apparent authority Premium clause B) the insurer's obligations are dependent upon certain acts of the insured individual which of the following best describes a conditional insurance contract? If the consumer price index had gone up 4%, how much may Ron increase the face value of the policy? What kind of policy is this? Active Status Results Leave, A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n) automatic premium loan nonforfeiture option collateral assignment irrevocable assignment, Period of time after the premium is due but the policy remains in force, What is an insurance policy's grace period? Principal Capacity, All of the following are elements of an insurance policy EXCEPT offer Which of the following is true of the law of contracts? Which of these statements is true? How does life insurance create an immediate estate? Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? A) Parties involved must be competent A) there is the potential for an unequal exchange of value Sharing commissions with a producer licensed in the same line of business. Only the insured is legally bound, According to the principle of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and it's C) Only the insurer is legally bound Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium". A contract that requires certain conditions or acts by the insured individual Which of these is considered to be a Living Benefit option in a life insurance policy? In the case of an insurance contract, the contracting parties are the claimant and the insurer. Food C. Plant D. Zucchini. B) producer B) conditional C) A contract where one party "adheres" to the terms of the contract. Your email address will not be published. nonparticipating life insurance policy participating life insurance policy divisible surplus life insurance policy straight life insurance policy, Which of the following is considered to be an event or condition that increases the probability of an insured's loss? D) underwriter, Reasonably necessary acts that an agent must perform for carrying out his/her expressly authorized duties are covered by an agent's Express Which of these riders will pay a death benefit if the insureds spouse dies? implied authority Accelerated death benefit rider Waiver of premium rider Extended term option Decreasing term insurance. After 15 years, the cash value has accumulated to $100,000 and the policy's face amount has become $600,000. C) insurer D. $2,863. Coverage decreases automatically Coverage increases automatically Coverage remains as long as proof of insurability is provided Coverage is eliminated, Joe has a life insurance policy that has a face amount of $300,000. The policies continue in force with no change. Risk Hazard Indemnity Peril, Insurance companies determine risk exposure by which of the following? D) Terminate the agent, Insurable interest does NOT occur in which of the following relationships? Because of this, an insurance contract is considered What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period? Which type of life insurance policy is this? In which form of corporate financing is the investor also an owner? consideration Vegetable B. A) there is an element of chance and potential for unequal exchange of value or consideration for both parties Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. D) the authority to add provisions to a contract, C) the authority to represent the insurer, Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"? discreet What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period? B) NAIC B) A contract that has the potential for the unequal exchange of consideration for both parties Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed in Ken? It is a government agency that collects medical information on the insured from the insurance companies C. It is a member organization that protects against insolvent insurers D. The present cash value of the policy equals $250,000. Provide funds to help fund retirement Provide funds to help pay taxes Provide funds for funeral expenses Provide tax deductions for premium payments, lower than the typical whole life policy during the first few years and then higher than typical for the remainder, The premium for a Modified whole life policy is higher than the typical whole life policy during the first few years and then lower than typical for the remainder lower than the typical whole life policy during the first few years and then higher than typical for the remainder normally graded over a period of 20 years level for the first 5 years then decreases for the remainder of the policy, The type of policy which pays on the death of the last person is called joint life survivorship life dual life shared life, A life insurance policy that is subject to a contract interest rate is referred to as adjustable life group life term life universal life, a policy that is paid up after only one payment, A single premium cash value policy can be described as a policy that is paid up after only one payment a policy that only requires an annual payment a policy that is guaranteed issue a policy that covers two or more lives, A limited payment whole life policy provides protection for 20 years lifetime protection protection for more than one person discounted premiums, A policyowner may change two policy features on what type of life insurance? Which of these would NOT be an unfair claims practice? Field underwriting performed by the producer involves, Completing the application and collecting initial premium, An employee under a group insurance policy has the right to name a beneficiary and the right to, Convert to an individual policy in the event of employment termination. conditional which of the following best describes a conditional insurance contract? A rating from a rating service company, such as A.M. Best An illustration A sales presentation Direct mailing from an agency, Fraternal Benefit Society has each of the following characteristics EXCEPT Incorporated Without capital stock Exist For profit Exist for the benefit of its members, A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called A self-derived plan A multiple-employer plan A blanket plan A self-funded plan, An insurer's ability to make unpredictable payouts to policyowners is called investment values liquidity assets capital, Ken is a producer who has obtained Consumer Information Reports under false pretenses. What guarantees that the statements supplied by an insurance applicant are true? An insurance applicant with a below-average likelihood of loss is typically considered to be a. It is the means by which one or more parties bind themselves to certain promises. the policy provides a straight, level $100,000 of coverage for 5 years. D) Countersignature, According to the principle of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and it's What would happen if a life insurance applicant is given a conditional receipt? In most cases, the insured is. If thats the case, you dont have to worry anymore. A life insurance claim which involves a per capita distribution of policy proceeds would be payable to the. Notify me of follow-up comments by email. Insurance producer Jerry offers a $350 shopping card if they purchase an insurance product through him. Peril Hazard Loss factor Liability, Which of these techniques will remove the risk of losing money in the stock market by never purchasing stocks? purpose, Insurable interest does NOT occur in which of the following relationships? The terms of the policy typically outline these conditions . 30 seconds. In this situation, who will receive Bob's policy proceeds? The most appropriate description ascribed to the meaning of definition from the options given is ; A precise statement of the qualities of an idea, object or process. An insurance contract usually involves an exchange of consideration between both parties: the insurer agrees to provide coverage and pay claims in the event of a loss, and the policyholder agrees to pay premiums in return. When initial premium is collected and policy is issued. be filed with the state Describe the structure. Write a summary of the main ideas. Law of Agency One-sided or unfair insurance contracts can, however, exist if they contain provisions that disproportionately benefit one party. Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill. James is the insured on a life insurance policy where his age was misstated on the application. The face amount and premium will remain constant over the 10-year period. A) fiduciary bond A minimum of 12 months after date of purchase, Insurance premium is determined by each of the following factors EXCEPT. What types of life insurance are normally used for key employee indemnification? representation D) only one party makes any kind of enforceable promise, C) the terms must be accepted or rejected in full, What is implied authority defined as? Which contract element is insurable interest a component of? A policy containing exclusions or limits that are not clearly disclosed to the policyholder, or a premium that is significantly higher than the risk covered, could be considered unfair or one-sided. collateral, What is implied authority defined as? Ken is a producer who has obtained Consumer Informations Reports under false pretenses. C) Bob's spouse Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties B) errors and omissions D) Utmost good faith, What does the insurance term "indemnity" refer to? C) statements made in the application and the premium C) Contract must have a legal purpose Typically, bilateral contracts involve an equal obligation or. The above question Which of the following BEST describes a conditional insurance contract?, Was part of Insurance MCQs & Answers. A) the appearance of authority an insurer gives to its agent Which of the following is an annuity that is linked to a market-related index? Post thoughts, events, experiences, and milestones, as you travel along the path that is uniquely yours. Which of these is considered to be a Living Benefit option in a life insurance policy? Bob dies 12 months later. warranty Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them? The coverage, conditions, and limitations in the master policy of a group contract can be found in which document? C) Insurance carriers Craig purchased a life insurance policy for enabling his heirs to pay estate taxes. there is the potential for an unequal exchange of value Which of these features are held exclusively by variable universal life insurance? Adjustable life policy Modified life policy Endowment policy Universal life policy, How are survivorship life insurance policies helpful in estate planning? there must be legal reasons for entering into the contract Connect with others, with spontaneous photos and videos, and random live-streaming. What does a life insurance policy guarantee to the stated beneficiary upon the death of the insured? D) A contract where only one party makes any kind of enforceable contract, A) A contract that requires certain conditions or acts by the insured individual, All of the following are elements of an insurance policy EXCEPT Which of the following are the premium payments for a universal life policy NOT used for? A. Adjustable life insurance Decreasing term insurance Increasing term insurance Modified life insurance, A spouse and child can be added to the primary insured's coverage as what kind of rider? An insurer exaggerating its dividends in a magazine advertisement. The gap between the total death benefit and the policy's cash value The gap between when a claim is filed and when the death benefit is received The amount of interest that has accumulated in the policy's cash value The point in time when the policy's cash value reaches $0, Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. A) estoppel B) at the time of application (D) Only one party is legally bound to the contract. D) Insurance producers, If a material warranty violation on the part of the insured is found, what recourse does an insurer have? The face amount and policy premium are not affected by the payment Before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal illness There may be a dollar limit on the maximum benefit The benefit can be offered as a rider at a specific extra cost or may be at no cost, Which of the following is NOT part of an insurance contract? A) definitions Returning a portion of a premium as inducement to purchase insurance, An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of, Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out. the contract is voidable upon proof of fraud. A double indemnity benefit will be payable to Matts beneficiary is Matt, All of the following riders can increase the death benefit amount EXCEPT, All of these are valid policy dividend options for a life insurance policyowner EXCEPT, The premium for a Modified whole life policy is, Lower than the typical whole life policy during the first few years and then higher than typical for the remainder, A nonparticipating company is sometimes called a(n), Intentional withholding of material facts that would affect an insurance policys validity is called a(n), Signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT. What is this an example of? A) Sue the insured A) One party is restored to the same financial position the party was in before the loss occurred B) The unequal exchange of value or consideration for both parties C) One party (the insurance company) prepares the contract with no negotiation between the applicant and insurer D) Only one party (the insurer) makes any kind of enforceable promise Julie has a $100,000 30-year mortgage on her new home. B) Offer and acceptance The period of coverage The face amount The premium payments The cash value, at a predetermined date or age, regardless of the insured's health, A Renewable Term Life insurance policy can be renewed at a predetermined date or age, regardless of the insured's health only if the insured provides evidence of insurability anytime at the policyowner's request typically with no change in premium, Pre-death distributions will become taxable, Under a Modified Endowment Contract, what are the likely tax consequences? A Modified Endowment Contract (MEC) is best described as A life insurance contract which accumulates cash values higher than the IRS will allow An annuity contract which was converted from a life insurance contract A modified life contract which enjoys all the tax advantages of whole life insurance A life insurance contract where all withdrawals B) A contract that has the potential for the unequal exchange of consideration for both parties. $1,000 $3,000 $5,000 $7,000, A nonparticipating company is sometimes called a(n) alien insurer mutual insurer reinsurer stock insurer, Because dividends are considered to be a return of premium, Why are dividends from a mutual insurer not subject to taxation? A unilateral contract is one in which only one party makes a legally binding guarantee. A) warranty C) the authority to represent the insurer D) Conditional, Which of the following is NOT a requirement of a contract? I hope you got the correct answer to your question. unilateral, Ambiguities in an insurance policy are always resolved in favor of the Which of the following is a TRUE statement? After being properly appointed by the insurer. This is an example of: An example of unfair discrimination would be, When an insurer charges a higher rate for insurance based on an insureds race, religion, or national origin, Fixed period settlement options are considered to be a form of a(n). weegy. B) A contract that has the potential for the unequal exchange of consideration for both parties C) the contract has been prepared by one party (the insurance company) with no negotiation between the applicant and the insurer Legal purpose Variable life insurance and Universal life insurance are very similar. The death benefit would be $250,000 $750,000 $375,000 $500,000, What does the word "level" in Level Term describe? B. D) unilateral, Who is responsible for assembling the policy forms for insureds? B) written contract An insurer's claim settlement practices are regulated by the Securities and Exchange Commission (SEC) National Association of Claims Adjusters (NACA) National Association of Insurance Commissioners (NAIC) State insurance departments, A life insurance company has transferred some of its risk to another insurer. When the term insurance expires. How many days is a temporary producers license valid? B) Indemnity Eventually, they retire and dissolve the business. A.$1,656 However, corporations also can raise money by selling bonds or issuing additional shares of stock. c. income earned by Pat's spouse. Which type of multiple protection policy pays on the death of the last person? A) producer's apparent authority Which of the following best describes the MIB? B) concealment Which of the following best describe the term definition. there must be an offer and acceptance What is the difference between insurance condition and warranty? express, ______ is NOT an element of a valid contract. If xxx actually turns out to be 131313, what do you think of the claim? Which of the following best describes a symbol. It allows for a spouse to be added as a rider to a life insurance policy It allows for policy loans to be advanced to the insured in the event of unemployment It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill It allows for a third party to purchase a life insurance policy at a discounted rate and immediately advance a portion of the death benefit, All of these are standard exclusions found in a life insurance policy EXCEPT hazardous occupations aviation disability war, Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue? All of the following are considered appropriate uses if life insurance for business purposes EXCEPT, Protecting the business by covering entry level employees with life insurance, Level premium permanent insurance accumulates a reserve that will eventually. What Benefit Does The Payor Clause On A Juvenile Life Policy Provide? The amount of his disability income payments for an on-the-job injury may be reduced by. Rob purchased a standard whole life policy with a $500,000 death benefit when we was age 30. Connect the text to your own experiences. D) Consideration clause, When the principal gives the agent authority in writing, it's referred to as D) Offer and acceptance must be involved, B) Equal consideration is required between the involved parties, A contract requires Modified Whole Life Decreasing Term Life Adjustable Life Whole Life, Decreasing term life insurance is often used to provide retirement funds provide coverage for a home mortgage accumulate cash value provide coverage for estate taxes, Which of these is NOT subject to income taxation under a Modified Endowment Contract (MEC)? A) Contract may be accepted or rejected by the insured, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as. D) A contract where only one party makes any kind of enforceable contract, Answer:A) A contract that requires certain conditions or acts by the insured individual. Guaranteed Insurability rider Family term insurance rider Family whole insurance rider Payor benefit rider, A partial surrender is allowed in which of the following life policies? See answers. One-sided or unfair insurance contracts can, however, exist if they contain provisions that disproportionately benefit one party. The insurers obligation to pay a death benefit upon an approved death claim. An insurance contract usually involves an exchange of consideration between both parties: the insurer agrees to provide coverage and pay claims in the event of a loss, and the policyholder agrees to pay premiums in return. All of the following are examples of a Business Continuation Plan EXCEPT. D) errors and oversights, In an insurance contract, the insurer is the only party legally obligated to perform. Insurance contracts are unilateral contracts. Sister and brother Parent and children Business partners Business owner and business client, The deeds and actions of a producer indicate what kind of authority? In exchange, the policyowner pays premiums. The policy may be paid up early by using accumulated cash values The policy may be paid up early by using policy dividends The policy's premiums will increase after 20 years The policy's cash values steadily decrease after 20 years, the policy would be payable, minus the premium amount, If an insured dies during the grace period with no premiums paid the policy would be payable, minus the premium amount the policy would be payable only after the beneficiary makes past due premium payment all past premiums will be refunded with interest the claim would be denied, In what part of an insurance policy are policy benefits found? What is the meaning of par value of stock with respect to the corporate form of organization? Which of the following is CORRECT regarding the death benefit amount? Waiver Exclusion Rider Provision, The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n) sickness suicide accident war, An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period? Rob recently died at age 60. be in writing Joint life policy Survivorship life policy Dual life policy Multiple life policy, A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called whole life group life credit life universal life, Can be converted to permanent coverage without evidence of insurability, Donald is the primary insured of a life insurance policy and adds a children's term rider. The gap between the total death benefit and the policys cash value. C) Insurable interest A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a(n). both parties consent to the contract. A) Unilateral contract Insurers must maintain files of all documents used for solicitation for ____ year(s) after the last authorizes date of use. ______ is NOT an element of a valid contract. C.$2,113 A) express authority A contract that requires certain conditions or acts by the insured individual This means that the insurer's promise to pay benefits depends on the occurrence of an event covered by the contract. A contract that requires certain conditions or acts by the insured individual A contract that has the potential for the unequal exchange of consideration for both parties A contract where one party "adheres" to the terms of the contract A contract where only one party makes any kind of enforceable contract, statements made in the application and the premium, In a life or health insurance contract, "consideration" would be the offer and acceptance premium only statements made in the application and the premium statements made in the application only, According to the principle of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and it's underwriting issuance of the policy promises made legal reserve, All of the following are elements of an insurance policy EXCEPT definitions other insurance claim forms conditions, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as Apparent Estoppel Aleatory Unilateral, Which of the following is an example of the insured's consideration? According to the Affordable Care Act (ACA), insurers can no longer deny health coverage due to pre-existing conditions unless that plan is a (n) Grandfathered plan Accident plan Individual plan Group plan Grandfathered plan 3. C) Business partners D) Only the insured is legally bound, Bob and Tom start a business. Which of the following best describes how you analyze a fiction text? A paid premium Which of the following statements correctly describes a contract of indemnity? Authority given to handle claims and process payments A policyowner is prohibited from making any changes to the policy without the beneficiarys written consent under which beneficiary designation? If the other agreement or condition is performed, then the conditional contract is . acceptance A) Express authority Which of the following statements is true? The terms and conditions of insurance contracts should be carefully reviewed by policyholders before signing. How do insurers predict the increase of individual risks? What is created after policy proceeds are obtained in a lump sum and then immediately invested? Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies? Because of this, an insurance contract is considered Conditional insurance contracts are insurance policies that require the insured person to satisfy certain conditions in order to become effective and/or to be paid out by the insurer. Authority given in writing to an agent in the agency agreement Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties Authority given to handle claims and process payments Authority given to an agent to act outside the scope of the agency agreement, The authority granted to a licensed producer is provided via the producer's apparent authority written contract Law of Agency Principal Capacity, Insurable interest does NOT occur in which of the following relationships? D) Consideration, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? aleatory What kind of policy is this? B) Law of adhesion A) State Insurance Departments After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. This rider is called a(n). D) Evident authority, Which of the following is an example of the insured's consideration?
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