Life & Health: Chapter 1 Quiz

The correct answer emphasizes not using the flashcards in a way that turns them into quizzes, as they are intended for a different purpose.

A domestic insurance company is one that is based in and operates within a specific state or country, in this case Indiana. Foreign insurance companies are based outside of the country, national companies operate throughout a specific country, and international companies operate in multiple countries.

In Puerto Rico, an insurance company from another country or jurisdiction is classified as foreign, not domestic or local.

The correct answer 'Alien' is a slang term often used to refer to an insurance company from Canada, as they are foreign entities in the insurance market.

Insurance involves transferring the risk from an individual or entity to an insurance company in exchange for payment of a premium. This helps in managing and reducing the financial impact of potential losses.

Deductibles are a form of risk retention in which a portion of the financial responsibility is retained by the insured individual or entity.

Quitting smoking is an example of reducing risk as it involves eliminating a harmful behavior that could lead to various health issues.

Gambling involves uncertain outcomes based on chance rather than systematic, operational, or market-related factors.

Gambling involves taking a chance with potential consequences, while driving a car, sleeping, and eating vegetables are not typically associated with significant risks that are intentionally created.

Insurance is designed to mitigate the financial impact of inherent risks, which are those risks that are unpredictable and beyond the control of the insured. Speculative risks involve the possibility of both gain and loss, making them unsuitable for insurance coverage.

A participating company can be organized as a mutual company where policyholders have ownership and voting rights.

A non-participating company is a type of stock company where shareholders do not have the ability to participate in the management or decisions of the company.

Mutual insurance companies are owned by policyholders and may distribute part of their profits in the form of dividends to policyowners.

Dividends are a distribution of a portion of a company's earnings to its shareholders, typically in the form of cash or additional stock.

A stock company is a type of business entity that is operated for the benefit of its shareholders, who own shares of the company's stock. This means that the shareholders are entitled to dividends and other benefits from the company's profits.

Reinsurance is a method through which insurance companies can protect themselves against the risk of large losses by transferring some part of their risk to other insurers through reinsurance agreements. Unlike underwriting, which involves assessing and accepting risks from policyholders, reinsurance specifically deals with transferring risk to another insurer. Premiums are the payments made by policyholders to the insurance company for coverage, and loss ratio is the percentage of claims paid out by an insurance company relative to the premiums received.

The correct URL to access the quiz for Chapter 1 is the one provided in the answer which is 'https://tinyurl.com/y6wz52rd'. The other options are incorrect and do not lead to the quiz website.

Pure risk refers to situations where there is only a chance to experience loss, with no possibility of gain. Therefore, the correct answer is 'Lose'.