Introduction to Life insurance
Peril is most easily defined as A. Something that increases the chance of loss. B. The cause of loss insured against. C. An unhealthy attitude about safety. D. The chance of a loss occurring.
B. The cause of loss insured against Perils are the causes of loss insured against in an insurance policy.
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 contact element does this describe? A. Conditional B. Unilateral C. Unidirectional D. Aleatory
B. Unilateral In a unilateral contract, the insured is not legally bound to do anything. the insurer, however, must pay losses covered by the policy.
Which of the following would qualify as a competent party in an insurance contract? A. The applicant is intoxicated at the time of the application B. The applicant is a 12-year-old student C. The applicant is under the influence of a mind-imparing medication at the time of the application D. The application has a prior felony conviction
D. The application has a prior felony conviction When an insurer and insured enter into a contract, both parties must be of legal age and mentally competent. it is legal for a person convicted of a felony to buy an insurance contract. An intoxicated person, however, may not be mentally competent, a 12-year-old student is considered to be underage in most states and a person under mind-imparing medication most likely would not be mentally competent.
In insurance, an offer is usually made when A. An applicant submits an application to the insurer B. The insurer approves the application and receives the initial premium C. The agent explains a policy to a potential applicant D. An agent explains a policy to a potential applicant
A. An applicant submits an application to the insurer
Events or conditions that increase the chances of an insured loss occurring are referred to as A. Hazards B. Exposures C. Risks D. Perils
A. Hazards Conditions such as lifestyle and existing health, or activities such as scuba diving are hazards and may increase the chance of a loss occurring.
The causes of loss insured against in an insurance policy are known as A. Perils B. Losses C. Risks D. Hazards
A. Perils Perils are the causes of loss insured against in an insurance policy.
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 legal concept? A. Nonforfeiture B. Indemnity C. Reasonable expectations D. Cease and desist
C. Reasonable expectations If, because of advertising or sales literature or statements by an agent, an insured could reasonably expect the coverage, the courts have held that the insurer must provide that coverage.
Which of the following individuals must have insurable interest in the insured? A. Beneficiary B. Underwriter C. Producer D. Policyowner
D. Policyowner The policyowner must have an insurable interest in the insured (his/her own life is the policyowner and the insured is the same person), or in the life of a family member business partner.
