PA Life, Accident, & Health Insurance Exam
| | | | | | |
with verified answers
| |
Insurance |- |correct |answer |defined |as |the |transfer |of |PURE |risk |to |the |insurance |company |in |
consideration |for |a |premium.
The |chance |of |loss |without |any |chance |of |gain |is |called |- |correct |answer |pure |risk
Speculative |risk |- |correct |answer |has |the |possibility |for |gain |or |loss |and |is |not |insurable.
Risk |is |defined |as |the |- |correct |answer |chance |of |loss.
A |condition |that |could |result |in |a |loss |is |known |as |an |- |correct |answer |exposure
A |hazard |is |something |that |increases |- |correct |answer |the |chance |of |loss.
The |presence |of |a |physical |hazard |- |correct |answer |increases |the |chance |of |a |loss |occurring.
A |peril |is |- |correct |answer |defined |as |a |cause |of |loss, |such |as |fire.
To |be |insurable, |- |correct |answer |losses |must |be |calculable.
The |law |of |large |numbers |- |correct |answer |allows |insurers |to |predict |claims |more |accurately.
The |law |of |large |numbers |applies |to |- |correct |answer |groups |of |people, |not |to |individuals.
The |more |people |in |the |group, |- |correct |answer |the |more |accurate |the |predictions |are.
,Most |insurers |buy |reinsurance |- |correct |answer |to |protect |themselves |in |the |event |of |a |catastrophic |
loss.
Insurance |laws |are |not |required |- |correct |answer |to |be |uniform |from |one |state |to |another.
A |stock |insurer |- |correct |answer |may |pay |dividends |to |its |shareholders |(stockholders), |but |they |may |
not |be |guaranteed.
A |reciprocal |insurance |company |is |managed |by |an |- |correct |answer |attorney-in-fact.
An |unincorporated |association |of |individuals |who |insure |each |other |is |known |as |- |correct |answer |a |
reciprocal |insurer.
The |government |offers |insurance |primarily |based |upon |- |correct |answer |social |needs, |such |as |flood |
insurance |and |workers |compensation, |but |does |not |offer |insurance |for |the |purpose |of |preventing |
fraud.
A |foreign |company |- |correct |answer |has |their |home |office |in |another |state.
An |insurer |incorporated |outside |of |the |U.S. |who |sells |in |the |U.S. |is |- |correct |answer |an |alien |
company.
A |producer |may |be |personally |liable |when |- |correct |answer |violating |the |producer's |contract.
Producers |represent |- |correct |answer |the |insurance |company, |not |the |insured.
Independent |producers |- |correct |answer |own |their |own |accounts |and |are |not |insurance |company |
employees.
Producers |have |- |correct |answer |express, |implied |and |apparent |authority.
, The |authority |a |producer |- |correct |answer |has |that |is |written |in |his |or |her |contract |is |known |as |
express |authority.
A |producer's |binding |authority |(if |any) |- |correct |answer |is |expressed |(written |down) |in |the |producer's |
contract |with |the |insurer |the |producer |represents.
The |authority |not |expressly |(written) |granted, |- |correct |answer |but |is |actual |authority |the |producer |
has |to |transact |normal |business |activities, |is |known |as |implied |authority.
The |elements |of |a |legal |contract |may |be |remembered |- |correct |answer |by |the |acronym |C-O-A-L |
(consideration, |offer, |acceptance, |legal |purpose |and |legal |capacity).
A |requirement |for |a |valid |contract |- |correct |answer |is |offer |and |acceptance, |or |mutual |agreement.
Advertising |the |availability |of |insurance |is |not |- |correct |answer |considered |to |be |an |offer.
A |specific |and |definite |proposal |to |enter |into |a |contract |is |known |as |- |correct |answer |an |offer.
The |consideration |on |a |policy |need |- |correct |answer |not |be |equal.
A |policy |may |not |be |voided |- |correct |answer |due |to |unequal |consideration.
Under |the |consideration |clause, |- |correct |answer |something |of |value |must |be |exchanged.
Because |insurance |contracts |are |contracts |of |adhesion, |- |correct |answer |policy |ambiguities |always |
favor |the |insured.
