MISSISSIPPI INSURANCE TEST 196 2026 STATE
INSURANCE LAWS AND REGULATIONS
WORKBOOK SOLVED QUESTIONS
COMPILATION
◉ What type of risk involves chance of gain or loss. Cannot be
insured.
Answer: Speculative Risk
◉ What are the 5 ways you can manage risk.
Answer: Avoidance, Retention, Transfer, Sharing, Reduction
◉ any condition that increases the chances of loss.
Answer: Hazard
◉ What are the three types of hazards.
Answer: Physical, Moral, Morale
◉ What type of hazard is tangible.
Answer: Physical
,◉ What type of hazard is dishonesty.
Answer: Moral
◉ What type of hazard is indifference-careless.
Answer: morale
◉ Event that causes the loss.
Answer: Peril
◉ What are three examples of a peril.
Answer: Fire, robbery, and flood
◉ Mathematical rule stating that the more exposures increase, the
more the actual results will approach the results expected for the
event..
Answer: Law of large Numbers
◉ What does the policy owner pay.
Answer: Gross annual premium
◉ Tendency of persons whose exposure to loss is higher than
average to buy insurance ( example: person with a terminal illness).
,Answer: Adverse Selection
◉ What are the two types of insurers in the state of Ms.
Answer: Domestic and Foreign
◉ What are the three types of insurers other states may have.
Answer: Domestic, Foreign, and Alien
◉ Owned by investors. Motive is to make a profit. Policyholders not
entitled to dividends.
Answer: Stock Insurance company
◉ Owned by a policyholder. Share in profits in form of dividends..
Answer: Mutual Insurance company
◉ Promise is made by only one party (insurer).
Answer: Unilateral contract
◉ Protection for a limited number of years. No cash value. Maximum
amount of insurance for lowest price.
Answer: Term Life Insurance
, ◉ Level protection for a set period. Premiums increase as insured
ages..
Answer: Level term
◉ Premiums increase each year.
Answer: Annual Renewable term or yearly renewal term
◉ Renewal premiums are lower if insured can demonstrate good
health. periods are usually 1 to 5 years.
Answer: Reentry Term
◉ Decreasing protection from year to year. Premium remain
constant during life of contract. Best policy for decreasing debt
(home, auto). Mortgage protection.
Answer: Decreasing Term
◉ Provide term insurance for juveniles. Usually sold in $1,000 units -
ages 1 to 15. When child reaches 21, face amount increases to 5
times original amount with no increasing in premiums..
Answer: Jumping Juvenile or Junior Estate Builder
◉ Level premiums, Permanent protection, Cash value build- up
(savings element), and Most common type of protection sold.
Maturity at age 100!.
INSURANCE LAWS AND REGULATIONS
WORKBOOK SOLVED QUESTIONS
COMPILATION
◉ What type of risk involves chance of gain or loss. Cannot be
insured.
Answer: Speculative Risk
◉ What are the 5 ways you can manage risk.
Answer: Avoidance, Retention, Transfer, Sharing, Reduction
◉ any condition that increases the chances of loss.
Answer: Hazard
◉ What are the three types of hazards.
Answer: Physical, Moral, Morale
◉ What type of hazard is tangible.
Answer: Physical
,◉ What type of hazard is dishonesty.
Answer: Moral
◉ What type of hazard is indifference-careless.
Answer: morale
◉ Event that causes the loss.
Answer: Peril
◉ What are three examples of a peril.
Answer: Fire, robbery, and flood
◉ Mathematical rule stating that the more exposures increase, the
more the actual results will approach the results expected for the
event..
Answer: Law of large Numbers
◉ What does the policy owner pay.
Answer: Gross annual premium
◉ Tendency of persons whose exposure to loss is higher than
average to buy insurance ( example: person with a terminal illness).
,Answer: Adverse Selection
◉ What are the two types of insurers in the state of Ms.
Answer: Domestic and Foreign
◉ What are the three types of insurers other states may have.
Answer: Domestic, Foreign, and Alien
◉ Owned by investors. Motive is to make a profit. Policyholders not
entitled to dividends.
Answer: Stock Insurance company
◉ Owned by a policyholder. Share in profits in form of dividends..
Answer: Mutual Insurance company
◉ Promise is made by only one party (insurer).
Answer: Unilateral contract
◉ Protection for a limited number of years. No cash value. Maximum
amount of insurance for lowest price.
Answer: Term Life Insurance
, ◉ Level protection for a set period. Premiums increase as insured
ages..
Answer: Level term
◉ Premiums increase each year.
Answer: Annual Renewable term or yearly renewal term
◉ Renewal premiums are lower if insured can demonstrate good
health. periods are usually 1 to 5 years.
Answer: Reentry Term
◉ Decreasing protection from year to year. Premium remain
constant during life of contract. Best policy for decreasing debt
(home, auto). Mortgage protection.
Answer: Decreasing Term
◉ Provide term insurance for juveniles. Usually sold in $1,000 units -
ages 1 to 15. When child reaches 21, face amount increases to 5
times original amount with no increasing in premiums..
Answer: Jumping Juvenile or Junior Estate Builder
◉ Level premiums, Permanent protection, Cash value build- up
(savings element), and Most common type of protection sold.
Maturity at age 100!.
