Georgia Life, Accident, & Sickness Study
Guide Questions With Correct Answers
Reimbursement Contract☑️Correct Ans-Based on the loss you will be paid back a certain
amount. EX: Health Insurance, Disability Insurance, Auto Insurance
Description of Insurance☑️Correct Ans-A large uncertain loss (death, disability) is exchanged
for a small certain loss (premium). The agreement is between the insurer (the company) and the
policy owner (may or may not be the insured) is established in a legal contract, called a policy.
The contract promises to pay a claim if a loss occurs. If a loss occurs the beneficiary will file a
claim.
Who is involved with a Policy?☑️Correct Ans-Applicant, Policy Owner, Insured, Beneficiary,
Insurer, Third party contract
Applicant☑️Correct Ans-Person applying for insurance
Policy Owner☑️Correct Ans-Pays the bill. Has all ownership of rights
Insured☑️Correct Ans-Person whose life is covered in the policy
Beneficiary☑️Correct Ans-The person named to receive the proceeds upon the death of the
insured. (THIS CAN BE ANYONE YOU WANT)
Insurer☑️Correct Ans-The company
Third Party Contract☑️Correct Ans-A policy that is owned by someone other than the insured.
EX: a husband buys insurance on his wife or a parent buys insurance on a child.
What creates risk?☑️Correct Ans-Peril and Hazard
, Peril☑️Correct Ans-Is the cause of the loss.
EX: fire, flood, accident
Hazard☑️Correct Ans-Anything that increases the chance of loss
Moral Hazard☑️Correct Ans-liar, misrepresents oneself (Ends in an L for LIAR)
Morale Hazard☑️Correct Ans-bad attitude, careless, a risk taker (ends in an E attitude ends in
an E)
EX: speeding ticket, DUI, bad credit
Method of Managing Risks☑️Correct Ans-Transfer
Buying Insurance☑️Correct Ans-The risk of the loss is transferred to the insurer and it is shared
by other insured's that have similar characteristics, like age, sex, occupation
Two basic concepts of insurance?☑️Correct Ans-Pooling Concept and Law of Large Numbers
Pooling Concept☑️Correct Ans-Looking at a group of people who share similar characteristics
to make predictions
Law of Large Numbers☑️Correct Ans-the larger the group, the more accurate the prediction.
The Mortality Table☑️Correct Ans-In use is The Commissioners Standard Ordinary Table.
Tracks life expectancy to age 120.
Exposure Unit☑️Correct Ans-The person or property being considered
Guide Questions With Correct Answers
Reimbursement Contract☑️Correct Ans-Based on the loss you will be paid back a certain
amount. EX: Health Insurance, Disability Insurance, Auto Insurance
Description of Insurance☑️Correct Ans-A large uncertain loss (death, disability) is exchanged
for a small certain loss (premium). The agreement is between the insurer (the company) and the
policy owner (may or may not be the insured) is established in a legal contract, called a policy.
The contract promises to pay a claim if a loss occurs. If a loss occurs the beneficiary will file a
claim.
Who is involved with a Policy?☑️Correct Ans-Applicant, Policy Owner, Insured, Beneficiary,
Insurer, Third party contract
Applicant☑️Correct Ans-Person applying for insurance
Policy Owner☑️Correct Ans-Pays the bill. Has all ownership of rights
Insured☑️Correct Ans-Person whose life is covered in the policy
Beneficiary☑️Correct Ans-The person named to receive the proceeds upon the death of the
insured. (THIS CAN BE ANYONE YOU WANT)
Insurer☑️Correct Ans-The company
Third Party Contract☑️Correct Ans-A policy that is owned by someone other than the insured.
EX: a husband buys insurance on his wife or a parent buys insurance on a child.
What creates risk?☑️Correct Ans-Peril and Hazard
, Peril☑️Correct Ans-Is the cause of the loss.
EX: fire, flood, accident
Hazard☑️Correct Ans-Anything that increases the chance of loss
Moral Hazard☑️Correct Ans-liar, misrepresents oneself (Ends in an L for LIAR)
Morale Hazard☑️Correct Ans-bad attitude, careless, a risk taker (ends in an E attitude ends in
an E)
EX: speeding ticket, DUI, bad credit
Method of Managing Risks☑️Correct Ans-Transfer
Buying Insurance☑️Correct Ans-The risk of the loss is transferred to the insurer and it is shared
by other insured's that have similar characteristics, like age, sex, occupation
Two basic concepts of insurance?☑️Correct Ans-Pooling Concept and Law of Large Numbers
Pooling Concept☑️Correct Ans-Looking at a group of people who share similar characteristics
to make predictions
Law of Large Numbers☑️Correct Ans-the larger the group, the more accurate the prediction.
The Mortality Table☑️Correct Ans-In use is The Commissioners Standard Ordinary Table.
Tracks life expectancy to age 120.
Exposure Unit☑️Correct Ans-The person or property being considered
