Life and Health 1
The opposite of an Aleatory contract is a:
Commutative
Bill Wilson wants to obtain a life insurance policy on his employee, Kenneth Myers, and names Kenneth's wife, Susan, as the beneficiary. Signatures of which of the following would be legally required on the application?1. Bill 2. Kenneth Myers 3. Susan
1 and 2
Which of the following statements concerning pure and speculative risks is/are true? 1. Pure risks have only the chance for loss. 2. Speculative risks have only the chance for gain. 3. Only pure risks are insurable. 4. Both pure and speculative risks are insurable.
1 and 3
To be characterized as a fraternal benefit society, the organization must :1. be non-profit.2. have ritualistic work within a lodge system.3. elected officers.4. operate on a pure assessment system.
1, 2 and 3
Ima Yankee has been licensed for seven years. How many hours of continuing education does Ima need?
20 hours every two years
The policyowner/insured of a $100,000 life insurance policy died of a heart attack four months after taking out the policy. The company then learned that the insured had been treated for a heart condition nine months prior to being insured, but the fact had been omitted from the application. Which course of action would the company likely follow? 1. The company had to pay the death benefit because the discrepancy was not uncovered prior to the insured's death. 2. The company had to pay the death benefit because the contract is incontestable after the payment of the initial premium .3. The company will not have to pay the death benefit, but will return the premiums.
3 only
While New Mexico Life Insurance Company is operating in the state of Florida, it would be considered by the state of Florida to be a/an:
A Foreign Company.
The authority of an agent to undertake certain functions for an insurance company would be found under which of the following?
A contract of agency
Tom completes the application, pays the initial premium, and the agent submits this to the insurance company. The insurer issues a policy with several riders and waivers not requested by Tom. Which of the following answers describes the insurer's action?
A counter offer by the insurer
Rooster died as the result of an automobile accident. His alcohol level was well above the state's limit for impairment. The accident was considered:
A peril
The statement "there is no attempt to value financial loss" would be applied to which of the following?
A valued contract
Which of the following statements concerning void/voidable contracts is true?
A void contract is without legal effect.
Which of the following describes the idea that the insurance contract is created by the insurer and the client can "take it or leave it"?
Adhesion
The use of testimonials, special offers, or statistics would be found under what code or act?
Advertising Code
Which of the following denotes an "element of chance"?
Aleatory
An insurance contract is:
All of the above
Which of the following is/are true concerning the NAIC?
All off the above
The following statements about INSURABLE INTEREST are true EXCEPT:
An insurable interest must exist between the policy owner and the insured at the time of the claim.
Which of the following statements are true?
Career agents are contracted to represent the particular company.
When an applicant applies for insurance by completing an application and paying one month's premium, this constitutes:
Consideration and an offer to buy.
Which of the following is an example of a Risk Retention Group (RRG)?
Dentists
Which of the following is not a unique characteristic of a life insurance contract?
Estoppel
Which type of authority is given to the agent specifically through a contract with an insurance company?
Expressed
An agent's license will terminate if he or she allows how many years to pass without an appointment?
Four years
Regarding warranties and representations, which of the statements below are true?
If a warranty is untrue, the insurer has the right to cancel the contract
What type of agent represents a number of insurance companies under separate contractual agreements?
Independent Agents
Which of the following is not true concerning the National Association of Insurance Commissioners?
It encourages uniformity in state insurance laws by legislative acts.
Which statement concerning a life insurance contract is true?
It is not a personal contract and can be given away.
All of the following statements about life insurance and the risk it covers are true EXCEPT:
Life insurance is like a mutual fund in that a certain sum of money must be set aside each year to meet the contractual obligations of the insured.
What is NOT used to determine a company's ratings?
Lloyds of London
Which of the following is not a federal run government insurance program?
