Florida Life and Health Insurance Exam

Florida Life and Health Insurance Exam
1. The transfer of risk from one party to anotherthrough a legal contract.
Answer: Concept of insurance
2. The larger the number of risks insured in the same risk pool; the morepredictable losses
become.
Answer: Law of Large Numbers
3. An immediate, specific event that causes a loss.
Answer: Peril
4. An unintended,unforeseen reduction,or destruction offinancial or economic value.
Answer: Loss
5. Creates an increased possibility that a peril (a cause of a loss) will actuallyoccur.
Answer: Hazard
6. Is any event that causes a loss.
Answer: Occurrence
7. Risk is defined as the potential or uncertainty for loss.
Answer: Risk
8. A situation in which either profit orlossis possible,not insured.
Answer: Speculativerisk
9. Issues very small face amounts, such as $1,000 or $2,000. Premiums arepaid weekly and
collected by debit agents. They were designed for burial coverage.
Answer: Industrial life insurance
10. Life insurance of commercial companies not issued on the weekly premium basis. It is
made up of several types of individual life insurance, such as temporary (term), permanent
(whole).
Answer: Ordinary life insurance
11. Insurance written for members of a group,such as a place of employment,association, or a
union. Coverage is provided to the members of that group under one master contract.The
group is underwritten as a whole, not on eachindividual member. One of the benefits of group
life coverage is usually thereis no evidence of insurability required.
Answer: Group life insurance
12. Life insurance that pays a death benefit if the policyholder dies within a specific time
period but has no remaining value at the end of this time.