Life insurance
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?
conditional
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?
conditional
Stranger-originated life insurance policies are in direct opposition to the principle of
insurable interest
Which of the following best describes the aleatory nature of an insurance contract?
Exchange of unequal values
The Gramm-Leach-Bliley Act was passed to
Protect private customer information filed with a financial institution.
Which of the following statements regarding HIV testing for life insurance purposes is NOT true?
Insurers are barred from requesting HIV testing
Representations are written or oral statements made by the applicant that are
Considered true to the best of the applicant's knowledge.
In the underwriting process, it was determined that the applicant for life insurance is in poor health and has some dangerous habits. Which of the following is true concerning the policy premium?
It will likely be higher because the applicant is a substandard risk.
Which of the following would qualify as a competent party in an insurance contract?
The applicant has a prior felony conviction
If an insurer requires a medical examination of an applicant in connection with the application for life insurance, who is responsible for paying the cost of the examination?
insurer
If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to
Charge an extra premium
Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?
Aleatory
Which of the following may be included on an insurance advertisement?
Testimonials from compensated individuals
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is
Conditional. The contract is formed on the basis that certain conditions are met.
