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Exam FX Life and Health - General
Insurance / Completing Application,
Underwriting and Delivering the Policy
100% Solved
What two elements are necessary to a life insurance contract to have a legal purpose? ✔✔1. Insurable Interest
- Consent
Insurance is a contract that protects the insured from what? ✔✔Loss
What Type of Risk is Insurable? ✔✔Pure
What is the term for the causes of loss insured against in a insurance policy? ✔✔Peril
What Law Protects Consumers from the circulation of inaccurate or obsolete information? ✔✔The Fair Credit Reporting Act
What are the three types of hazards? ✔✔1. Physical
- Moral
- Morale
In forming an insurance contract, when does an acceptance usually occur? ✔✔When the insurer approves a prepaid application
An insurance company domiciled in California and transacts insurance in Nevada. What is this insurer's classification in Nevada? ✔✔Foreign
A state-issued document empowering an insurance company to become an admitted insurer is called what? ✔✔Certificate of Authority
What entities make up the Medical Information Bureau? ✔✔Insurers
What type of insurer is a voluntarily formed organization that provides insurance benefits for members of an affiliated lodge or religious organization with representative form of governtment? ✔✔Fraternal Insurers
What insurance policy paid a nontaxable dividend to the insured one year, and nothing the next. From what type of insurer did the insured purchase the policy? ✔✔Mutual
In insurance, when is the offer usually made on a contract? ✔✔When insurance application is submitted.
The type of insurance company organized to return any surplus money to its policyholders is known as what? ✔✔Mutual Company
What law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated? ✔✔Law of large numbers
When does an insurance policy go into effect? ✔✔When the policy is delivered and the premium is paid?
For the purpose of the insurance, what is risk? ✔✔Uncertainty of Loss
What is the name of the process that insurance companies use to determine whether or now an application is insured? ✔✔Underwriting
The person who does not lock the doors to his or her house shows an indifferent attitude. This person presents what type of hazard? ✔✔Morale
According to Law of Agency, a principal is represented by whom? ✔✔Agent or Producer
What are the five characteristics of an ideally insurable risk? ✔✔Loss Must Be
- Due to Chance
- Definite and Measurable
- Statistically Predictable
- Not Catastrophic
- Coverage cannot be mandatory
Whom doe an insurance agent represent? ✔✔Insurance Company
The insurer organized to return a profit to the stockholders is what of insurer? ✔✔Stock Company
The reduction, decrease, or disappearance of value of the person or property insured in a policy is known as what? ✔✔Loss
When a change needs to be made on the application for insurance, which is the best method of correcting the information? ✔✔Complete a new application or ask the applicant to initial the correction on the original application.
What are the strategies used by underwriters to prevent adverse selection? ✔✔Restriction of coverage, refusal to accept a risk, and accepting a risk at a higher rate.
What type of insurer is formed under the law of another country? ✔✔Alien
If an applicant does not receive his or her insurance policy, who would be held responsible? ✔✔The agent
Who owns stick companies? ✔✔Stockholders
What are the four elements of an insurance contract? ✔✔Agreement (offer and acceptance), consideration, competent parties, and legal purpose.
What are the three types of agent authority? ✔✔Express, Implied, and Apparent
When risks with higher probability of loss are seeking insurance more often than other risks, this is known as what? ✔✔Adverse Selection
Insurers are classified according to their domicile. What are the three types of insurers? ✔✔Domestic, foreign, and alien.
In order to transact insurance within a given state, an alien insurer must first obtain what? ✔✔Certificate of Authority
Wagering on a sporting event is known as what type of risk? ✔✔Speculative
An insurance company that is formed under the laws of another state is known as what type of insurer? ✔✔Foreign
