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333 Cards in this Set
- Front
- Back
- 3rd side (hint)
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A person who wants to work in the insurance industry but has a prior felony conviction must apply for_____ A) Amnesty B) Clemency C) Expungement D) Consent to work
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D) Consent to work |
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An unincorporated organization that is formed by individuals, firms, and business corporations that exchange insurance on one another and whose members are known as subscribers is called a: A) Risk Retention Group B) Fraternal Benefit Society C) Reciprocal Insurance Company D) Mutual Insurance Company |
C) Reciprocal Insurance Company |
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It is the______ who issues a Certificate of Authority enabling an insurer to conduct insurance business within a particular state. A) State Senate B) State Congress C) Secretary of State D) State Insurance Commissioner |
D) state Insurance Commissioner |
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Which of the following parties does not sign an application for life insurance? A) The insured B) The applicant C) The agent/ producer D) The beneficiary |
D) The beneficiary |
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A(n) ______ has the right to review the consumer report used in the underwriting process. A) Beneficiary B) Spouse C) Producer D) Applicant |
D) Applicant |
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The intentional distortion of the truth in order to induce another to part with something of value or to surrender a legal right is: A) Warranty B) Concealment C) Misrepresentation D) Fraud |
D) Fraud |
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If a policy is written with unclear definitions, conditions, and provisions which are hidden in the contract, and the insured files a law suit. In the court of law, the contract would be construed in favor of the insured because it is a: A) Contract of indemnity B) Contract of adhesion C) Contract of utmost good faith D) Unilateral contract |
B) Contract of adhesion |
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_______ is generally an option only for large corporations who may want to limit their risk up to a certain dollar amount, then buy insurance above and beyond that amount. A) Reciprocal insurance B) Risk retention C) Mutual insurance D) Self-insurance
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D) Self-insurance |
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An applicant inaccurately representing information on the application is guilty of: A) Waiver and Estoppel B) Misrepresentation C) Concealment D) Fraud |
B) Misrepresentation |
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The contract type in which only one party is legally bound to its contractual obligations after a premium is paid is a(n) _____ contract. A) Conditional B) Unilateral C) Aleatory D) Personal |
B) Unilateral |
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Tom submits an application and a premium check. Six days later, the insurer issues the policy as applied for and mails it overnights to Toms producer. Tom picks up the policy at his producers office the next day. When did Tom’s coverage begin? A) The day Tom picked you his policy at his producers office B) The day Tom submitted his application C) The day the insurer mailed the policy D) The day the insurer issued the policy |
B) The day Tom submitted his application |
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______ manufacture and sell insurance coverage in the form of policies or contracts of insurance. A) Producers B) Insurers C) Agencies D) Insureds |
B) Insurers |
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______ manufacture and sell insurance coverage in the form of policies or contracts of insurance. A) Producers B) Insurers C) Agencies D) Insureds |
B) Insurers |
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Which of the following is not an essential element of an insurance risk? A) The chance of loss must be calculable B) The loss must be measurable C) A large number of similar or same type units facing the same perils D) The loss must be intentional |
D) The loss must be intentional |
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______ manufacture and sell insurance coverage in the form of policies or contracts of insurance. A) Producers B) Insurers C) Agencies D) Insureds |
B) Insurers |
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Which of the following is not an essential element of an insurance risk? A) The chance of loss must be calculable B) The loss must be measurable C) A large number of similar or same type units facing the same perils D) The loss must be intentional |
D) The loss must be intentional |
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All of the following are true of insurance in general, except: A) It reduces uncertainty B) It transfers risk C) It eliminates risk D) It can reduce risk |
C) It eliminates risk |
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Why is a policy considered to be a contract of adhesion? A) One party prepares the contract with little or no input or negotiation from the other party B) It is a contract of unequal value C) Only the insurance company is bound to live up to its side of the agreement D) Only the insured is bound to live up to its side of the agreement |
A) One party prepares the contract with little or no input or negotiation from the other party |
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Why is a policy considered to be a contract of adhesion? A) One party prepares the contract with little or no input or negotiation from the other party B) It is a contract of unequal value C) Only the insurance company is bound to live up to its side of the agreement D) Only the insured is bound to live up to its side of the agreement |
A) One party prepares the contract with little or no input or negotiation from the other party |
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A person who negotiates insurance contracts with insurers on behalf of an applicant is known as a(n): A) Consultant B) Agent/Producer C) Broker D) Advisor |
C) Broker |
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Why is a policy considered to be a contract of adhesion? A) One party prepares the contract with little or no input or negotiation from the other party B) It is a contract of unequal value C) Only the insurance company is bound to live up to its side of the agreement D) Only the insured is bound to live up to its side of the agreement |
A) One party prepares the contract with little or no input or negotiation from the other party |
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A person who negotiates insurance contracts with insurers on behalf of an applicant is known as a(n): A) Consultant B) Agent/Producer C) Broker D) Advisor |
C) Broker |
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______ are primarily social organizations that engage in charitable and benevolent activities consisting of members of a given faith, lodge, or order, and are usually organized as non-profits. A) Mutual Insurance Companies B) Fraternal Benefit Societies C) Stock Insurance Companies D) Domestic Insurance Companies |
B) Fraternal Benefit Societies |
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Why is a policy considered to be a contract of adhesion? A) One party prepares the contract with little or no input or negotiation from the other party B) It is a contract of unequal value C) Only the insurance company is bound to live up to its side of the agreement D) Only the insured is bound to live up to its side of the agreement |
A) One party prepares the contract with little or no input or negotiation from the other party |
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A person who negotiates insurance contracts with insurers on behalf of an applicant is known as a(n): A) Consultant B) Agent/Producer C) Broker D) Advisor |
C) Broker |
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______ are primarily social organizations that engage in charitable and benevolent activities consisting of members of a given faith, lodge, or order, and are usually organized as non-profits. A) Mutual Insurance Companies B) Fraternal Benefit Societies C) Stock Insurance Companies D) Domestic Insurance Companies |
B) Fraternal Benefit Societies |
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An applicant completes the application and submits it to the insurer along with a premium check. When is the applicants offer considered accepted? A) When the application and premium check arrive at the insurers home office B) When the insurer issues a policy C) Upon cashing the premium check D) Only after the policyowner completes any required medical exams |
