Life Insurance

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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


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