OHIO Life Insurance Exam Accurate 100%

Insurance: - ANSWER A contract in which the insurance company agrees to indemnify the insured party against loss, damage or liability arising from an unknown event. Insurance Transfers: - ANSWER The risk of loss from an individual or business entity to an insurance company, which in turn spreads costs of unexpected losses to many individuals. Direct response marketing: - ANSWER A direct response marketing system effectively bypasses the insurance agent. Business is conducted over the phone, through the mail, or online. This is a perfectly legal approach to selling insurance. It is not mandatory in all situations for the insured to physically sign any documents in order for coverage to go into effect. Insurance Transaction: (4) - ANSWER Solicitation, Negotiations, Sale (effectuation of a contract of insurance, and Advising an individual concerning coverage of claims. Risk: (Two Types) - ANSWER The uncertainty or chance of a loss occurring. Pure Risk: -Situations that can only result in a loss or no change. There is no opportunity for financial gain. This is the only type that insurance companies will accept. Speculative Risk: -Involves the opportunity for either loss or gain. Ex: Risk of gambling. These are not insurable risks. Concealment: - ANSWER The withholding of information that will result in an imprecise underwriting decision. Exposure: - ANSWER A unit of measure used to determine rates charged for insurance