B) When the insurer issues a policy |
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Why is a policy considered to be a contract of adhesion? A) One party prepares the contract with little or no input or negotiation from the other party B) It is a contract of unequal value C) Only the insurance company is bound to live up to its side of the agreement D) Only the insured is bound to live up to its side of the agreement |
A) One party prepares the contract with little or no input or negotiation from the other party |
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A person who negotiates insurance contracts with insurers on behalf of an applicant is known as a(n): A) Consultant B) Agent/Producer C) Broker D) Advisor |
C) Broker |
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______ are primarily social organizations that engage in charitable and benevolent activities consisting of members of a given faith, lodge, or order, and are usually organized as non-profits. A) Mutual Insurance Companies B) Fraternal Benefit Societies C) Stock Insurance Companies D) Domestic Insurance Companies |
B) Fraternal Benefit Societies |
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An applicant completes the application and submits it to the insurer along with a premium check. When is the applicants offer considered accepted? A) When the application and premium check arrive at the insurers home office B) When the insurer issues a policy C) Upon cashing the premium check D) Only after the policyowner completes any required medical exams |
B) When the insurer issues a policy |
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When two parties rely upon the statements and promises of the other and assume no attempt to conceal or deceive means that the contract was entered into upon the basis of: A) Utmost good faith B) Reasonable expectations C) Equal consideration D) Sound business practices |
A) Utmost good faith |
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Why is a policy considered to be a contract of adhesion? A) One party prepares the contract with little or no input or negotiation from the other party B) It is a contract of unequal value C) Only the insurance company is bound to live up to its side of the agreement D) Only the insured is bound to live up to its side of the agreement |
A) One party prepares the contract with little or no input or negotiation from the other party |
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A person who negotiates insurance contracts with insurers on behalf of an applicant is known as a(n): A) Consultant B) Agent/Producer C) Broker D) Advisor |
C) Broker |
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______ are primarily social organizations that engage in charitable and benevolent activities consisting of members of a given faith, lodge, or order, and are usually organized as non-profits. A) Mutual Insurance Companies B) Fraternal Benefit Societies C) Stock Insurance Companies D) Domestic Insurance Companies |
B) Fraternal Benefit Societies |
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An applicant completes the application and submits it to the insurer along with a premium check. When is the applicants offer considered accepted? A) When the application and premium check arrive at the insurers home office B) When the insurer issues a policy C) Upon cashing the premium check D) Only after the policyowner completes any required medical exams |
B) When the insurer issues a policy |
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When two parties rely upon the statements and promises of the other and assume no attempt to conceal or deceive means that the contract was entered into upon the basis of: A) Utmost good faith B) Reasonable expectations C) Equal consideration D) Sound business practices |
A) Utmost good faith |
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Which definition is correct? |
A) An aleatory contract is a contract of equal values B) Representations are guaranteed to be true in all respects C) Concealment is the withholding of information that should have been provided to an insurer D) An actuary is responsible for evaluating risk |
C) Concealment is the withholding of information that should have been provided to an issuer |
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Why is a policy considered to be a contract of adhesion? A) One party prepares the contract with little or no input or negotiation from the other party B) It is a contract of unequal value C) Only the insurance company is bound to live up to its side of the agreement D) Only the insured is bound to live up to its side of the agreement |
A) One party prepares the contract with little or no input or negotiation from the other party |
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A person who negotiates insurance contracts with insurers on behalf of an applicant is known as a(n): A) Consultant B) Agent/Producer C) Broker D) Advisor |
C) Broker |
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______ are primarily social organizations that engage in charitable and benevolent activities consisting of members of a given faith, lodge, or order, and are usually organized as non-profits. A) Mutual Insurance Companies B) Fraternal Benefit Societies C) Stock Insurance Companies D) Domestic Insurance Companies |
B) Fraternal Benefit Societies |
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An applicant completes the application and submits it to the insurer along with a premium check. When is the applicants offer considered accepted? A) When the application and premium check arrive at the insurers home office B) When the insurer issues a policy C) Upon cashing the premium check D) Only after the policyowner completes any required medical exams |
B) When the insurer issues a policy |
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When two parties rely upon the statements and promises of the other and assume no attempt to conceal or deceive means that the contract was entered into upon the basis of: A) Utmost good faith B) Reasonable expectations C) Equal consideration D) Sound business practices |
A) Utmost good faith |
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Which definition is correct? |
A) An aleatory contract is a contract of equal values B) Representations are guaranteed to be true in all respects C) Concealment is the withholding of information that should have been provided to an insurer D) An actuary is responsible for evaluating risk |
C) Concealment is the withholding of information that should have been provided to an issuer |
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Travis owns his own insurance agency and sells and places business with 12 different issuers, each of which he represents by contract. Travis is a(n): A) Direct Writer B) Direct Marketer C) Captive Agent D) Independent Agent |
D) Independent Agent |
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Why is a policy considered to be a contract of adhesion? A) One party prepares the contract with little or no input or negotiation from the other party B) It is a contract of unequal value C) Only the insurance company is bound to live up to its side of the agreement D) Only the insured is bound to live up to its side of the agreement |
A) One party prepares the contract with little or no input or negotiation from the other party |
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A person who negotiates insurance contracts with insurers on behalf of an applicant is known as a(n): A) Consultant B) Agent/Producer C) Broker D) Advisor |
C) Broker |
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______ are primarily social organizations that engage in charitable and benevolent activities consisting of members of a given faith, lodge, or order, and are usually organized as non-profits. A) Mutual Insurance Companies B) Fraternal Benefit Societies C) Stock Insurance Companies D) Domestic Insurance Companies |
B) Fraternal Benefit Societies |
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An applicant completes the application and submits it to the insurer along with a premium check. When is the applicants offer considered accepted? A) When the application and premium check arrive at the insurers home office B) When the insurer issues a policy C) Upon cashing the premium check D) Only after the policyowner completes any required medical exams |
B) When the insurer issues a policy |
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When two parties rely upon the statements and promises of the other and assume no attempt to conceal or deceive means that the contract was entered into upon the basis of: A) Utmost good faith B) Reasonable expectations C) Equal consideration D) Sound business practices |
