Life Insurance General Insurance

What documentation grants express authority to an agent? A. Fiduciary contract B. State provisions C. Agents contract with the principal D. Agents insurance license

Agent's contract with the principal (The principal grants authority to an agent through the agents contract)

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of: A. Concealment B. Waiver C. Fraud D. Breach of warranty

Concealment (in an insurance, concealment is the withholding of information that will result in an imprecise underwriting decision)

An insurance company sells an insurance policy over the phone in response to a TV ad. Which of the following best describes this act? A. Independent agent marketing B. Illegal C. Insurance telemarketing D. Direct response marketing

Direct response marketing

In Insurance transactions, fiduciary responsibility means A. Maintaining a good credit record B. Being liable C. Commingling premiums with agents personal funds D. Handling insurer funds in a trust capacity

Handling insurer funds in a trust capacity

Which statement regarding insurance risks is NOT correct? A. An insurable risk must involve loss that is definite as to cause, time, place and amount. B. Insureds cannot be randomly selected C. Insurance cannot be mandatory D. The insurable risk needs to be statistically predictable

Insureds cannot be randomly selected (granting insurance must not be mandatory, selecting insured randomly will help the insurer to have a fair proportion of good risks to poor risks. All other statements are true)

Which of the following is the basis for a claim against an insurance policy? A. Loss B. Material change C. Hazard D. Misrepresentation

Loss (claims result from losses by a peril insured against in an insurance policy)

Installing deadbolt locks on the doors of a home is an example of which method of handling risk? A. Transfer B. Self-insurance C. Reduction D. Avoidance

Reduction (Steps taken to prevent loss from occurring are called risk reduction)

What term best describes the act of withholding material information that would be crucial to an underwriting decision? A. Concealment B. Withholding C. Leading D. Breach of warranty

concealment