Life chap 1

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company? A) Consumer Privacy Act B) Conditional receipt C) Disclosure rule D) Fair Credit Reporting Act

D) Fair Credit Reporting Act

Which of the following individuals must have insurable interest in the insured? A) Producer B) Policy owner C) Beneficiary D) Underwriter

B) Policy owner

Which of the following is not the consideration in a policy? A) The promise to pay covered losses B) The application given to a prospective insured C)Something of value exchanged between parties D) The premium amount paid at the time of application

B) The application give to prospective insure

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? A) The customer has no knowledge of this action B) The customer's associates, friends, and neighbors provide the report's data C) They provide additional information from an outside source about a particular risk D) They provide information about a customer's character and reputaion

B) The customer's associates, friends, and neighbors provide the report's data

In insurance, an offer is usually made when A ) The insurer approves the application and receives the initial premium B ) The agent hands the policy to the policyholder C) An agent explains a policy to a potential applicant D) An applicant submits an application to the insurer

D) An applicant submits an application to insurer

A life insurance policy has a legal purpose if both of which of the following elements exit? A) Offer and counteroffer B) Policy owners and named beneficiaries C) Insurable interest and consent D) Underwriting and reciprocity

C) Insurable interest and consent

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? A) Unidirectional B) Aleatory C) Conditional D) Unilateral

D) Unilateral

As a field underwriter, a producer is responsible for all of the following tasks EXCEPT A) Help prevent adverse selection B) Solicit business that will fall within the insurer's underwriting guidelines C) Obtain appropriate signatures on the application for insurance D) Issue the policy that is requested

D) Issue the policy that is requested

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) Consideration B) Legal purpose C) Offer and acceptance D) Conditions

D) Conditions

Another name for a substandard risk classification is A) Controlled B) Declined C) Elevated D) Rated

D) Rated

An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that? A) Underwriter's Report B) Inspection Report C) Medical Information Bureau's report D) Agents Report

B) Inspection Report

The term "illustration" in a life insurance policy refers to A) A presentation of non guaranteed elements to a policy B) A depiction of policy benefits and guarantees C) Pictures accompanying a policy D) Charts and graphs

A) A presentation of non guaranteed elements to a policy

Which of the following is not consideration in policy? A) The promise to pay covered losses B) The application given to a prospective insured C) Something of value exchanged between parties D) The premium amount paid at the time of application

B) Application given to prospective insured

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) Contracts of adhesion B) Unilateral contracts C) Aleatory contracts D) Binding contracts

A) Contracts of adhesion

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company? A) Consumer Privacy Act B) Conditional receipt C) Disclosure D) Fair Credit Reporting Act

D) Fair Credit Reporting Act

In forming an insurance contracts, when does acceptance usually occur? A) When an insurer's underwriter approves coverage B) When an insurer delivers the policy C) When an insurer receives an application D) When an insured submits an application

A) When an insurer's underwriter approves coverage

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? A) 3 days B) 5 days C) 10 days D) 14 days

A) 3 days