Primerica Chapter 1 questions
Within how many days of requesting an Investigative Consumer Report must an insurer notify the consumer in a writing that the report will be obtained?
3
When must insurable interest exist in a life insurance policy?
At the time of application
Who makes up the Medical Information Bureau?
Insurers
What is the purpose of a conditional receipt?
It is intended to provide coverage on a date earlier than the date of the issuance of the policy
An underwriter may contain information on an applicant's hobbies, financial status, and habits by ordering a(n)...
Inspection report
The MIB was created to protect...
Insurance companies from adverse selection by high risk persons
Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a...
Premium receipt
An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of what?
A STOLI policy (stranger-orginated life insurance)
The term "illustration" in a life insurance policy refers to...
A presentation of guaranteed elements of a policy
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
When would a misrepresentation on the insurance application be considered fraud?
If it is intentional and material
An insurer received a report regarding a potential insured that included the insured's financial status, hobbies, and habits. What type of report is that?
Inspection Report
What do individuals use to transfer their risk of loss to a larger group?
Insurance
What is a material misrepresentation?
A statement by the applicant, that upon discovery, would affect the underwriting decision of the insurance company
Best Describe the MIB
Nonprofit organization that maintains underwriting information on applicants for life and health insurance
Another name of substandard risk classification is...
Rated
When both parties to a contract must preform certain duties and follow rules of conduct to make the contract enforceable, the contract is...
Conditional
An Insurer neglects to pay a legitimate claim that is covered under the terms of the policy. What insurance principles has the insurer violated?
Consideration
Representations are written or oral statements made by the applicant that are...
Considered true to the best of the applicants knowledge
In insurance, an offer is usually made when...
the application is submitted
What document must be provided to the policy owner or applicant during policy replacement?
Notice Regarding Replacement
What is the definition of a unilateral contract?
One sided; only one party makes an enforceable promise
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will...
Pay the policy proceeds only if it would have issued the policy
In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the inner is legally obligated to pay losses covered by the policy. What contract element does that describe?
Unilateral
What is the time frame for filing relevant Suspicious Activity Reports?
Within 30 days of initial discovery
L's insurer has made all the decisions regarding the provisions including in her policy. L finds an objectionable provision and wants to do so. Her only options are to reject the policy or accept as is. Which contract feature does this describe?
Adhesion -a contract that is prepared by only the insurer; the insured's only option is to accept or reject the policy as it is written
