On The Air General Course
License Coach Cram Course Instructor: Bri3on Whitbeck
Announcements/Reminders • Class starts at 6PM Central / 7PM Eastern, every Tuesday, Wednesday, and Thursday. • If your copy of the slides don’t match the class, give me your e-‐mail address in the chat box, and I will send you updated copies. • If you have trouble with video or audio, try refreshing your screen. • SomeImes the video stream doesn’t work well with Google Chrome, but there are no problems with Internet Explorer, Safari, or Firefox.
Study Tips • Review STATE SUPPLEMENTS in general, life, and health secIon. • Go over DIFFICULT chapters and modules. • Retake as many QUIZZES and EXAMS as possible. • Look over the different LISTS of terms, provisions, and other informaIon in the modules. • Don’t worry about MEMORIZING, focus on LEARNING.
Test Taking Tips
• Answer ALL the quesIons. • READ the quesIon thoroughly and watch out for key words (Except, All of the Above) • BE Conscious of your TIME. • Before you begin, write down on the paper given any acronyms you have memorized. • Focus, Visualize, and Celebrate!
The Night Before Your Exam • Relax, give your brain a rest. • Get a good night’s sleep. • Know when and where to go!
Schedule Your Exam • Is your exam scheduled? • Needs to be set within 2 weeks!
• “Do it” tomorrow!
General Insurance
In health insurance, the rate at which accident, sickness or disability will occur.
Morbidity
What Is Risk Pooling or Loss Sharing? Spreading a risk over a large group of people, by subsItuIng a small cost for a large unknown risk. (economic risk of dying)
What do we call the predicIng of the approximate number of deaths or the likelihood of disability that will occur among a certain group during a certain period?
Law of Large Numbers
The unintenIonal decrease in value of an asset due to a peril.
Loss
What is the definiIon of RISK? Uncertainty regarding Financial Loss
What is SpeculaIve Risk? Answer: SpeculaIve Risk involves both the chance of Loss or Gain
QuesIon: What is Pure Risk? Pure Risk has only the chance of loss. (injury, illness, and death) Only Pure Risks are insurable
6 elements of Insurable Risk
(Remember: Only pure risks are insurable)
• LOSS MUST BE due to chance • LOSS MUST BE definite and measurable
6 elements of insurable risk • LOSS Exposure to be insured MUST BE large • LOSS exposure MUST BE randomly selected
6 elements of insurable risk • LOSS MUST BE predictable • LOSS CANNOT be CATASTROPHIC
The condiIon of being prone to loss due to a hazard or uncertain event.
Exposure
The item insured in the policy.
Exposure Unit
What is a Peril? The immediate specific event that causes a loss. What gives rise to a Peril?
A Hazard.
3 basic types of Hazards 1. Physical – blind, family traits 2. Moral – stealing, smoking, habits that increase the probability of loss 3. MoralE – jay walking, careless, the ajtudE state of mind (It’s insured so why worry, whatever!)
What kind of hazard is it when an employee takes merchandise without paying for it?
Moral
What kind of hazard is it when you are late for an appointment?
Morale “Whatever” ajtude.
The applicaIon of laws, regulaIons, and legal court rulings which increase the chance or amount of loss.
Legal Hazard
The total amount the insurer will pay for an insured risk.
Limit of Liability
Defined as the possibility of a loss occurring.
Risk
4 opIons to handle Risk
ARRT A -‐ Avoidance (don’t fly) R – ReducIon (smoke alarm) R – RetenIon (self insured) T – Transference (buys insurance)
QuesIon: What is a company called that helps an insurance company transfer a porIon of its risk? Answer: Reinsurer
The enIty that assumes the insured’s risk. Synonymous with insurance company.
Insurer (Insurance Company)
Insurance which offers coverage to people through the individual market.
Private Insurers
A Company doing business in the state in which it is incorporated. DomesIc A Company licensed to do business in a state in which it is not incorporated. Foreign
What does Alien Insurer mean?
Companies incorporated in a country outside the US.
Yes or No If a company is licensed in the state where it is incorporated, does it need to be licensed in the states where it does business? YES
MulI-‐line insurance companies write more than one line of insurance.
The insurer must have a cerIficate of authority for each lines of insurance in which they transact.
People who sell, solicit and negoIate insurance. It is an all-‐encompassing term which includes agents and brokers.
Producers
Who regulates the insurance industry?
Federal Government Or State
Stock Insurance Companies
• Purpose is to make a profit for the
stockholder .
