Life Insurance Chapter 1 Quiz

Over several years, a POLICYOWNER paid $10,000 in PREMIUMS for his INSURANCE POLICY. When he suffered a LOSS, the INSURANCE COMPANY paid out $50,000 in BENEFITS. What CHARACTERISTIC of an INSURANCE CONTRACT does this describe?

ADHESION

Which of the following includes information regarding a PERSON'S CREDIT, CHARACTER, REPUTATION, and HABITS?

CONSUMER REPORT

In an INSURANCE CONTRACT, CONSIDERATION refers to___________________

EXCHANGE of something of VALUE by BOTH PARTIES

If the AGENT feels that there could be MISREPRESENTATION on the part of the APPLICANT for INSURANCE, what must the AGENT do?

INFORM the INSURANCE COMPANY

An INSURED SUBMITS the FULL PREMIUM along with a COMPLETED APPLICATION, and the POLICY is issued 10 DAYS later. When does the COVERAGE begin?

On the DATE of the APPLICATION

If no RECEIPT is ISSUED at the time of APPLICATION, a STATEMENT of GOOD HEALTH is usually required at the time of__________________

POLICY DELIVERY

If an AGENT FAILS to OBTAIN an APPLICANT'S SIGNATURE on the INSURANCE APPLICATION, the AGENT must____________________

RETURN the APPLICATION to the APPLICANT for SIGNATURE.

REPRESNTATIONS

STATEMENTS made by the APPLICANT that are CONSIDERED TRUE to the best of the APPLICANT'S KNOWLEDGE.

Which of the following best describes the PURPOSE of the USA PATRIOT ACT with regards to the INSURANCE INDUSTRY?

To PREVENT TERRORISM activities through MONITORING of FINANCIAL TRANSACTIONS

MEDICAL INFORMATION BUREAU (MIB)

a SOURCE of MEDICAL INFORMATION to ALERT INSURERS to ADVERSE MEDICAL HISTORY

Which of the following is considered a FIELD UNDERWRITER?

an AGENT

What is the MAIN RESPONSIBILITY of a COMPANY'S UNDERWRITING UNIT?

RISK SELECTION and CLASSICATION

When must INSURABLE INTEREST exist in LIFE INSURANCE?

APPLICATION or ISSUE DATE

All of the following may have an INSURABLE INTEREST in the INSURED EXCEPT_______________

INSURED'S BEST FRIEND

Which of the following would be the MAIN SOURCE of UNDERWRITING INFORMATION used by the company in the RISK SELECTION PROCESS?

APPLICATION