Life and Health

A legal agreement between an insurer and the insured/applicant

Risk pooling combines similar loss from many people to predict future losses

The law of large numbers states that the larger the group the easier it is to predict future losses

Risk is the possibility of loss occuring

Risks that jeopardize an individuals greats assest, his earning power

Peril is the cause of loss

Indemnity is to "make whole again". Insurance policies agree to provide payment of benefits to restore the insured's economic loss

Commercial insurers sell insurance to make profit

Stock companies are owned by it's stock holders who pay dividens from comapany profits

Mutual comapanies are commercial insueres owned by policyowners

Noncommercial organizations are entities offering strict health coverage paid directly to health providers. Most common are blue cross which pays for hospital expenses and blue shield which pays for medical expenses

Transactions crossing state lines are interstate commerce and are subject ot federal regulation

Federal government may not exercise rights if the insurance indutry is effectively and adequately regulated on the state level

Regulates the way consumer credit reporing agencies collect and use an applicant's personal credit information

Allows financial entities to merge and accommodate greater competition

Promotes standardization of laws between states

An offer is made when an applicant submits an application to the insurer. The offer is accepted after it has been approved by an underwriter

Is an exchange of values between the insurer and the insured

Where the insurer has no say in the terms and conditions of the contract

An unequal exchange, where one party contributes more than the other

Statements that are guaranteed to be true and are apart of the legal contract

• Waiver is surrendering a known right.
• Estoppel is the legal process of preventing one party from reclaiming a right that was waived

Contract may be voided if one or more parties to the contract commit material misrepresentation or concealment

The right of the insurer to assume the rights of the insured and sue the responsible thirt party for damages

Mortality and interest

net premium with loading

Net premium with loading for one year

• 1. Gereral information
• 2. Medical information
• 3. Agent's statement

Where multiple employers form a trust fund to reduce the tax effects on providing employee benefits

METs and MEWA are used synonmously

The policy is incontestable after being in force for at least two years

• - Licensing and regulation
• - May suspend or revoke licenses
• - May issue cease and desist orders
• - Conducts examinations of all domestic insurers at least once every five years