LOMA 281 Study Guide with Complete
Solutions
Pure risk - Answer️️ -Risks that involve either a loss or no loss
Speculative risk - Answer️️ -Risk that can result in a loss, gain or no change
Insurance - Answer️️ -A method for transferring risk from an individual to an insurance
comp...
Medical risk factor - Answer✔️✔️-A physical or psychological characteristic that may
increase the likelihood of loss
Moral hazard - Answer✔️✔️-A characteristic that exists when the reputation, financial
position, or criminal record of an application or a proposed insured indicates that the
person may act dishonestly in the insurance transaction
Antiselection - Answer✔️✔️-The tendency of individuals who believe they have a greater
than average likelihood of loss to seek insurance protection to a greater extent than do
other individuals
Risk class - Answer✔️✔️-A grouping of insureds who represent a similar level of risk to
the insurer
Preferred Risks - Answer✔️✔️-A proposed insured who presents a significantly lower
than average likelihood of loss
Substandard risk - Answer✔️✔️-A proposed insured who has a significantly greater than
average likelihood of loss but is still found to be insurable
Substandard premium rates - Answer✔️✔️-A higher than standard premium rate charged
insureds who are classified as substandard rates
Preferred premium rates - Answer✔️✔️-A lower than standard premium rate charged
insureds who are classified as preferred risks
Declined risks - Answer✔️✔️-A proposed insured who is considered to present a risk that
is too great for the insurer to cover
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