TENNESSEE LIFE AND HEALTH INSURANCE EVALUATION EXAM
2025 QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔What kind of Risks are insurable - ✔✔- loss must be accidental
- loss must be definable (or calculable)
- must not be financially catastrophic
- premiums must be reasonable
✔✔Retention - ✔✔The act of the individual taking on the risk themselves, or retaining
some of the cost themselves
✔✔Peril - ✔✔An example of what caused the loss (ie: death)
- a fire
✔✔Hazard - ✔✔A condition that exists that increases the chance of a loss occuring
✔✔What are the 3 types of Hazards - ✔✔1) Physical
2) Moral
3) Morale (ie apathy, carelessness, smoking)
✔✔Life insurance adds to what? - ✔✔The estate of the individual
✔✔What are the 6 things that need to be in a life insurance contract - ✔✔1) the parties
2) the party who is the insured
3) the insurable interest of the owner of the policy
4) the risk being insured agains (ie death)
5) the coverage period
6) the premium and the mode
✔✔Insurable Interest - ✔✔- the amount that the insurance co is at risk for; One can
have an insurable interest in another
✔✔What does the insurance company need to pay the death benefit - ✔✔- death
cirtificate
- completed claim form
✔✔Human Value approach - ✔✔- the approach to determine how much insurance one
should get
- it looks at the lost earnings potential if someone should die
- often limited to 10x annual income
✔✔Needs Approach - ✔✔- the amount of money to pay off debts, funeral, shcool, etc
✔✔How are life insurance premiums determined - ✔✔1) Mortality (the probability of
death)
,2) Interest (how much the insurance co earns on the premiums)
3) Expenses (cost of issuing the policy)
✔✔Net Premium - ✔✔Mortality + Interest costs
✔✔Gross Prium - ✔✔Mortality + interest costs + expense costs
✔✔Rate - ✔✔The price of insurance per 1000 of coverage
ie if it costs 3.45 / unit than u multiply by 1000 to get total cost
✔✔Earned Premium - ✔✔the amount of premium that has been paid to date
✔✔Unearned Premium - ✔✔the amount that has not been paid to date but if he pays
more, than he gets it back
✔✔Departments of an insurance co - ✔✔1) underwrite
2) marketing and sales
3) Actuarial Department
4) Claims Department
✔✔Underwriting department - ✔✔determines whether the applicant can get insurance
✔✔Actuarial Department - ✔✔Determines the premium rates, reserves and persistency
rates of policies
✔✔Types of Insurance Companies - ✔✔Determined by where they are located
✔✔Domestic Insurance Co - ✔✔Charter located in the state it's doing business in
✔✔Foreign Insurance Co - ✔✔Insurance Co that's allowed to do business in a state
other than their home state
✔✔Alien Insurance Co - ✔✔An insurer authorized to conduct business in any of the 50
states but who has its hoje office in another country
✔✔Ownership of Insurance Company - ✔✔2 types
1) mutual co or participating company (policy owners own the company). The dividend
is considered a return of premium
2) Stock company or Non participating company
✔✔Authorized Insurance Company - ✔✔An insurance company that can operate in a
state. You need a cCertificate of Authority to operate.
, ✔✔Cerrtificate of Authority - ✔✔What an insurance company needs to have in order to
operate in a state
✔✔Fraternal Organization - ✔✔A non profit or benevolent association and only can
provide insurance to its members.
✔✔Fraternal Agent - ✔✔The agent of the fraternal organization that can sell the
insurance
✔✔Reciprocal Organization - ✔✔an unincorporated organization whereby members
insure eachother. managed by an attorney in fact
✔✔Attorney in Fact - ✔✔the agent in a reciprocal organizaiton that can sell the
insurance
✔✔Lloyds Association - ✔✔group of individuals who share the risk and the exposure
- known for insuring unusual risks
✔✔Surplus Lines of Insurance - ✔✔An insurance co that is authorized to sell
unauthorized insurance. You can only go to a surplus lines co if you cant get it from a
regular insurance company
✔✔Risk Retention Group - ✔✔- each policy owner is also a stockholder and can only
sell liability insurance (medical malpractice, general liability, product liability)
- the group assumes the risk themselves
✔✔Reinsurance - ✔✔Insurance purchased by insurance companies
- limits liability of insurance co and prevents catastrophic loss
✔✔Facultative Reinsurance - ✔✔insurance co and re insurance co make their own
agreement per loss exposure
✔✔Automatic or Treaty Insurance - ✔✔An automatic acceptance of a risk between the
insurance company and the reinsurance company
✔✔Retrocession - ✔✔When a reinsurance company reinsures with another reinsurer
✔✔Primary Insurer - ✔✔The insurance company that is transfering its risk to another
insurance company
✔✔Federal Regulation 18 USC 1033/1034 - ✔✔Anyone who tries to sell insurance
deceptively
