Unit 1 Learn |20 Questions| With Correct Answers.

What is defined as a contingency that may cause a loss? {Ans: Peril}For an individual who owns a motorcycle and does not insure it what type of so called risk technique is being used by the individual if the motorcycle is stolen and the insured pays for its loss out of his own savings? {Ans: Risk Retention}What is the term used for the economic valuation of an individual based on the individual's earning potential both present and future? {Ans: Human Life Value}Which type of risk is ONLY the chance of loss? {Ans: Pure Risk}A Hazard is any factor that gives rise to a peril - for purposes of life and health insurance, there are three basic types of hazards. What are they? {Ans: Physical, Moral, Morale}What is the most common form of risk transfer? {Ans: Insurance}Insurance companies aggregate (collect) premiums to make claims payments. What is the term used for the aggregating of premiums to pay claims? {Ans: Risk Pooling}What device is used by insurance companies to accumulate funds to meet uncertain losses? {Ans: insurance policy}Tendency of less favorable insurance risks to seek or continue insurance to a greater extent than others