Pretest

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

As of the application date

Aleatory

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 characteristic of an insurance contract does this describe?

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

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

Limited pay whole life

An insured committed suicide one year after his life insurance policy was issued. The insurer will

Refund the premiums paid.

When a fixed annuity owner pays pays a monthly annuity premium to the insurance company, where is this money placed?

The insurance company's general account

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

What is the purpose of the buyer's guide?

To allow the consumer to compare the costs of different policies

Before service is rendered, a written agreement must be prepared outlining the nature of activity to be performed and fees to be paid. Both the consultant and which of the following must sign the agreement?

Client

Units with the same or similar exposure to loss are referred to as

Homogeneous.