age 1 of 74
Life & Health Insurance Exam Prep Questions and
Answers
policy owner ......ANSWER........usually, but not always the person
covered by the policy
beneficiary ......ANSWER........the person who is paid when a
claim
is submitted
agent/producer ......ANSWER........acts as a legal representative
of the insurance company
broker ......ANSWER........representative of the Insured, not the
insurance company
risk ......ANSWER........The chance or uncertainty of loss
Pure risk ......ANSWER........the chance of experiencing a loss
(without the possibility of gain). Only downside, no upside.
Speculative risk ......ANSWER........s the chance of loss one accepts
in the hope of realizing a gain
,age 2 of 74
Risk avoidance ......ANSWER........staying away from risky
activities altogether
Risk reduction ......ANSWER........reduce the chance of something
bad happening
Risk shifting ......ANSWER........Get someone else to accept the risk
Buying insurance ......ANSWER........transfer a portion of your risk
to the Insurer
Risk Retention ......ANSWER........the individual or business that
opts not to buy insurance retains the entire risk
Indemnification ......ANSWER........an insurance concept that states
that some portions of the insurance industry prefer that we be
made only whole after a loss rather than coming out ahead
(Only getting back what you are owed, not getting more than
what you had to start with)
Subrogation
,age 3 of 74
Peril ......ANSWER........the ca......ANSWER........the transfer to the
Insurer of the Insured's rights to recover damages from a
responsible third party use of loss
Law of Large numbers ......ANSWER........the mathematical
concept that makes it easier to predict losses if we have a large
number of Insureds
Insurable losses are... ......ANSWER........Economic, Predictable,
Accidental, Measurable, Non-Catastrophic
non-participating companies ......ANSWER........Stock companies
that exist for the sole purpose of generating profits
for their stockholders
participating companies ......ANSWER........A company owned by
its policy holders where the profits are distributed among policy
holders
Social Security act ......ANSWER........a guarantee that
government
, age 4 of 74
would never again allow workers (and their families) to become
destitute
OASDI (Social Security) ......ANSWER........Old Age, Survivors,
and Disability Insurance...Federal Government law
FICA ......ANSWER........Federal Insurance Contributions Act
or FICA, payroll taxes levied on employees, employers, and the
self-employed.
Not covered by social security ......ANSWER........payroll taxes
levied on employees, employers,
and the self-employed.
FICA Fully Insured ......ANSWER........(Worked for 10 years)
payroll taxes levied on employees, employers,
and the self-employed.
Retirement Benefits;
Disability Income Benefits; and
Life & Health Insurance Exam Prep Questions and
Answers
policy owner ......ANSWER........usually, but not always the person
covered by the policy
beneficiary ......ANSWER........the person who is paid when a
claim
is submitted
agent/producer ......ANSWER........acts as a legal representative
of the insurance company
broker ......ANSWER........representative of the Insured, not the
insurance company
risk ......ANSWER........The chance or uncertainty of loss
Pure risk ......ANSWER........the chance of experiencing a loss
(without the possibility of gain). Only downside, no upside.
Speculative risk ......ANSWER........s the chance of loss one accepts
in the hope of realizing a gain
,age 2 of 74
Risk avoidance ......ANSWER........staying away from risky
activities altogether
Risk reduction ......ANSWER........reduce the chance of something
bad happening
Risk shifting ......ANSWER........Get someone else to accept the risk
Buying insurance ......ANSWER........transfer a portion of your risk
to the Insurer
Risk Retention ......ANSWER........the individual or business that
opts not to buy insurance retains the entire risk
Indemnification ......ANSWER........an insurance concept that states
that some portions of the insurance industry prefer that we be
made only whole after a loss rather than coming out ahead
(Only getting back what you are owed, not getting more than
what you had to start with)
Subrogation
,age 3 of 74
Peril ......ANSWER........the ca......ANSWER........the transfer to the
Insurer of the Insured's rights to recover damages from a
responsible third party use of loss
Law of Large numbers ......ANSWER........the mathematical
concept that makes it easier to predict losses if we have a large
number of Insureds
Insurable losses are... ......ANSWER........Economic, Predictable,
Accidental, Measurable, Non-Catastrophic
non-participating companies ......ANSWER........Stock companies
that exist for the sole purpose of generating profits
for their stockholders
participating companies ......ANSWER........A company owned by
its policy holders where the profits are distributed among policy
holders
Social Security act ......ANSWER........a guarantee that
government
, age 4 of 74
would never again allow workers (and their families) to become
destitute
OASDI (Social Security) ......ANSWER........Old Age, Survivors,
and Disability Insurance...Federal Government law
FICA ......ANSWER........Federal Insurance Contributions Act
or FICA, payroll taxes levied on employees, employers, and the
self-employed.
Not covered by social security ......ANSWER........payroll taxes
levied on employees, employers,
and the self-employed.
FICA Fully Insured ......ANSWER........(Worked for 10 years)
payroll taxes levied on employees, employers,
and the self-employed.
Retirement Benefits;
Disability Income Benefits; and