- can be fined 50k and up to 10 years
2025 QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔What kind of Risks are insurable - ✔✔- loss must be accidental
- loss must be definable (or calculable)
- must not be financially catastrophic
- premiums must be reasonable
✔✔Retention - ✔✔The act of the individual taking on the risk themselves, or retaining
some of the cost themselves
✔✔Peril - ✔✔An example of what caused the loss (ie: death)
- a fire
✔✔Hazard - ✔✔A condition that exists that increases the chance of a loss occuring
✔✔What are the 3 types of Hazards - ✔✔1) Physical
2) Moral
3) Morale (ie apathy, carelessness, smoking)
✔✔Life insurance adds to what? - ✔✔The estate of the individual
✔✔What are the 6 things that need to be in a life insurance contract - ✔✔1) the parties
2) the party who is the insured
3) the insurable interest of the owner of the policy
4) the risk being insured agains (ie death)
5) the coverage period
6) the premium and the mode
✔✔Insurable Interest - ✔✔- the amount that the insurance co is at risk for; One can
have an insurable interest in another
✔✔What does the insurance company need to pay the death benefit - ✔✔- death
cirtificate
- completed claim form
✔✔Human Value approach - ✔✔- the approach to determine how much insurance one
should get
- it looks at the lost earnings potential if someone should die
- often limited to 10x annual income
✔✔Needs Approach - ✔✔- the amount of money to pay off debts, funeral, shcool, etc
✔✔How are life insurance premiums determined - ✔✔1) Mortality (the probability of
death)
,2) Interest (how much the insurance co earns on the premiums)
3) Expenses (cost of issuing the policy)
✔✔Net Premium - ✔✔Mortality + Interest costs
✔✔Gross Prium - ✔✔Mortality + interest costs + expense costs
✔✔Rate - ✔✔The price of insurance per 1000 of coverage
ie if it costs 3.45 / unit than u multiply by 1000 to get total cost
✔✔Earned Premium - ✔✔the amount of premium that has been paid to date
✔✔Unearned Premium - ✔✔the amount that has not been paid to date but if he pays
more, than he gets it back
✔✔Departments of an insurance co - ✔✔1) underwrite
2) marketing and sales
3) Actuarial Department
4) Claims Department
✔✔Underwriting department - ✔✔determines whether the applicant can get insurance
✔✔Actuarial Department - ✔✔Determines the premium rates, reserves and persistency
rates of policies
✔✔Types of Insurance Companies - ✔✔Determined by where they are located
✔✔Domestic Insurance Co - ✔✔Charter located in the state it's doing business in
✔✔Foreign Insurance Co - ✔✔Insurance Co that's allowed to do business in a state
other than their home state
✔✔Alien Insurance Co - ✔✔An insurer authorized to conduct business in any of the 50
states but who has its hoje office in another country
✔✔Ownership of Insurance Company - ✔✔2 types
1) mutual co or participating company (policy owners own the company). The dividend
is considered a return of premium
2) Stock company or Non participating company
✔✔Authorized Insurance Company - ✔✔An insurance company that can operate in a
state. You need a cCertificate of Authority to operate.
, ✔✔Cerrtificate of Authority - ✔✔What an insurance company needs to have in order to
operate in a state
✔✔Fraternal Organization - ✔✔A non profit or benevolent association and only can
provide insurance to its members.
✔✔Fraternal Agent - ✔✔The agent of the fraternal organization that can sell the
insurance
✔✔Reciprocal Organization - ✔✔an unincorporated organization whereby members
insure eachother. managed by an attorney in fact
✔✔Attorney in Fact - ✔✔the agent in a reciprocal organizaiton that can sell the
insurance
✔✔Lloyds Association - ✔✔group of individuals who share the risk and the exposure
- known for insuring unusual risks
✔✔Surplus Lines of Insurance - ✔✔An insurance co that is authorized to sell
unauthorized insurance. You can only go to a surplus lines co if you cant get it from a
regular insurance company
✔✔Risk Retention Group - ✔✔- each policy owner is also a stockholder and can only
sell liability insurance (medical malpractice, general liability, product liability)
- the group assumes the risk themselves
✔✔Reinsurance - ✔✔Insurance purchased by insurance companies
- limits liability of insurance co and prevents catastrophic loss
✔✔Facultative Reinsurance - ✔✔insurance co and re insurance co make their own
agreement per loss exposure
✔✔Automatic or Treaty Insurance - ✔✔An automatic acceptance of a risk between the
insurance company and the reinsurance company
✔✔Retrocession - ✔✔When a reinsurance company reinsures with another reinsurer
✔✔Primary Insurer - ✔✔The insurance company that is transfering its risk to another
insurance company
✔✔Federal Regulation 18 USC 1033/1034 - ✔✔Anyone who tries to sell insurance
deceptively
- can be fined 50k and up to 10 years