• Structured the same as any corporaIon. • Most stock companies pay no dividends to policyholders.
Mutual Insurance Companies Owned By? Policyholders
Issue? ParIcipaIng or Non ParIcipaIng Policies
What is paid to the policyholders? Dividends
Dividends QuesIon? What is a dividend paid to policyholders? Answer: Refund of Overpayment (ParIal overpayment being returned to policyowner)
Name 3 examples of RaIng Services that demonstrate the financial strength and stability of insurance companies: 1. AM Best 2. Standard & Poor’s 3. Moody and Fitch
Home Service is also known as Debit Insurer/Industrial Insurance (small face amounts, cash accepted as premiums, more expensive)
DefiniIon: Illegally converIng another person’s funds for your own use.
Embezzlement $$
An intenIonal misrepresentaIon or concealment of material fact made by one party in order to cheat another party out of something that has economic value.
Fraud
Insurance Contract
Name and Describe the elements needed for contracts to be legally valid and binding?
• L – Legal Purpose • O -‐ Offer • C – ConsideraIon-‐$ • C – Competent ParIes • A -‐ Acceptance
Name 3 groups of people who are Not competent to enter a legal contract: • Minors • Mentally Impaired • Under the influence of alcohol or drugs
A medical condiIon, whether physical or mental, resulIng from accident or sickness prevenIng a person from being able to work.
Disability
Policyowner This is the person who has all the ownership rights under the policy, pays premiums, and accepts the policy when delivered-‐ synonymous with policyholder.
The rights and responsibiliIes of all parIes of the contract.
CondiFons
Aleatory Example= $50 prem./ $100,000 Death Benefit
What is it called when the values exchanged are not equal?
When only one party prepares the contact it is called:
Adhesion Basically policyowner is “stuck” with the contract as it is.
I ndemnity is the type of contract that only reimburses or pays the amount of loss.
What is called when informaIon is guaranteed to be true?
Warranty
What is it called when informaIon is believed to be true?
RepresentaFon (statements made by client on applicaIon in relaIon to their health)
What is it called when both parIes are trusted to reveal relevant facts?
Utmost Good Faith
What kind of contract pays a stated amount in the event of loss?
Valued (Life insurance face amount)
Legal Contract Concealment is when an applicant fails to disclose known material facts.
This form is filled out by the agent and includes informaIon about the proposed insured’s health history, occupaIon, and background.
ApplicaFon
QuesIon: Who must sign an applicaIon? MulIple Choice: • Insured • Policyowner • Agent All 3 must sign!
They select, classify, and rate risks.
Underwriters
The process that insurers use to select, classify and rate risks so that they accurately reflect the amount of risk undertaken.
UnderwriIng
UnderwriIng An agent is considered a field underwriter.
What type of UnderwriIng Risk is this?
Preferred
UnderwriIng classificaIon in which individuals are in average physical condiIon with average lifestyles and habits for people of their respecIve sex and age group.
Standard
This risk is also called a rated risk because they pose a higher risk to the insurer than standard risks.
Substandard
UnderwriIng classificaIon in which the risk is uninsurable because the applicant poses too great a risk for the insurer to provide coverage.
Declined
What are the 5 other reports an underwriter could use in determining an applicants insurability?
• Medical Report • MIB • Special QuesIonnaire • InspecIon Report • Credit Report
Who completes the medical report?
Physician Or Paramedic (Either one)
What is the purpose of the MIB?
Hold down insurance costs and prevent fraud
QuesIon: What is adverse selecIon?
Less than favorable insurance risks (such as people in poor health) to seek or conInue insurance to a greater extent than people in good health.
QuesIon: The buyer’s guide and policy summary must be give to the insured prior to or at Policy delivery.
The insurer’s costs which include: acquisiIon costs, commissions, salaries, other administraIve costs, and claims payments.
Expenses
The person who is covered under the policy
Insured (Ed is the person)
The insured’s noIficaIon that a payment is requested for a covered loss.
Claim
Group Insurance
Method used to establish premium rates for group health plan members, based on the claims experience of the group.
Experience RaIng
QuesIon: What is a policy called that is issued for Group Insurance? Answer:
Master Contract
Group Insurance • The policyowner (employer/ associaIon) receives the master contract. • Employees/Members receive a cerIficate of insurance.
QuesIon: How many employees must parIcipate in a non-‐contributory plan?
