Chapter 1 quiz: questions missed

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay 10,000$ for a covered loss. What characteristics of an insurance contract does this describe?

Aleatory

In classifying a risk, the home office underwriting department will look at all of the following EXCEPT

Applicant's past income.

Contracts that are prepared by one party and submitted to the other party on a take it or leave it it basis are classified as

Contracts of adhesion

When would a misrepresentation on the insurance application be considered fraud?

If it is intentional and material

Whose responsibility is it to make Certain that an application for insurance is filled out completely and correctly

Producer

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?

The policy will be interpreted as if the insurer waived its right to have an answer on the application

What is the purpose of a disclosure statement in life insurance policies?

To explain features and benefits of a proposed policy to the consumer

Who might receive dividends from a mutual insurer?

Policyholders

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years?

Policy summary