Louisiana Life, Health, and Accident Insurance Licensing Exam
Study online at https://quizlet.com/_606f3c
1. Insurance the transfer of Pure risk to the insurance company in consideration for a premium
must be pure risk and calculable.
2. Pure Risk the chance of loss without any chance of gain; insurable
3. Speculative Risk possibility for gain or loss; not insurable
4. Risk Chance of loss
5. Exposure a condition that could result in loss
6. hazard something that increases the chance of loss
eg. presence of physical hazard increases the chance of a loss occuring
7. peril cause of loss
eg. fire
8. law of large num- allows insurers to predict claims more accuratley; applies to grops of people not
ber individuals. The more people in the group, the more accurate the predictions are
9. Reinsurance A form of insurance whereby one insurance company (the reinsurer) in consid-
eration of a premium paid to it, agrees to indemnify another insurance company
(the ceding company) for part or all of its liabilities from insurance policies it has
issued.
10. stock insurer may pay dividends to shareholders (stockholders), thought not guarenteed
11. reciprocal insur- managed by an attorney-in-fact; unincorporated association of individuals who
ance company insure each other
12. government in- offers insurance for social needs (eg. flood insurance, workers compensation),
surance offering but doesn't offer to prevent fraud
, Louisiana Life, Health, and Accident Insurance Licensing Exam
Study online at https://quizlet.com/_606f3c
13. foreign company has their home office in another state
14. alien company a insurer incorporated outside the US
15. producer liability personally liable when violate producer's contract
16. producer repre- represent the insurance company, not the insured
senation
17. independent owns their own accounts, and are not insurance company employees
producer
18. producer author- expressed
ity implied
apparent
19. express authority authority of producer that is written in his or her contract
of producer
20. implied authority authority not expressly (writtten) granted, but actual authority producer has to
of producer transact normal business activities
21. Legal Elements Consideration
of Contract Offer
Acceptance
Legal Purpose
Legal Capacity
22. Consideration something of value must be exchanged, though it does not have to be equal;
Clause policy can't be voided for unequal consideration
23. Offer specific and definte proposal to enter into a contract
24.
, Louisiana Life, Health, and Accident Insurance Licensing Exam
Study online at https://quizlet.com/_606f3c
insurance con- contracts of adhesion ("take it or leave it"), therefore policy ambiguities always
tracts are favor the insured; unilateral contracts (only the insurer has a legal obligation to
uphold)
25. Principle of In- the purpose of insurance is to restore the insured to the same position as before
demnity the loss occurred
26. Principle of Ut- all parties to an insurance transaction are honest
most Good Faith
27. Representation the truth to the best of one's knowledge
28. Warranty a sworn truth, guaranteed to be true, and if a breach of warranty is found, it could
potentially makes the contract voidable.
29. Concealment the failure to disclose a material fact
30. Giving up the a waiver
right to obtain
information re-
quires...
31. Life Insurance In- must exist at the time of application, but not necessarily at the tie of a claim
surable Interest
may be based on economics or family relationship
exists if someone would benefit if another person continues to live
32. Personal Uses of - Provide a benefit to loved ones in case of the policy owner's death
Life Insurance - Creates an immediate estate
- Estate Conversion
- A life settlement contract
33. when life insurance is used to pay estate taxes
Study online at https://quizlet.com/_606f3c
1. Insurance the transfer of Pure risk to the insurance company in consideration for a premium
must be pure risk and calculable.
2. Pure Risk the chance of loss without any chance of gain; insurable
3. Speculative Risk possibility for gain or loss; not insurable
4. Risk Chance of loss
5. Exposure a condition that could result in loss
6. hazard something that increases the chance of loss
eg. presence of physical hazard increases the chance of a loss occuring
7. peril cause of loss
eg. fire
8. law of large num- allows insurers to predict claims more accuratley; applies to grops of people not
ber individuals. The more people in the group, the more accurate the predictions are
9. Reinsurance A form of insurance whereby one insurance company (the reinsurer) in consid-
eration of a premium paid to it, agrees to indemnify another insurance company
(the ceding company) for part or all of its liabilities from insurance policies it has
issued.
10. stock insurer may pay dividends to shareholders (stockholders), thought not guarenteed
11. reciprocal insur- managed by an attorney-in-fact; unincorporated association of individuals who
ance company insure each other
12. government in- offers insurance for social needs (eg. flood insurance, workers compensation),
surance offering but doesn't offer to prevent fraud
, Louisiana Life, Health, and Accident Insurance Licensing Exam
Study online at https://quizlet.com/_606f3c
13. foreign company has their home office in another state
14. alien company a insurer incorporated outside the US
15. producer liability personally liable when violate producer's contract
16. producer repre- represent the insurance company, not the insured
senation
17. independent owns their own accounts, and are not insurance company employees
producer
18. producer author- expressed
ity implied
apparent
19. express authority authority of producer that is written in his or her contract
of producer
20. implied authority authority not expressly (writtten) granted, but actual authority producer has to
of producer transact normal business activities
21. Legal Elements Consideration
of Contract Offer
Acceptance
Legal Purpose
Legal Capacity
22. Consideration something of value must be exchanged, though it does not have to be equal;
Clause policy can't be voided for unequal consideration
23. Offer specific and definte proposal to enter into a contract
24.
, Louisiana Life, Health, and Accident Insurance Licensing Exam
Study online at https://quizlet.com/_606f3c
insurance con- contracts of adhesion ("take it or leave it"), therefore policy ambiguities always
tracts are favor the insured; unilateral contracts (only the insurer has a legal obligation to
uphold)
25. Principle of In- the purpose of insurance is to restore the insured to the same position as before
demnity the loss occurred
26. Principle of Ut- all parties to an insurance transaction are honest
most Good Faith
27. Representation the truth to the best of one's knowledge
28. Warranty a sworn truth, guaranteed to be true, and if a breach of warranty is found, it could
potentially makes the contract voidable.
29. Concealment the failure to disclose a material fact
30. Giving up the a waiver
right to obtain
information re-
quires...
31. Life Insurance In- must exist at the time of application, but not necessarily at the tie of a claim
surable Interest
may be based on economics or family relationship
exists if someone would benefit if another person continues to live
32. Personal Uses of - Provide a benefit to loved ones in case of the policy owner's death
Life Insurance - Creates an immediate estate
- Estate Conversion
- A life settlement contract
33. when life insurance is used to pay estate taxes