A) Utmost good faith |
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Which definition is correct? |
A) An aleatory contract is a contract of equal values B) Representations are guaranteed to be true in all respects C) Concealment is the withholding of information that should have been provided to an insurer D) An actuary is responsible for evaluating risk |
C) Concealment is the withholding of information that should have been provided to an issuer |
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Travis owns his own insurance agency and sells and places business with 12 different issuers, each of which he represents by contract. Travis is a(n): A) Direct Writer B) Direct Marketer C) Captive Agent D) Independent Agent |
D) Independent Agent |
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When the exchange of value is unequal, the contract is considered: A) Fraudulent B) Unilateral C) Personal D) Aleatory |
D) Aleatory |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Legally speaking, a producer has a ______ dirt when handling life insurance premiums and applications for a insurer. |
Fiduciary |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Legally speaking, a producer has a ______ dirt when handling life insurance premiums and applications for a insurer. |
Fiduciary |
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The _____ has the power to issue rules and regulations to help enforce insurance statues. |
Commissioner |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Legally speaking, a producer has a ______ dirt when handling life insurance premiums and applications for a insurer. |
Fiduciary |
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The _____ has the power to issue rules and regulations to help enforce insurance statues. |
Commissioner |
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All of the following are producer responsibilities to the applicant, except: A) Reviewing and evaluation the applicants current insurance coverage, limits, and risks B) Seeking and gaining knowledge of the applicants insurance needs C) Forwarding premium on to the insurer on a timely basis D) Offering and selling only the lowest premium policy |
D) Offering and selling only the lowest premium policy |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Legally speaking, a producer has a ______ dirt when handling life insurance premiums and applications for a insurer. |
Fiduciary |
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The _____ has the power to issue rules and regulations to help enforce insurance statues. |
Commissioner |
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All of the following are producer responsibilities to the applicant, except: A) Reviewing and evaluation the applicants current insurance coverage, limits, and risks B) Seeking and gaining knowledge of the applicants insurance needs C) Forwarding premium on to the insurer on a timely basis D) Offering and selling only the lowest premium policy |
D) Offering and selling only the lowest premium policy |
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Deliberate deception with intent to gain is the definition of: |
Fraud |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Legally speaking, a producer has a ______ dirt when handling life insurance premiums and applications for a insurer. |
Fiduciary |
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The _____ has the power to issue rules and regulations to help enforce insurance statues. |
Commissioner |
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All of the following are producer responsibilities to the applicant, except: A) Reviewing and evaluation the applicants current insurance coverage, limits, and risks B) Seeking and gaining knowledge of the applicants insurance needs C) Forwarding premium on to the insurer on a timely basis D) Offering and selling only the lowest premium policy |
D) Offering and selling only the lowest premium policy |
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Deliberate deception with intent to gain is the definition of: |
Fraud |
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The _____ branch is responsible for interpreting and determining the constitutionality of the statues. |
Judicial |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Legally speaking, a producer has a ______ dirt when handling life insurance premiums and applications for a insurer. |
Fiduciary |
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The _____ has the power to issue rules and regulations to help enforce insurance statues. |
Commissioner |
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All of the following are producer responsibilities to the applicant, except: A) Reviewing and evaluation the applicants current insurance coverage, limits, and risks B) Seeking and gaining knowledge of the applicants insurance needs C) Forwarding premium on to the insurer on a timely basis D) Offering and selling only the lowest premium policy |
D) Offering and selling only the lowest premium policy |
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Deliberate deception with intent to gain is the definition of: |
Fraud |
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The _____ branch is responsible for interpreting and determining the constitutionality of the statues. |
Judicial |
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A voluntary surrender of a known right, claim, or privilege is known as: |
A waiver |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Legally speaking, a producer has a ______ dirt when handling life insurance premiums and applications for a insurer. |
Fiduciary |
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The _____ has the power to issue rules and regulations to help enforce insurance statues. |
Commissioner |
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All of the following are producer responsibilities to the applicant, except: A) Reviewing and evaluation the applicants current insurance coverage, limits, and risks B) Seeking and gaining knowledge of the applicants insurance needs C) Forwarding premium on to the insurer on a timely basis D) Offering and selling only the lowest premium policy |
D) Offering and selling only the lowest premium policy |
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Deliberate deception with intent to gain is the definition of: |
Fraud |
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The _____ branch is responsible for interpreting and determining the constitutionality of the statues. |
Judicial |
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A voluntary surrender of a known right, claim, or privilege is known as: |
A waiver |
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An applicant inaccurately representing information on the application is guilty of: |
Misrepresentation |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Legally speaking, a producer has a ______ dirt when handling life insurance premiums and applications for a insurer. |
Fiduciary |
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The _____ has the power to issue rules and regulations to help enforce insurance statues. |
Commissioner |
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All of the following are producer responsibilities to the applicant, except: A) Reviewing and evaluation the applicants current insurance coverage, limits, and risks B) Seeking and gaining knowledge of the applicants insurance needs C) Forwarding premium on to the insurer on a timely basis D) Offering and selling only the lowest premium policy |
D) Offering and selling only the lowest premium policy |
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Deliberate deception with intent to gain is the definition of: |
Fraud |
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The _____ branch is responsible for interpreting and determining the constitutionality of the statues. |
Judicial |
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A voluntary surrender of a known right, claim, or privilege is known as: |
A waiver |
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An applicant inaccurately representing information on the application is guilty of: |
Misrepresentation |
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Which of the following is NOT considered one of the essential elements of a contract? A) Conditions B) Legal Purpose C) Offer and Acceptance D) Competent Parties |
A) Conditions |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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The transfer of some or all of the financial risk of loss from one insurer to another insurer or insurers is best described as: |
Reinsurance |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Legally speaking, a producer has a ______ dirt when handling life insurance premiums and applications for a insurer. |
Fiduciary |
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The _____ has the power to issue rules and regulations to help enforce insurance statues. |
Commissioner |
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All of the following are producer responsibilities to the applicant, except: A) Reviewing and evaluation the applicants current insurance coverage, limits, and risks B) Seeking and gaining knowledge of the applicants insurance needs C) Forwarding premium on to the insurer on a timely basis D) Offering and selling only the lowest premium policy |
D) Offering and selling only the lowest premium policy |
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Deliberate deception with intent to gain is the definition of: |
Fraud |
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The _____ branch is responsible for interpreting and determining the constitutionality of the statues. |
Judicial |
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A voluntary surrender of a known right, claim, or privilege is known as: |
A waiver |
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An applicant inaccurately representing information on the application is guilty of: |
Misrepresentation |
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Which of the following is NOT considered one of the essential elements of a contract? A) Conditions B) Legal Purpose C) Offer and Acceptance D) Competent Parties |
A) Conditions |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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The transfer of some or all of the financial risk of loss from one insurer to another insurer or insurers is best described as: |
Reinsurance |
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An insurer NOT authorized to do business within this state is considered what type of insurer? |
Non- Admitted |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Legally speaking, a producer has a ______ dirt when handling life insurance premiums and applications for a insurer. |
Fiduciary |
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The _____ has the power to issue rules and regulations to help enforce insurance statues. |
Commissioner |
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All of the following are producer responsibilities to the applicant, except: A) Reviewing and evaluation the applicants current insurance coverage, limits, and risks B) Seeking and gaining knowledge of the applicants insurance needs C) Forwarding premium on to the insurer on a timely basis D) Offering and selling only the lowest premium policy |
D) Offering and selling only the lowest premium policy |
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Deliberate deception with intent to gain is the definition of: |
Fraud |
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The _____ branch is responsible for interpreting and determining the constitutionality of the statues. |
Judicial |
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A voluntary surrender of a known right, claim, or privilege is known as: |
A waiver |
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An applicant inaccurately representing information on the application is guilty of: |
Misrepresentation |
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Which of the following is NOT considered one of the essential elements of a contract? A) Conditions B) Legal Purpose C) Offer and Acceptance D) Competent Parties |
A) Conditions |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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The transfer of some or all of the financial risk of loss from one insurer to another insurer or insurers is best described as: |
Reinsurance |
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An insurer NOT authorized to do business within this state is considered what type of insurer? |
Non- Admitted |
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A company is considered to be domiciled: |
In the state where it’s home office is located |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Legally speaking, a producer has a ______ dirt when handling life insurance premiums and applications for a insurer. |
Fiduciary |
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The _____ has the power to issue rules and regulations to help enforce insurance statues. |
Commissioner |
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All of the following are producer responsibilities to the applicant, except: A) Reviewing and evaluation the applicants current insurance coverage, limits, and risks B) Seeking and gaining knowledge of the applicants insurance needs C) Forwarding premium on to the insurer on a timely basis D) Offering and selling only the lowest premium policy |
D) Offering and selling only the lowest premium policy |
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Deliberate deception with intent to gain is the definition of: |
Fraud |
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The _____ branch is responsible for interpreting and determining the constitutionality of the statues. |
Judicial |
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A voluntary surrender of a known right, claim, or privilege is known as: |
A waiver |
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An applicant inaccurately representing information on the application is guilty of: |
Misrepresentation |
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Which of the following is NOT considered one of the essential elements of a contract? A) Conditions B) Legal Purpose C) Offer and Acceptance D) Competent Parties |
A) Conditions |
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Which of the following is not an essential element of an insurance risk? A) The loss must be intentional B) A large number of similar or same type units facing the same perils C) The chance of loss must be calculable D) The loss must be measurable |
A) The loss must be intentional |
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The transfer of some or all of the financial risk of loss from one insurer to another insurer or insurers is best described as: |
Reinsurance |
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An insurer NOT authorized to do business within this state is considered what type of insurer? |
Non- Admitted |
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A company is considered to be domiciled: |
In the state where it’s home office is located |
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Which of the following is a sound legal method of minimizing adverse selection? |
Quality underwriting practices |
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A _______ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. |
Faculative |
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Legally speaking, a producer has a ______ dirt when handling life insurance premiums and applications for a insurer. |
Fiduciary |
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The _____ has the power to issue rules and regulations to help enforce insurance statues. |
Commissioner |
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All of the following are producer responsibilities to the applicant, except: A) Reviewing and evaluation the applicants current insurance coverage, limits, and risks B) Seeking and gaining knowledge of the applicants insurance needs C) Forwarding premium on to the insurer on a timely basis D) Offering and selling only the lowest premium policy |
D) Offering and selling only the lowest premium policy |
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Deliberate deception with intent to gain is the definition of: |
Fraud |
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The _____ branch is responsible for interpreting and determining the constitutionality of the statues. |
Judicial |
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A voluntary surrender of a known right, claim, or privilege is known as: |
A waiver |
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An applicant inaccurately representing information on the application is guilty of: |
Misrepresentation |
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Which of the following is NOT considered one of the essential elements of a contract? A) Conditions B) Legal Purpose C) Offer and Acceptance D) Competent Parties |
A) Conditions |
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Which of the following statements regarding an insurance risk is FALSE? A) The loss must cause an economic hardship on the insurer B) There must be a large number of homogeneous units C) The chance of loss must be calculable D) The insured event must be accidental |
A) The loss must cause an economic hardship on the insurer |
