17. law of large numbers the more times we observe a particular event, the more likely that our observed results will approximate the true probability that the event will occur
18. laws regarding insurable interest see page 33 in chapter 1
19. life and health insurance company issue and sell products that insure against financial losses that result from personal risks such as death, disability, illness, accident, and outliving one's savings
20. life insurance insurance that pays a benefit upon the death of a named person
21. moral hazard when the reputation, financial position, or criminal record of an applicant or a proposed insured indicates that the person may act dishonestly in the insurance transaction
22. morbidity rate the rates at which sickness and accidents occur among a specified group of people during a specified period (usually a year)
23. morbidity table charts that indicate the number of people in a large group who are likely to get sick or have an accident at each age
24. mortality rate the rates at which death occurs among a specified group of people during a specified period (usually one year)
25. mortality table charts that indicate the number of people in a large group who are likely to die at each age
26. personal risk risk of economic loss associated with death, poor health, injury, and outliving one's economic resources
27. physical hazard a physical characteristic that may increase the likelihood of loss, i.e. heart disease history, or even smoking
28. policy benefit a specific amount of money the insurer agrees to pay under an insurance policy when a loss occurs
29. policyowner the person or business that owns the insurance policy, usually also the applicant
30. preferred premium rate lower rate charged to those deemed a preferred risk
31. preferred risk proposed insureds who present a significantly lower than average likelihood of loss
32. premium the specified amount of money an insurer charges in exchange for agreeing to pay a policy benefit when a specified loss occurs
33. probability likelihood