FPQP ACTUAL EXAM ACTUAL QUESTIONS WITH

FPQP ACTUAL EXAM ACTUAL / QUESTIONS WITH

ANSWERS GUARANTEED PASS!!

4 Types of Pure Risk:

1. personal risk: the risk that we might become unable to earn

an income

2. property risk: the possibility that we may lose some of our

property

3. liability risk: the chance that we could accidentally cause a

loss to another person

4. failure of others: we may suffer a loss because of another

person's action or inaction

A peril is a cause of loss

A hazard is something that increases the chance of loss

moral hazard:

people being dishonest

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morale hazard:

corps/institutions are careless and have a poor attitude

• elements for an insurable risk
• the law of large numbers must apply
• the loss must be accidental
• the loss must be definite and measurable
• the loss must not be catastrophic to the insurance company

the insurance contract:

• insurable interest
• the person applying must have a personal financial loss if

the covered event occurs

• unilateral v bilateral
• unilateral, no commitment, bilateral, commitment from both
• indemnity
• made whole, not profit
• riders and endorsements

the 4 basic sections of an insurance policy: 2 / 4

declarations insuring agreement exclusions conditions

2 Types of Insurance Companies:

Mutual and Stock

Mutual Insurance Companies Owned by policyholders/participating policies (policyholders receive profit/dividends)

Stock Insurance Companies Owned by stockholders/usually nonparticipating policies (stockholders receive dividends)

Insurance Agents:

• legal reps of the company, allegiance to the company, can

bind the company to coverage, not accountable for legal misrepresentation

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Insurance Brokers

• represent the buyer, allegiance to client, not employees of

the company, cannot bind an insurance company, accountability always present for legal misrepresentation

Homeowners Coverage, Section I and II

a: dwelling

b: other structures

c: personal property

d: loss of use

e: personal liability

f: medical payments to others

rule of thumb for home insurance 80% of the value

Automobile insurance has 4 areas of coverage:

liability, medical payments, physical damage, and uninsured motorists

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