Barbaras policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. Adjustable life policy Modified life policy Endowment policy Universal life policy, How are survivorship life insurance policies helpful in estate planning? 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? Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident? Under the McCarran-Ferguson Act, what is the minimum penalty for this? Which of these statements is true? Use the binomial distribution to find P(x13)P(x \leq 13)P(x13) if the stain removal product's claim is correct. A unilateral contract is one in which only one party makes a legally binding guarantee. What Benefit Does The Payor Clause On A Juvenile Life Policy Provide? C) Legal purpose C) promises made Which of the following BEST describes a conditional insurance contract? express, ______ is NOT an element of a valid contract. C) the contract has been prepared by one party (the insurance company) with no negotiation between the applicant and the insurer Insurance contracts are unilateral contracts. Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed in Ken? Definition refers to a description which is given to a word, idea or phenomenon . Log in for more information. Term Straight Life Endowment Variable Life, A life insurance policy that has premiums fully paid up within a stated time period is called stated payment insurance limited universal insurance stated modified insurance limited payment insurance, Reggie purchased a life insurance policy with a face amount of $500,000. The amount of his disability income payments for an on-the-job injury may be reduced by. 3. Peril Hazard Loss factor Liability, Which of these techniques will remove the risk of losing money in the stock market by never purchasing stocks? It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. $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? I hope you got the correct answer to your question. A policyowner is prohibited from making any changes to the policy without the beneficiarys written consent under which beneficiary designation? issuance of the policy Assume that the product will be tested on 202020 randomly selected stained garments, and let xxx denote the number of these garments from which the stains will be completely removed. 0 Answers/Comments. written contract What guarantees that the statements supplied by an insurance applicant are true? Aleatory Contract: A contract type in which the parties involved do not have to perform a particular action until a specific event occurs. 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. $0 $5,000 $10,000 $15,000, Determine financial strength of an insurance company, What is the primary purpose of a rating service company such as A.M Best? guarantee For a trip to the hospital, Evan Appleton paid $1,656 in hospital charges, a$750 insurance deductible, and a $457 co-payment. When the principal gives the agent authority in writing, its referred to as, The terms must be accepted or rejected in full. promises made Only the insured pays the premium Only the insured can change the provisions Only the insurer is legally bound Only the insured is legally bound, A professional liability for which producers can be sued for mistakes of putting a policy into effect is called fiduciary bond errors and omissions fiduciary trust errors and oversights, In order for a contract to be valid, it must be filed with the state be signed and witnessed by an attorney be in writing contain an offer and acceptance, 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". Connect the text to your own experiences. B) A paid premium What is the difference between insurance condition and warranty? 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"? Intentional withholding of material facts that would affect an insurance policy's validity is called a(n). C) Business partners Accelerated death benefit rider Waiver of premium rider Extended term option Decreasing term insurance. C) Materiality of concealment there must be legal reasons for entering into the contract A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a(n). GENERAL LAW OF CONTRACTS A contract is an agreement enforceable by law. Which of these statements is true? C) there must be legal reasons for entering into the contract C) insurer Which of the following statements correctly describes a contract of indemnity? Loans obtained by a policyowner against the cash value of a life insurance policy. Andy the annuitant dies before the annuity start date. C) adhesion the contract must be a contract of adhesion, there must be legal reasons for entering into the contract, What makes an insurance policy a unilateral contract? B) Parent and children A) estoppel C) Indemnity contract D) legal reserve, In an insurance contract, the element that shows each party is giving something of value is called Which of these would NOT be an unfair claims practice? When the term insurance expires. b. benefits paid under workers compensation. the contract must be aleatory C) statements made in the application and the premium What kind of policy is this? The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? 