ALABAMA LIFE &
HEALTH INSURANCE
EXAM|| UPDATED 2025/202
6.
• Agent/ProducerANSWER A person who acts for another person or
entity with regard to contractual arrangements with third parties; a legal
representative of an insurance company.
,• Agent/Agency ContractANSWER a contract that is held
between an insurer and an agent/producer, containing the expressed
authority given to the agent/producer, outlining
thedutiesand
responsibilitiesto theprincipal.If the agent is in violation of the agency
contract (or agreement), he or she
may be held personally liable to the
insurer for breach of contract.
• Applicant or Proposed InsuredANSWER A person
who requests or seeks insurance from an insurer.
• BeneficiaryANSWER thepersonwhoreceivesthe
benefits from the policy of insurance
• DeathBenefit ANSWER The amountpaid whena
claim is issuedagainsta policy of insurance
• Insurance PolicyANSWER a contract between a
policyowner (and/or insured) and an insurance company which
agrees topay theinsuredor thebeneficiaryfor loss caused by specific
events
,• Insured ANSWER The personcoveredby thepolicy of
insurance who may or may not be the applicant or policy
owner.
• Insurer (principal) ANSWER a companythatissuesa
policy of insurance
• Life Insurance ANSWER a coverageupon a person's
life,andgranting,purchasingor disposingof annuities
• PolicyownerANSWER the person entitled to
exercisetherights and privilegesin thepolicy and who may or
may not be the insured
• Premium ANSWER themoneypaid to theinsurance
company for the policy of insurance
• Insurance is the of risk. Insureds'lossesare
transferred overto the ANSWER transfer;insurer
• Risk ANSWER The uncertaintyor chanceof a loss
occurring.
• Pure Risk ANSWER refers to situations that can only result
in
a loss orno change.No opportunityfor financialgain.
, Only typeof risk thatinsurancecompaniesarewilling to accept.
• Speculative riskANSWER Involves the opportunity for
eitherlossor gain.An exampleof speculativerisk is gambling. These types
of risks are not insurable.
• Only risks areinsurable ANSWER pure
• Exposure ANSWER A unit of measureusedto
determine rates charged for insurance coverage.
• Hazards ANSWER Conditionsor situationsthatincreasethe
probabilityof an insuredloss occurring.
• PhysicalHazard ANSWER individualcharacteristics
thatincreasethechancesof thecauseof loss
• Moral Hazard ANSWER tendenciestowardsincreased risk.
Involve evaluating the char
- acter and reputation of the proposed
insured
HEALTH INSURANCE
EXAM|| UPDATED 2025/202
6.
• Agent/ProducerANSWER A person who acts for another person or
entity with regard to contractual arrangements with third parties; a legal
representative of an insurance company.
,• Agent/Agency ContractANSWER a contract that is held
between an insurer and an agent/producer, containing the expressed
authority given to the agent/producer, outlining
thedutiesand
responsibilitiesto theprincipal.If the agent is in violation of the agency
contract (or agreement), he or she
may be held personally liable to the
insurer for breach of contract.
• Applicant or Proposed InsuredANSWER A person
who requests or seeks insurance from an insurer.
• BeneficiaryANSWER thepersonwhoreceivesthe
benefits from the policy of insurance
• DeathBenefit ANSWER The amountpaid whena
claim is issuedagainsta policy of insurance
• Insurance PolicyANSWER a contract between a
policyowner (and/or insured) and an insurance company which
agrees topay theinsuredor thebeneficiaryfor loss caused by specific
events
,• Insured ANSWER The personcoveredby thepolicy of
insurance who may or may not be the applicant or policy
owner.
• Insurer (principal) ANSWER a companythatissuesa
policy of insurance
• Life Insurance ANSWER a coverageupon a person's
life,andgranting,purchasingor disposingof annuities
• PolicyownerANSWER the person entitled to
exercisetherights and privilegesin thepolicy and who may or
may not be the insured
• Premium ANSWER themoneypaid to theinsurance
company for the policy of insurance
• Insurance is the of risk. Insureds'lossesare
transferred overto the ANSWER transfer;insurer
• Risk ANSWER The uncertaintyor chanceof a loss
occurring.
• Pure Risk ANSWER refers to situations that can only result
in
a loss orno change.No opportunityfor financialgain.
, Only typeof risk thatinsurancecompaniesarewilling to accept.
• Speculative riskANSWER Involves the opportunity for
eitherlossor gain.An exampleof speculativerisk is gambling. These types
of risks are not insurable.
• Only risks areinsurable ANSWER pure
• Exposure ANSWER A unit of measureusedto
determine rates charged for insurance coverage.
• Hazards ANSWER Conditionsor situationsthatincreasethe
probabilityof an insuredloss occurring.
• PhysicalHazard ANSWER individualcharacteristics
thatincreasethechancesof thecauseof loss
• Moral Hazard ANSWER tendenciestowardsincreased risk.
Involve evaluating the char
- acter and reputation of the proposed
insured
