Louisiana Life and Health Insurance
Licensing: Chapter One, General
Insurance Exam Questions and Answers
Agent or Producer - Answer- a legal representative of an insurance company
Producer - Answer- usually includes agents and brokers
Agent - Answer- represents an insurer
Broker - Answer- insurance producer not appointed by an insurer and is deemed to
represent the client
True - Answer- T/F the insured may or may not be the policyowner
Principal/Insurer - Answer- The company who issues an insurance policy
Reciprocity/Reciprocal - Answer- a mutual interchange of rights and privileges
Idemnify - Answer- make whole
Pure and Speculative Risk - Answer- The risk of loss may be classified as
Pure Risk - Answer- A chance of loss or no loss, but no chance of gain.
Speculative Risk - Answer- Chance of loss or gain
Speculative Risk - Answer- What times of risks are not insurable?
Exposure - Answer- A unit of measure used to determine rates charged for insurance
coverage.
1. age of the insured
2. medical history
3. occupation
4. gender - Answer- In life insurance, all of the following factors are considered in
determining rates:
homogeneous - Answer- a large number of units having the same or similar exposure to
loss
, hazards - Answer- Conditions or situations that increase the probability of an insured
loss occurring.
Physical, moral, and morale - Answer- What are the three types of hazards?
Physical Hazards - Answer- individual characteristics that increase the chances of the
cause of loss
Physical Hazards - Answer- exist because of a physical condition, past medical history,
or condition at birth, such as blindness
Moral Hazard - Answer- Tendencies toward increased risk
Moral Hazard - Answer- refers to individuals who may lie on an insurance app or have
submitted fraudulent claims against an insurer
Morale Hazard - Answer- Arise from a state of mind that causes indifference to loss,
such as carelessness
Perils - Answer- causes of loss insured against in an insurance policy
Life Insurance - Answer- insurance against the financial loss caused by the premature
death of the insured
Health Insurance - Answer- insures against the medical expenses and/or loss of income
caused by the insured's sickness or accidental injury
Property Insurance - Answer- insures against the loss of physical property or the loss of
its income-producing abilities
Casualty Insurance - Answer- insures against the loss and/or damage of property and
resulting liabilities
Loss - Answer- The reduction, decrease, or disappearance of value of the person or
property insured in a policy, by a named peril
Avoidance - Answer- eliminating exposure to a loss; seldom practical
Retention - Answer- planned assumption of risk by an insured through the use of
deductibles, co-payments, or self-insurance
the insured accepts the responsibility for the loss before the insurance company pays -
Answer- risk retention is also known as self-insurance when
1. to reduce expenses and improve cash flow
Licensing: Chapter One, General
Insurance Exam Questions and Answers
Agent or Producer - Answer- a legal representative of an insurance company
Producer - Answer- usually includes agents and brokers
Agent - Answer- represents an insurer
Broker - Answer- insurance producer not appointed by an insurer and is deemed to
represent the client
True - Answer- T/F the insured may or may not be the policyowner
Principal/Insurer - Answer- The company who issues an insurance policy
Reciprocity/Reciprocal - Answer- a mutual interchange of rights and privileges
Idemnify - Answer- make whole
Pure and Speculative Risk - Answer- The risk of loss may be classified as
Pure Risk - Answer- A chance of loss or no loss, but no chance of gain.
Speculative Risk - Answer- Chance of loss or gain
Speculative Risk - Answer- What times of risks are not insurable?
Exposure - Answer- A unit of measure used to determine rates charged for insurance
coverage.
1. age of the insured
2. medical history
3. occupation
4. gender - Answer- In life insurance, all of the following factors are considered in
determining rates:
homogeneous - Answer- a large number of units having the same or similar exposure to
loss
, hazards - Answer- Conditions or situations that increase the probability of an insured
loss occurring.
Physical, moral, and morale - Answer- What are the three types of hazards?
Physical Hazards - Answer- individual characteristics that increase the chances of the
cause of loss
Physical Hazards - Answer- exist because of a physical condition, past medical history,
or condition at birth, such as blindness
Moral Hazard - Answer- Tendencies toward increased risk
Moral Hazard - Answer- refers to individuals who may lie on an insurance app or have
submitted fraudulent claims against an insurer
Morale Hazard - Answer- Arise from a state of mind that causes indifference to loss,
such as carelessness
Perils - Answer- causes of loss insured against in an insurance policy
Life Insurance - Answer- insurance against the financial loss caused by the premature
death of the insured
Health Insurance - Answer- insures against the medical expenses and/or loss of income
caused by the insured's sickness or accidental injury
Property Insurance - Answer- insures against the loss of physical property or the loss of
its income-producing abilities
Casualty Insurance - Answer- insures against the loss and/or damage of property and
resulting liabilities
Loss - Answer- The reduction, decrease, or disappearance of value of the person or
property insured in a policy, by a named peril
Avoidance - Answer- eliminating exposure to a loss; seldom practical
Retention - Answer- planned assumption of risk by an insured through the use of
deductibles, co-payments, or self-insurance
the insured accepts the responsibility for the loss before the insurance company pays -
Answer- risk retention is also known as self-insurance when
1. to reduce expenses and improve cash flow
