ch 1 quiz questions
when would a misrepresentation on the insurance application be considered fraud? a- any misrepresentation is considered fraud b- if it is intentional and material c- Never: statements by the applicant are only representations d- when the application is incomplete
b- a misrepresentaion would be considered fraud if it is intentional and material. Fraud would be groups for voiding the contract
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as: a- aleatory contracts b- binding contracts c- contracts of adhesion d- unilateral contracts
c- insruance policies are written by the insurer and submitted ot the insured on a take it or leave it basis. the insured does not have any input into the contract, but simply adhears to the contract
Who must pay for the cost of a medical examination required in the process of underwriting? a- applicant b- underwriters c- department of insurance d- insurer
d- if an insurer requests a medical examination, the insurer is responsible for the cost of the exam
which of the following entities can legally bind coverage? a- Federal Insurance Board b- Agent c- Insurer d- The insured
c- only insurers, not agents, can bind coverage
in comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? a- they provide additional information from an outside source about a particular risk b- they provide information about a customers character and reputation c- the customer has no knowledge of this action d- the customers associates, friends, and neighbors provide the reports data
d- both consumer reports and investigative consumer reports provide addtional info fm an outside source about a customers character and reputation, and both types of reports are used under the FAIR CREDIT REPORTING ACT.
the insurance policy, together with the policy application and any added riders form what is knowns as: a- entire contract b- certification of coverage c- contract of adhesion d- whole life policy
a- when a a policy is issued a copy of the applicaiton, any riders and amendments are attached to the back of the policy and become part of the entire contract
in terms of parties to a contract, which of the following does NOT describe a competent party? a- the person must be mentally competent to understand the contract b- the person must have at least completed secondary education c- the person must not be under the influence of drugs or alcohol d- the person must be of legal age
b- the parties to a contract must be capable of entering into a contract in the eyes of the law. Generally this requires that both parties be of legal age, mentally competent to understand the contract and not under the influence of drugs or alcohol
what is material misrepresentation? a- any misstatement by the producer b- concealment c- a statement by the applicant that, upon discovery would affect the underwriting decision of the insurance company d- any misstatement made by an applicant for insurance
c- a material misrepresentaion is a statment that, if discovered would alter the underwriting decision of the insurance company
on a health insurance application, a signature is required from all of the following individuals EXCEPT: a- the policyowner b- the agent c- the spouse of the policyowner d- the proposed insured
c- every health insruance applicaiton requires the signature of the proposed insured, the policyowner (if different than the insured) and the agent who solicits the insurance.
in insurance, an offer is usually made when: a- the agent hands the policy to the policyholder b- an agent explains a policy to a potential applicant c- an applicant submits an application to the insurer d- the insurer approves the application and receives the initial premium
c- in insurance the offer is usually made by the applicant in the form of the application. acceptance takes place when an insurers underwritter approves the applicaiton and issues a policy
if an insurance company wishes to order a consumer report on a applicant to assist in the underwriting process, and if a notice of the insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicants: a- habits b- prior insurance c- ancestry d- credit history
c-the fair credit reporting act regulates what information may be collected and how the information may be used. consumer reports include written and or oral information regarding a consumers credit, character, reputation and habits collected by a reporting agency from employment records, credit reports and other public sources. ancestry is not a relevant factor assessed in these reports
the comply with fair credit reporting act, when must a producer notify an applicant that a credit report may be requested? a- at the time of application b- when the applicants credit is checked c- when the policy is delivered d- at the initial interview
a- notice to the applicant must be issued to all applicants for health insurance coverage
which of the following would provide an underwriter with information concerning an applicant's health history? a- the inspection report b- the Medical Information Bureau c- a medical examination d- the agents report
b- an agents report and inspection report provide personal information. Medical exams provide infomation on current health. Only the MIB will provide infmoation about an applicants medical history
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: a- conditions b- considerations c- legal purpose d- offer and acceptance
a- conditions are part of the policy structure. consideration is an essentail part of a contract
which of the following is NOT an essential element of an insurance contract? a- legal purpose b- counteroffer c- consideration d- agreement
b- in order for insurance contracts to be legally binding, they must have 4 esssentail elements agreement (offer and acceptance) consideration competent parties and legal purpose.