PA Life, Accident, And Health Insurance Exam 183 Questions And Answers
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Terms in this set
183
Insurance
defined as the transfer of PURE risk to the insurance company in consideration for a premium.
The chance of loss without any chance of gain is called
pure risk
Speculative risk
has the possibility for gain or loss and is not insurable.
Risk is defined as the
chance of loss.
A condition that could result in a loss is known as an
exposure
A hazard is something that increases
the chance of loss.
The presence of a physical hazard
increases the chance of a loss occurring.
A peril is
defined as a cause of loss, such as fire.
To be insurable,
losses must be calculable.
The law of large numbers
allows insurers to predict claims more accurately.