Insurance Certification (Life)

When must insurable interest exist in a life insurance policy?

at the time of the application

An insurance contract must contain all of the following to be considered legally binding except...

Beneficiary's consent

An insured pays $100 every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Aleatory

In insurance, an offer is usually made when

An applicant submits an application to the insurer.

When does the policy coverage become effective?

As of the application date

Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?

Buyers Guide

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is....

Conditional

An insurer neglects to pay a legitimate claim covered under the terms of the policy. What insurance principles has the insurer violated?

Consideration

If a change needs to be made to the application for the insurance, the agent may do all of the following except...

Erase the incorrect answer and record the correct answer

What best describes the MIB

It is a nonprofit organization that maintains underwriting information on applicants for the life and health insurance

What is the purpose of a conditional receipt?

It is intended to provide coverage on a date prior to the policy issue

Which statement is guaranteed to be true, but if untrue, may breach an insurance contract?

Warranty

On a participating insurance policy issued by a mutual insurance company, dividends paid to the policy holders are

not taxable since the IRS treats them as a return of a portion of the premium paid

Which documents delivered to the policy owner include information about premium amounts, cash values, surrender values and death benefits for specific policy years?

policy summary

Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?

Adhesion

An insurance contract requires that both the insured and the insurer meet the certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?

Conditional

The term illustration in a life insurance policy refers to...

a presentation of non-guaranteed elements of a policy

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT?

condtions

Part 2 of the application for life insurance provides questions regarding all of the following EXCEPT

other insurance coverages

Which of the following does not describe a competent party?

the person must not have at least completed secondary education

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral

Which of the following would qualify as a competent party in an insurance contract?

applicant has a prior felony or conviction

Representations are written or oral statements made by the applicant that are

considered to be true to the best of the applicant's knowledge

What includes information regarding a person's credit, character, reputation and habits?

consumer report

Stranger oriented life insurance policies are in direct opposition to the principle of what?

insurable interest

When an agent collects the initial premium from the applicant, the agent should issue the applicant a...

premium receipt

Upon delivery, the producer may be required to obtain any of the following except

signed waiver of premium

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

if a policy includes a free-look period of at least 10 days, the buyers guide may be delivered to the applicant no later than

with the policy

Upon policy delivery, the producer may be required to obtain any of the following except.....

signed waiver of premium

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent

If an insurer issued a policy based on the application that had unanswered questions, what is true?

the policy will be interpreted as if the insurer waived its right to have an answer on the application

Why should the insurer personally deliver the policy when the first premium has already been paid out?

to help the insured understand all aspects of the contract

What describes the specific information about a policy?

Policy summary

What will be included in a policy summary?

Premium amounts and surrender values