XCEL Ch. 2 Keywords Exam Questions and
Answers with Verified Solutions | Latest
Updated 2026
Adverse Selection improve comprehension against the
company. It
includes the Adverse selection tendency of
is
people insurance to a greater extent than
those
with includes the tendency of policyowners
to take
advantage of favorable options in Reol
broadly
defined as selection with higher risks to
seek or
continue little or less risk. Adverse
selection also
insurance contracts.
Hazard: any factor, condition, or situation that
creates an
increased possibility that a peril ( a cause
of a loss )
will actually occur
Homogeneous Exposure Units are similar objects of insurance that are
exposed to
the same group of perils
, Indemnity contract attempt to return the insured to their
original
financial position
Law of Large Numbers a fundamental principle of insurance that
the larger
the number of individual risks combined
into a
group, the more certainty there is in
predicting the
degree or amount of loss that will be
incurred in
any given period
Loss the unintentional decrease in the value of
of an
asset due to a peril
Loss Exposure The risk of a possible loss
Moral Hazard A hazard brought on by the effect of
personal
reputation, character, associates, personal
living
habits, financial responsibility, and
environment, as
distinguished from physical health, upon
an
individual's general insurability
Answers with Verified Solutions | Latest
Updated 2026
Adverse Selection improve comprehension against the
company. It
includes the Adverse selection tendency of
is
people insurance to a greater extent than
those
with includes the tendency of policyowners
to take
advantage of favorable options in Reol
broadly
defined as selection with higher risks to
seek or
continue little or less risk. Adverse
selection also
insurance contracts.
Hazard: any factor, condition, or situation that
creates an
increased possibility that a peril ( a cause
of a loss )
will actually occur
Homogeneous Exposure Units are similar objects of insurance that are
exposed to
the same group of perils
, Indemnity contract attempt to return the insured to their
original
financial position
Law of Large Numbers a fundamental principle of insurance that
the larger
the number of individual risks combined
into a
group, the more certainty there is in
predicting the
degree or amount of loss that will be
incurred in
any given period
Loss the unintentional decrease in the value of
of an
asset due to a peril
Loss Exposure The risk of a possible loss
Moral Hazard A hazard brought on by the effect of
personal
reputation, character, associates, personal
living
habits, financial responsibility, and
environment, as
distinguished from physical health, upon
an
individual's general insurability
