Life and Health Insurance Quiz Questions

Something of value exchanged between the insurer and the insured is considered a/an:

Consideration

A tornado that destroys property would be an example of which of the following?

A Peril

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an:

Authorized Insurer

An insurance contract must contain all of the following to be considered legally binding EXCEPT:

Beneficiary's consent

A producer who fails to segregate premium monies from his own personal funds is guilty of:

Commingling

Representations are written or oral statements made by the applicant that are

Considered to be true to the best of the applicant's knowledge

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants

An individual's tendency to be dishonest would be indicative of a

Moral hazard

Who might receive dividends from a mutual insurer?

Policyholders

Which of the following insurance options would be considered a risk-sharing arrangement?

Reciprocal

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

Indemnity

Which of the following is NOT an essential element of an insurance contract?

Counteroffer

Units with the same or similar exposure to loss are referred to as:

Homogenous

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug use, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?

The policy will not be affected

When an individual purchases insurance, what risk management technique is he or she practicing?

Transfer