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. Because of this, an insurance contract is considered apparent C) Competent parties D) collateral, Express power given to an agent in an agency agreement is Which of these is considered to be a disadvantage of owning this type of annuity? Risk reduction Risk transference Risk avoidance Risk retention, The cause of a loss is referred to as a(n) hazard adversity peril risk, How do insurers predict the increase of individual risks? B) the insurer's obligations are dependent upon certain acts of the insured individual Both partners are still married at the time of Bob's death. A contract that requires certain conditions or acts by the insured individual. Policyowner has the right to select the investment which will provide the greatest return. Term, whole, and universal life insurance. A) A contract that requires certain conditions or acts by the insured individual 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. D) Competent parties, Which of the following BEST describes a conditional insurance contract? D) Personal contract, The importance of a representation is demonstrated in what rule? weegy. Barry offers Chris his mountain cabin for the weekend to secure his order for his insurance business. A) the appearance of authority an insurer gives to its agent How does life insurance create an immediate estate? A) fiduciary bond A) One party is restored to the same financial position the party was in before the loss occurred. The above question Which of the following BEST describes a conditional insurance contract?, Was part of Insurance MCQs & Answers. underwriting Accelerated death benefit An example of an unfair claims practice would be the contract is voidable upon proof of fraud. Eventually, they retire and dissolve the business. purpose, Insurable interest does NOT occur in which of the following relationships? producer A) Competent parties A) Insurer's promise to pay benefits a) a conditional acceptance allows the parties to negotiate the definite terms of the contract upon the completion of the contract. A) offer and acceptance In the case of an insurance contract, the contracting parties are the claimant and the insurer. His insurance agent told him the policy would be paid up if he reached age 100. A) there is an element of chance and potential for unequal exchange of value or consideration for both parties offer Which of the following does a producer NOT have a fiduciary responsibility to? The type of annuity she is seeking is called. Adjustable life Credit life Modified life Universal life, Whole life policy with premiums paid up after 20 years, Which of these would be the best example of a limited pay life insurance policy? Which Of The Following Best Describes A Conditional Insurance Contract. An example of an unfair claims practice would be, Failing to effectuate prompt, fair, and fair equitable settlements of a claim. Competent parties What kind of policy is this? The insured, on the other hand, makes few, if any, legally binding promises to the insurer. C) negotiation between the involved parties Anheuser-Busch InBev is trying to reduce its water usage. Which of the following statements is true? Loan against the cash value Policy withdrawal Policy dividend Death benefit, A business will typically use which type of life insurance to cover their employees? Insurers must maintain files of all documents used for solicitation for ____ year(s) after the last authorizes date of use. the terms must be accepted or rejected in full only one party makes any kind of enforceable promise, the terms must be accepted or rejected in full, 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". What is this an example of? A) there is the potential for an unequal exchange of value A) underwriting This legal agreement requires prior performance of another agreement or clause in order to be enforceable. 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? Business partners C) representation Net death benefit will be reduced if the loan is not repaid No interest will be charged on loan balance Term life policies are the only type of insurance that allows policy loans A loan can be taken out for up to the face amount of the policy, Ownership of a life insurance policy may be temporarily transferred with a(n) collateral assignment absolute assignment transferable assignment beneficiary assignment, provide evidence of insurability to the insurer, In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST remit all past-due premiums within the grace period provide evidence of insurability to the insurer resubmit a new life insurance application provide a valid reason for the lapse, Which of the following is considered to be an alternative to a life settlement? A life insurance policyowner does NOT have the right to, Fixed annuities provide each of the following EXCEPT. C) the authority to represent the insurer What does the word level in Level Term describe? 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)? B) concealment Preferred risk policies with reduced premiums are issued by insurance companies because the insured has, Better than average mortality or morbidity experience. Orissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. B) errors and omissions A. B) at the time of application A) A contract that requires certain conditions or acts by the insured individual. Parent and children A) Unilateral contract C.$2,113 there must be an offer and acceptance B) implied authority A) definitions D) only when determined by a judge, Xcel Chapter 3 Legal Concepts of the Insuranc, Chapter 3 Exam - Legal Concepts of the Insura, Chapter 4 Exam - Life Insurance - Types of Po, 4 - (Questions) Life Insurance Policies - Pro, Chapter 5: Life Insurance Premiums, Proceeds,, Chapter 4: Type of Insurance Policies Part 1, Chapter 4: Policy Provisions, Options and Rid, Calculus for Business, Economics, Life Sciences and Social Sciences, Karl E. Byleen, Michael R. Ziegler, Michae Ziegler, Raymond A. Barnett, Fundamentals of Engineering Economic Analysis, David Besanko, Mark Shanley, Scott Schaefer, The Cultural Landscape: An Introduction to Human Geography, AP Edition, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Unit 7 AP Env. A) when any business relationship exists Which statement is CORRECT when describing