Which risk will result in the highest premium?

What is a preferred risk in life insurance?

Preferred Risk — any risk considered a better or preferred risk (i.e., one having lower potential loss frequency and severity) than the standard or "average" risk upon which premium rates are calculated.

What type of risk is most likely to be insurable quizlet?

Pure risk is the only type of risk that is insurable because there is only the chance of loss. The Law of Large Numbers allows the probability of loss to become more predictable.

What is pure risk and speculative risk?

Whereas pure risk is beyond human control and can only result in a loss if it occurs, speculative risk is risk that is taken on voluntarily and can result in either a profit or loss. Speculative risks are thus considered controllable risks.

What is risk as used in insurance?

In insurance terms, risk is the chance something harmful or unexpected could happen. This might involve the loss, theft, or damage of valuable property and belongings, or it may involve someone being injured.

What are the 4 types of risk?

What are the major types of risk?

What does premium mean in insurance?

The amount you pay for your health insurance every month. In addition to your premium, you usually have to pay other costs for your health care, including a deductible, copayments, and coinsurance. If you have a Marketplace health plan, you may be able to lower your costs with a premium tax credit.

What is substandard risk?

Substandard Risk. Person who is considered an under-average or impaired insurance risk because of physical conditions family or personal history of disease, occupation, residence in unhealthy climate or dangerous habits.

Which of the following are the speculative risk based?

Speculative Risk: Three possible outcomes exist in speculative risk: something good (gain), something bad (loss) or nothing (staying even). Gambling and investing in the stock market are two examples of speculative risks. Each offers a chance to make money, lose money or walk away even.

What are the classifications of substandard risks?

What is speculative risk?

Speculative risk is a category of risk that can be taken on voluntarily and will either result in a profit or loss. All speculative risks are undertaken as a result of a conscious choice.

What is static and dynamic risk?

Static risks are present in an unchanging economy. Dynamic risks are only present in a changing economy. Static risks affect only individuals or very few individuals. Dynamic risk affect large number of Individuals.

What is static risk?

Static risks are risks that involve losses brought about by acts of nature or by malicious and criminal acts by another person. These losses refer to damages or loss to property or entity that is not caused by the economy.

Which of the following is the most common way to transfer risk and insurance?

The most common way to transfer risk is through an insurance policy, where the insurance carrier assumes the defined risks for the policyholder in exchange for a fee, or insurance premium, and will cover the costs for worker injuries and property damage.

Which of the following is not an insurable risk?

A non-insurable risk is a risk that the insurance company deems too hazardous or financially impractical to take on. These are typically risks that are commercially uninsurable, illegal for the insurance company to insure, or hold the potential for catastrophic loss. Common examples include: Residential overland water.

Which of the following is the most common way to transfer risk quizlet?

Which of the following is the most common way to transfer risk? Rationale: The most effective way to handle risk is to transfer it so that the loss is borne by another party. Insurance is the most common method of transferring risk from an individual or group to an insurance company.

What are the risks of life insurance?

What is premium amount?

Definition: Premium is an amount paid periodically to the insurer by the insured for covering his risk. Description: In an insurance contract, the risk is transferred from the insured to the insurer. For taking this risk, the insurer charges an amount called the premium.

How do you classify life premium?