Question: In Insurance, a hazard is a…

Answer: A hazard is any condition or exposure that increases the possibility of loss occurring. Hazards are generally classified as either physical, moral, or morale.

Question: Which of the following is not a government insurance program? Medicare - Medicaid - Federal Deposit Insurance Corp - Social Security

Answer: Federal Deposit Insurance Corporation

Question: Insurers who meet the state’s financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer.

Answer: Authorized

Question: Events or conditions that increase the chances of an insured loss occurring are referred to as…

Answer: Hazards. Hazards are conditions or situations that increase the probability of an insured loss occurring.

Question: What is an aleatory contract?

Answer: In an aleatory contract, unequal amounts are exchanged between payments and benefits. In this instance, the insured receives a large benefit for a small price.

Question: Pure Risk VS Speculative Risk?

Answer:

Question: Which of the following must an insurer obtain in order to transact insurance within a given state?

A Producer’s certificate

B Business entity license

C Insurer’s license

D Certificate of authority

Answer: D. Certificate of authority

Question: An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

A Representation

B Adhesion

C Consideration

D Good faith

Answer: The binding force in any contract is consideration. Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss.

Question: The causes of loss insured against in an insurance policy are known as

A Losses

B Risks

C Hazards

D Perils

Answer: Perils are the causes of loss insured against in an insurance policy.

Question: The authority granted to an agent through the agent’s contract is referred to as

A Express authority.

B Apparent authority.

C Implied authority.

D Absolute authority.

Answer: Express powers are written into the contract between the insurer and the agent.