Life & Health Insurance Fundamentals Ch. 1 AFE 1 Exam
Study Questions with All Correct Solutions
The first cultural manifestation of wealth - Answer production of grains by incipient agrarian societies in
amounts exceeding requirements of current consumption and the emergence of the stockpile
The innate drive to reduce risk - Answer motivated the earliest formations of clans, tribes and other
groups
The physical and economic security formerly provided by the tribe or extended family - Answer
diminishes with industrialization
Income-dependent, wealth acquiring lifestyles - Answer render us and our families more vulnerable to
societal and environmental changes
The risk transfer aspect of life insurance - Answer dates back more than 2,500 years to Greek societies
An elaborate funeral - Answer was an important social and religious ritual of ancient times
The belief of ancient times - Answer that the soul of the departed would gain entrance into the special
paradise of his or her faith only if the funeral was conducted with all required rituals, sacrifices and
feasts.
Roman collegia - Answer evolved into mutual benefit associations with stated benefits and regular
membership contributions.
Dissolution of Roman Empire - Answer brought an end to Roman Collegia
Guilds - Answer evolved to meet the need for mutual protection and security after Rome fell. Provided
mutual assistance to their members.
, Craftsmen Guilds - Answer evolved in Japan during the period 1699-1868. Primary purposes were
religious, social and economic.
English friendly societies - Answer were true mutual benefit groups. Not concerned with trade, craft or
religion. They were operated by officers and a committee elected by members and governed by a set of
rules adopted and amended by the membership
All societies - Answer had some sort of death or burial fund benefit
The beginnings of friendly societies - Answer predate the first mortality tables, the laws of probability,
and the mathematics of insurance
Assessment basis insurance contracts - Answer permit insureds (members) to be assessed
retrospectively as claims occur to provide promised benefit payments.
Individual underwriters - Answer The earliest insurers
underwriting - Answer The term that arose when individuals would write their names under the amount
of insurance that they were willing to back.
Underwriter - Answer the person making the contract
1584 - Answer the earliest dispute on record illustrated how the meaning of words can be critically
important
Earliest dispute 1584 - Answer A life insurance contract was issued on June 15, 1583 by the office of
insurance within the Royal Exchange on the life of William Gybbons for a term of 12 months. 13
individuals underwrote the contract for 75pounds. Mr Gybbons died shortly before the expiration of 1
year. The insurers refused to pay on the grounds that their intended 12 months were the shorter lunar
months and not calendar months. Mr Gybbons heirs prevailed on their suit.
The Life Assurance and Annuity Association - Answer The first true mutual insurance company.
Established by The Mystery of the Mercers of London on October 4, 1699. It failed 46 years later.
Study Questions with All Correct Solutions
The first cultural manifestation of wealth - Answer production of grains by incipient agrarian societies in
amounts exceeding requirements of current consumption and the emergence of the stockpile
The innate drive to reduce risk - Answer motivated the earliest formations of clans, tribes and other
groups
The physical and economic security formerly provided by the tribe or extended family - Answer
diminishes with industrialization
Income-dependent, wealth acquiring lifestyles - Answer render us and our families more vulnerable to
societal and environmental changes
The risk transfer aspect of life insurance - Answer dates back more than 2,500 years to Greek societies
An elaborate funeral - Answer was an important social and religious ritual of ancient times
The belief of ancient times - Answer that the soul of the departed would gain entrance into the special
paradise of his or her faith only if the funeral was conducted with all required rituals, sacrifices and
feasts.
Roman collegia - Answer evolved into mutual benefit associations with stated benefits and regular
membership contributions.
Dissolution of Roman Empire - Answer brought an end to Roman Collegia
Guilds - Answer evolved to meet the need for mutual protection and security after Rome fell. Provided
mutual assistance to their members.
, Craftsmen Guilds - Answer evolved in Japan during the period 1699-1868. Primary purposes were
religious, social and economic.
English friendly societies - Answer were true mutual benefit groups. Not concerned with trade, craft or
religion. They were operated by officers and a committee elected by members and governed by a set of
rules adopted and amended by the membership
All societies - Answer had some sort of death or burial fund benefit
The beginnings of friendly societies - Answer predate the first mortality tables, the laws of probability,
and the mathematics of insurance
Assessment basis insurance contracts - Answer permit insureds (members) to be assessed
retrospectively as claims occur to provide promised benefit payments.
Individual underwriters - Answer The earliest insurers
underwriting - Answer The term that arose when individuals would write their names under the amount
of insurance that they were willing to back.
Underwriter - Answer the person making the contract
1584 - Answer the earliest dispute on record illustrated how the meaning of words can be critically
important
Earliest dispute 1584 - Answer A life insurance contract was issued on June 15, 1583 by the office of
insurance within the Royal Exchange on the life of William Gybbons for a term of 12 months. 13
individuals underwrote the contract for 75pounds. Mr Gybbons died shortly before the expiration of 1
year. The insurers refused to pay on the grounds that their intended 12 months were the shorter lunar
months and not calendar months. Mr Gybbons heirs prevailed on their suit.
The Life Assurance and Annuity Association - Answer The first true mutual insurance company.
Established by The Mystery of the Mercers of London on October 4, 1699. It failed 46 years later.
