Insurance

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

consideration

What is the major difference between a stock company in a mutual company?

ownership

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

peril

The cause of loss insured against in an insurance policy are known as?

perils

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

If an applicant for life insurance policy and in person to be insured by the policy are two different people, the underwriter would be concerned about

Whether an insurable interest exists between the individuals

All of the following are personal uses of life insurance except

buy-sell agreement

A situation in which a person can only lose or have no change represents?

pure risk

Which of the following methods of calculating the amount of life insurance needed takes into account the insured wages years until retirement, and inflation?

(HLVA)-Human life value approach

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

Moral hazard

In insurance, an offer is usually made when

An applicant submits an application to the insurer

An underwriter is reviewing the medical question in the application and need further information to the medical situation applicant has in the past but with the underwriter require?

Attending physician statement

Which of the following statements concerning buy sell agreement is true?

Byselle agreements are normally funded with a life insurance policy

To legally transact insurance in the state and insured must obtain which of the following?

Certificate of authority

Which of the following is not an example of a valid insurable interest?

Debtor in the life of the creditor

A producer agent must do all of the Following when delivering a new policy to the insured except

Disclose commissions earned from the sale of the policy.

Which authority is not stated in an agent contract but its required for the agent to conduct business?

Implied

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable interest and consent

Which of the following is not true regarding a certificate of authority?

It is issued to group insurance participants.

Which of the following best describes gross annual premium?

Net premium plus expenses

Who might receive dividends from a mutual insurer?

Policyholders

If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded it would be an example of which the legal concept?

Reasonable expectations

The insured discovered that one of the applicants for life insurance missed a couple of questions on the application. What must the insurer do with the application?

Return to the applicant for completion

Hazard is best defined as

Something that increases the risk of loss

Which of the following would qualify as a competent party in an insurance contract?

The applicant has a prior felony conviction

Which of the following is an example of a producers fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

All of the following our choir meds for 11 transfer stations except

They must be a part of the contract

For what reason may a life insurance producer backdate a life insurance policy?

To avoid an increase in premium rate for the insured

Which of the following is the best reason to purchase like insurance rather than annuities?

To create an estate

If an insurer meets the states financial requirements and is approved to transact business in the state it is considered to be

authorized

Which of the following is the most common way to transfer risk?

purchase insurance

Which of the following information about the applicant is not included in the general information section of the application for insurance?

Medical background

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

Which of the following is considered to be a moral hazard?

Driving recklessly

All of the following are true of key person insurance except

The plan is funded by permanent insurance only.

Which of the following is not a goal of risk retention?

To minimize the insured's level of liability in the event of 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

Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?

apparent

When an insured makes truthful statements on the application for insurance and pay the required premium it is known as which of the following?

Consideration

An agent and an applicant for life insurance policy fill out and sign the application. However, the applicant does not wish to give the other initial premium, and no conditional receipt is issued. When will the coverage begin?

When the agent delivers the policy, collect the initial premium, and the applicant completes an acceptable statement of good health

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

to transfer

Pertaining to insurance what is the definition of a fiduciary responsibility?

Promptly forwarding premiums to the insurance company

Which of the following applicants child the insurer charge higher rate of premium and not violate regulations regarding unfair discrimination?

An applicant who is a smoker

The authority granted to an agent through the agent's contract is referred to as

express authority