Life Insurance
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
What documentation grants express authority to an agent?
Agent's contract with the principal
An insured pays a $100 premium 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
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an
Authorized insurer
An individual was involved in a head-on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk does this describe?
Avoidance
To legally transact insurance in this state, an insurer must obtain which of the following?
Certificate of Authority
The requirement that agents not commingle insurance monies with their own funds is known as
Fiduciary responsibility
All of the following actions caused by a person could be described as risk avoidance EXCEPT
Investing in the stock Market
Which of the following is NOT true regarding a Certificate of Authority
It is issued to group insurance participants
Insurance is a contract by which one seeks to protect another from
Loss
The reduction, decrease, or disappearance of value of the person or property insured in a policy by a peril insured is known as what?
Loss
Insurance is the transfer of
Risk
Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT
The loss may be intentional
Which of the following is an example of a producers fiduciary duty?
The trust that a client places in the producer in regard to handling premiums.
When an individual purchases insurance, what risk management technique is he or she practicing?
Transfer
If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?
Unilateral
