Ny Life, Accident, And Health Insurance Agent/broker Exam Series 17-55 Questions & Answers 2023 ( A+ Graded 100% Verified)

Life & Health Insurance ExamInsurance>>> transfer of riskSpeculative risk>>> has a possibility of both loss and gainPure risk>>> only has a possibility of loss (no gain)Exposure>>> risks for which an insurance company would be liableexpressed in unitsPeril>>> cause of a lossHazard>>> an increase in the chance of lossMoral hazard>>> arise from people's character (faking a loss)Morale hazard>>> state of mind or careless attitude (accidentally leaving door unlocked)Methods of handling risk>>> STARRShare, transfer, avoid, retain, reduceThe law of large numbers>>> the larger the group, the more accurately losses can be predictedElements of insurable risk>>> CANHAMCalculable, affordable, non-catastrophic, homogenous, accidental, measurableAdverse selection>>> tendency for higher-risk individuals to get and keep insuranceReinsurance>>> an insurance company (ceding) pays another insurance company (reinsurer) to assume some risk in the event of a catastrophic lossFacultative reinsurance>>> reinsurer evaluates each risk before allowing the transferTreaty reinsurance>>> reinsurer accepts all risk of a certain type from the ceding companyStock insurer>>> insurance company owned by shareholders who chose the board of directorstaxable dividends can be paid from profitsissues non-participating (non-par) policiesMutual insurer>>> no shareholders, rather policyowners who chose the board of directorsnontaxable dividends can be paid from profits (return of excess premium)issues participating (par) policiesFraternal Benefit