offer 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? implied purpose, Insurable interest does NOT occur in which of the following relationships? A) A contract that requires certain conditions or acts by the insured individual Express 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"? Rob purchased a standard whole life policy with a $500,000 death benefit when we was age 30. insured The face amount and premium will remain constant over the 10-year period. All of the following are examples of pure risk EXCEPT. 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. In this situation, who will receive Bob's policy proceeds? Which of the following statements correctly describes a contract of indemnity? B) Unequal consideration Competent parties Offer and acceptance Consideration Legal purpose, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? 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. 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? Craig purchased a life insurance policy for enabling his heirs to pay estate taxes. Orissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. which of the following best describes a conditional insurance contract? The insured does not meet established underwriting requirements, The type of multiple protection coverage that pays on the death of the last person is called a(n). 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? 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? D) unilateral, Who is responsible for assembling the policy forms for insureds? the terms must be accepted or rejected in full 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? Bob dies 12 months later. How soon can the benefit payments begin with a deferred annuity? Events are those which cannot be controlled by either . 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. Which of the following best describes a symbol. 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". Parent and children C) Consideration Dorian exercises a nonforfeiture option by using his life policys cash value to purchase an extended term insurance option. How do marketers use insights regarding the self-concept? Insurance interest does NOT occur in which of the following relationships? A conditional contract, also called a hypothetical contract, is a contract agreement that only requires performance once the delineated conditions are met. c) a contract must be in writing. the insurer's obligations are dependent upon certain acts of the insured individual The Fair Credit Reporting Acts main purpose is to, Protect consumers with guidelines regarding credit reporting and distribution, A whole life insurance policy accumulated cash value that becomes, The policy loan value which the insured may borrow against. Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies? The insured, on the other hand, makes few, if any, legally binding promises to the insurer. WINDOWPANE is the live-streaming app for sharing your life as it happens, without filters, editing, or anything fake. Which of the following is a TRUE statement? Vegetable B. To see this page as it is meant to appear, please enable your Javascript! Adjustable life policy Modified life policy Endowment policy Universal life policy, How are survivorship life insurance policies helpful in estate planning? Aleatory Contract: A contract type in which the parties involved do not have to perform a particular action until a specific event occurs. If the consumer price index had gone up 4%, how much may Ron increase the face value of the policy? Provide an opinion. Insurer's promise to pay benefits Insurable interest Insurance exchanges Law of large numbers and risk pooling Population table data, People with higher loss exposure have the tendency to purchase insurance more often than those at average risk. C) Apparent authority (A) Both parties to the contract are bound to the terms. The terms and conditions of insurance contracts should be carefully reviewed by policyholders before signing. Connect the text to your own experiences. representation Rob recently died at age 60. acceptance 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? b. benefits paid under workers compensation. C) Probability of loss This rider is called a(n). Which of these riders will pay a death benefit if the insureds spouse dies? 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. 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. 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. A marathon is 42.2 kilometers. What kind of policy is this? B) issuance of the policy Of the following dividend options, which of these is taxable? A) express authority performance is conditioned upon a future occurrence. At what point may a producer sell insurance for an insurer? Which of the following is true of the law of contracts? 2003-2023 Chegg Inc. All rights reserved. unilateral, Ambiguities in an insurance policy are always resolved in favor of the A) there is an element of chance and potential for unequal exchange of value or consideration for both parties Sorry, you have Javascript Disabled! Which of these features are held exclusively by variable universal life insurance? they are "take it or leave it" contracts. which of the following best describes a conditional insurance contract? 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. 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. In order to maintain coverage and make a successful claim, its crucial that policyholders read and understand their insurance contract carefully. What are an applicants statements concerning occupation, hobbies, and personal health history regarded as? 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. 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. GENERAL LAW OF CONTRACTS A contract is an agreement enforceable by law. Provide death benefits Provide money for retirement Provide living benefits Provide money for college, The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT charities political organizations insurance sales calls surveys, protect consumers with guidelines regarding credit reporting and distribution, The Fair Credit and Reporting Act's main purpose is to assist in the underwriting of insurance policies protect insurers from an applicant's misrepresentation protect consumers with guidelines regarding credit reporting and distribution assist an insurer in determining an applicant's creditworthiness, What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus? Identify the type of financing (stock or bond) that best answers the question. A) Insurer's promise to pay benefits discreet apparent implied express, Bob and Tom start a business. C) adhesion Declarations Entire contract Waivers Conditions, A whole life policy option where extended term insurance is selected is called a(n) dividend option settlement option nonforfeiture option interest-only option, Which of these would limit a company's liability to provide insurance coverage? Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? What is the advantage of adding this rider? The policy may be paid up early by using policy dividends. Question and answer. C) The insured and the insurer contribute equally to the contract. Which of the following statements is true? there must be an offer and acceptance B) only an offer Business partners Producers act in a(n) ________ capacity when holding insurance premiums. 