C) apparent authority What does the word level in Level Term describe? D) Only the insured is legally bound, Bob and Tom start a business. Peril Hazard Loss factor Liability, Which of these techniques will remove the risk of losing money in the stock market by never purchasing stocks? Connect with others, with spontaneous photos and videos, and random live-streaming. Law of Agency An insurance contract usually involves an exchange of consideration between both parties: the insurer agrees to provide coverage and pay claims in the event of a loss, and the policyholder agrees to pay premiums in return. D) the contract must be a contract of adhesion, C) there must be legal reasons for entering into the contract, Ambiguities in an insurance policy are always resolved in favor of the A contract that requires certain conditions or acts by the insured individual A contract that has the potential for the unequal exchange of consideration for both parties A contract where one party "adheres" to the terms of the contract A contract where only one party makes any kind of enforceable contract, statements made in the application and the premium, In a life or health insurance contract, "consideration" would be the offer and acceptance premium only statements made in the application and the premium statements made in the application only, According to the principle of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and it's underwriting issuance of the policy promises made legal reserve, All of the following are elements of an insurance policy EXCEPT definitions other insurance claim forms conditions, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as Apparent Estoppel Aleatory Unilateral, Which of the following is an example of the insured's consideration? express authority What are conditions in an insurance policy? The death benefit would be. B) errors and omissions A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a(n). A) One party is restored to the same financial position the party was in before the loss occurred B) The unequal exchange of value or consideration for both parties C) One party (the insurance company) prepares the contract with no negotiation between the applicant and insurer D) Only one party (the insurer) makes any kind of enforceable promise Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested? b. benefits paid under workers compensation. Net death benefit will be reduced if the loan is not repaid No interest will be charged on loan balance Term life policies are the only type of insurance that allows policy loans A loan can be taken out for up to the face amount of the policy, Ownership of a life insurance policy may be temporarily transferred with a(n) collateral assignment absolute assignment transferable assignment beneficiary assignment, provide evidence of insurability to the insurer, In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST remit all past-due premiums within the grace period provide evidence of insurability to the insurer resubmit a new life insurance application provide a valid reason for the lapse, Which of the following is considered to be an alternative to a life settlement? D) the authority to add provisions to a contract, C) the authority to represent the insurer, Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"? When handling premiums for an insured, an agent is acting in which capacity? Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Barry offers Chris his mountain cabin for the weekend to secure his order for his insurance business. D) unilateral, Who is responsible for assembling the policy forms for insureds? Both partners are still married at the time of Bob's death. Naming a contingent beneficiary as all surviving children is described as which term? A) there is an element of chance and potential for unequal exchange of value or consideration for both parties Variable life insurance and Universal life insurance are very similar. B. What is created after policy proceeds are obtained in a lump sum and then immediately invested? A unilateral contract is one in which only one party makes a legally binding guarantee. A) Only the insured pays the premium She would like to borrow $15,000 against the cash value. D) Legal Purpose, Which of the following is present when an applicant stands to lose value if the insured dies? Intent, The deeds and actions of a producer indicate what kind of authority? A) producer's apparent authority B) Unequal consideration express, ______ is NOT an element of a valid contract. Barbaras policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. A) Insurable interest insurer Premium clause Identify the type of financing (stock or bond) that best answers the question. A) there is the potential for an unequal exchange of value A life insurance policy that is subject to a contract interest rate is referred to as. renewal reinstatement resumption renovation, the MEC tends to be an investment vehicle, Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because the MEC has tax deductible premiums the MEC is considered an illegal product the MEC tends to be an investment vehicle the MEC does not accumulate cash value, The face amount and premium will remain constant over the 10-year period, Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. C) fiduciary trust Can be converted to permanent coverage without evidence of insurability Coverage can be different for each child Premiums on this rider are not required until the limiting age is reached Increases the policy's overall cash value, Which type of policy combines the flexibility of a universal life policy with investment choices? Provide funds to help fund retirement Provide funds to help pay taxes Provide funds for funeral expenses Provide tax deductions for premium payments, lower than the typical whole life policy during the first few years and then higher than typical for the remainder, The premium for a Modified whole life policy is higher than the typical whole life policy during the first few years and then lower than typical for the remainder lower than the typical