Life Insurance

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

When J. applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be completed by

A paramedic or examining physician at the insurer's expense

Which of the following produces evaluations of insurers' financial status often used by state departments of insurance?

AM best

Which of the following is the closest term to an authorized insurer?

Admitted

What documentation grants express authority to an agent?

Agent's contract with the principal

In insurance, an offer is usually made when

An applicant submits an application to the insurer.

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?

Authorized

Contracts that are prepared by one party and submitted to another party on a take-it-or-leave-it basis are classified as

Contracts of adhesion

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment

The authority granted to an agent through the agent's contract is referred to as

Express authority

The requirement that agents not commingle insurance monies with their own funds is known as

Fiduciary responsibility

What insurance concept is associated with the names Weiss and Fitch?

Guides describing company financial integrity

Which of the following documents must be provided to the policy owner or applicant during policy replacement?

Notice Regarding Replacement

What is a definition of a unilateral contract?

One-sided, only one party makes an enforceable promise

What is the major difference between a stock company and a mutual company?

Ownership

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

Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?

Reduction

Events in which a person has both the chance of winning or losing are classified as

Speculative risk

which of the following is NOT a characteristic of an insurable risk?

The loss must be catastrophic

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

For the purpose of insurance, risk is defined as:

The uncertainty or chance of loss