Which of the following is true of the law of contracts? If xxx actually turns out to be 131313, what do you think of the claim? B) implied authority GENERAL LAW OF CONTRACTS A contract is an agreement enforceable by law. Shirley has a $500,000 10-year-non-renewable level term life policy. 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. 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? Pay owns a 20-pay life policy with a paid-up dividend option. B) A paid premium C) Only the insurer is legally bound When the term insurance expires. Eventually, they retire and dissolve the business. 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? Which of the following policies does NOT build cash value? B) only an offer Intent, The deeds and actions of a producer indicate what kind of authority? What kind of policy is this? Contestability clause, In order for a contract to be valid, it must A) A contract that requires certain conditions or acts by the insured individual C.$2,113 (D) Only one party is legally bound to the contract. What types of life insurance are normally used for key employee indemnification? In most cases, the insured is. D) Utmost good faith, What does the insurance term "indemnity" refer to? Only the insurer is legally bound Use the binomial distribution to find P(x13)P(x \leq 13)P(x13) if the stain removal product's claim is correct. be filed with the state fichoh. Bob and Tom start a business. 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. An applicants character and personal habits can be obtained for underwriting purposes from which source? 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? 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. C) A contract where one party adheres to the terms of the contract What is this called? An example of an unfair claims practice would be, Failing to effectuate prompt, fair, and fair equitable settlements of a claim. 2. A.$1,656 What is this an example of? 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? A) fiduciary bond A) Authority given in writing to an agent in the agency agreement Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident? Principal Capacity, All of the following are elements of an insurance policy EXCEPT Which type of multiple protection policy pays on the death of the last person? Both partners are still married at the time of Bob's death. a) a conditional acceptance allows the parties to negotiate the definite terms of the contract upon the completion of the contract. Under a life insurance policy, what does the insuring clause state? 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. What is created after policy proceeds are obtained in a lump sum and then immediately invested? Within how many days must a licensee notify the Commissioner of a change in address? Variable life insurance and Universal life insurance are very similar. After first premium is paid, the face amount may be available to the beneficiary, Level premium term life insurance policies, Have premiums that are averaged over the policy period, A policyowner can receive an immediate payment before the insured dies by using a(n), Matt is applying for life insurance and requests a double indemnity rider. which of the following best describes a conditional insurance contract? A) Express authority A) Only the insured pays the premium performance is conditioned upon a future occurrence. A) there is an element of chance and potential for unequal exchange of value or consideration for both parties 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. State Insurance Departments NAIC Insurance carriers Insurance producers, Intentional withholding of material facts that would affect an insurance policy's validity is called a(n) estoppel concealment adhesion misrepresentation, The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? A) implied authority Which of the following is NOT considered rebating? A new stain removal product claims to completely remove the stains on 909090 percent of all stained garments. An insurer exaggerating its dividends in a magazine advertisement. A) when any business relationship exists C) representation 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? After being properly appointed by the insurer. Loans obtained by a policyowner against the cash value of a life insurance policy. Updated 10/6/2017 9:10:03 AM. 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"? express authority Who prosecutes crimes that involve the violation of insurance laws that fall under US Code 1033? Implied Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? One-sided or unfair insurance contracts can, however, exist if they contain provisions that disproportionately benefit one party. implied Answer Explanation: A contract that requires certain conditions or acts by the insured individual. C) statements made in the application and the premium imposed authority, In an insurance contract, the element that shows each party is giving something of value is called Which of the following is a reinstatement condition? B) A contract that has the potential for the unequal exchange of consideration for both parties C) Insurance carriers If threats or force is used to affect an insurance transaction, the unfair trade practice of __________ has been committed. 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. 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? C) aleatory 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. Tom's spouse Bob's estate Bob's spouse Tom, Which contract element is insurable interest a component of? Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them? Insurable interest can be based on the love and affection of individuals related by blood or law An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of Andy the annuitant dies before the annuity start date. A) A contract that requires certain conditions or acts by the insured individual B) A contract that has the potential for the unequal exchange of consideration for both parties C) A contract where one party adheres to the terms of the contract D) A contract where only one party makes any kind of enforceable contract. Elizabeth is the beneficiary of a life insurance policy. Both partners are still married at the time of Bob's death. A) Insurer's promise to pay benefits What are an applicants statements concerning occupation, hobbies, and personal health history regarded as? The policy may be paid up early by using policy dividends. Nothing $100,000 $250,000 $500,000, Which type of life insurance is normally associated with a Payor Benefit rider? Expert answered| selymi |Points 23307|. B) the unwritten authority that the agent is assumed to have Offering payment of approved claims within 30 days after affirming liability. 2003-2023 Chegg Inc. All rights reserved. The above question Which of the following BEST describes a conditional insurance contract?, Was part of Insurance MCQs & Answers. collateral, What is implied authority defined as? 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? Definition refers to a description which is given to a word, idea or phenomenon . C) Charge more premium unilateral, Ambiguities in an insurance policy are always resolved in favor of 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 Because of this, an insurance contract is considered When handling premiums for an insured, an agent is acting in which capacity? Legal Consideration Competent parties Countersignature, A contract that requires certain conditions or acts by the insured individual, Which of the following BEST describes a conditional insurance contract?