underwriting 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? A) there is an element of chance and potential for unequal exchange of value or consideration for both parties Can be converted to permanent coverage without evidence of insurability Coverage can be different for each child Premiums on this rider are not required until the limiting age is reached Increases the policy's overall cash value, Which type of policy combines the flexibility of a universal life policy with investment choices? Anheuser-Busch InBev is trying to reduce its water usage. Principal Capacity, All of the following are elements of an insurance policy EXCEPT B) Rescind the policy The annuitants life expectancy determines the annuity payments, No one may be denied coverage by an insurance company due to, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n). Bob dies 12 months later. An example of an unfair claims settlement practice is, Turning down a claim without providing the basis of denial. What is the advantage of adding this rider? C) Apparent authority Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? The policy automatically converts to whole life after the 10-year period The face amount will remain constant and the premium will increase over the 10-year period The premium will remain constant and the face amount will increase over the 10-year period The face amount and premium will remain constant over the 10-year period, will no longer provide insurance protection, Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint life policy covering all three of their lives. Variable life insurance and Universal life insurance are very similar. Increasing Term Life policy Nonparticipating policy Modified Whole Life policy Universal Life policy, What is the automatic continuance of insurance coverage referred to as? C) Law of large numbers Insurance contracts are unilateral contracts. Premium clause Consideration clause Adhesion clause Contestability clause, When the principal gives the agent authority in writing, it's referred to as express authority implied authority apparent authority imposed authority, Ambiguities in an insurance policy are always resolved in favor of the insured producer insurer underwriter, ______ is NOT an element of a valid contract. When the term insurance expires. 2003-2023 Chegg Inc. All rights reserved. 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. D) Personal contract, The importance of a representation is demonstrated in what rule? Eventually, they retire and dissolve the business. Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. other insurance Which of the following does a life insurance policy summary normally include? 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? Connect with others, with spontaneous photos and videos, and random live-streaming. A) Insurability Because insurance premiums are tax-deductible Because dividends are already subject to capital gains Because dividends are payable directly to the policyholder Because dividends are considered to be a return of premium, A type of insurer that is owned by its policyowners is called domestic mutual stock in-house, What is considered to be the primary reason for buying life insurance? guarantee Utah requires that an insurance producer must complete ___ hour(s) of continuing education on the subject of law and ethics every reporting period. A) producer's apparent authority B) Bob's estate What is the purpose for having an accelerated death benefit on a life insurance policy? If Sharon MUST obtain Mikes signature in order to change the beneficiary, what kind of beneficiary designations is this? D) errors and oversights, In an insurance contract, the insurer is the only party legally obligated to perform. A) underwriting Which of the following is an annuity that is linked to a market-related index? Preferred risk policies with reduced premiums are issued by insurance companies because the insured has, Better than average mortality or morbidity experience. Reduction of premium One year term Paid-up additions Accumulation at interest, All of these are valid policy dividend options for a life insurance policyowner EXCEPT cash outlay to the policyowner accumulate without interest reduction in policy premium buy additional insurance coverage, Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Bob dies 12 months later. B) Equal consideration is required between the involved parties Elizabeth is the beneficiary of a life insurance policy. Sorry, you have Javascript Disabled! She would like to borrow $15,000 against the cash value. C) Legal purpose B) Consideration Peril Hazard Loss factor Liability, Which of these techniques will remove the risk of losing money in the stock market by never purchasing stocks? Countersignature, Which of the following is an example of the insured's consideration? C) there must be legal reasons for entering into the contract B) 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 Which of the following statements is true? term, whole, and universal life insurance increasing term insurance joint, credit, and group life insurance adjustable, permanent, and limited-pay life insurance, Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. One-sided or unfair insurance contracts can, however, exist if they contain provisions that disproportionately benefit one party. All of these are typically sources of underwriting information for life or health insurance EXCEPT. Business partners For a trip to the hospital, Evan Appleton paid $1,656 in hospital charges, a$750 insurance deductible, and a $457 co-payment. D) Conditional, Which of the following is NOT a requirement of a contract? A) A contract that requires certain conditions or acts by the insured individual. Authority given in writing to an agent in the agency agreement B) other insurance C) apparent authority How do marketers use insights regarding the self-concept? which of the following best describes a conditional insurance contract? What types of life insurance are normally used for key employee indemnification? Which of the following BEST describes a conditional insurance contract? Accumulation at Interest Option Cash Dividend Option Paid-Up Additions Option One-Year Term Dividend Option, The policy may be paid up early by using policy dividends, Pat owns a 20-pay life policy with a paid-up dividend option. A conditional contract, also called a hypothetical contract, is a contract agreement that only requires performance once the delineated conditions are met. An insurance applicant with a below-average likelihood of loss is typically considered to be a. $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? Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? Log in for more information. Insurer's promise to pay benefits A paid premium Legal purpose Intent, 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, What is implied authority defined as? Who is responsible for assembling the policy forms for insureds? Who assumes the investment risk with a fixed annuity contract? 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. How could a company manager use a process cost summary to determine if the program to reduce water usage is successful? 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. Reduction of premium dividend option Extended term option Paid-up option Cash dividend option, Net death benefit will be reduced if the loan is not repaid, Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. B) at the time of application It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. B. How often must the Commissioner examine each domestic insurance company? A) Legal C) Materiality of concealment representation 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? apparent authority A) Make whole The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. She is receiving the death benefit in payments of $10,000 per month until the principal and interest has been paid out. D) Principal Capacity, A unilateral contract is one in which Which of the following BEST describes a conditional insurance contract? Which of the following BEST describes a conditional insurance contract? Which statement is CORRECT when describing a contract of adhesion? Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? Which of the following statements about aleatory contracts is NOT true? A) Unilateral contract 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 Competent parties Rob recently died at age 60. C) Law of Agency C) Competent parties Aleatory Contract: A contract type in which the parties involved do not have to perform a particular action until a specific event occurs. In the case of an insurance contract, the contracting parties are the claimant and the insurer. In a life or health insurance contract, "consideration" would be the, statements made in the application and the premium, A professional liability for which producers can be sued for mistakes of putting a policy into effect is called. 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? A contract that requires certain conditions or acts by the insured individual. Which of the following is NOT considered rebating? The terms of the policy typically outline these conditions . A bilateral contract is an agreement between two parties in which each side agrees to fulfill their side of the bargain. D) imposed authority, What makes an insurance policy a unilateral contract? Policy Application Riders Certificate of Authority, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n) guaranteed term rider guaranteed insurability rider accelerated benefit rider cost of living rider, The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid minus indebtedness and with interest during the last 12 months minus indebtedness and without interest during the last 6 months, A life insurance policyowner does NOT have the right to change a beneficiary select a beneficiary take out a policy loan revoke an absolute assignment, A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT fare-paying passenger pilot of personal airplane suicide war, The insurer's obligation to pay a death benefit upon an approved death claim, Under a life insurance policy, what does the insuring clause state?
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