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Which of the following statements regarding an insurance risk is FALSE? A) The loss must cause an economic hardship on the insurer B) There must be a large number of homogeneous units C) The chance of loss must be calculable D) The insured event must be accidental |
A) The loss must cause an economic hardship on the insurer |
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An insurer NOT authorized to do business within this state is considered what type of insurer? |
Non- Admitted |
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The authority created when a producer/agent exceeds the authority stipulated in his/her contract, and when the insurer does nothing to counter the public impression that such authority exists (i.e., the producer/agent accepting premiums on lapsed policies) is known as _____ authority: |
Apparent |
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Wagering on a horse race or at the casino tables is known as what type of risk? |
Speculative |
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If a producer is acting as an agent, whom do they represent? |
Always the insurer |
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The intentional distortion of the truth in order to induce another to part with something of value or to surrender a legal right is: |
Fraud |
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It is the ______ who issues a Certificate of Authority enabling an insurer to conduct insurance business with a particular state. |
State Insurance Commissioner |
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Implied authority is: |
What the public assumes the agent has |
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Which of the following is not a marketing and distribution system used by insurers? |
Broker Agency |
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Ultimately it is up to the ____ to determine if the proposed insured is an acceptable risk. |
Home office underwriter |
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Which of the following is used by an insurer to collect information from the applicant/ insured for underwriting purpose? |
An application |
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The Medical Information Bureau (MIB) is firmed by: |
Insurance companies |
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In life insurance, the Buyers Guide is required to be provided not later than at the time of policy______. |
Delivery |
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Part 2 of the application consists of all of the following information, except; |
Date of birth, gender |
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If after a policy has been issued and delivered, the insurer discovers unanswered questions on the applications, what can the insurer legally do at this point? |
Nothing, the insurer has waived its right to that information |
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An Errors & Omissions policy primarily covers the liability of: |
A producer or agency |
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Once the gross amount of dollars required to fund an insured’s needs has been determined using the needs analysis approach, what is the next step? |
Subtract any assets available to fund financial needs after death |
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The Do Not Call Registry and the Telemarketer Sales Rule were created by the_____. |
Federal Trade Commission (FTC) |
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The person offering him/herself or another person to be insured by the contract best defines the: |
Applicant |
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The person offering him/herself or another person to be insured by the contract best defines the: |
Applicant |
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Loading included all of the following except: |
Mortality |
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Which of the following is a policy not issued with a rating? |
Preferred Rate |
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Which of the following is a policy not issued with a rating? |
Preferred Rate |
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Which of the following is a type of rating that does not involve an extra premium being assessed? |
The lien plan |
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The burden of proof falls on the _____ to establish issued policies were in fact delivered to the applicant. |
Insurer |
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The burden of proof falls on the _____ to establish issued policies were in fact delivered to the applicant. |
Insurer |
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Which of the following is included in Part I of a Life Insurance Application? |
Name and Occupation |
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The date on which insurance coverage is no longer in effect is referred to as the ___ date. |
Expiration |
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The date on which insurance coverage is no longer in effect is referred to as the ___ date. |
Expiration |
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Debit life insurance is classified as which of the following? |
Industrial |
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The date on which insurance coverage is no longer in effect is referred to as the ___ date. |
Expiration |
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Debit life insurance is classified as which of the following? |
Industrial |
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The Needs Analysis Approach always assumes the death of the insured to be: |
Immediate |
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_____ life insurance is when an insurer is induced into purchasing life insurance with the sole intent of selling that policy once issued to third party investors for an amount less than the death benefit, but greater than its cash values. |
Stranger originated |
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_____ life insurance is when an insurer is induced into purchasing life insurance with the sole intent of selling that policy once issued to third party investors for an amount less than the death benefit, but greater than its cash values. |
Stranger originated |
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A life insurance applicant pays the initial premium at the time of application and receives a Conditional Receipt. If coverage is issued as applied for, when did coverage go into effect? |
The date of the application or upon the completion of any required medical exam (whichever is later) |
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_____ life insurance is when an insurer is induced into purchasing life insurance with the sole intent of selling that policy once issued to third party investors for an amount less than the death benefit, but greater than its cash values. |
Stranger originated |
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A life insurance applicant pays the initial premium at the time of application and receives a Conditional Receipt. If coverage is issued as applied for, when did coverage go into effect? |
The date of the application or upon the completion of any required medical exam (whichever is later) |
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When an insurer requires that an insurer be subjected to a medical examination, who pays for the medical exam? |
The insurer |
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_____ life insurance is when an insurer is induced into purchasing life insurance with the sole intent of selling that policy once issued to third party investors for an amount less than the death benefit, but greater than its cash values. |
Stranger originated |
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A life insurance applicant pays the initial premium at the time of application and receives a Conditional Receipt. If coverage is issued as applied for, when did coverage go into effect? |
The date of the application or upon the completion of any required medical exam (whichever is later) |
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When an insurer requires that an insurer be subjected to a medical examination, who pays for the medical exam? |
The insurer |
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When are Errors and Omissions claims filed? |
When clients file a report or a complaint |
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_____ life insurance is when an insurer is induced into purchasing life insurance with the sole intent of selling that policy once issued to third party investors for an amount less than the death benefit, but greater than its cash values. |
Stranger originated |