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 B. Policy loans are disallowed The premium payments will be tax deductible Pre-death distributions are typically taxable Withdrawals will be prohibited, When a whole life policy is surrendered, income taxes may be owed, All of these statements concerning whole life insurance are false EXCEPT Policyowner can take out a policy loan up to the face amount When a whole life policy is surrendered, income taxes may be owed Coverage is normally temporary The death benefit is not affected by outstanding loans, A life insurance policy which contains cash values that vary according to its investment performance of stocks is called Increasing Term Life Modified Whole Life Variable Whole Life Adjustable Whole Life, Which of these riders will pay a death benefit if the insured's spouse dies? B) concealment 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. C) Bob's spouse D) errors and oversights, In an insurance contract, the insurer is the only party legally obligated to perform. Which of the following BEST describes a conditional insurance contract? Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed in Ken? B) errors and omissions D) Intent, Which contract element is insurable interest a component of? After 15 years, the cash value has accumulated to $100,000 and the policy's face amount has become $600,000. Because of this, an insurance contract is considered voidable conditional aleatory unilateral, Who is responsible for assembling the policy forms for insureds? Which military service exclusion clause would pay upon his death? This is called risk retention preexisting conditions law of large numbers adverse selection, What is known as the immediate specific event causing loss and giving rise to risk? 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. $2,406 Consideration What is the difference between insurance condition and warranty? 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 Under the McCarran-Ferguson Act, what is the minimum penalty for this? D) Terminate the agent, Insurable interest does NOT occur in which of the following relationships? Which of these statements is true? Which of the following BEST describes a conditional insurance contract? Business owner and business client, The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? Which of the following is an annuity that is linked to a market-related index? Bob dies 12 months later. When does a life insurance policy typically become effective? imposed authority, In an insurance contract, the element that shows each party is giving something of value is called Death benefits Cash value Loading costs Separate account investments, Which policy feature makes a universal life policy different from a whole life policy? C) Contract must have a legal purpose Anheuser-Busch InBev is trying to reduce its water usage. 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. A) there is the potential for an unequal exchange of value Required fields are marked *. d. a deductible stated in the policy's provision. C) Materiality of concealment Legal purpose A contract that requires certain conditions or acts by the insured individual, According to life insurance contract law, insurable interest exists, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as. B) written contract C) claim forms C) Implied Increasing Term Life policy Nonparticipating policy Modified Whole Life policy Universal Life policy, What is the automatic continuance of insurance coverage referred to as? Use the binomial distribution to find P(x13)P(x \leq 13)P(x13) if the stain removal product's claim is correct. Tom's spouse Bob's estate Bob's spouse Tom, Which contract element is insurable interest a component of? Which of these is considered to be a disadvantage of owning this type of annuity? Which market index is normally associated with an indexed annuitys rate of return? Insurance contracts are unilateral contracts. 2. C) the authority to represent the insurer both parties consent to the contract. A) Tom's spouse Apparent _______ is the authority given to a producer to transact business on behalf of the insurer. 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. What does the Group Life underwriting risk selection process help protect insurance companies from? B) Offer and acceptance Modified Endowment Contract Current assumptive whole life Credit life insurance Equity index whole life, What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death? Which Of The Following Best Describes A Conditional Insurance Contract. C) aleatory apparent authority Express Apparent Implied Conditional, The type of multiple protection coverage that pays on the death of the last person is called a(n) joint life policy survivorship life policy annuity joint policy dual life policy, A nonforfeiture option can be used to increase the death benefit, All of these are valid options for an Adjustable Life Policy EXCEPT The policy's premium can be increased or decreased The policy's death benefit can be increased or decreased A nonforfeiture option can be used to increase the death benefit The policy's protection period can be modified, A life insurance contract which accumulates cash values higher than the IRS will allow, 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 prior to age 65 are subject to a 10% penalty, An interest-sensitive life insurance policyowner may be able to withdraw the policy's cash value interest free. Expert answered|Malekith22|Points 0| Log in for more information. Which of the following does a producer NOT have a fiduciary responsibility to? C) apparent authority weegy. A) Unilateral After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. Which of the following statements about aleatory contracts is NOT true? A) offer 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. Both partners are still married at the time of Bob's death. In order for a contract to be valid, it must. D) imposed authority, What makes an insurance policy a unilateral contract? Both partners are still married at the time of Bob's death. B) Period to which the coverage exists Completing all applications and collecting initial premiums. Which Of The Following Statements About Personal Selling Is Correct? Which of these factors is NOT taken into account when determining an applicants life insurance needs? Restoring an insured to the same condition as before a loss is an example of the principle of. B) Rescind the policy Juvenile insurance Family income insurance Spouse insurance Term rider, A life insurance policy written on one contract for two people in which it is payable upon the first death is called Split Shared Joint Survivorship, Level premium permanent insurance accumulates a reserve that will eventually equal the face amount of the policy pay a dividend to the policyowner require the policyowner to make periodic withdrawals become larger than the face amount, A permanent life insurance policy where the policyowner pays premiums for a specified number of years is called a(n) adjustable policy limited pay policy level term policy variable universal policy, term, whole, and universal life insurance, What types of life insurance are normally used for key employee indemnification? Which of the following is a reinstatement condition? Which of the following BEST describes a conditional insurance contract? Who assumes the investment risk with a fixed annuity contract? Write a summary of the main ideas. 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? Options 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 discreet D) Legal Purpose, Which of the following is present when an applicant stands to lose value if the insured dies? 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. Because of this, an insurance contract is considered C) Insurable interest Which option was chosen? D) Consideration, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? If Sharon MUST obtain Mikes signature in order to change the beneficiary, what kind of beneficiary designations is this? How could a company manager use a process cost summary to determine if the program to reduce water usage is successful?