Business > EXAM > Fundamentals of Insurance Planning - Final Exam 2022- QUESTIONS WITH COMPLETE SOLUTIONS (All)

Also available in bundle ( Click Here )

Fundamentals of Insurance Planning - Final Exam 2022- QUESTIONS WITH COMPLETE SOLUTIONS

Document Content and Description Below

What are the legal requirements of an insurance contract? Correct Answer: Offer and Acceptance Legal Competency of both parties Consideration is given Lawful Purpose What are the elements of an ... insurable risk? Correct Answer: Large number of homogenous exposures Losses must be accidental Losses must be measurable Losses must be determinable Cannot be catastrophic to the insurance company Premiums must be affordable Indemnity Correct Answer: The idea that one cannot make a profit from an insurance claim Subrogation Correct Answer: Clause in the policy that prohibits the insured from going after the negligent party if the insured has been made whole by the insurance company Peril Correct Answer: The immediate cause and reason for a loss occurred Fire, Storm, Theft, Collision, Lightning, Hurricane Physical Hazard Correct Answer: A physical condition that increase the likelihood of loss occurring Moral Hazard Correct Answer: The potential loss occurring because of the moral character of the insured, and the filing of a false claim with their insurance company Morale Hazard Correct Answer: The indifference to a loss created because the insured has insurance Pure Risk Correct Answer: Risk that is insurable, the chance of a loss or no loss happening Speculative Risk Correct Answer: Risk that is not insurable, the chance of a loss or a gain Adverse Selection Correct Answer: The tendency of those that most need insurance to seek it out High in frequency and low in severity Correct Answer: Reduce- the process of reducing the likelihood of a pure risk (severity is the size in dollars) Low frequency and low severity Correct Answer: Retain- Accepting some or all of the potential loss exposure for the risks [Show More]

Last updated: 3 years ago

Preview 1 out of 13 pages

Buy Now

Instant download

We Accept: