The terms and conditions of insurance contracts should be carefully reviewed by policyholders before signing. Which of the following would be a valid reason why a policy premium would be higher than the standard premium? 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? D) Only the insured is legally bound, Bob and Tom start a business. This legal agreement requires prior performance of another agreement or clause in order to be enforceable. Who prosecutes crimes that involve the violation of insurance laws that fall under US Code 1033? Guaranteed Insurability rider Family term insurance rider Family whole insurance rider Payor benefit rider, A partial surrender is allowed in which of the following life policies? Which of these statements is true? 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? B) implied authority guarantee Adjustable life policy Modified life policy Endowment policy Universal life policy, How are survivorship life insurance policies helpful in estate planning? B) guarantee Which of the following is the best descriptive word? A) A contract that requires certain conditions or acts by the insured individual The most appropriate description ascribed to the meaning of definition from the options given is ; A precise statement of the qualities of an idea, object or process. A) voidable How many days is a temporary producers license valid? Which of the following does a producer NOT have a fiduciary responsibility to? What kind of policy is this? 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. Which of these features are held exclusively by variable universal life insurance? 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. Adjustable life policy Variable universal policy Universal policy Modified whole life policy, A securities license is required for a life insurance producer to sell modified life insurance Modified Endowment Contracts (MEC) variable life insurance universal life insurance, The shorter the payment period, the higher the premium, The statement which best describes the relationship between the premiums of a whole life policy and the premium payment period is The shorter the payment period, the lower the premium The longer the payment period, the higher the premium The shorter the payment period, the higher the premium The payment period has no affect on the premium payment, Policyowner has the right to select the investment which will provide the greatest return, Variable life insurance and Universal life insurance are very similar. Question. Insurance producer Jerry offers a $350 shopping card if they purchase an insurance product through him. If the other agreement or condition is performed, then the conditional contract is . C) Materiality of concealment WINDOWPANE is the live-streaming app for sharing your life as it happens, without filters, editing, or anything fake. Her son, Mike, is the beneficiary. GENERAL LAW OF CONTRACTS A contract is an agreement enforceable by law. 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. What kind of policy is this? imposed authority, In an insurance contract, the element that shows each party is giving something of value is called Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? Which of the following BEST describes a conditional insurance contract? What is the name of the provision which states that a copy of the application must be attached to the policy when issued? Because of this, an insurance contract is considered B) Rescind the policy D) Competent parties, Which of the following BEST describes a conditional insurance contract? Which of the following would be an act of Unfair Discrimination by an insurer? 0 Answers/Comments. ______ is NOT an element of a valid contract. It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. The policy may be paid up early by using policy dividends. Food C. Plant D. Zucchini. conditional b) a contract is an agreement enforceable at law. If she dies 15 years after the policys inception date, how much will her beneficiary receive? Because of this, an insurance contract is considered What kind of policy is this? A unilateral contract is one in which only one party makes a legally binding guarantee. A) Contract may be accepted or rejected by the insured, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as. 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. How could a company manager use a process cost summary to determine if the program to reduce water usage is successful? Consideration clause Apparent A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a(n). Which of the following is a reinstatement condition? B) A paid premium 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. A life insurance policy that is subject to a contract interest rate is referred to as. A life insurance policyowner does NOT have the right to, Fixed annuities provide each of the following EXCEPT. warranty guarantee representation collateral, there must be legal reasons for entering into the contract, Legal purpose is a term used in contract law meaning there must be an offer and acceptance the contract must be aleatory there must be legal reasons for entering into the contract the contract must be a contract of adhesion, In an insurance contract, the element that shows each party is giving something of value is called offer acceptance consideration purpose, What makes an insurance policy a unilateral contract? B) Contract of adhesion The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. _______ is the authority given to a producer to transact business on behalf of the insurer. B. voidable C) Bob's spouse the policy provides a straight, level $100,000 of coverage for 5 years. 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. Who is responsible for assembling the policy forms for insureds? B) Apparent The terms and conditions of insurance contracts should be carefully reviewed by policyholders before signing. D) conditions, The authority granted to a licensed producer is provided via the 2003-2023 Chegg Inc. All rights reserved. A) the appearance of authority an insurer gives to its agent 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 issuance of the policy B) acceptance 3. A) express authority Coverage decreases automatically Coverage increases automatically Coverage remains as long as proof of insurability is provided Coverage is eliminated, Joe has a life insurance policy that has a face amount of $300,000. D) Risk insured against, A professional liability for which producers can be sued for mistakes of putting a policy into effect is called It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill. James is the insured on a life insurance policy where his age was misstated on the application. Bob dies 12 months later. The policies continue in force with no change. D) errors and oversights, In an insurance contract, the insurer is the only party legally obligated to perform. The two major actions required for a policyowner to comply with the Reinstatement Clause are, Provide evidence of insurability, pay past due premiums, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as. Adhesion clause C) there must be legal reasons for entering into the contract Which of the following does a life insurance policy summary normally include? Joint life policy Survivorship life policy Dual life policy Multiple life policy, A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called whole life group life credit life universal life, Can be converted to permanent coverage without evidence of insurability, Donald is the primary insured of a life insurance policy and adds a children's term rider. Which of these is considered to be a disadvantage of owning this type of annuity? D) imposed authority, What makes an insurance policy a unilateral contract? In order to maintain coverage and make a successful claim, its crucial that policyholders read and understand their insurance contract carefully. 