Chapter 1: HEALTH & ACCIDENT

insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. what contract characteristic does this describe: A: adhesion B: unilateral C: conditional D: personal

A: adhesion

which of the following would qualify as a competent party in an insurance contract: A: the applicant is under the influence of mind-impairing medication at the time of the application B: the application has prior felony conviction C: the applicant is intoxicated at the time pf application D: the applicant is a 12 year old student

B: the application has prior felony conviction

in forming an insurance contract, when does acceptance usually occur: A: when an insured submits and application B: when an insurer's underwriter approves coverage C: when an insurer delivers the policy D: when an insurer receives an application

B: when an insurer's underwriter approves coverage

in insurance, an offer is usually made when: A: the agent hands the policy to the policyholder B: an agent explains a policy to a potential applicant C: an applicant submits an application to the insurer D: the insurer approves the application and receives the initial premium

C: an applicant submits an application to the insurer

in insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. what contract element does this describe: A: undirectional B: aleatory C: conditional D: unilateral

D: unilateral

in a replacement situation, all of the following must be considered EXCEPT: A: assets B: benefits C: limitations D: exclusions

A: assets

which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information: A: the fair credit reporting act B: unfair trade practice law C: the guaranty association D: consumer privacy act

A: the fair credit reporting act

which is true regarding obtaining underwriting sources: A: it is illegal to obtain information from outside sources in order to determine an applicants insurability B: the applicant must be informed of the sources contacted and how the information is being gathered C: the insurer does not need to inform the applicant of how the information is gathered; informing only of the source is sufficent D: the insurer only needs to inform the applicant of how information is being gathered; it is not necessary to disclose the sources.

B: the applicant must be informed of the sources contacted and how the information is being gathered

which of the following would provide an underwriter with information concerning an applicants health history: A: the agent's report B: the inspection report C: the medical information bureau D: a medical examination

C: the medical information bureau

which of the following entities can legally bind coverage: A: the insured B: federal insurance board C: agent D: insurer

D: insurer

the federal fair credit reporting act: A: protects customer privacy B: regulates telemarketing C: prevents money laundering D: regulates consumer reports

D: regulates consumer reports

an insurance contract must contain all of the following to be considered legally blinding EXCEPT: A: beneficiary's consent B: offer and acceptance C: consideration D: competent parties

A: beneficiary's consent

which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract: A: warranty B: concealment C: indemnity D: representation

A: warranty

which of the following is NOT the consideration in a policy: A: the promise to pay covered losses B: the application given to a prospective insured C: something of value exchanged between parties D: the premium amount paid at the time of application

B: the application given to a prospective insured

which of the following best describes MIB: A: it is a government agency that collects medical information on the insured from the insurance companies B: it is a member organization that protects insured against insolvent insurers C: it is a rating organization for health insurance D: it is a nonprofit organization that maintains underwriting information on applicants for life and health insurance

D: it is a nonprofit organization that maintains underwriting information on applicants for life and health insurance

Mr. R purchases a health insurance policy for his daughter, who recently graduated from college. the daughter receives the required medical examination, and the insurance application. who needs to sign the application: A: Mr R since he is purchasing the policy B: the daughter since she is the proposed insured C: Both Mr R and his daughter D: the agent, Mr R and his daughter

D: the agent, Mr R and his daughter

an applicant for a health insurance policy returns a completed application to her agent, along with a check for a the first premium. she receives a conditional receipt two weeks later. which of the following has the insurer done by this point: A: approved the application B: issued the policy C: neither approved the application nor issued the policy D: both approved the application and issued the policy

C: neither approved the application nor issued the policy

the proposed insured makes the premium payment on a new insurance policy. if the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. this is an example of what kind of contract: A: personal B: unilateral C: conditional D: adhesion

C: conditional

because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT: A: legal purpose B: offer and acceptance C: conditions D: consideration

C: conditions

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following: A: contract of adhesion B: acceptance C: consideration D: legal purpose

C: consideration

as insurer neglects to pay a legitimate claim that covered under the terms of the policy. which of the following insurance principles has the insurer violated: A: representation B: adhesion C: consideration D: good faith

C: consideration

a life insurance policy has a legal purpose if both of which of the following elements exist: A: offer and counteroffer B: policy-owners and named beneficiaries C: insurable interest and consent D: underwriting and reciprocity

C: insurable interest and consent

in terms of parties to a contract, which of the following does NOT describe a competent party: A: the person must have at least completed secondary education B: the person must not be under the influence of drugs or alcohol C: the person must be of legal age D: the person must be mentally competent to understand the contract

A: the person must have at least completed secondary education

insurable interest can be best described by which of the following: A: it is not necessary for the insured to be aware of the insurable interest or give permission for the insurance that is to be written B: the applicant must experience a financial loss due to an accident or sickness that befalls the insured C: the insured must genuinely interested in the life of the applicant D: all beneficiaries need to have notification of their status

B: the applicant must experience a financial loss due to an accident or sickness that befalls the insured

an insure stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. which of the following will explain the reason a death benefit claim is denied: A: utmost good faith B: estoppel C: material misrepresentation D: waiver

C: material misrepresentation