whole life policy during the first few years and then higher than typical for the remainder normally graded over a period of 20 years level for the first 5 years then decreases for the remainder of the policy, The type of policy which pays on the death of the last person is called joint life survivorship life dual life shared life, A life insurance policy that is subject to a contract interest rate is referred to as adjustable life group life term life universal life, a policy that is paid up after only one payment, A single premium cash value policy can be described as a policy that is paid up after only one payment a policy that only requires an annual payment a policy that is guaranteed issue a policy that covers two or more lives, A limited payment whole life policy provides protection for 20 years lifetime protection protection for more than one person discounted premiums, A policyowner may change two policy features on what type of life insurance? All of the following are examples of pure risk EXCEPT. Options A) A contract that requires certain conditions or acts by the insured individual B) A contract that has the potential for the unequal exchange of consideration for both parties C) A contract where one party "adheres" to the terms of the contract nonparticipating life insurance policy participating life insurance policy divisible surplus life insurance policy straight life insurance policy, Which of the following is considered to be an event or condition that increases the probability of an insured's loss? Waiver of premium Juvenile waiver Guaranteed insurability Payor benefit, Which of the following is a reinstatement condition? C) Competent parties A rating from a rating service company, such as A.M. Best An illustration A sales presentation Direct mailing from an agency, Fraternal Benefit Society has each of the following characteristics EXCEPT Incorporated Without capital stock Exist For profit Exist for the benefit of its members, A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called A self-derived plan A multiple-employer plan A blanket plan A self-funded plan, An insurer's ability to make unpredictable payouts to policyowners is called investment values liquidity assets capital, Ken is a producer who has obtained Consumer Information Reports under false pretenses. A) State Insurance Departments What would happen if a life insurance applicant is given a conditional receipt? The death benefit paid will be what the premium would have purchased at the correct age, Converting a group plan to permanent life insurance requires, The conversion being applied for within 31 days of termination. B) Apparent B) only an offer Offering payment of approved claims within 30 days after affirming liability. D) Evident authority, Which of the following is an example of the insured's consideration? The gap between the total death benefit and the policys cash value. Corporations, like all firms, can raise money by borrowing from banks and other lending institutions. C) Law of large numbers promises made The provision that allows this is called Partial Surrender Subrogation Automatic Premium Loan Accelerated Death Benefit, All of these are characteristics of a universal life insurance policy EXCEPT Flexible death benefit Fixed surrender value Flexible premiums Builds cash value, Which of the following policies does NOT build cash value? Required fields are marked *. Modified Endowment Contract Current assumptive whole life Credit life insurance Equity index whole life, What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death? What is this called? Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties Because insurance premiums are tax-deductible Because dividends are already subject to capital gains Because dividends are payable directly to the policyholder Because dividends are considered to be a return of premium, A type of insurer that is owned by its policyowners is called domestic mutual stock in-house, What is considered to be the primary reason for buying life insurance? Your email address will not be published. If she dies 15 years after the policys inception date, how much will her beneficiary receive? (B) Both parties adhere to the contract. (A) Both parties to the contract are bound to the terms. Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. b) a contract is an agreement enforceable at law. Sharon is the policyowner of a $500,000 life insurance policy. Insurance Exam Flashcards | Chegg.com Which of the following best defines diction? A. simile B - Weegy Which of the following is the best descriptive word? A - Weegy D) misrepresentation, Which of the following is NOT required in the content of a policy? Which of the following statements is true? Sister and brother The gap between the total death benefit and the policy's cash value The gap between when a claim is filed and when the death benefit is received The amount of interest that has accumulated in the policy's cash value The point in time when the policy's cash value reaches $0, Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. D) an offer and acceptance of the contract terms, D) an offer and acceptance of the contract terms, In an insurance contract, the applicant's "consideration" is the Joint life policy Survivorship life policy Dual life policy Multiple life policy, A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called whole life group life credit life universal life, Can be converted to permanent coverage without evidence of insurability, Donald is the primary insured of a life insurance policy and adds a children's term rider. Which of the following BEST describes a conditional insurance contract? C) Law of Agency Before using an assumed name in Utah, a producer MUST, Maria would like an annuity that provides a guaranteed accumulation or payout. Adhesion clause imposed authority, In an insurance contract, the element that shows each party is giving something of value is called C) Bob's spouse How do insurers predict the increase of individual risks? C) Probability of loss What is the meaning of par value of stock with