XCEL Chapter 3

Which of the following BEST describes a conditional insurance contract? A. A contract that requires certain conditions or acts by the insured individual B. A contract that has the potential for the unequal exchange of consideration for both parties C. A contract where one party "adheres" to the terms of the contract D. A contract where only one party makes any kind of enforceable contract

A contract that requires certain conditions or acts by the insured individual

The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as? A. Apparent B. Estoppel C. Aleatory D. Unilateral

Aleatory

Insurable interest does NOT occur in which of the following relationships? A. Sister and brother B. Parent and children C. Business partners D. Business owner and business client

Business owner and business client

In an insurance contract, the element that shows each party is giving something of value is called? A. offer B. acceptance C. consideration D. purpose

Consideration

Who is responsible for assembling the policy forms for insureds? A. State Insurance Departments B. NAIC C. Insurance carriers D. Insurance producers

Insurance carriers

The authority granted to a licensed producer is provided via the? A. producer's apparent authority B. written contract C. Law of Agency D. Principal Capacity

Law of Agency

Which contract element is insurable interest a component of? A. Competent parties B. Offer and acceptance C. Consideration D. Legal purpose

Legal purpose

What makes an insurance policy a unilateral contract? A. Only the insured pays the premium B. Only the insured can change the provisions C. Only the insurer is legally bound D. Only the insured is legally bound

Only the insurer is legally bound

Under a contract of adhesion? A. there is the potential for an unequal exchange of value B. the insurer's obligations are dependent upon certain acts of the insured individual C. the terms must be accepted or rejected in full D. only one party makes any kind of enforceable promise

The terms must be accepted or rejected in full

According to life insurance contract law, insurable interest exists? A. when any business relationship exists B. at the time of application C. at the time of death D. only when determined by a judge

at the time of application

All of the following are elements of an insurance policy EXCEPT? A. definitions B. other insurance C. claim forms D. conditions

claim forms

What is implied authority defined as? A. Authority given in writing to an agent in the agency agreement B. Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties C. Authority given to handle claims and process payments D. Authority given to an agent to act outside the scope of the agency agreement

Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties

Legal purpose is a term used in contract law meaning? A. there must be an offer and acceptance B. the contract must be aleatory C. there must be legal reasons for entering into the contract D. the contract must be a contract of adhesion

There must be legal reasons for entering into the contract

When the principal gives the agent authority in writing, it's referred to as A. express authority B. implied authority C. apparent authority D. imposed authority

Express authority

Bob and Tom start a business. Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob's death. In this situation, who will receive Bob's policy proceeds? A. Tom's spouse B. Bob's estate C. Bob's spouse D. Tom

Tom