Arizona Health Insurance Complete
Exam Study Questions with 100%
Correct Answers | Latest Edition
1. Insurance - ANSWER a contract in which one party (the insurance
company) agrees to "make whole" the insured party against loss, damage or
liability arising from an unlikely event
2. In ___________ insurance, the policy protects survivors from losses
suffered after the insured's death - ANSWER Life
3. Insurance __________ the risk of loss from an individual or business to an
insurance company - ANSWER Transfers
4. Risk - ANSWER the uncertainty or chance of a loss occurring
5. Peril - ANSWER the causes of loss insured against an insurance policy.
6. __________ insures against the financial loss caused by premature death of
the insured. - ANSWER Life
7. __________ insures against the medical expenses and/or loss of income
caused by the insured's sickness or accidental injury. - ANSWER Health
8. __________ insurance insures against the loss of physical property of the
loss of income producing abilities. - ANSWER Property
,9. __________ insurance insures against the loss and/or damage of property
resulting in liabilities. - ANSWER Casualty
10.Loss - ANSWER the reduction, decrease, or disappearance of value of the
person or property insured in a policy, caused by a named peril.
11.Risk Avoidance - ANSWER eliminating exposure to a loss
12.Risk avoidance is __________ but seldom __________. - ANSWER
Effective/Practical
13.Risk Retention - ANSWER the planned assumption of risk by an insured
throughthe use of deductibles, co-payments or self-insurance.
14.Risk retention is also known as __________ when the insured accepts the
responsibility for the loss before the insurance company pays. - ANSWER
Self-insurance
15.The purpose of retention is: - ANSWER 1. to reduce expenses and improve
cash flow
2. to increase control of claim reserving and claims settlements
3. to fund for losses that cannot be insured
16.Risk Sharing - ANSWER a method of dealing with risk for a group of
individual persons or businesses with the same or similar exposure to loss to
share the losses that occur within that group.
,17.A __________ is a formal risk-sharing agreement. - ANSWER Reciprocal
insurance exchange
18.Risk Reduction - ANSWER actions taken to attempt to lessen the
possibility or severity of a loss (ex: installing smoke detectors, annual
physicals, making lifestyle changes)
19.The most effective way to handle risk is to __________ it so that the loss is
borne by another party. - ANSWER Transfer
20.Insurance is the most common method of __________ risk from an
individual or group to an insurance company. Though the purchasing of
insuranc will not eliminate the risk of death or illness, it relieves the insured
