Arizona Life and Health Insurance Exams (Latest
2024/ 2025 Updates STUDY BUNDLE WITH
COMPLETE SOLUTIONS) Questions and Verified
Answers| 100% Correct| Grade A
Insurance - ANSWERa contract that idemnifies another against loss, damage or
liability from an unknown event.
Indemnify - ANSWERTo make a person whole by restoring that person to the same
financial position that existed before the loss.
Policyowner - ANSWERThe insured
Premium - ANSWERA set amount of money for the insurance
Insurer - ANSWERThe insurance company
Insured - ANSWERPerson covered by insurance
Policy - ANSWERLegal document of a contract of insurance
Loss - ANSWERReduction in the value of an asset
Claim - ANSWERDemand for payment of the insurance benefit to the person named
in the policy
Risk - ANSWEREvaluated by two things: possibility of loss and the uncertainty of
whether or not the loss will occur
Uncertaintiy of financial loss
Pure Risk - ANSWERThere is only a chance of loss only one insurable
Speculative Risk - ANSWERInvolves both an uncertainty of loss and gain
Peril - ANSWERThe immediate specific event causing loss and giving rise to risk,
cause of risk
Hazard - ANSWERAny factor that gives rise to peril, three types
Physical hazards - ANSWERArise from material, structural, or operational features of
a risk situation. (Slippery Floors, unsanitary conditions etc..)
Moral hazards - ANSWERArise from people's habits and values, filling a false claim ex
,Morale hazards - ANSWERArise out of human carelessness or irresponsibility, (failure
to take safety precautions)
Five methods for dealing with risk - ANSWERS. T. A. R. R.
Sharing - ANSWERA risk that cannot be avoided, choosing risk as a means of handling
the risk, by sharing risk we can also share the potential losses.
Transfer - ANSWERTransferring the risk of loss to another party, usually an insurance
company more wiling to bear the risk.
Avoidance - ANSWERAvoiding the risk in the first place, not undertaking a chance
that can result in a chance of loss
Reduction - ANSWERWhen risks cannot be avoided, they may be able to be reduced
Reducing the potential loss that might occur or by reducing the amount the potential
loss if it occurs
Retention - ANSWERDoing nothing about the risk, people assume or retain the
overall risk
Law of large numbers - ANSWERAbility to make predictions of losses in a group is
based upon the law of large numbers
Insurable interest - ANSWERPerson having legitimate interest and can benefit from
preservation of the life or the property insured
Deductible - ANSWERThe initial amount of a covered loss that the insured must pay
In order for insurer to pay for the remainder of the claim
Elimination period - ANSWERThe number of days an insured must be disabled before
disability income benefits become payable
Co insurance - ANSWERWithin a specific coverage range the insured and the insurer
will share the allowed expenses
Property insurance - ANSWERProtects the insured against the financial
consequences of the direct or consequential loss
Casualty insurance - ANSWERProtects the insured against the financial consequences
of legal liability including that for death,injury, disability or damage to real or
personal property
Life insurance - ANSWERInsurance coverage on human lives including endowments
and annuities and may include benefits based upon accidental death or benefits for
disability
, Annuity - ANSWERProvides guaranteed income for the life of an annuitant,
protecting an individual from the risk of living to long
Accident and health or sickness insurance - ANSWERProtects the insured against
financial loss cause by sickness, bodily injury, accidental death, and may include
benefits for disability income
Variable life and variable annuity products - ANSWERInsurance coverage provided
under variable life insurance contracts and variable annuities. Variable carry
investment risk an require an insurance license and a securities License
Credit insurance - ANSWERLimited line of insurance protecting the insured who is
usually a creditor, if unable to repay debts or results of illness
Private commercial insurers - ANSWERProfit making insurance company
Private non commercial insurers - ANSWERNon profit service organization
U.S. Government insurers - ANSWERSpecial non profit insurer
Stocks insurance company - ANSWERConsists of stockholders also known as share
holders whip own shares in the company, this is considered non participating as
there is no dividends
Non participating company - ANSWERPolicy holders do not receive dividends from
stock ownership
Participating company - ANSWERPolicy holders receive dividends and participate in
them
Mutual insurers - ANSWERNo stock holders, ownership rests with the policy holders
also known as policy holders.
Reciprocal insurers - ANSWERAre unincorporated groups of people that provide
insurance for one another through individual indemnity agreements. Each reciprocal
is known as a subscriber.
