Health Insurance Nevada Exam Questions and Answers
indemnify make a person whole by restoring that person to the same financial position
that existed before the loss
transfer of risk basic principal of all insurance
risk two components: a possibility of loss and the uncertainty about whether the loss will
occur
pure risk there is only a chance for loss and no possiblity of a gain. only pure risk is
insurable
speculative risk involves both an uncertainty of loss or gain. uninsurable
peril immediate specific event causing loss and giving rise to risk. ie: when a building
burns, fire is the peril.
hazard any factor that gives rise to a peril. 3 types: physical, morale, and moral
physical hazards arise from material, structural, or operational features of a risk situation
moral hazards arise from people's habits and values
,morale hazards arise out of human carelessness or irresponsibility
managing risk sharing, transfer, avoidance, reduction, or retention, STARR
retention simply means doing nothing about the risk. In other words, people assume or
retain the risk and, in effect, become self-insurers. For example, the insured would pay a
smaller portion of the loss than the insurer, such as paying a deductible
law of large numbers insurers are able to predict how many losses will occur in a group
exposure units in life and health insurance, it is the economic value of the individual
person's life. in property and casualty insurance, it is the number of cars, homes, etc.
insurable interest before an individual can benefit from insurance, that individual must
have a legitimate interest in the preservation of the life or property insured
characteristics of insurable risks 1. large number of homogenous units.
2. loss must be measurable.
3. loss must be uncertain.
4. economic hardship.
5. exclusion of catastrophic perils.
, subrogation entitles one who has paid for another's loss to take over the other's right to
recourse from the party responsible for the loss. never used in life insurance and rarely in
health.
limit of liability max amount the insurer will pay for a specified insured contigency.
face amount aka limit of liability.
elimination period the number of days an insured must be disabled before disability
income benefits become payable
coinsurance within a specified coverage range, the insured and insurer will share the
allowable expenses. usually expressed in percentages and designed to keep insurance
premiums down.
casualty insurance contracts include automobile policies, general liability policies,
workers' compensation coverage, crime insurance, surety (bonding), boiler and machinery
coverages, and many others.
life insurance insurance coverage on human lives, including endowments and annuities,
and may include benefits in the event of accidental death or dismemberment and benefits for
disability. It is designed to protect against the risk of premature death, which exposes a family
or a business to certain financial risks.
indemnify make a person whole by restoring that person to the same financial position
that existed before the loss
transfer of risk basic principal of all insurance
risk two components: a possibility of loss and the uncertainty about whether the loss will
occur
pure risk there is only a chance for loss and no possiblity of a gain. only pure risk is
insurable
speculative risk involves both an uncertainty of loss or gain. uninsurable
peril immediate specific event causing loss and giving rise to risk. ie: when a building
burns, fire is the peril.
hazard any factor that gives rise to a peril. 3 types: physical, morale, and moral
physical hazards arise from material, structural, or operational features of a risk situation
moral hazards arise from people's habits and values
,morale hazards arise out of human carelessness or irresponsibility
managing risk sharing, transfer, avoidance, reduction, or retention, STARR
retention simply means doing nothing about the risk. In other words, people assume or
retain the risk and, in effect, become self-insurers. For example, the insured would pay a
smaller portion of the loss than the insurer, such as paying a deductible
law of large numbers insurers are able to predict how many losses will occur in a group
exposure units in life and health insurance, it is the economic value of the individual
person's life. in property and casualty insurance, it is the number of cars, homes, etc.
insurable interest before an individual can benefit from insurance, that individual must
have a legitimate interest in the preservation of the life or property insured
characteristics of insurable risks 1. large number of homogenous units.
2. loss must be measurable.
3. loss must be uncertain.
4. economic hardship.
5. exclusion of catastrophic perils.
, subrogation entitles one who has paid for another's loss to take over the other's right to
recourse from the party responsible for the loss. never used in life insurance and rarely in
health.
limit of liability max amount the insurer will pay for a specified insured contigency.
face amount aka limit of liability.
elimination period the number of days an insured must be disabled before disability
income benefits become payable
coinsurance within a specified coverage range, the insured and insurer will share the
allowable expenses. usually expressed in percentages and designed to keep insurance
premiums down.
casualty insurance contracts include automobile policies, general liability policies,
workers' compensation coverage, crime insurance, surety (bonding), boiler and machinery
coverages, and many others.
life insurance insurance coverage on human lives, including endowments and annuities,
and may include benefits in the event of accidental death or dismemberment and benefits for
disability. It is designed to protect against the risk of premature death, which exposes a family
or a business to certain financial risks.
