GENERAL INSURANCE PRINCIPALS clase 1 LOST AND RISK

All the following are elements of an insurable risk EXCEPT.

Losses resulting from the insured peril must be potentially catastrophic. Because, To be insurable, a loss must be definable, measurable, uncertain, and not catastrophic.

From an insurance perspective, all the following statements regarding risk and loss are correct EXCEPT:

Only speculative risk is insurable. Because Only pure risks (representing the chance of loss but not gain) are insurable. Speculative risks, which involve the chance of gain as well as loss, are not insurable.

The tendency of a person diagnosed with a serious illness to try to buy life or health insurance is known as:

adverse selection Because The tendency of people to buy and keep insurance if they perceive themselves to be at a greater risk of a loss is a moral hazard called adverse selection.

Example During their working years, coal miners are generally exposed to a greater risk of death, accidents, and serious illness than insurance agents and brokers. Thus, life and health insurers assign more exposure units to coal miners than they do to insurance producers. All other factors being equal, this translates into a higher premium for coal miners than insurance producers.

Ejemplo Durante sus años de trabajo, los mineros del carbón generalmente están expuestos a un mayor riesgo de muerte, accidentes y enfermedades graves que los agentes y corredores de seguros. Por lo tanto, las aseguradoras de vida y salud asignan más unidades de exposición a los mineros del carbón que a los productores de seguros. Todos los demás factores son iguales, esto se traduce en una prima más alta para los mineros del carbón que los productores de seguros.

For Your Review Risk means the "chance of loss." Only pure risk is insurable. A loss is an unplanned reduction in economic value. A peril is the cause of a loss, which insurance protects against. A hazard is a condition that increases the chance of a peril occurring or increases the severity of a loss. Risk transfer—transferring the loss to a third party—is the basis for most forms of insurance today. Through the underwriting process, insurance company underwriters determine if the risk proposed for insurance should be accepted or rejected. The law of large numbers is the mathematical principle of probability that insurance is based on. Mortality tables are used in determining life insurance premiums, while morbidity tables are the basis of health insurance premiums. 3:04 Next Lesson

Para su revisión Riesgo significa la "posibilidad de pérdida". Solo el riesgo puro es asegurable. Una pérdida es una reducción no planificada del valor económico. Un peligro es la causa de una pérdida, contra la cual el seguro protege. Un peligro es una condición que aumenta la posibilidad de que ocurra un peligro o aumenta la gravedad de una pérdida. La transferencia de riesgos (transferir la pérdida a un tercero) es la base de la mayoría de las formas de seguro actuales. A través del proceso de suscripción, los aseguradores de las compañías de seguros determinan si el riesgo propuesto para el seguro debe ser aceptado o rechazado. La ley de los grandes números es el principio matemático de probabilidad en el que se basa el seguro. Las tablas de mortalidad se utilizan para determinar las primas de los seguros de vida, mientras que las tablas de morbilidad son la base de las primas de los seguros de salud. 3:04 Siguiente lección Volver a hacer el cuestionario Volver arriba Copyright 2020 by WebCE, Inc. All rights reserved. All content is copyrighted by WebCE, Inc., International Risk Management Institute, Inc. (IRMI), or is used under license. No content may be reproduced, retransmitted, distributed, sold, published, broadcast or circulated by anyone, including but not limited to individuals in the same company or organization, without the written permission of WebCE, Inc. You are permitted to use this content only for your personal, noncommercial purposes. (Purchase of a prelicensing education course includes a license for one person to use the course for 90 days from the date of shipment or activation.) You may not distribute course materials to individuals who have not purchased the course unless WebCE, Inc. has given you written permission to do so. You may not make the course materials available to others over a computer network, Intranet, Internet, or any other storage, transmittal, or retrieval system. Although we strive to ensure that the course content is accurate, you use it with the understanding that the authors and publishers are not engaged in giving legal, accounting, tax, financial or other professional advice.

Key Point The risk management technique of risk transfer is the basis for most insurance today.

Punto clave La técnica de gestión de riesgos de transferencia de riesgos es la base de la mayoría de los seguros en la actualidad.

Key Point Risk means the chance of loss. Loss is an unplanned reduction in economic value. Only pure risk (not speculative risk) is insurable.

Punto clave Riesgo significa la posibilidad de pérdida . La pérdida es una reducción no planificada en el valor económico . Solo el riesgo puro (no el riesgo especulativo) es asegurable.

As a risk management technique, which of the following best illustrates risk transfer?

Robert purchases life insurance because he figures doing so is far less expensive than trying to save all the money his survivors would need upon his death. Because Purchasing insurance is a risk transfer technique because it transfers to a third party (the insurer) the financial risk associated with premature death.

All the following statements regarding perils and hazards are correct EXCEPT:

Smoking cigarettes is an example of a peril. Because A peril is the event that insurance protects against. Smoking is a moral hazard that increases the chance of encountering the perils of death and illness.

To be considered insurable, a risk (and the potential loss it represents) must meet which one of the following requirements?

The loss must be definable as to time, cause, and location. Because, To be insurable, a loss must be definable, measurable, uncertain, and not catastrophic.

Lucy is applying for an individual health insurance policy and discloses that she is diabetic, which is considered which of the following?

a physical hazard Because A physical hazard is a physical characteristic, such as diabetes, that increases the chance of loss.

What is the mathematical concept of probability that helps insurers estimate the statistical likelihood of mortality or morbidity losses at any given age?

law of large numbers Because, Based on the idea that predictions become more accurate as the number of exposures increase, the law of large numbers is the mathematical principle of probability that insurance is based on.

A person who refuses to engage is risky activities like rock climbing for fear of injury or death is demonstrating which risk management technique?

risk avoidance Because Refusing to engage in a risky activity is a form of risk avoidance.

Which of the following is an insurable risk?

the possibility of becoming disabled and unable to earn an income Because,

From an insurance perspective, underwriting is best defined as:

the process of determining if an applicant is an insurable risk Because, Through the underwriting process, insurance company underwriters determine if the risk proposed for insurance should be accepted or rejected. That is, they determine if the applicant represents an insurable risk.

All of the following are insurable risks EXCEPT:

the risk of one's home value decreasing due to a drop in market prices Because Only pure risks (representing the chance of loss but not gain) are insurable. Speculative risks are not. Premature death, illness, and disability are insurable risks.

From an insurance risk perspective, an applicant engaging in adverse selection is demonstrating which type of hazard?

moral hazard Because, A conscious willingness to defraud insurers, perhaps by lying on an application or claim form, is a moral hazard, as is adverse selection, which is the tendency of someone at a high risk of loss to try and buy insurance.

Buying life or health insurance is an example of which risk management technique?

risk transfer Because Risk transfer-transferring the loss to a third party-is the basis for most forms of insurance today. Through risk transfer an individual or business transfers the risk of loss to an insurance company in exchange for paying a premium.

From an insurance perspective, the term "loss exposure" means:

the extent to which an insurer is subject to a possible loss Because Also called loss exposure, exposure is the state of being subject to a possible loss. The extent of loss exposure facing an insurer has a direct bearing on the premium it charges.