CA Life Insurance Exam [Terms]
A life policy has a legal purpose if both of which of the following elements exist?
Insurance interest and consent
Which of the following terms refers to an unintentional tort?
Negligence
If no receipt is issued at the time of application, a statement of good health is usually required at the time of...
Policy delivery
Which of the following describes specific information about policy provisions and benefits?
Policy summary
The price of insurance for each unit of exposure is know as...
Rate
In insurance contracts, a warranty is a...
Statement that must be true
Which of the following methods of calculating the amount of life insurance needed takes into account the insured's salary and years until retirement?
The human life value approach
Which of the following does NOT need to be identified in an insurance policy?
The insurer's financial rating
Which of the following would NOT be eligible for coverage under key person insurance ?
The owner of a shop
Which method of dealing with risk is applied when a person purchases insurance?
Transfer
Risk in insurance terminology refers to
Uncertainty of financial loss
The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as
Utmost good faith
Who acts on behalf of the principal?
agent
Which of the following is considered a field underwriter?
an agent
Which of the following would be the main source of underwriting information used by the company in the risk selection process?
application
Conditions that increase the chances of an insured loss occurring are referred to as...
hazards
A substandard risk compared to a standard risk would pay..
higher premium
All of the following are examples of risk retention EXCEPT...
premiums
Medical Information Bureau (MIB) is
A source of medical information to alert insurers to adverse medical history
An insurance contract must contain all of the following elements to be considered legally binding EXCEPT..
Beneficiary's consent
An insured submits the full premium along with a completed application, and the policy is issued 10 days later. When does the coverage begin?
Date of application
When must insurance interest exist in life insurance?
Date of application
In an insurance contract, consideration refers to..
Exchange of something of value by both parties
Which of the following best describes the aleatory nature of an insurance contract?
Exchange of unequal values
Which of the following in NOT a type of hazard?
Exposure
When would a misrepresentation on the insurance application be considered fraud?
If it is intentional and material
Which provision states that if a policy for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?
Indemnity