, pays for losses with own money
what are risk retention groups - Answer-self insurers who want to share the task of running a self
insurer group, gives companies infostructure support to self insure their risks
what are surplus line insureres - Answer-not an insurance company or product but a market for
insurance that is not available through any admitted companies in that state
what are reinsurance companies - Answer-formal agreement which both he risk and premium are
shared with one or more insurance companies
, whats the difference between and admitted and non-admitted insurer - Answer-admitted companies
hold a certificate of authority in the state is sells insurance
whats the difference between a domestic, foreign, and alien insurance company - Answer-domestic:
admitted company is a domestic state
foreign: is what is considered in other states
alien: insurance company out of the states
what is the difference between a career or captive agency distribution system and an independent
agency system - Answer-career or captive sell for one insurance exclusively, independent can sell for all
companies
what is the role of the insurance underwriting department - Answer-evaluate completed insurance
policies to determine the applicant level of risk and appropriate rates
what are the major federal and state social insurance programs, and what basic insurance-like
protection does each provide - Answer-federal- SSI and Medicare
state- worker comp and unemployment, and Medicaid
provides a limited amount of protection to those who qualify
describe insurer financial status - Answer-financial strength and claims paying ability graded from A-D
what does it mean by the statement a producer has a fiduciary responsibility to both the customer are
insurer - Answer-they have to look out for the financial interest of the insurer and memeber
what is the diference between express, implied, and apparent authority, and which is most likely to
cause problems for the insurer - Answer-apparent: breaking rules that you don't cover and is the most
likely to cause problems
implied: doing things implied to help the business
