Primerica Pre-licensing Course with complete verified solutions 2025
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Course
HBSS 501
Institution
HBSS 501
agent
legal representative of an insurance company; the classification of producer usually includes agents and brokers; agents are the agents of the insurer
insured
the person covered by the insurance policy; this person may or may not be the policyowner
broker
an insurance agent n...
Primerica Pre-licensing Course
with complete verified
solutions 2025
agent - answer legal representative of an insurance company; the
classification of producer usually includes agents and brokers;
agents are the agents of the insurer
insured - answer the person covered by the insurance policy; this
person may or may not be the policyowner
broker - answer an insurance agent not appointed by an insurer
and is deemed to represent the client
insurance policy - answer a contract between a policyowner
(and/or insured) and an insurance company which agrees to pay the
insured or the beneficiary for loss caused by specific events
insurer - answer the company who issues an insurance policy
policyowner - answer the person entitled to exercise the rights and
privileges in the policy
premium - answer the money paid to the insurance company for
the insurance policy
reciprocity - answer a mutual interchange of rights and priveleges
risk - answer the uncertainty or chance of a loss occurring
,pure risk - answer situations that can only result in a loss or no
change; no opportunity for financial gain
speculative risk - answer involves the opportunity for either loss or
gain; not insurable
hazard - answer condition or situation that increases the
probability of an insured loss occurring
physical hazard - answer individual characteristic that increases
the chance of a cause of loss; exists because of a physical condition,
past medical history, or condition at birth (i.e. blindness)
moral hazard - answer tendency towards increased risk; involves
evaluating the character and reputation of the proposed insured;
these applicants may lie on an application for insurance, or have
submitted fraudulent claims in the past
morale hazard - answer similar to moral hazards; arise from a state
of mind that causes indifference to loss, such as carelessness;
actions taken without forethought may cause physical injuries
peril - answer the cause of the loss insured against in an insurance
policy
life insurance - answer insures against the financial loss caused by
the premature death of the insured
health insurance - answer insures against the medical expenses
and/or loss of income caused by the insured's sickness or accidental
injury
,property insurance - answer insures against the loss of physical
property or the loss of its income-producing abilities
casualty insurance - answer insures against the loss and/or
damage of property and resulting liabilities
loss - answer the reduction, decrease, or disappearance of value of
the person or property insured in a policy, caused by a named peril;
insurance provides a means to transfer loss
sharing risk - answer a method of dealing with risk for a group of
individual persons or businesses with the same or similar exposure
to loss to share the losses that occur within that group; a reciprocal
insurance exchange is a risk-sharing arrangement
transfer risk - answer the loss is borne by another party; will not
eliminate the risk of death or illness, but relieves the insured of the
financial losses these risks bring
avoidance of risk - answer eliminating exposure to a loss
retention - answer also known as self-insurance when the insured
accepts the responsibility for the loss before the insurance company
pays; planned assumption of risk by an insured through the use of
deductibles, copayments, or self-insurance
reduction - answer includes actions such as installing smoke
detectors in our homes, having an annual physical to detect health
problems early, or perhaps making a change in our lifestyles
due to chance - answer a loss that is outside the insured's control
, definite and measurable - answer a loss that is specific as to the
cause, time, place, and amount; an insurer must be able to
determine how much the benefit will be and when it becomes
payable
statistically predictable - answer insurers must be able to estimate
the average frequency and severity of future losses and set
appropriate premium rates
not catastrophic - answer insurers need to be reasonably certain
their losses will not exceed specific limits; this is why insurance
policies will typically exclude coverage for loss caused by war or
nuclear events
randomly selected and large loss exposure - answer there must be
a sufficiently large pool of the insured that represents a random
selection of risks in terms of age, gender, occupation, health and
economic status, and geographic location
Stock companies - answer owned by the stockholders who provide
the capital necessary to establish and operate the insurance
company and who share in any profits or losses
nonparticipating policies - answer in which policyowners do not
share in profits or losses
mutual company - answer owned by the policy owners and issue
participating policies (policyowners are entitled to dividends, which,
in the case of mutual companies, are a return of excess premiums
and are therefore nontaxable)
Certificate of authority - answer business owners must be granted
a license from the state department of insurance and meet any
financial (capital and surplus) requirements set by the state
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