Basic Insurance Concepts and Priciples - Chapter Quiz

All of the following are examples of risk retention EXCEPT?

Premiums

Which of the following would NOT be eligible for coverage under key person insurnace?

The owner of a shop.

Risk in insurance terminology refers to?

The uncertanty of financial loss.

Which method of dealing with risk is applied when a person purchases insurance?

Transfer

The insurer must be able to rely on the statements in the application, and the insured must be avble to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is reffered to as?

Utmost good faith

When must insurable interest exist in life insurance?

Date of application.

Which of the following is NOT a type of hazard?

Exposure

Conditions that increases the chances of an insured loss occurring are referred to as?

Hazards

Which provision states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

Indemnity

Which of the following methods of calculating the amount of life insurance needed takes into account the insured's salary and years until retirement.

The human life value approach