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12 Cards in this Set
- Front
- Back
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The growing tendency of individuals to file a lawsuits and to claim tremendous amounts for alleged damages is known as |
Legal hazard |
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Adverse selection is a concept that is described as |
Risks with higher probability of loss seeking insurance more often than other risks |
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Which of the following is NOT A characteristic of pure risk? |
The loss must be catastrophic |
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An individual was involved in a head on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in the car ever again. Which method of risk management does this describe? |
Avoidance |
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When an individual purchases insurance, what risk management technique is he or she practicing? |
Transfer |
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To achieve the profitable distribution of exposures, |
Preferred risks and poor risks, with average risks in the middle |
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Which of the following is the most common way to transfer risk? |
Purchase insurance |
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What is the term for the fee a policy owner must pay to the insurance company to maintain coverage? |
Premium |
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If an applicant for a life Insurance policy in person to be insured by the policy are two different people, the underwriter would be concerned about |
Whether an insurable interest exists between the individuals |
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Which of the following is NOT a goal of risk retention? |
To minimize the insured’s level of liability in the event of loss |
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Following a career change, and insured is no longer required to perform any many physical activities, so he has implemented a program where he walks and jog for 45 minutes each morning. The insured has also illuminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe? |
Reduction |
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A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard? |
Morale |