Medicaid
The Florida Guarantee Association:
Protects the insured if the insurer becomes insolvent
The Financial Services Modernization Act:
Repealed the Glass-Steegal Act
An applicant for a health policy has a heart condition of which he is unaware and therefore he answers "no" to the question pertaining to heart problems. His answer is considered to be a:
Representation
The USA PATRIOT Act requires financial institutions to do all of the following, except:
Share information with credit reporting agencies
Sonny submitted an application, with the first month's required premium, to the insurance company for $100,000. The company issued the policy as applied for. Which statement is true?
Sonny made the offer and the company accepted.
Which of the following statements are true?
Stock companies sell both participating and non-participating policies
The NAIC developed:
The Advertising Code AND The Unfair Trade Practices Act
An applicant has been denied insurance coverage because of information contained in a consumer report. According to the Fair Credit Reporting Act, all of the following statements are true about this situation EXCEPT:
The applicant has the right to obtain a copy of the consumer report directly from the insurance company that used the report.
The company transferring the risk to another company is called the:
The ceding company
For a risk to be insurable it must contain all of the following characteristics EXCEPT:
The loss must not be due to chance.
A company transfers a risk. The company assuming the risk is:
The re-insurer
Which of the following is true regarding a STOLI or IOLI?
These are usually sold by persuading seniors to purchase life insurance for the benefit of an investor.
Which is true about the net payment cost comparison index and the surrender cost comparison index?
They are found in the policy summary
A group of pharmacists or dentists might be covered under:
a risk retention group
Which of the following could be considered a commercial company?
a stock or mutual company
Which of the following statements would mean that the values of the contract are unequal?
aleatory
When an agent is replacing an existing policy, he is to provide what with the application?1. Agent's name and ID number2. Notice to Applicant Regarding Replacement of Life Insurance? (Exhibit A)3. A copy of all Sales Proposals used for presentation to the applicant
all of the above
Which of the following statements best describes an element of an insurable risk? 1. The loss must be due to chance. 2. The loss must be definite and measurable. 3. The loss must not be catastrophic. 4. The loss exposures to be insured must be large.
all of the above
Which of the following is not a valued contract?
an 80/20 major medical policy
Andy the agent was fired by the general agent three months ago for conduct "unbecoming". Andy's general agent later was known to accept business that Andy had written after having been fired. One of these policy holders died before the policy was issued but had paid the required premium. Assuming the applicant had been insurable at standard rates, the company would pay because of:
apparent authority
The opposite of a unilateral contract is a:
bilateral contract
A producer represents the
company
Because an insurance contract has been prepared by an insurance company without negotiation, it is considered a/an
contract of adhesion
Another name for a home service company is:
debit
All of the following systems support the sale of insurance through agents EXCEPT:
direct selling
Selling insurance through a vending machine would be:
direct selling
What type of authority is not overtly extended but must be used to enable the agent to transact business of the principle?
implied authority
The "right of subrogation" means the insurance company may acquire the right of the insured against liable third parties, those that may have contributed to the loss, in the event a claim is paid. This could be found in which type of contract?
indemnity contracts
Which of the following is not true concerning a Risk Retention Group?
it insures a group of separate businesses
Alcoholism or drug addiction would be considered which of the following hazards?
moral
Long Life, a stock insurance company, transfers ownership of the company to the policy holders. This process is called:
mutualization
All statements on an application are considered to be:
representations
Statements made by an applicant for a life insurance policy which are supposed to be true are referred to as:
representations
There are risks that include the possibility of loss or gain. What is the definition of accepting risk and confronting it if and when it occurs?
retention
In a sales transaction, the producer will represent the:
the company
A producer owes a fiduciary responsibility to:
the company and the client
The principle that the large amount of exposures that are combined into a group, the more certainty there is to the amount of loss incurred in any given period is known as
the law of large numbers
A person covered under a service provider is called:
the subscriber
The USA PATRIOT Act was created in response to which of the following?
to protect against terrorism & money laundering
Fraternal Benefit Societies are required to do all of the following except:
to provide the insured with a policy
A _______ contract may be set aside.
voidable
A/an __________ is the voluntary giving up of a legal right.
waiver