Answer: 100% of eligible employees must parIcipate -‐ they all must be insured. (75% for contributory plans)
Announcements/Reminders • Class starts at 6PM Central / 7PM Eastern, every Tuesday, Wednesday, and Thursday. • If your copy of the slides don’t match the class, give me your e-‐mail address in the chat box, and I will send you updated copies. • If you have trouble with video or audio, try refreshing your screen. • SomeImes the video stream doesn’t work well with Google Chrome, but there are no problems with Internet Explorer, Safari, or Firefox.
Study Tips • Review STATE SUPPLEMENTS in general, life, and health secIon. • Go over DIFFICULT chapters and modules. • Retake as many QUIZZES and EXAMS as possible. • Look over the different LISTS of terms, provisions, and other informaIon in the modules. • Don’t worry about MEMORIZING, focus on LEARNING.
Test Taking Tips
• Answer ALL the quesIons. • READ the quesIon thoroughly and watch out for key words (Except, All of the Above) • BE Conscious of your TIME. • Before you begin, write down on the paper given any acronyms you have memorized. • Focus, Visualize, and Celebrate!
The Night Before Your Exam • Relax, give your brain a rest. • Get a good night’s sleep. • Know when and where to go!
Schedule Your Exam • Is your exam scheduled? • Needs to be set within 2 weeks!
• “Do it” tomorrow!
General Insurance
In health insurance, the rate at which accident, sickness or disability will occur.
Morbidity
What Is Risk Pooling or Loss Sharing? Spreading a risk over a large group of people, by subsItuIng a small cost for a large unknown risk. (economic risk of dying)
What do we call the predicIng of the approximate number of deaths or the likelihood of disability that will occur among a certain group during a certain period?
Law of Large Numbers
The unintenIonal decrease in value of an asset due to a peril.
Loss
What is the definiIon of RISK? Uncertainty regarding Financial Loss
What is SpeculaIve Risk? Answer: SpeculaIve Risk involves both the chance of Loss or Gain
QuesIon: What is Pure Risk? Pure Risk has only the chance of loss. (injury, illness, and death) Only Pure Risks are insurable
6 elements of Insurable Risk
(Remember: Only pure risks are insurable)
• LOSS MUST BE due to chance • LOSS MUST BE definite and measurable
6 elements of insurable risk • LOSS Exposure to be insured MUST BE large • LOSS exposure MUST BE randomly selected
6 elements of insurable risk • LOSS MUST BE predictable • LOSS CANNOT be CATASTROPHIC
The condiIon of being prone to loss due to a hazard or uncertain event.
Exposure
The item insured in the policy.
Exposure Unit
What is a Peril? The immediate specific event that causes a loss. What gives rise to a Peril?
A Hazard.
3 basic types of Hazards 1. Physical – blind, family traits 2. Moral – stealing, smoking, habits that increase the probability of loss 3. MoralE – jay walking, careless, the ajtudE state of mind (It’s insured so why worry, whatever!)
What kind of hazard is it when an employee takes merchandise without paying for it?
Moral
What kind of hazard is it when you are late for an appointment?
Morale “Whatever” ajtude.
The applicaIon of laws, regulaIons, and legal court rulings which increase the chance or amount of loss.
Legal Hazard
The total amount the insurer will pay for an insured risk.
Limit of Liability
Defined as the possibility of a loss occurring.
Risk
4 opIons to handle Risk
ARRT A -‐ Avoidance (don’t fly) R – ReducIon (smoke alarm) R – RetenIon (self insured) T – Transference (buys insurance)
QuesIon: What is a company called that helps an insurance company transfer a porIon of its risk? Answer: Reinsurer
The enIty that assumes the insured’s risk. Synonymous with insurance company.
Insurer (Insurance Company)
Insurance which offers coverage to people through the individual market.
Private Insurers
A Company doing business in the state in which it is incorporated. DomesIc A Company licensed to do business in a state in which it is not incorporated. Foreign
What does Alien Insurer mean?
Companies incorporated in a country outside the US.
Yes or No If a company is licensed in the state where it is incorporated, does it need to be licensed in the states where it does business? YES
MulI-‐line insurance companies write more than one line of insurance.
The insurer must have a cerIficate of authority for each lines of insurance in which they transact.
People who sell, solicit and negoIate insurance. It is an all-‐encompassing term which includes agents and brokers.
Producers
Who regulates the insurance industry?
Federal Government Or State
Stock Insurance Companies
• Purpose is to make a profit for the
stockholder .
