Quiz 1

An agent is trying to convince a potential insured to buy a policy from him, so he misrepresents the benefits of the policy. This is an example of

Fraud

Events or conditions that increase the changes of an insured loss occurring are referred to as

Hazards

Which provision states that if a policy allows for greater compensations that the financial loss incurred, the insured may only receive benefits for the amount lost

Indemnity

A life insurance policy has a legal purpose if there are both

Insurable interest and consent

A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?

Morale

Which of the following is an example of apparent authority?

The agent accepts a premium payment after the end of the grace period

Who should the Insurer always represent?

The insured, not the company

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

By purchasing health insurance, what are you doing to your risk?

Transferring

An insurance agent's responsibilities include all of the following EXCEPT

represent the client

Peril is most easily defined as

the cause of loss insured against in an insurance policy

Officers who manage stock insurance companies are

elected by stockholders

Which of the following terms best describes what a person is doing when he takes a defensive driving course or deadbolt locks on the doors of his home?

Risk reduction

When the agents are acting within the scope of their contract, their actions will be assumed to be the acts of the

insurer

The requirement that an agent not co-mingle insurance monies with their own funds is known as

Fiduciary responsibility