a contract of adhesion? Apparent A) Tom's spouse If Sharon MUST obtain Mikes signature in order to change the beneficiary, what kind of beneficiary designations is this? b) a contract is an agreement enforceable at law. 2 See answers Dual Life insurance Joint Life insurance Last Survivor Life insurance Shared Life insurance, Index whole life insurance contains a securities component that acts as a(n) hedge against inflation premium stabilizer means to lowering taxes on earnings incentive to purchase more coverage, Which of the following are the premium payments for a Universal life policy NOT used for? C) aleatory apparent authority voidable D) underwriter, Reasonably necessary acts that an agent must perform for carrying out his/her expressly authorized duties are covered by an agent's Updated 10/6/2017 9:10:03 AM. B) Only the insured can change the provisions How soon can the benefit payments begin with a deferred annuity? Implied B) issuance of the policy Which of the following is CORRECT regarding the death benefit amount? A) Unilateral The death benefit would be $250,000 $750,000 $375,000 $500,000, What does the word "level" in Level Term describe? B) Contract of adhesion Child term rider Payor rider Family maintenance rider Family income rider, What happens to the coverage under a children's term rider when that child reaches a certain specified age? 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? Expert answered|Malekith22|Points 0| Log in for more information. D) unilateral, Who is responsible for assembling the policy forms for insureds? A life insurance contract guarantees to the beneficiary not only a death benefit, but a payment of a sum of money in perpetuity, called a death benefit for that purpose of insurance coverage. A) Sister and brother Which of the following products would allow him to accomplish this? A minimum of 12 months after date of purchase, Insurance premium is determined by each of the following factors EXCEPT. 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. A fixed cash value A flexible premium schedule A fixed death benefit The ability to take out a policy loan, The least expensive option to pay off a 30-year mortgage balance would be convertible term life decreasing term life adjustable term life increasing term life, Pre-death distributions are typically taxable, Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test? The authority granted to a licensed producer is provided via the 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 If the consumer price index had gone up 4%, how much may Ron increase the face value of the policy? Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? What is this called? D) Risk insured against, A professional liability for which producers can be sued for mistakes of putting a policy into effect is called Because you're already amazing. Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested? Law of large numbers U.S. Census Average mortality incidents Experience of morbidity, Insurance represents the process of risk selection avoidance transference assumption, Doctors pooling their money to cover malpractice exposures, An example of risk sharing would be Adding more security to a high-risk building Choosing not to invest in the stock market Doctors pooling their money to cover malpractice exposures Buying an insurance policy to cover potential liabilities, All of the following are examples of pure risk EXCEPT Losing money at a casino Injured while playing football Falling at a casino and breaking a hip Jewelry stolen during a home robbery, the terms must be accepted or rejected in full, Under a contract of adhesion, there is the potential for an unequal exchange of value the insurer's obligations are dependent upon certain acts of the insured individual the terms must be accepted or rejected in full only one party makes any kind of enforceable promise, According to life insurance contract law, insurable interest exists when any business relationship exists at the time of application at the time of death only when determined by a judge, In an insurance contract, the insurer is the only party legally obligated to perform. The automatic premium loan provision authorized an insurer to withdraw from a policys cash value the amount of, Past due premiums that have not been paid by the end of the grace period. The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? B) the contract must be aleatory c. income earned by Pat's spouse. If threats or force is used to affect an insurance transaction, the unfair trade practice of __________ has been committed. In order for a contract to be valid, it must. D) Legal Purpose, Which of the following is present when an applicant stands to lose value if the insured dies? This is also known as a non-negotiable insurance contract, or an automatic contract. C) Insurance carriers 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. Which of the following are the premium payments for a universal life policy NOT used for? Which of the following BEST describes a conditional insurance contract. A paid premium D) purpose, Which principle is accurately described with the statement "Insureds are entitled to recover an amount NOT greater than the amount of their loss"? Only the insured can change the provisions D) Tom, The deeds and actions of a producer indicate what kind of authority? Typically, bilateral contracts involve an equal obligation or. 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. This rider is called a(n). Authority given to an agent to act outside the scope of 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, When the principal gives the agent authority in writing, it's referred to as 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.