Webce Life and Health Insurance Exam
Question and Answer 2023
Risk - Chance of loss
Loss - Unplanned reduction of economic value
Peril - cause of loss
Hazard - a condition that increases the chance of peril
Risk Transfer - buying insurance to shift the risk to insurance company
Underwriting - assessing applicant to determine insurability
Adverse Selection - people with greater risk of loss trying to buy insurance
Mutual Companies - owned by policyholders and issue participating polices dividends
which aren't guaranteed or taxable
Stock Companies - Owned by stockholders whose stock can be publicly traded and pay
dividends that are taxable
Federal Insurance Programs - Medicare and Social Security
State Insurance Programs - Medicaid and Workers' comp
Producers Authority - Expressed
Implied
Apparent
Required Disclosures - Buyer's guide and policy summary
Offer - signed application and initial premium
Acceptance - issuing of policy as applied for by insurer
Contract of Adhesion - ambiguities in the contract that are interpreted to the benefit of
the policyowner
Representations - applicants truthful statements on application
Ways to manage risk - Transfer
Avoid
, Retain
Reduce
Share with others
Speculative Risk - result in loss or gain, noninsurable
Moral Hazard - character weakness like habits or lifestyle
Morale Hazard - State of mind or carless attitude
Physical Hazard - physical condition that increases ones less like heavy drinking or
smoking
Managed Care Service Providers - blend of commercial and medical insurance like blue
cross blue shield
Fraternal benefit society - An organization formed to provide insurance benefits for
affiliated members
Self Insurer - large companies that can cover losses, must follow laws and pay for itself
Risk Retention groups - Self-run insurance programs set up by insurance companies to
do own admin tasks
Surplus Line insurers - property and causality market for insurance not covered by state
Reinsurance - The transfer of insurance risk from one insurer to another through a
contractual agreement
Difference between Admitted and Non-admitted insurers - certification to due business
in that state
Five elements of legal contract - offer
acceptance
consideration
competent parties
legal purpose
Insurable Interest - financial interest between applicant and insured when policy is
created
Types of personal relationships with automatic insurable interest - Individuals and self
spouses
parents and children
children and financially depender
Question and Answer 2023
Risk - Chance of loss
Loss - Unplanned reduction of economic value
Peril - cause of loss
Hazard - a condition that increases the chance of peril
Risk Transfer - buying insurance to shift the risk to insurance company
Underwriting - assessing applicant to determine insurability
Adverse Selection - people with greater risk of loss trying to buy insurance
Mutual Companies - owned by policyholders and issue participating polices dividends
which aren't guaranteed or taxable
Stock Companies - Owned by stockholders whose stock can be publicly traded and pay
dividends that are taxable
Federal Insurance Programs - Medicare and Social Security
State Insurance Programs - Medicaid and Workers' comp
Producers Authority - Expressed
Implied
Apparent
Required Disclosures - Buyer's guide and policy summary
Offer - signed application and initial premium
Acceptance - issuing of policy as applied for by insurer
Contract of Adhesion - ambiguities in the contract that are interpreted to the benefit of
the policyowner
Representations - applicants truthful statements on application
Ways to manage risk - Transfer
Avoid
, Retain
Reduce
Share with others
Speculative Risk - result in loss or gain, noninsurable
Moral Hazard - character weakness like habits or lifestyle
Morale Hazard - State of mind or carless attitude
Physical Hazard - physical condition that increases ones less like heavy drinking or
smoking
Managed Care Service Providers - blend of commercial and medical insurance like blue
cross blue shield
Fraternal benefit society - An organization formed to provide insurance benefits for
affiliated members
Self Insurer - large companies that can cover losses, must follow laws and pay for itself
Risk Retention groups - Self-run insurance programs set up by insurance companies to
do own admin tasks
Surplus Line insurers - property and causality market for insurance not covered by state
Reinsurance - The transfer of insurance risk from one insurer to another through a
contractual agreement
Difference between Admitted and Non-admitted insurers - certification to due business
in that state
Five elements of legal contract - offer
acceptance
consideration
competent parties
legal purpose
Insurable Interest - financial interest between applicant and insured when policy is
created
Types of personal relationships with automatic insurable interest - Individuals and self
spouses
parents and children
children and financially depender
