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. 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. A) Insurability Julie has a $100,000 30-year mortgage on her new home. Insurer's promise to pay benefits B) Offer and acceptance Which of the following statements is TRUE? All of the following are examples of a Business Continuation Plan EXCEPT. What is this an example of? 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 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 Completing all applications and collecting initial premiums. Offering payment of approved claims within 30 days after affirming liability. Accelerated death benefit rider Waiver of premium rider Extended term option Decreasing term insurance. In the case of an insurance contract, the contracting parties are the claimant and the insurer. Craig purchased a life insurance policy for enabling his heirs to pay estate taxes. In this situation, who will receive Bob's policy proceeds? performance is conditioned upon a future occurrence. the terms must be accepted or rejected in full 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? 2 See answers A) underwriting C) representation What guarantees that the statements supplied by an insurance applicant are true? 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"? A) Express 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? D) Principal Capacity, A unilateral contract is one in which I hope you got the correct answer to your question. A contract that requires certain conditions or acts by the insured individual. D) conditions, The authority granted to a licensed producer is provided via the A) the appearance of authority an insurer gives to its agent The coverage, conditions, and limitations in the master policy of a group contract can be found in which document? C) Law of large numbers B) Bob's estate C) the terms must be accepted or rejected in full Which of these statements regarding the annuitant is CORRECT? The above question Which of the following BEST describes a conditional insurance contract?, Was part of Insurance MCQs & Answers. 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? C) Probability of loss C) fiduciary trust Loans obtained by a policyowner against the cash value of a life insurance policy. Under the McCarran-Ferguson Act, what is the minimum penalty for this? What does the Group Life underwriting risk selection process help protect insurance companies from? B) A contract that has the potential for the unequal exchange of consideration for both parties C) Contract must have a legal purpose C) A contract where one party "adheres" to the terms of the contract Which of the following would be a valid reason why a policy premium would be higher than the standard premium? Ken is a producer who has obtained Consumer Informations Reports under false pretenses. __________. A contract that requires certain conditions or acts by the insured individual This means that the insurer's promise to pay benefits depends on the occurrence of an event covered by the contract. Which of the following products would allow him to accomplish this? 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. The insurer assuming the risk is called the mutual insurer reinsurer reciprocal insurer participating insurer, Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. An example of an unfair claims practice would be, Failing to effectuate prompt, fair, and fair equitable settlements of a claim. B) the unwritten authority that the agent is assumed to have State Insurance Departments NAIC Insurance carriers Insurance producers, Intentional withholding of material facts that would affect an insurance policy's validity is called a(n) estoppel concealment adhesion misrepresentation, The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? the insurer's obligations are dependent upon certain acts of the insured individual Which of the following best describes the MIB? What is created after policy proceeds are obtained in a lump sum and then immediately invested? C) Apparent authority A) insured Bilateral Contract: Definition, How It Works, and Example - Investopedia If xxx actually turns out to be 131313, what do you think of the claim? Policyowner has the right to select the investment which will provide the greatest return. insured Contestability clause, In order for a contract to be valid, it must B) Offer and acceptance A) there is an element of chance and potential for unequal exchange of value or consideration for both parties Both partners are still married at the time of Bob's death. His insurance agent told him the policy would be paid up if he reached age 100. Which type of multiple protection policy pays on the death of the last person? What kind of policy is this? Flashcards - Connecticut Insurance Test 2021 - FreezingBlue Because of this, an insurance contract is considered collateral, What is implied authority defined as? Nothing $100,000 $250,000 $500,000, Which type of life insurance is normally associated with a Payor Benefit rider? Expert answered| selymi |Points 23307|. express, ______ is NOT an element of a valid contract. 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 Legal It allows for a spouse to be added as a rider to a life insurance policy It allows for policy loans to be advanced to the insured in the event of unemployment It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill It allows for a third party to purchase a life insurance policy at a discounted rate and immediately advance a portion of the death benefit, All of these are standard exclusions found in a life insurance policy EXCEPT hazardous occupations aviation disability war, Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue? Notify me of follow-up comments by email. B) A contract that has the potential for the unequal exchange of consideration for both parties. What is a corridor in relation to a Universal Life insurance policy? D) both the policyowner and the insurer must know all material facts and relevant information, B) only one party (the insurer) makes any kind of legally enforceable promise, Intentional withholding of material facts that would affect an insurance policy's validity is called a(n) B) the contract must be aleatory She would like to borrow $15,000 against the cash value. The policy may be paid up early by using policy dividends. An individual who removes the risk of losing money in the stock market by never purchasing stocks is said to be engaging in. The policy automatically converts to whole life after the 10-year period The face amount will remain constant and the premium will increase over the 10-year period The premium will remain constant and the face amount will increase over the 10-year period The face amount and premium will remain constant over the 10-year period, will no longer provide insurance protection, Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint life policy covering all three of their lives. A policyowner is prohibited from making any changes to the policy without the beneficiarys written consent under which beneficiary designation? Which of the following best describe the term definition. Which military service exclusion clause would pay upon his death? C) Competent parties A minimum of 12 months after date of purchase, Insurance premium is determined by each of the following factors EXCEPT. A unilateral contract is one in which only one party makes a legally binding guarantee. Which of these statements is true? 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. Business partners B) implied authority Insurance Cram Ch. 6 Flashcards | Chegg.com 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 The present cash value of the policy equals $250,000. discreet Determine which insurer offers the best rates Determine which insurer offers the best policies Determine financial strength of an insurance company Determine which agent to use locally, A nonparticipating policy will provide a return of premium provide tax advantages not pay dividends give policyowners special privileges, A rating from a rating service company, such as A.M. Best, Which of the following is NOT considered advertising? Food C. Plant D. Zucchini. 30 seconds. Insurable interest can be based on the love and affection of individuals related by blood or law An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of c. income earned by Pat's spouse. Typically, bilateral contracts involve an equal obligation or. D) errors and oversights, In an insurance contract, the insurer is the only party legally obligated to perform. y=f(x)=10x5x+1535if0x3if3
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