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A life insurance applicant pays the initial premium at the time of application and receives a Conditional Receipt. If coverage is issued as applied for, when did coverage go into effect? |
The date of the application or upon the completion of any required medical exam (whichever is later) |
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When an insurer requires that an insurer be subjected to a medical examination, who pays for the medical exam? |
The insurer |
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When are Errors and Omissions claims filed? |
When clients file a report or a complaint |
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A producer to cider a conditional receipt to an applicant who paid the first premium with the application. The applicant died before a policy was issued. If the insurer denies the claim, which party would have to prove the reasons for its actions if the claim was challenged? |
The insurer |
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_____ life insurance is when an insurer is induced into purchasing life insurance with the sole intent of selling that policy once issued to third party investors for an amount less than the death benefit, but greater than its cash values. |
Stranger originated |
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A life insurance applicant pays the initial premium at the time of application and receives a Conditional Receipt. If coverage is issued as applied for, when did coverage go into effect? |
The date of the application or upon the completion of any required medical exam (whichever is later) |
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When an insurer requires that an insurer be subjected to a medical examination, who pays for the medical exam? |
The insurer |
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When are Errors and Omissions claims filed? |
When clients file a report or a complaint |
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A producer to cider a conditional receipt to an applicant who paid the first premium with the application. The applicant died before a policy was issued. If the insurer denies the claim, which party would have to prove the reasons for its actions if the claim was challenged? |
The insurer |
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A producer must include their name and address on which of the following? |
A policy summary |
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_____ life insurance is when an insurer is induced into purchasing life insurance with the sole intent of selling that policy once issued to third party investors for an amount less than the death benefit, but greater than its cash values. |
Stranger originated |
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A life insurance applicant pays the initial premium at the time of application and receives a Conditional Receipt. If coverage is issued as applied for, when did coverage go into effect? |
The date of the application or upon the completion of any required medical exam (whichever is later) |
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When an insurer requires that an insurer be subjected to a medical examination, who pays for the medical exam? |
The insurer |
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When are Errors and Omissions claims filed? |
When clients file a report or a complaint |
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A producer to cider a conditional receipt to an applicant who paid the first premium with the application. The applicant died before a policy was issued. If the insurer denies the claim, which party would have to prove the reasons for its actions if the claim was challenged? |
The insurer |
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A producer must include their name and address on which of the following? |
A policy summary |
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If a medical exam is required as part of the underwriting process, who normally conducts the exam? |
A physician or nurse |
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_____ life insurance is when an insurer is induced into purchasing life insurance with the sole intent of selling that policy once issued to third party investors for an amount less than the death benefit, but greater than its cash values. |
Stranger originated |
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A life insurance applicant pays the initial premium at the time of application and receives a Conditional Receipt. If coverage is issued as applied for, when did coverage go into effect? |
The date of the application or upon the completion of any required medical exam (whichever is later) |
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When an insurer requires that an insurer be subjected to a medical examination, who pays for the medical exam? |
The insurer |
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When are Errors and Omissions claims filed? |
When clients file a report or a complaint |
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A producer to cider a conditional receipt to an applicant who paid the first premium with the application. The applicant died before a policy was issued. If the insurer denies the claim, which party would have to prove the reasons for its actions if the claim was challenged? |
The insurer |
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A producer must include their name and address on which of the following? |
A policy summary |
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If a medical exam is required as part of the underwriting process, who normally conducts the exam? |
A physician or nurse |
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Which of the following is used by an insurer to collect information from the applicant/ insured for underwriting purposes? |
An application |
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_____ life insurance is when an insurer is induced into purchasing life insurance with the sole intent of selling that policy once issued to third party investors for an amount less than the death benefit, but greater than its cash values. |
Stranger originated |
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A life insurance applicant pays the initial premium at the time of application and receives a Conditional Receipt. If coverage is issued as applied for, when did coverage go into effect? |
The date of the application or upon the completion of any required medical exam (whichever is later) |
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When an insurer requires that an insurer be subjected to a medical examination, who pays for the medical exam? |
The insurer |
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When are Errors and Omissions claims filed? |
When clients file a report or a complaint |
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A producer to cider a conditional receipt to an applicant who paid the first premium with the application. The applicant died before a policy was issued. If the insurer denies the claim, which party would have to prove the reasons for its actions if the claim was challenged? |
The insurer |
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A producer must include their name and address on which of the following? |
A policy summary |
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If a medical exam is required as part of the underwriting process, who normally conducts the exam? |
A physician or nurse |
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Which of the following is used by an insurer to collect information from the applicant/ insured for underwriting purposes? |
An application |
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A generic brochure developed by the NAIC to provide consumers with descriptions of basic types of life insurance as well as the comparative costs of each is called the_____ |
Buyers Guide |
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_____ life insurance is when an insurer is induced into purchasing life insurance with the sole intent of selling that policy once issued to third party investors for an amount less than the death benefit, but greater than its cash values. |
Stranger originated |
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A life insurance applicant pays the initial premium at the time of application and receives a Conditional Receipt. If coverage is issued as applied for, when did coverage go into effect? |
The date of the application or upon the completion of any required medical exam (whichever is later) |
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When an insurer requires that an insurer be subjected to a medical examination, who pays for the medical exam? |
The insurer |