• Structured the same as any corporaIon. • Most stock companies pay no dividends to policyholders.
Mutual Insurance Companies Owned By? Policyholders
Issue? ParIcipaIng or Non ParIcipaIng Policies
What is paid to the policyholders? Dividends
Dividends QuesIon? What is a dividend paid to policyholders? Answer: Refund of Overpayment (ParIal overpayment being returned to policyowner)
Name 3 examples of RaIng Services that demonstrate the financial strength and stability of insurance companies: 1. AM Best 2. Standard & Poor’s 3. Moody and Fitch
Home Service is also known as Debit Insurer/Industrial Insurance (small face amounts, cash accepted as premiums, more expensive)
DefiniIon: Illegally converIng another person’s funds for your own use.
Embezzlement $$
An intenIonal misrepresentaIon or concealment of material fact made by one party in order to cheat another party out of something that has economic value.
Fraud
Insurance Contract
Name and Describe the elements needed for contracts to be legally valid and binding?
• L – Legal Purpose • O -‐ Offer • C – ConsideraIon-‐$ • C – Competent ParIes • A -‐ Acceptance
Name 3 groups of people who are Not competent to enter a legal contract: • Minors • Mentally Impaired • Under the influence of alcohol or drugs
A medical condiIon, whether physical or mental, resulIng from accident or sickness prevenIng a person from being able to work.
Disability
Policyowner This is the person who has all the ownership rights under the policy, pays premiums, and accepts the policy when delivered-‐ synonymous with policyholder.
The rights and responsibiliIes of all parIes of the contract.
CondiFons
Aleatory Example= $50 prem./ $100,000 Death Benefit
What is it called when the values exchanged are not equal?
When only one party prepares the contact it is called:
Adhesion Basically policyowner is “stuck” with the contract as it is.
I ndemnity is the type of contract that only reimburses or pays the amount of loss.
What is called when informaIon is guaranteed to be true?
Warranty
What is it called when informaIon is believed to be true?
RepresentaFon (statements made by client on applicaIon in relaIon to their health)
What is it called when both parIes are trusted to reveal relevant facts?
Utmost Good Faith
What kind of contract pays a stated amount in the event of loss?
Valued (Life insurance face amount)
Legal Contract Concealment is when an applicant fails to disclose known material facts.
This form is filled out by the agent and includes informaIon about the proposed insured’s health history, occupaIon, and background.
ApplicaFon
QuesIon: Who must sign an applicaIon? MulIple Choice: • Insured • Policyowner • Agent All 3 must sign!
They select, classify, and rate risks.
Underwriters
The process that insurers use to select, classify and rate risks so that they accurately reflect the amount of risk undertaken.
UnderwriIng
UnderwriIng An agent is considered a field underwriter.
What type of UnderwriIng Risk is this?
Preferred
UnderwriIng classificaIon in which individuals are in average physical condiIon with average lifestyles and habits for people of their respecIve sex and age group.
Standard
This risk is also called a rated risk because they pose a higher risk to the insurer than standard risks.
Substandard
UnderwriIng classificaIon in which the risk is uninsurable because the applicant poses too great a risk for the insurer to provide coverage.
Declined
What are the 5 other reports an underwriter could use in determining an applicants insurability?
• Medical Report • MIB • Special QuesIonnaire • InspecIon Report • Credit Report
Who completes the medical report?
Physician Or Paramedic (Either one)
What is the purpose of the MIB?
Hold down insurance costs and prevent fraud
QuesIon: What is adverse selecIon?
Less than favorable insurance risks (such as people in poor health) to seek or conInue insurance to a greater extent than people in good health.
QuesIon: The buyer’s guide and policy summary must be give to the insured prior to or at Policy delivery.
The insurer’s costs which include: acquisiIon costs, commissions, salaries, other administraIve costs, and claims payments.
Expenses
The person who is covered under the policy
Insured (Ed is the person)
The insured’s noIficaIon that a payment is requested for a covered loss.
Claim
Group Insurance
Method used to establish premium rates for group health plan members, based on the claims experience of the group.
Experience RaIng
QuesIon: What is a policy called that is issued for Group Insurance? Answer:
Master Contract
Group Insurance • The policyowner (employer/ associaIon) receives the master contract. • Employees/Members receive a cerIficate of insurance.
QuesIon: How many employees must parIcipate in a non-‐contributory plan?
Answer: 100% of eligible employees must parIcipate -‐ they all must be insured. (75% for contributory plans)
