Life insurance quiz questions

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is: A.) Personal B.) Unilateral C.) Conditional D.) Aleatory

C.) Conditional

Which of the following information about the applicant is NOT included in the General Information section of the application for insurance? A.) Gender B.) Occupation C.) Marital status D.) Medical background

D.) Medical background

An applicant signs an application for a $25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. Fi the applicant dies the following day, which of the following is TRUE? A.) The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy B.) The premium would be returned to the insured's estate because the policy was not issued C.) The death claim will be rejected D.) The application will be violated

A.) The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy

When would a misrepresentation on the insurance application be considered fraud? A.) Never: statements by the applicant are only representations B.) When the application is incomplete C.) Any misrepresentation is considered fraud D.) If it is intentional and material

D.) If it is intentional and material

When must insurable interest exist in a life insurance policy? A.) At the time of loss B.) At the time of application C.) At the time of policy delivery D.) When there is a change in beneficiary

B.) At the time of application

An insurance contract must contain all of the following to be considered legally binding EXCEPT A.) Competent parties B.) Beneficiary's consent C.) Offer and acceptance D.) Consideration

B.) Beneficiary's consent

Which of the following is NOT an essential element of an insurance contract? A.) Legal purpose B.) Counteroffer C.) Consideration D.) Agreement

B.) Counteroffer

Stranger-originated life insurance policies are in direct opposition to the principal of A.) Law of large numbers B.) Good faith C.) Indemnity D.) Insurable interest

D.) Insurable interest

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant has to submit a medical exam. If the policy is issued, what would be the policy's effective date? A.) The policy delivery date B.) The date of issue C.) The date of application D.) The date of medical exam

D.) The date of medical exam

Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values, and death benefits for specific policy years? A.) A policy summary B.) A notice regarding replacement C.) A privacy notice D.) A buyer's guide

A.) A policy summary

If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT: A.) Erase the incorrect answer and record the correct answer B.) Draw a line through the first answer, record the correct answer, and have the applicant initial the change C.) Note on the application the reason for the change D.) Destroy the application and complete a new one

A.) Erase the incorrect answer and record the correct answer

A life insurance policy has a legal purpose if both of which of the following elements exist? A.) Policyowners and named beneficiaries B.) Insurable interest and consent C.) Underwriting and reciprocity D.) Offer and counteroffer

B.) Insurable interest and consent

Most agencies try to collect the initial premium from submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a: A.) Warranty B.) Premium receipt C.) Statement of good health D.) Backdated receipt

B.) Premium receipt

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

B.) The applicant has a prior felony conviction

If 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? A.) As of the first month after the policy issue B.) As of the policy issue date C.) As of the application date D.) As of the policy delivery date

C.) As of the application date

When is the earliest a policy may go into effect? A.) When the insurer approves the application B.) After the underwriter reviews the policy C.) When the application is signed and a check is given to the agent D.) When the first premium is paid and the policy has been delivered

C.) When the application is signed and a check is given to the agent

All of the following are duties and responsibilities of producers at the time of application EXCEPT: A.) Explain the nature and type of any receipt the producer is giving to the applicant B.) Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information C.) Check to make sure that there are no unanswered questions on the application D.) Change any incorrect statement on the application by personally initialing next to the corrected statement

D.) Change any incorrect statement on the application by personally initialing next to the corrected statement

Representations are written or oral statements made by the applicant that are: A.) Guaranteed to be true B.) Found to be false after further investigation C.) Immaterial to the actual acceptability of the insurance contract D.) Considered true to the best of the applicant's knowledge

D.) Considered to be true to the best of the applicant's knowledge

If a policy includes a free-look period of at least 10 days, the Buyer's Guide must be delivered to the applicant: A.) Upon issuance of the policy B.) Within 30 days after the premium payment was collected C.) Prior to filling out an application for insurance D.) With the policy

D.) With the policy