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When are Errors and Omissions claims filed? |
When clients file a report or a complaint |
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A producer to cider a conditional receipt to an applicant who paid the first premium with the application. The applicant died before a policy was issued. If the insurer denies the claim, which party would have to prove the reasons for its actions if the claim was challenged? |
The insurer |
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A producer must include their name and address on which of the following? |
A policy summary |
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If a medical exam is required as part of the underwriting process, who normally conducts the exam? |
A physician or nurse |
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Which of the following is used by an insurer to collect information from the applicant/ insured for underwriting purposes? |
An application |
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A generic brochure developed by the NAIC to provide consumers with descriptions of basic types of life insurance as well as the comparative costs of each is called the_____ |
Buyers Guide |
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The term ‘mode’ refers to the: |
Frequency of premium payments |
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In a replacement transaction, all of the following are insurer duties and responsibilities, except: |
Contact the client to assure that they understand the transaction |
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The individual who has the ownership rights of a policy is called the: |
Policyowner |
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The individual who has the ownership rights of a policy is called the: |
Policyowner |
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The National Do Not Call Registry requires companies to update their list at least once every ______ days. |
31 days |
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In determining the proper amount of life insurance, the Needs Analysis Approach takes into consideration al of the following factors except: |
The projected future value of services provided by the insured |
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In life insurance, the Buyers Guide is required to be provided not later than at the time of policy_____ |
Delivery |
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The income-earning ability lost to dependents by the insurers premature death is a way to evaluate an individuals insurance needs. This method is known as the: |
Human Life Value Approach |
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The term ‘mode’ refers to the: |
Frequency of premium payments |
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Applicants must consent to be tested and be informed that testing for _____ may determine insurability. |
HIV |
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Applicants must consent to be tested and be informed that testing for _____ may determine insurability. |
HIV |
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When producer Pete delivers a policy, he should also do which of the following? |
Explain the policy fully |
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The person who generally has the rights in the insurance policy is known as the |
Policyowner |
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Which of the following best describes a Statement of Good Health? |
It verifies that the insured has not suffered a serious illness or injury requiring surgery or hospitalization since the application date |
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Which of the following best describes a Statement of Good Health? |
It verifies that the insured has not suffered a serious illness or injury requiring surgery or hospitalization since the application date |
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The results of the ____ is the only document that might be copied and made part of the policy. |
Medical Examination |
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There are____ methods available to determine the income objective after the death of the client for planning purposes. |
2 |
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Which of the following medical reports cannot be used as the sole basis for rating or denying coverage to an applicant? |
MIB |
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The burden of proof falls on the ____ to establish issued policies were in fact delivered to the applicant. |
Insurer |
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The burden of proof falls on the ____ to establish issued policies were in fact delivered to the applicant. |
Insurer |
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Which of the following listed policies has the least likelihood of keeping pace with inflation? |
Straight Whole Life |
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The burden of proof falls on the ____ to establish issued policies were in fact delivered to the applicant. |
Insurer |
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Which of the following listed policies has the least likelihood of keeping pace with inflation? |
Straight Whole Life |
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If an applicant is a minor, who signs the application? |
Their guardian |
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The burden of proof falls on the ____ to establish issued policies were in fact delivered to the applicant. |
Insurer |
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Which of the following listed policies has the least likelihood of keeping pace with inflation? |
Straight Whole Life |
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If an applicant is a minor, who signs the application? |
Their guardian |
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If Greg’s policy has a Guaranteed Insurability rider, it means that he can purchase more insurance: |
On his own life at certain specified ages without proof of insurability. |
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The burden of proof falls on the ____ to establish issued policies were in fact delivered to the applicant. |
Insurer |
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Which of the following listed policies has the least likelihood of keeping pace with inflation? |
Straight Whole Life |
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If an applicant is a minor, who signs the application? |
Their guardian |
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If Greg’s policy has a Guaranteed Insurability rider, it means that he can purchase more insurance: |
On his own life at certain specified ages without proof of insurability. |
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What is required to add a non family member to a life insurance policy under a term rider? |
Insurance interest |
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Which of the following traditional whole life policies has the lowest first-year annual premium? |
40- pay life |
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In order to covert a term policy to a permanent policy as of the original issue age, all of the following must occur, except: |
The cash values will have to be paid out first before the conversion can be effected |
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In order to covert a term policy to a permanent policy as of the original issue age, all of the following must occur, except: |
The cash values will have to be paid out first before the conversion can be effected |
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Jason has a Whole Life Insurance policy with a face amount of $100,000 , an annual premium of $1,000, and a cash value of $10,000. If he wants to borrow money from the insurer, what is the maximum he can obtain? |
$10,000 |
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When the life insurance policy’s cash value equals the face amount of the policy and the proceeds are paid to the policyowner, this is known as the policys____. |
Endowment |
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When the life insurance policy’s cash value equals the face amount of the policy and the proceeds are paid to the policyowner, this is known as the policys____. |
Endowment |
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All of the following are correct regarding renewable term insurance except; |
Evidence of instability is required to renew the policy. |
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Of the following, which best describes a Straight Whole Life policy? |
Level guaranteed premium and face value for the life of the insured |