respect to the corporate form of organization? Which of the following best describes a symbol Law of large numbers U.S. Census Average mortality incidents Experience of morbidity, Insurance represents the process of risk selection avoidance transference assumption, Doctors pooling their money to cover malpractice exposures, An example of risk sharing would be Adding more security to a high-risk building Choosing not to invest in the stock market Doctors pooling their money to cover malpractice exposures Buying an insurance policy to cover potential liabilities, All of the following are examples of pure risk EXCEPT Losing money at a casino Injured while playing football Falling at a casino and breaking a hip Jewelry stolen during a home robbery, the terms must be accepted or rejected in full, Under a contract of adhesion, there is the potential for an unequal exchange of value the insurer's obligations are dependent upon certain acts of the insured individual the terms must be accepted or rejected in full only one party makes any kind of enforceable promise, According to life insurance contract law, insurable interest exists when any business relationship exists at the time of application at the time of death only when determined by a judge, In an insurance contract, the insurer is the only party legally obligated to perform. Which of the following BEST describes a conditional insurance contract. What does the Group Life underwriting risk selection process help protect insurance companies from? A) Authority given in writing to an agent in the agency agreement Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Insurable interest Insurance exchanges Law of large numbers and risk pooling Population table data, People with higher loss exposure have the tendency to purchase insurance more often than those at average risk. Group policy Adjustable life policy Whole life policy Endowment policy, A renewable Term Life insurance policy allows the policyowner the right to renew the policy at anytime the policyowner chooses as many times as the policyowner chooses paying the same premium as before the renewal without producing proof of insurability, When a decreasing term policy is purchased, it contains a decreasing death benefit and increasing premiums level premiums decreasing premiums variable premiums, Julie has a $100,000 30-year mortgage on her new home. His insurance agent told him the policy would be paid up if he reached age 100. Insurance interest does NOT occur in which of the following relationships? Andy the annuitant dies before the annuity start date. Advertisement. Life & Health 1 (Chapters 1, 2, 3, & 4) Flashcards Preview - Brainscape Which option was chosen? the contract must be a contract of adhesion, there must be legal reasons for entering into the contract, What makes an insurance policy a unilateral contract? B) written contract Expert answered| selymi |Points 23307|. Which of these legislation Acts is designed to protect consumers with guidelines regarding credit reporting and distribution? B) the unwritten authority that the agent is assumed to have How many days is a temporary producers license valid? Dorian exercises a nonforfeiture option by using his life policys cash value to purchase an extended term insurance option. If xxx actually turns out to be 131313, what do you think of the claim? B) Contract of adhesion Under the McCarran-Ferguson Act, what is the minimum penalty for this? C) claim forms The face amount and policy premium are not affected by the payment Before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal illness There may be a dollar limit on the maximum benefit The benefit can be offered as a rider at a specific extra cost or may be at no cost, Which of the following is NOT part of an insurance contract? D) Business owner and business client, Under a contract of adhesion, conditions, Legal purpose is a term used in contract law meaning B) Only the insured can change the provisions representation In this situation, who will receive Bob's policy proceeds? Chapter 3 Legal Concepts of the Insurance Contract - Quizlet Ken is a producer who has obtained Consumer Informations Reports under false pretenses. An example of an unfair claims practice would be, Failing to effectuate prompt, fair, and fair equitable settlements of a claim. A paid premium Under the McCarran-Ferguson Act, what is the minimum penalty for this? Preferred risk policies with reduced premiums are issued by insurance companies because the insured has, Better than average mortality or morbidity experience. A Modified Endowment Contract (MEC) is best described as A life insurance contract which accumulates cash values higher than the IRS will allow An annuity contract which was converted from a life insurance contract A modified life contract which enjoys all the tax advantages of whole life insurance A life insurance contract where all withdrawals A contract that requires certain conditions or acts by the insured individual. Only the insured can change the provisions A) One party is restored to the same financial position the party was in before the loss occurred. Bob and Tom start a business. How could a company manager use a process cost summary to determine if the program to reduce water usage is successful? In this situation, who will receive Bob's policy proceeds? It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill. James is the insured on a life insurance policy where his age was misstated on the application. Because of this, an insurance contract is considered Authority given in writing to an agent in the agency agreement Which of these statements regarding the annuitant is CORRECT? weegy. Which of the following best describe the term definition Countersignature, Which of the following is an example of the insured's consideration? Business partners A provision that allows a policyowner to withdraw a policys cash value interest free is a(n), The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT, All of these are valid options for an Adjustable Life Policy EXCEPT, The policys premium can be increased or decreased, An insurers claim settlement practices are regulated by the. However, corporations also can raise money by selling bonds or issuing additional shares of stock. A) Legal The most appropriate description ascribed to the meaning of definition from the options given is ; A precise statement of the qualities of an idea, object or process. C) Charge more premium C) aleatory B) at the time of application Insurance Quiz (MCQs) Archives - Management Notes This is also known as a non-negotiable insurance contract, or an automatic contract. Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. B) Indemnity In a life or health insurance contract, "consideration" would be the, statements made in the application and the premium, A professional liability for which producers can be sued for mistakes of putting a policy into effect is called. performance is conditioned upon a future occurrence. Which of the following best describes a symbol. definitions A) estoppel A) Tom's spouse Whole life policy that pays out its cash value over a 20 year period Whole life policy with premiums paid up after 20 years Term life policy that returns cash value after 20 years Term life policy with premiums paid up after 20 years, Which type of multiple protection policy pays on the death of the last person? WINDOWPANE is the live-streaming app for sharing your life as it happens, without filters, editing, or anything fake. Cash surrender Extended term insurance Reduced paid-up insurance Life income annuity, Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? Zucchini is the best descriptive word. Administrative actions taken against a producer must be reported to the Commissioner within ____ days. An applicants character and personal habits can be obtained for underwriting purposes from which source? The agent's obligation to provide the proper amount of coverage The insurer's obligation to return all premiums upon an approved death claim The insurer's obligation to pay a death benefit upon an approved death claim The agent's obligation to pay a death benefit upon an approved death claim, Of the following dividend options, which of these is taxable? How does life insurance create an immediate estate? C) Consideration Competent parties Offer and acceptance Consideration Legal purpose, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? At what point may a producer sell insurance for an insurer? offer Policy Summary Buyer's Guide Entire Contract Entire Policy, It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill, What is the purpose for having an accelerated death benefit on a life insurance policy? A fixed cash value A flexible premium schedule A fixed death benefit The ability to take out a policy loan, The least expensive option to pay off a 30-year mortgage balance would be convertible term life decreasing term life adjustable term life increasing term life, Pre-death distributions are typically taxable, Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test? Which of the following Best Describes a Conditional Insurance Contract Posted on April 19, 2022 by Ephori London To be enforceable, a contract must be concluded by the competent parties. An individual who has a hobby racing cars once a month. The policies continue in force with no change. Adjustable life Credit life Modified life Universal life, Whole life policy with premiums paid up after 20 years, Which of these would be the best example of a limited pay life insurance policy? B) the insurer's obligations are dependent upon certain acts of the insured individual Asked 10/6/2017 7:04:21 AM. A policy containing exclusions or limits that are not clearly disclosed to the policyholder, or a premium that is significantly higher than the risk covered, could be considered unfair or one-sided. B) other insurance warranty Which type of multiple protection policy pays on the death of the last person? Bob dies 12 months later. When does a life insurance policy typically become effective? GENERAL LAW OF CONTRACTS A contract is an agreement enforceable by law. Premiums paid plus interest earned is returned to the beneficiary. Consideration clause D) collateral, Express power given to an agent in an agency agreement is A) Contract may be accepted or rejected by the insured, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as. In order to maintain coverage and make a successful claim, its crucial that policyholders read and understand their insurance contract carefully. D) Insurance producers, If a material warranty violation on the part of the insured is found, what recourse does an insurer have? For a trip to the hospital, Evan Appleton paid $1,656 in hospital charges, a$750 insurance deductible, and a $457 co-payment. apparent authority After being properly appointed by the insurer. D) statements made in the application only, C) statements made in the application and the premium, According to life insurance contract law, insurable interest exists An insurer's claim settlement practices are regulated by the Securities and Exchange Commission (SEC) National Association of Claims Adjusters (NACA) National Association of Insurance Commissioners (NAIC) State insurance departments, A life insurance company has transferred some of its risk to another insurer. which of the following best describes a conditional insurance contract Conditional insurance contracts are insurance policies that require the insured person to satisfy certain conditions in order to become effective and/or to be paid out by the insurer. Nothing $100,000 $250,000 $500,000, Which type of life insurance is normally associated with a Payor Benefit rider? fichoh. C) there must be legal reasons for entering into the contract Insurer's promise to pay benefits To see this page as it is meant to appear, please enable your Javascript! there must be legal reasons for entering into the contract A) definitions B) issuance of the policy In most cases, the insured is. there must be an offer and acceptance The type of annuity she is seeking is called. A) Sister and brother

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