Fraternal insurers - ANSWERAre primarily life insurance carriers that exists as social
organizations and usually engage in charitable, customed to individuals associated
with that particular group
Lloyds of London - ANSWERIs not a physical insurance company but acts as a
meeting
Place and services to its members who transact insurance
2024/ 2025 Updates STUDY BUNDLE WITH
COMPLETE SOLUTIONS) Questions and Verified
Answers| 100% Correct| Grade A
Insurance - ANSWERa contract that idemnifies another against loss, damage or
liability from an unknown event.
Indemnify - ANSWERTo make a person whole by restoring that person to the same
financial position that existed before the loss.
Policyowner - ANSWERThe insured
Premium - ANSWERA set amount of money for the insurance
Insurer - ANSWERThe insurance company
Insured - ANSWERPerson covered by insurance
Policy - ANSWERLegal document of a contract of insurance
Loss - ANSWERReduction in the value of an asset
Claim - ANSWERDemand for payment of the insurance benefit to the person named
in the policy
Risk - ANSWEREvaluated by two things: possibility of loss and the uncertainty of
whether or not the loss will occur
Uncertaintiy of financial loss
Pure Risk - ANSWERThere is only a chance of loss only one insurable
Speculative Risk - ANSWERInvolves both an uncertainty of loss and gain
Peril - ANSWERThe immediate specific event causing loss and giving rise to risk,
cause of risk
Hazard - ANSWERAny factor that gives rise to peril, three types
Physical hazards - ANSWERArise from material, structural, or operational features of
a risk situation. (Slippery Floors, unsanitary conditions etc..)
Moral hazards - ANSWERArise from people's habits and values, filling a false claim ex
,Morale hazards - ANSWERArise out of human carelessness or irresponsibility, (failure
to take safety precautions)
Five methods for dealing with risk - ANSWERS. T. A. R. R.
Sharing - ANSWERA risk that cannot be avoided, choosing risk as a means of handling
the risk, by sharing risk we can also share the potential losses.
Transfer - ANSWERTransferring the risk of loss to another party, usually an insurance
company more wiling to bear the risk.
Avoidance - ANSWERAvoiding the risk in the first place, not undertaking a chance
that can result in a chance of loss
Reduction - ANSWERWhen risks cannot be avoided, they may be able to be reduced
Reducing the potential loss that might occur or by reducing the amount the potential
loss if it occurs
Retention - ANSWERDoing nothing about the risk, people assume or retain the
overall risk
Law of large numbers - ANSWERAbility to make predictions of losses in a group is
based upon the law of large numbers
Insurable interest - ANSWERPerson having legitimate interest and can benefit from
preservation of the life or the property insured
Deductible - ANSWERThe initial amount of a covered loss that the insured must pay
In order for insurer to pay for the remainder of the claim
Elimination period - ANSWERThe number of days an insured must be disabled before
disability income benefits become payable
Co insurance - ANSWERWithin a specific coverage range the insured and the insurer
will share the allowed expenses
Property insurance - ANSWERProtects the insured against the financial
consequences of the direct or consequential loss
Casualty insurance - ANSWERProtects the insured against the financial consequences
of legal liability including that for death,injury, disability or damage to real or
personal property
Life insurance - ANSWERInsurance coverage on human lives including endowments
and annuities and may include benefits based upon accidental death or benefits for
disability
, Annuity - ANSWERProvides guaranteed income for the life of an annuitant,
protecting an individual from the risk of living to long
Accident and health or sickness insurance - ANSWERProtects the insured against
financial loss cause by sickness, bodily injury, accidental death, and may include
benefits for disability income
Variable life and variable annuity products - ANSWERInsurance coverage provided
under variable life insurance contracts and variable annuities. Variable carry
investment risk an require an insurance license and a securities License
Credit insurance - ANSWERLimited line of insurance protecting the insured who is
usually a creditor, if unable to repay debts or results of illness
Private commercial insurers - ANSWERProfit making insurance company
Private non commercial insurers - ANSWERNon profit service organization
U.S. Government insurers - ANSWERSpecial non profit insurer
Stocks insurance company - ANSWERConsists of stockholders also known as share
holders whip own shares in the company, this is considered non participating as
there is no dividends
Non participating company - ANSWERPolicy holders do not receive dividends from
stock ownership
Participating company - ANSWERPolicy holders receive dividends and participate in
them
Mutual insurers - ANSWERNo stock holders, ownership rests with the policy holders
also known as policy holders.
Reciprocal insurers - ANSWERAre unincorporated groups of people that provide
insurance for one another through individual indemnity agreements. Each reciprocal
is known as a subscriber.
Fraternal insurers - ANSWERAre primarily life insurance carriers that exists as social
organizations and usually engage in charitable, customed to individuals associated
with that particular group
Lloyds of London - ANSWERIs not a physical insurance company but acts as a
meeting
Place and services to its members who transact insurance