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In many jurisdictions, permanent policies are required to have some cash value by the end of : |
The third year |
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____ is a form of whole life in which the insurance company can change the premiums or interest rate being credited to the account based on current money market rates. |
Current Assumption Whole Life |
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In a Universal Life policy, the minimum separation between the cash value and the death benefit is called the _____. |
Risk corridor |
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In a Universal Life policy, the minimum separation between the cash value and the death benefit is called the _____. |
Risk corridor |
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Which of the following policies could be expected to have the lowest premium? |
Whole Life |
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Which of the following policies requires a producer to have both a life and securities license to sell? |
Variable Universal |
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Which of the following policies requires a producer to have both a life and securities license to sell? |
Variable Universal |
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All of the following are typical exclusions for coverage under and accelerated death benefit rider, except: |
AIDS |
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What is the name of the rider that requires that the premium payout become totally and permanently disabled before it will pay a claim? |
Pay or Benefit (Waiver of Payors Premium) |
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What is the name of the life insurance policy that is written on the life of a minor, is owned and paid for initially by a parent, and whose face amount increases to 5 times it’s original amount at age 21? |
Jumping Juvenile |
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A ____ is a contractual agreement that allows a company or person to buy one or more of the rights of ownership in a life policy on the life of another person, should the owner/ insured become terminally ill. |
Viatical Settlement |
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A ____ is a contractual agreement that allows a company or person to buy one or more of the rights of ownership in a life policy on the life of another person, should the owner/ insured become terminally ill. |
Viatical Settlement |
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Premiums for a variable universal life policy: |
Can vary in amount as well as payment schedule. |
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What is the typical time limit on life expectancy for a Viatical Settlement candidate? |
2 years |
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A $100,000 policy with a waiver of premium rider and $30,000 of cash value is in force. The base policy costs $750 and the rider is $50. What is the total premium annually the policyowner must pay to keep the policy in force if the policyowner decides to cancel the rider? |
$750 |
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A $100,000 policy with a waiver of premium rider and $30,000 of cash value is in force. The base policy costs $750 and the rider is $50. What is the total premium annually the policyowner must pay to keep the policy in force if the policyowner decides to cancel the rider? |
$750 |
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In which of the following circumstances would the accidental death benefit NOT apply? |
Death caused by an intentional act |
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A $100,000 policy with a waiver of premium rider and $30,000 of cash value is in force. The base policy costs $750 and the rider is $50. What is the total premium annually the policyowner must pay to keep the policy in force if the policyowner decides to cancel the rider? |
$750 |
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In which of the following circumstances would the accidental death benefit NOT apply? |
Death caused by an intentional act |
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In determining whether disability is permanent, most companies call for a : |
3 to 6 month waiting period |
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Who receives the endowment value of a whole life policy? |
The policyowner |
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Who receives the endowment value of a whole life policy? |
The policyowner |
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Life insurance that does not require a medical exam is known as: |
Simplified issue |
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Which of the following traditional whole life policies has the highest first-year annual premium, all other factors being equal? |
10-pay life |
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A married couple wants to have funds available so that the heirs to their estate have the funds necessary to pay the estate taxes. Which of the following would be the most economical and effective way to accomplish this? |
Buy a joint Survivorship Life policy |
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A married couple wants to have funds available so that the heirs to their estate have the funds necessary to pay the estate taxes. Which of the following would be the most economical and effective way to accomplish this? |
Buy a joint Survivorship Life policy |
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If an insured currently has a policy with a waiver of premium rider and should change to a more hazardous occupation, the insurance company will: |
Continue the waiver of premium rider |
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A _____ policy is one that is written on the life of a minor. |
Juvenile |
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A _____ policy is one that is written on the life of a minor. |
Juvenile |
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The waiver of premium rider normally expires at age: |
65 |
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Generally, Universal Life has how many death benefit options to choose from? |
2 |
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Which of the following statements about policy dividends is TRUE? |
There are several dividend option to choose from |
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Which of the following is the most expensive premium mode overall? |
Monthly |
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Which of the following is the most expensive premium mode overall? |
Monthly |
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When a policy lapses due to nonpayment of premium, which nonforfeiture option is the automatic option? |
Extended term |
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Which of the following is the most expensive premium mode overall? |
Monthly |
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When a policy lapses due to nonpayment of premium, which nonforfeiture option is the automatic option? |
Extended term |
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The ____ is the time period provided after the premium due date before a policy lapses. |
Grace period |
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All of the following are traditional whole life policy nonforfeiture values, EXCEPT: |
Renewable and convertible features |
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______ are conditions stipulated in the contract for which the insurer will not provide coverage. |
Exclusions |
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Most often, life policies pay death claims in a single lump sum. The options that allow benefits to be paid other than lump sum are called ____. |
Settlement options |
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Most often, life policies pay death claims in a single lump sum. The options that allow benefits to be paid other than lump sum are called ____. |
Settlement options |
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Tom elects the Life Income with 10-year Period Certain settlement option. Tom does in year 6. The beneficiary received payments for______. |
4 years |
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What is a material misstatement? |
One which would have caused the insurer to not issue the policy had it been known |
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All of the following are TRUE about the Automatic Premium Loan (APL) provision, except: |
It is available on any type of life insurance policy. |
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The _____ has the right to change the premium mode. |
Policyowner |
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