Insurance |policies |are |considered |- |correct |answer |to |be |unilateral |contracts, |in |that |only |one |party |
makes |an |enforceable |promise |the |insurer.
| | | | | | |
with verified answers
| |
Insurance |- |correct |answer |defined |as |the |transfer |of |PURE |risk |to |the |insurance |company |in |
consideration |for |a |premium.
The |chance |of |loss |without |any |chance |of |gain |is |called |- |correct |answer |pure |risk
Speculative |risk |- |correct |answer |has |the |possibility |for |gain |or |loss |and |is |not |insurable.
Risk |is |defined |as |the |- |correct |answer |chance |of |loss.
A |condition |that |could |result |in |a |loss |is |known |as |an |- |correct |answer |exposure
A |hazard |is |something |that |increases |- |correct |answer |the |chance |of |loss.
The |presence |of |a |physical |hazard |- |correct |answer |increases |the |chance |of |a |loss |occurring.
A |peril |is |- |correct |answer |defined |as |a |cause |of |loss, |such |as |fire.
To |be |insurable, |- |correct |answer |losses |must |be |calculable.
The |law |of |large |numbers |- |correct |answer |allows |insurers |to |predict |claims |more |accurately.
The |law |of |large |numbers |applies |to |- |correct |answer |groups |of |people, |not |to |individuals.
The |more |people |in |the |group, |- |correct |answer |the |more |accurate |the |predictions |are.
,Most |insurers |buy |reinsurance |- |correct |answer |to |protect |themselves |in |the |event |of |a |catastrophic |
loss.
Insurance |laws |are |not |required |- |correct |answer |to |be |uniform |from |one |state |to |another.
A |stock |insurer |- |correct |answer |may |pay |dividends |to |its |shareholders |(stockholders), |but |they |may |
not |be |guaranteed.
A |reciprocal |insurance |company |is |managed |by |an |- |correct |answer |attorney-in-fact.
An |unincorporated |association |of |individuals |who |insure |each |other |is |known |as |- |correct |answer |a |
reciprocal |insurer.
The |government |offers |insurance |primarily |based |upon |- |correct |answer |social |needs, |such |as |flood |
insurance |and |workers |compensation, |but |does |not |offer |insurance |for |the |purpose |of |preventing |
fraud.
A |foreign |company |- |correct |answer |has |their |home |office |in |another |state.
An |insurer |incorporated |outside |of |the |U.S. |who |sells |in |the |U.S. |is |- |correct |answer |an |alien |
company.
A |producer |may |be |personally |liable |when |- |correct |answer |violating |the |producer's |contract.
Producers |represent |- |correct |answer |the |insurance |company, |not |the |insured.
Independent |producers |- |correct |answer |own |their |own |accounts |and |are |not |insurance |company |
employees.
Producers |have |- |correct |answer |express, |implied |and |apparent |authority.
, The |authority |a |producer |- |correct |answer |has |that |is |written |in |his |or |her |contract |is |known |as |
express |authority.
A |producer's |binding |authority |(if |any) |- |correct |answer |is |expressed |(written |down) |in |the |producer's |
contract |with |the |insurer |the |producer |represents.
The |authority |not |expressly |(written) |granted, |- |correct |answer |but |is |actual |authority |the |producer |
has |to |transact |normal |business |activities, |is |known |as |implied |authority.
The |elements |of |a |legal |contract |may |be |remembered |- |correct |answer |by |the |acronym |C-O-A-L |
(consideration, |offer, |acceptance, |legal |purpose |and |legal |capacity).
A |requirement |for |a |valid |contract |- |correct |answer |is |offer |and |acceptance, |or |mutual |agreement.
Advertising |the |availability |of |insurance |is |not |- |correct |answer |considered |to |be |an |offer.
A |specific |and |definite |proposal |to |enter |into |a |contract |is |known |as |- |correct |answer |an |offer.
The |consideration |on |a |policy |need |- |correct |answer |not |be |equal.
A |policy |may |not |be |voided |- |correct |answer |due |to |unequal |consideration.
Under |the |consideration |clause, |- |correct |answer |something |of |value |must |be |exchanged.
Because |insurance |contracts |are |contracts |of |adhesion, |- |correct |answer |policy |ambiguities |always |
favor |the |insured.
Insurance |policies |are |considered |- |correct |answer |to |be |unilateral |contracts, |in |that |only |one |party |
makes |an |enforceable |promise |the |insurer.