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? What is a corridor in relation to a Universal Life insurance policy? Describe the structure. Only the insurer is legally bound If threats or force is used to affect an insurance transaction, the unfair trade practice of __________ has been committed. B) Bob's estate B) Offer and acceptance 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. written contract Bob dies 12 months later. A) offer and acceptance 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. Eventually, they retire and dissolve the business. Producers act in a(n) ________ capacity when holding insurance premiums. Which of the following statements is true? insured B) at the time of application D) Consideration clause, When the principal gives the agent authority in writing, it's referred to as a. medical expenses covered under Pat's employer-sponsored group health insurance. Who assumes the investment risk with a fixed annuity contract? Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed in Ken? The authority granted to a licensed producer is provided via the Which of the following BEST describes a conditional insurance contract? A paid premium Your email address will not be published. Vegetable B. The policies continue in force with no change. Barry offers Chris his mountain cabin for the weekend to secure his order for his insurance business. D) an offer and acceptance of the contract terms, D) an offer and acceptance of the contract terms, In an insurance contract, the applicant's "consideration" is the Write a summary of the main ideas. 1 pt. Whole life policy that pays out its cash value over a 20 year period Whole life policy with premiums paid up after 20 years Term life policy that returns cash value after 20 years Term life policy with premiums paid up after 20 years, Which type of multiple protection policy pays on the death of the last person? Because of this, an insurance contract is considered voidable conditional aleatory unilateral, Who is responsible for assembling the policy forms for insureds? express, ______ is NOT an element of a valid contract. D) Tom, The deeds and actions of a producer indicate what kind of authority? What is the purpose for having an accelerated death benefit on a life insurance policy? C) representation B) premium only The gap between the total death benefit and the policys cash value. C.$2,113 Premiums paid plus interest earned is returned to the beneficiary. Bob and Tom start a business. B) only one party (the insurer) makes any kind of legally enforceable promise Returning a portion of a premium as inducement to purchase insurance, An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of, Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out. C) Implied 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? C) the terms must be accepted or rejected in full B) A contract that has the potential for the unequal exchange of consideration for both parties. D) the contract must be a contract of adhesion, C) there must be legal reasons for entering into the contract, Ambiguities in an insurance policy are always resolved in favor of the Naming a contingent beneficiary as all surviving children is described as which term? Bob dies 12 months later. Which scenario would most life insurance policies exclude coverage for? D) Offer and acceptance must be involved, B) Equal consideration is required between the involved parties, A contract requires which of the following best describes a conditional insurance contract? Sorry, you have Javascript Disabled! 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)? C) aleatory Which contract element is insurable interest a component of? warranty A) State Insurance Departments C) Indemnity contract Julie has a $100,000 30-year mortgage on her new home. An example of an unfair claims settlement practice is, Turning down a claim without providing the basis of denial. Authority given to handle claims and process payments Conditional, Under a contract of adhesion, C) the contract has been prepared by one party (the insurance company) with no negotiation between the applicant and the insurer C) Law of large numbers Interest on policy loans is tax deductible Premium payments are tax deductible Pre-death distributions will become taxable Cash value cannot be surrendered early, seeks temporary protection and lower premiums, Term insurance is appropriate for someone who seeks living benefits for themselves seeks a policy that builds cash value seeks temporary protection and lower premiums seeks permanent protection and higher premiums, Shirley has a $500,000 10-year non-renewable level term life policy. What is the advantage of adding this rider? acceptance Anheuser-Busch InBev is trying to reduce its water usage. B) A contract that has the potential for the unequal exchange of consideration for both parties 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? Eventually, they retire and dissolve the business. 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. Provide funds to help fund retirement Provide funds to help pay taxes Provide funds for funeral expenses Provide tax deductions for premium payments, lower than the typical whole life policy during the first few years and then higher than typical for the remainder, The premium for a Modified whole life policy is higher than the typical whole life policy during the first few years and then lower than typical for the remainder lower than the typical whole life policy during the first few years and then higher than typical for the remainder normally graded over a period of 20 years level for the first 5 years then decreases for the remainder of the policy, The type of policy which pays on the death of the last person is called joint life survivorship life dual life shared life, A life insurance policy that is subject to a contract interest rate is referred to as adjustable life group life term life universal life, a policy that is paid up after only one payment, A single premium cash value policy can be described as a policy that is paid up after only one payment a policy that only requires an annual payment a policy that is guaranteed issue a policy that covers two or more lives, A limited payment whole life policy provides protection for 20 years lifetime protection protection for more than one person discounted premiums, A policyowner may change two policy features on what type of life insurance? An insurance applicant with a below-average likelihood of loss is typically considered to be a. 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.
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