of the financial losses these risks bring. - ANSWER Transferring
21.Pure Risk - ANSWER situations that can only result in a loss or no change
22.In __________ risk, there is no opportunity for financial gain - ANSWER
Pure
23.__________ risk is the only type of risk that insurance companies are
willing to accept - ANSWER Pure
24.Speculative Risk - ANSWER involves the opportunity for loss or gain
25.__________ risk is not insurable - ANSWER Speculative
26.Exposure - ANSWER unit of measurement used to determine rates charged
for insurance coverage
, 27.4 Determining Factors in Life Insurance - ANSWER - Age of insured
- Medical history
- Occupation
- Sex of insured
28.Homogeneous - ANSWER a large number of units having the same or
similar exposure to loss
29.What is the basis of insurance? - ANSWER Sharing the risk among
members of a large homogeneous group with similar exposure to loss
30.Hazards - ANSWER conditions or situations that increase the probability of
an insured loss occurring
31.Physical Hazards - ANSWER individual characteristics that increase the
chances of the cause of loss
32.__________ hazards exist because of physical condition, past medical
history, or a condition at birth. - ANSWER Physical
33.Moral Hazards - ANSWER tendencies towards increased risk
34.__________ hazards involve evaluationg the character and reputation of the
proposed insured. - ANSWER Moral
35.__________ refer to those applicants who may life on an application for
insurance, or in the past, have submitted fraudulent claims against an
insurer. - ANSWER Moral
Exam Study Questions with 100%
Correct Answers | Latest Edition
1. Insurance - ANSWER a contract in which one party (the insurance
company) agrees to "make whole" the insured party against loss, damage or
liability arising from an unlikely event
2. In ___________ insurance, the policy protects survivors from losses
suffered after the insured's death - ANSWER Life
3. Insurance __________ the risk of loss from an individual or business to an
insurance company - ANSWER Transfers
4. Risk - ANSWER the uncertainty or chance of a loss occurring
5. Peril - ANSWER the causes of loss insured against an insurance policy.
6. __________ insures against the financial loss caused by premature death of
the insured. - ANSWER Life
7. __________ insures against the medical expenses and/or loss of income
caused by the insured's sickness or accidental injury. - ANSWER Health
8. __________ insurance insures against the loss of physical property of the
loss of income producing abilities. - ANSWER Property
,9. __________ insurance insures against the loss and/or damage of property
resulting in liabilities. - ANSWER Casualty
10.Loss - ANSWER the reduction, decrease, or disappearance of value of the
person or property insured in a policy, caused by a named peril.
11.Risk Avoidance - ANSWER eliminating exposure to a loss
12.Risk avoidance is __________ but seldom __________. - ANSWER
Effective/Practical
13.Risk Retention - ANSWER the planned assumption of risk by an insured
throughthe use of deductibles, co-payments or self-insurance.
14.Risk retention is also known as __________ when the insured accepts the
responsibility for the loss before the insurance company pays. - ANSWER
Self-insurance
15.The purpose of retention is: - ANSWER 1. to reduce expenses and improve
cash flow
2. to increase control of claim reserving and claims settlements
3. to fund for losses that cannot be insured
16.Risk Sharing - ANSWER a method of dealing with risk for a group of
individual persons or businesses with the same or similar exposure to loss to
share the losses that occur within that group.
,17.A __________ is a formal risk-sharing agreement. - ANSWER Reciprocal
insurance exchange
18.Risk Reduction - ANSWER actions taken to attempt to lessen the
possibility or severity of a loss (ex: installing smoke detectors, annual
physicals, making lifestyle changes)
19.The most effective way to handle risk is to __________ it so that the loss is
borne by another party. - ANSWER Transfer
20.Insurance is the most common method of __________ risk from an
individual or group to an insurance company. Though the purchasing of
insuranc will not eliminate the risk of death or illness, it relieves the insured
of the financial losses these risks bring. - ANSWER Transferring
21.Pure Risk - ANSWER situations that can only result in a loss or no change
22.In __________ risk, there is no opportunity for financial gain - ANSWER
Pure
23.__________ risk is the only type of risk that insurance companies are
willing to accept - ANSWER Pure
24.Speculative Risk - ANSWER involves the opportunity for loss or gain
25.__________ risk is not insurable - ANSWER Speculative
26.Exposure - ANSWER unit of measurement used to determine rates charged
for insurance coverage
, 27.4 Determining Factors in Life Insurance - ANSWER - Age of insured
- Medical history
- Occupation
- Sex of insured
28.Homogeneous - ANSWER a large number of units having the same or
similar exposure to loss
29.What is the basis of insurance? - ANSWER Sharing the risk among
members of a large homogeneous group with similar exposure to loss
30.Hazards - ANSWER conditions or situations that increase the probability of
an insured loss occurring
31.Physical Hazards - ANSWER individual characteristics that increase the
chances of the cause of loss
32.__________ hazards exist because of physical condition, past medical
history, or a condition at birth. - ANSWER Physical
33.Moral Hazards - ANSWER tendencies towards increased risk
34.__________ hazards involve evaluationg the character and reputation of the
proposed insured. - ANSWER Moral
35.__________ refer to those applicants who may life on an application for
insurance, or in the past, have submitted fraudulent claims against an
insurer. - ANSWER Moral
