Utah Health Insurance Exam

UTAH HEALTH INSURANCE EXAM EXAM QUESTIONS WITH CORRECT VERIFIED ANSWERS | 100% PASS (A+ CERTIFIED) Insurance Answer Transfer of risk. Types of risk Answer Pure and Speculative Pure Risk Answer A chance of loss or no loss, but no chance of gain. The ONLY type of insurable risk. Speculative Risk Answer Chance of loss or gain. CANNOT be insured. (Example: Buying stock in the stock market) Types of Hazards Answer Physical, Moral and Morale Physical Hazard Answer A physical condition that increases the chance of loss. Moral Hazard Answer Dishonesty or character defects in an individual that increase the frequency or severity of loss (Example: Applicant lies on insurance application) Morale Hazard Answer Through carlessness or irresponsible actions an increase in the possibilty of a loss. (Example: Not cutting down a tree branch that might fall on your house because you have insurance if it does) Perils Answer causes of loss insured against in an insurance policy Avoidance Answer Eliminating exposure to a loss (not driving so you won't get in a car accident) retention Answer Planned assumption of risk through the use of deductibles, co-payments, or self-insurance. reduction Answer Actions such as installing smoke detectors to reduce the risk of loss from fire or getting an annual physical to help prevent/detect health problems early. Transfer Answer Transferring the risk of loss to another company or entity. Insurance is the most common way to transfer risk. To be insurable, a risk must be Answer -due to chance -Definite and measurable -Statistically predictable -NOT catastrophic -Large loss exposure (large pool of randomly selected people/risks) Adverse Selection Answer Tendency for poorer than average risks to seek insurance. Reinsurance Answer Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability. Ceding Insurer Answer The company transferring risk in a reinsurance arrangement. assuming insurer Answer reinsurer or company who is taking over the risk Stock Companies Answer -Owned by stockholders -nonparticipating (policy holders DO NOT share in profits or